From Volume 4, Issue Number 50 of EIR Online, Published Dec. 13, 2005

Ibero-American News Digest

Argentine Government Announced Directed Credit Program

The Argentine government has opted to direct state credit into productive investment as a way to combat inflation—exactly the opposite of what former Finance Minister Lavagna had planned and the IMF demands. President Nestor Kirchner officially announced on Dec. 7 the government plan to issue a $1.5-billion credit line through the state-run Banco de la Nacion, of which new Finance Minister Felisa Miceli was president until a week ago. The credit, to be issued at interest rates below the market average and repayable in ten years, is available to either Argentine or foreign companies for investment in purchase of capital goods (either domestically or abroad) for industry or agriculture, new technology, as capital for investment projects, land purchases, and to help pay tariff costs on imported machinery, among other things.

The plan, which synarchists of various stripes are already describing as proof of Kirchner's "hegemonic pretensions" and "excessive Presidentialism," places special emphasis on credit for small and medium-sized industry, to which the government is also offering tax breaks if profits are reinvested in capital goods. The government will also reportedly make similar kinds of financing available for state investment in infrastructure.

Will There Be an Argentine-Brazilian Nuclear Reactor?

The Argentina-Brazil "Joint Statement on Nuclear Policy," signed at the Nov. 30 summit between Brazilian President Lula da Silva and Argentine President Kirchner (see In-Depth #49), commits the two countries to promote concrete programs which will further the integration of their nations' work in nuclear power plants as well as nuclear research plants, and in nuclear medicine and other industrial uses of nuclear energy. The statement asserts: "In particular, taking into account the context of the growing reevaluation of nuclear energy as a source of reliable, sustainable, clean and safe electricity, [the two Presidents] call upon the respective competent bodies and companies in this sector to promote the joint development of a new model of power reactor, which would allow both nations to meet the future demands of their growing economies."

In an additional "Complementary Protocol," the two Presidents agreed that binational working groups would be established within 60 days to coordinate work on: "research, development, planning, construction, operation, and deactivation" of nuclear power reactors and research reactors; on the same for nuclear fuels, materials and components; the supply of radioisotopes and medical products; and strategies to deal with radioactive residues, of high, medium and low radioactivity.

Will Argentina's Policies Infect Brazil?

The IMF's Anne Krueger was reported to have asked the same question of everyone she met when she was in Brasilia on Dec. 1: "Do you know anything about [Argentina's new Finance Minister] Felisa Miceli? Where she came from, and where she's going?" An O Globo political columnist on Dec. 3 pointedly described Miceli as possibly "the Dilma Rousseff of the land of Kirchner," a reference to President Lula da Silva's head of cabinet, Dilma Rouseff, whose attack against her own government's austerity economic policy on Nov. 9 ignited a firestorm in Brazil which has yet to subside.

Financier circles are not so worried about Dilma Rousseff per se, as they are about the steady weakening of their iron grip on Brazil's successive governments. Day after day, the so-called "expansionist" faction within the Lula government demands a change in policy.

On Dec. 1, Vice President Jose Alencar attacked the government's economic policy for the third time in a week, this time in a way calculated to draw the military into this fight, by uniting it with the defense of the Amazon. Addressing military officers and students at the Defense Ministry's "First National Defense in Debate Seminar: Amazon," Alencar blamed the lack of sufficient resources to defend and develop the Amazon, or for the military generally, on the high-interest-rate policy. Today, there is no money for anything but debt payments, he charged. But even in the colonial days, projects were built, he pointed out. As President, Gertulio Vargas created the National Steel Company, the giant mineral firm, Vale do Rio Doce, state oil company Petrobras, the National Economic and Social Development Bank (BNDES), and regional development agencies; Juscelino Kubitscheck built a new city, Brasilia, as the capital while in office. The country had less resources then than it has today, yet today nothing is built.

Between Dec. 5 and 8, three other top Lula officials—Guido Mantega, head of the National Economic and Social Development Bank; Development, Industry and Trade Minister Luiz Fernando Furlan; and Jose Sergio Gabrielli, the head of Petrobras—publicly criticized the high-interest-rate/primary-budget-surplus policy of Lula's economic team as "exaggerated," overly orthodox, and damaging to the economy.

