From Volume 4, Issue Number 46 of EIR Online, Published Nov. 15, 2005

Ibero-American News Digest

Shockwaves Continue Off Summit of the Americas

Argentine President Nestor Kirchner and Brazilian President Lula da Silva have announced they will meet on Nov. 30 to celebrate the 20th anniversary of the launching of integration projects between their two countries, a sign of improved relations following their effective work together at the just concluded Summit of the Americas. Both Presidents consider the summit to have been a success, it is reported. (See InDepth this issue for EIR's analysis and the first published English text of President Kirchner's ground-breaking speech to the summit.)

Not so Mexican President Vicente Fox, whose public petulant fit over President Kirchner's refusal to capitulate to the Free Trade Area of the Americas has landed him in hot water at home. Fox and his Foreign Minister began ranting to reporters against Kirchner almost as soon as they got on the plane in Argentina to return to Mexico. Between them, they denounced Kirchner, by name, and the Mercosur countries and Venezuela, for "small-mindedness," thinking only of "Argentine public opinion," being "too ideological," etc. The Mexican Senate, where the opposition has a majority, immediately passed a resolution condemning President Fox's egregious confrontation with fellow Ibero-American governments on behalf of a free-trade policy which Mexicans know has nearly destroyed their country.

Kirchner was not impressed by Fox's petulance. Speaking Nov. 7 speech in Buenos Aires province, he answered: "We want integration with justice, not just in favor of the most powerful. Let President Fox worry about the Mexicans. I was elected by the Argentine people, and I will take care of them as I should." He added: "I don't go to summits to look good for the visitors. We're not fighting for the leadership spot with anyone, but for a Latin America which is greater. For some people, good diplomacy means permanently paying homage" [to the most powerful]. "If necessary," he said, "I'll stand alone to defend the interests of the Argentine people."

LaRouche Addresses Trade Unionists Across the Americas

For the full story, see the feature in this week's InDepth.

Fujimori Begins His Comeback; Returns to the Americas

Former Peruvian President Alberto Fujimori left Japan and flew into Chile on Nov. 6, with the declared purpose of preparing his campaign in the April 2006 Presidential election in Peru. He was arrested less than 24 hours later by Chilean authorities acting at the request of Peru's government, which says it will seek Fujimori's extradition so he can be tried on the corruption, human rights, and other charges heaped up against him by the government of Alejandro Toledo.

Fujimori has lived in exile in Japan since his ouster by a Project Democracy coup financed by narco-speculator George Soros in November 2000. The extradition process will not be quick, however, and Peru's political class and government were thrown into a tizzy over the sudden landing of this "hot potato." Fujimori, who led the crushing of Sendero Luminoso and other narcoterrorists in the 1990s, has a significant following in the country still, and was running at 20% or more in Presidential polls, until the political pollsters decided to drop his name from their questionnaires. A reported 1,500 people rallied in his support in Lima on Nov. 7.

New Border Conflict Triggered in South America

Just as when the battle lines in South America are being drawn between free trade and a New Bretton Woods financial system, a new border dispute between Peru and Chile has been triggered by known intelligence elements, quickly taking on a dangerous tone which is stirring up worries across the region.

On Nov. 3, the Peruvian Congress unanimously and unilaterally passed a law re-drawing Peru's maritime border with Chile, so as to give Peru access to 35,000 more square kilometers of sea that include coveted fishing waters off the Pacific Coast. Chile's government has announced that it will not recognize the new law, which it claims violates treaty agreements signed back in 1954. Peru has dismissed that "treaty" as "a mere fishing agreement."

The primary sponsor of the Peruvian bill was Fernando Olivera's "Independent Moralizing Front" (FIM), a narco-linked intelligence operation masquerading as a party, and a part of Peruvian President Toledo's governing coalition. Olivera and the FIM's last big political initiative was their support earlier this year for separatist attempts to legalize unrestricted coca cultivation.

Although Chilean President Ricardo Lagos has denied military reinforcement of the border, Chile's Defense Minister Jaime Ravinet threatened on Nov. 2 that while "Chile seeks peace, wants to build peace, it also knows how to defend its land and maritime territory." Chile has suspended trade negotiations with Peru, and has appealed to a number of other major Ibero-American countries to intervene. Peru, meanwhile, has said it would be happy to take the conflict to The Hague.

Central Bank Out To Destroy Brazil's National Development Bank, Lessa Charges

The Central Bank is laying the groundwork to shut down Brazil's powerful National Economic and Social Development Bank (BNDES), in a desperate attempt to lock in neoliberal policies, no matter what government is in power in 2006, the former head of the BNDES, Carlos Lessa, charged on Nov. 7. The bankers are worried about what might emerge from the 2006 Presidential elections, he said.

BNDES, which Lessa headed for the first three years of the administration of Brazilian President Lula da Silva, is the second-largest development bank in the world, and the leading source of funds for Brazil's domestic development and for such regional infrastructure projects as have gotten underway in South America. Created under Gertulio Vargas's postwar administration, the BNDES was—except under the government of Fernando Henrique Cardoso in the 1990s—the closest thing in Brazil to a Hamiltonian National Bank. Today, it is the only financial institution left in Brazil which issues long-term credit, at low interest rates.

Lessa issued his red alert on the Central Bank's plans, after Folha de Sao Paulo leaked on Nov. 6 that the Central Bank has been auditing BNDES, and has come up with a list of supposed "irregularities" and violations of monetary regulations which the bank has committed. In particular, the Central Bank claims BNDES's malfeasance comes from not using regular market criteria to calculate risk-spreads for its loans, as if it were not a development bank with a specific mission.

Lessa laced into Central Bank head Henrique Meirelles, calling him "an anti-Brazil knight" who believes that "everything relevant to the nation is a mortal sin, and should be eliminated.... This group—[Treasury Minister Antonio] Dr. Palocci, Dr. Meirelles, the Brazilian Federation of Banks men, the capital market, the world of the so-called market—are very worried about the Presidential succession. They want to set the rules now, which would make a change in economic policy impossible."

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