Ibero-American News Digest

Ecuadorian Government Ousted

After four months of growing street protests and partisan wrangling between political parties, branches of government, and power-seekers, a majority of the Congress of Ecuador voted on April 20 to oust President Lucio Gutierrez, and replace him with Vice President Alfredo Palacio, a move that was quickly supported by the Armed Forces. Palacio was sworn in the same day. His government has yet to be internationally recognized, however, as of April 23, and U.S. Secretary of State Condoleezza Rice "suggested" on April 22 that new elections should be called as soon as possible. Both the Organization of American States (OAS) and the South American Community of Nations have decided to send missions into Ecuador, to help "mediate" a consensus in what remains a highly polarized and unstable situation.

Details of the fight which led to the de facto coup are complicated, with the ostensible issue being the President's dumping of the entire Supreme Court last December, so as to head off demands for his impeachment by Congressional interests out to replace him. In recent weeks, the Bush Administration, while calling for "dialogue" to resolve the growing political conflict, sided with Congressional opponents of Gutierrez, charging the independence of the judiciary had been violated.

The competing interests which make up the opposition range from the rightwing free traders of Guayaquil's oligarchy, centered in the Social Christian party; to the ambitious Mayor of Quito, "Paco" Moncayo, the former "war" hero in the 1995 conflict with Peru, who worked with now-OAS Secretary General Luigi Einaudi; to the radical Jacobins of the CONAIE Indian movement, and their associates.

Few signs have been seen that they are prepared to address the underlying issue: that the looting of Ecuador under the dying global financial system has driven the country to collapse, after having destroyed even the existence of its own currency, with the decision to dollarize in 2000. Three Presidents have been overthrown since 1997. Gutierrez himself—a former Lt. Colonel who led a Jacobin uprising in 2000 against then-President Jamil Mahuad, in alleged opposition to the decision to dollarize the economy—once elected to office did Wall Street's bidding with enthusiasm.

What must be watched closely, is how the crisis in Ecuador affects the nascent "peace through infrastructure integration" in South America.

Will Lopez Obrador Case Lead to a Constitutional Crisis in Mexico?

The next flashpoint shaping up in battle over the currently leading Mexican Presidential candidate, Andres Manuel Lopez Obrador, could occur on April 25, when Lopez Obrador has announced he intends to return to his office as Mexico City Mayor, because his lawyers have decided that under the Constitution, it is legal for him to do so. Lopez Obrador is organizing a silent march of his supporters for the day before, Sunday, April 24.

Lopez Obrador, a pre-candidate within the PRD Party for the 2006 Presidential election, was stripped of his legal immunity on April 7 by an unholy alliance in the Congress between the ruling PAN Party of President Vicente Fox and the majority of the formerly ruling PRI Party, so that he could be tried on absurd "contempt of court" charges brought against him by prosecutors of the Fox regime, in a blatant attempt to block his candidacy.

Lopez Obrador had not returned to his Mayoral office since the Congressional vote, until his lawyers determined that he is constitutionally empowered to continue as Mayor despite the charges. Mexico's Constitution specifies that a public official who is subject to criminal proceedings must leave his office, once a judge has decided that there are charges against him—the equivalent of an indictment under the Mexican legal system. But Lopez Obrador's immunity was only lifted by the Chamber of Deputies (so far), and a court decision awaits rulings on various legal maneuvers initiated by his supporters.

Others say that if he assumes his office again, he will be in violation of a Federal law which says that an official has to leave as soon as immunity is lifted. Proponents of this legal view say an arrest warrant could be issued against Lopez Obrador for abuse of authority, should he return to his office.

Any such decision could lead to a constitutional crisis. As constitutional lawyer Clemente Valdes told Reforma newspaper, "If the Constitution continues to govern in this country, clearly what the Constitution says takes precedence over what any secondary law says."

Lyndon LaRouche commented April 19 that the unbelievable stupidity of this campaign by President Fox, reveals just how desperate Fox and his crew must be.

Brazil's Debt Rises, with Interest Rate Hikes

The Brazilian Central Bank raised interest rates, and thus Brazil's debt, once again. The quarter-point hike on April 20, bringing the benchmark SELIC rate to 19.5%, set off howls from virtually all of Brazil's labor, industry, and trade federations. The National Association of Financial Executives calculates that the increase means that the average interest rate charged to consumers will now be the equivalent of 140% a year! The Unified Labor Federation (CUT) called for President Lula to step in, and ordered the monetary authorities to change policy. Sao Paulo Commercial Association chief Guilherme Afif Domingos slammed the Central Bank for listening solely to the financial market, "ignoring the impact of its policy upon the real side of the economy, which is what produces, generates employment, and income."

This is the eighth month in a row in which the Central Bank has increased interest rates. Since 56.9% of the Federal debt now carries floating interest rates, various newspapers calculated that the Central Bank had already increased the Federal government debt by over 102 billion reals (close to $40 billion!) between September 2004 and March 2005, solely by raising the interest rates from 16% to 19.25%.

As another Sao Paulo businessman, Abram Szajman, pointed out, the increase in the debt means that everything the government "saves" by cutting the budget, is eaten up by the debt increases. In the first two months of 2005 alone, the government spent nearly 40% of tax revenues collected on debt payments, Szajman said, while the rate hikes do nothing to stop inflation—the ostensible pretext for the increases—since international commodity prices are going through the roof, anyway.

Free Trade Accord 'Off the Agenda' of Brazil's President

Speaking to a gathering of labor leaders in the capital Brasilia just days before U.S. Secretary of State Condoleezza Rice was to visit Brazil, President Lula da Silva said on April 20 that "for two years, the Free Trade Accord of the Americas (FTAA) has not been discussed in Brazil, because we took it off the agenda." Indeed, Brazil has focussed on strengthening trade ties among its Ibero-American neighbors and promoting infrastructural projects for regional integration.

"How did we take it off the agenda?" asked Lula. "By strengthening Mercosur, creating the South American Community of Nations and trying to establish a new standard of relations between south American countries," he answered himself.

Nonetheless, Brazil still co-chairs with the U.S. the talks to create the FTAA. So, Foreign Ministry spokesman Glaucio Veloso had to translate Lula's words for diplomatic consumption: "In no way did the President want to say that Brazil is no longer interested in FTAA or wants to withdraw." Veloso said that "what he is saying is that over the past two years Brazil has resorted to a new approach towards negotiations."

Central America Free Trade in Trouble, Too

The more President Bush pushes the Central America Free Trade Accord (CAFTA-DR, including the Dominican Republic), the more the resistance against it grows. A group of both Democratic and Republican legislators, trade-union leaders, and businessmen held a press conference on April 21, to announce their rejection of the treaty, which the House of Representatives is soon to begin discussing. Democratic Rep. Sherrod Brown (Ohio) said that about 195 Democrats and 60 Republicans oppose it, and in any event, those agreements are as bad as NAFTA, which promised everything and delivered nothing but an increase of the trade deficit form $39 billion in 1992, to $618 billion in 2004.

But Bush insisted, in an April 20 speech to the U.S. Hispanic Chamber of Commerce in Washington, that "we need to continue to knock down trade barriers across the world, so we can open up new markets for America's entrepreneurs." About $33 billion of goods a year are exported and imported between the U.S. and Central America.

But while the U.S. Hispanic Chamber of Commerce voted to support the CAFTA-DR deal, within two hours a representative of the nation's largest and oldest Hispanic organization, the League of United Latin American Citizens, pushed her way to the front of an anti-CAFTA rally on Capitol Hill, and said her group opposed CAFTA.