A Dark Age Is Developing in Brazil

On Nov. 30, members of a drug gang ambushed a city bus in Rio de Janeiro, boarded it, poured gasoline on the passengers and driver, and set them on fire, killing five and wounding 14. Public buses in Rio de Janeiro are routinely stopped and torched by drug gangs, but this was the first time the passengers were not permitted to get off first. Like the maras (drug gangs) in Central America and the U.S., these atrocities are being carried out by children and youths from the Rio de Janeiro's giant favelas, or shantytowns, which have been abandoned to the drug trade. On Dec. 1, four of those involved in the Nov. 30 attack—ages 16, 18, 20 and 25—were executed by a rival drug gang, which promised to kill seven others involved, including the head of the drug gang, who is all of 20 years old. A 13-year-old girl who participated is now in government custody.

According to former BNDES head Carlos Lessa, the collapse of life expectancy for the poorest strata in Brazil, who have been abandoned to organized crime and the drug trade, has become so great, that the number of males between the ages of 16 and 30 in Brazil is falling. Lessa revealed this shocking figure in a speech to a Senate seminar on Nov. 25, in which he excoriated Brazil's destruction under globalization.

Pinochetista-Advised Presidential Candidate Defeated in Honduras

A sign of the times: Even people in gang-wracked Honduras are turning against the Cheney crowd. Porfirio Lobo Sosa, candidate of the now-outgoing National Party, ran on a law-and-order/family-values platform centered on the demand that the death penalty be reinstituted to deal with the maras. His principal campaign strategist was Mark Klugman, an American who has lived in Chile since 1989, when he teamed up with Pinochet's infamous pension privatizer, José Piñera, to make piles of money by supporting the Pinochet crowd. On Klugman's advice, Lobo Sosa's campaign symbol was an iron fist.

Lobo Sosa started out as the acknowledged favorite, but the campaign turned into a referendum on the death penalty, and when the vote was held on Nov. 27, he was defeated, 50% to 46%. President-elect Manuel Zelaya of the Liberal Party, who campaigned for life sentences as better than the death penalty, will assume office on Jan. 27.

The vote does not favor the efforts of Cheney and Rumsfeld to use Central America as the launching pad for the creation of a supranational military force to impose free trade on a dying people, on the pretext of eliminating the maras.

Venezuela Vote: 'A Pox on All Your Houses'

The pro-Chavez coalition of parties won all 167 seats of Venezuela's National Assembly in the Dec. 4 midterm elections, but then again, the major opposition parties and political organizations had withdrawn from the race just five days before they were to be held. And although there is generally less participation in parliamentary elections than in Presidential ones, voter abstention was the highest ever recorded: 75%. Out of 14.5 million registered voters, only 3.5 million showed up, fewer people than the number who voted for Chavez in the last Presidential elections.

Chavez's party, MVR (Fifth Republic Movement), won 114 seats, which is the absolute majority needed to pass any law; the rest of the seats were distributed among other parties from the pro-government coalition.

The abstention rate certainly shows that Chavez's support does not run very deep. But efforts by Bush's State Department to play the overwhelming abstention as a reflection of the strength of the opposition parties, are also a fraud. It was evident from some time back that the population at large was not going to turn out for anyone running, opposition or government, given the electorate's general disenchantment with both the traditional leadership of Venezuela's opposition parties and the government. Smelling this, the traditional parties—the Social Democratic AD, Christian Democratic Copei, and Proyecto Venezuela, the elders of the "center-left" and "center-right"—withdrew from the elections at the last minute, under the cover of protesting election conditions. The newer parties such as the National Endowment for Democracy-sponsored Primero Justicia then followed suit.

Parallel to this, is the exacerbation of the more radical right-wing Synarchist movement, calling for overturning the Chavez government for his supposed "Castro-Communist" leanings. Among the latter is Alejandro Peña, a renegade from the Lyndon LaRouche political movement, who called upon people to take to the streets, to defend themselves with arms, and not leave until Chavez was toppled; but nobody showed up to support that, either.

Sendero Luminoso on the Offensive Again in Peru

An ambush of a police convoy in the Ayacucho area of Peru by the Sendero Luminoso ("Shining Path") narcoterrorists left five policemen dead; the drug-trafficker they were transporting escaped. The ambush reflects just how far the drug trade has advanced in reconquering the country, leading figures warned this week. Analysts estimate Sendero's forces at some 100 men, but backed by the finances of the drug trade and combined with the coca-growers mobilization with its increasingly "indigenist" color, Peru stands "at the doorstep of the formation of a liberated zone within national territory," La Primera editor Juan Carlos Tafur warned on Dec. 7.

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