From Volume 5, Issue Number 16 of EIR Online, Published Apr. 18, 2006

Ibero-American News Digest

Lula-Bachelet Meeting Builds South American Club of Presidents

Chile and Brazil will cooperate in building bi-oceanic corridors and other South American integration projects, promises a joint communiqué issued by Presidents Michelle Bachelet and Lula da Silva on April 11, in the latest in Presidents' Club diplomacy. Bachelet was invited to Brazil for a full state visit, in which she met with Lula for more than an hour, addressed the Brazilian Congress (which she wowed by joining in the singing of the Brazilian national anthem in Portuguese), and was received by the Supreme Court.

The joint communiqué is centered on the two governments' commitment to South American integration, including guaranteeing sufficient regional energy supplies, albeit with few specifics spelled out. It also calls upon the two governments to work on ways of finding financing for projects which connect the Atlantic and Pacific coasts of the continent through infrastructure corridors.

Speaking to the press after their meeting, Lula praised the dialogue between Chile and Bolivia on normalizing their historically tense relations. The dialogue exemplifies "a collective regional will to overcome the divisions of the past, and move forward in building a future of solidarity."

For her part, Bachelet told the Brazilian Congress that the consolidation of democracy in Ibero-America depends on reducing poverty and inequality. "If we are not capable of changing the conditions, the material conditions, of the population's daily life, the legitimacy of democratic institutions will be at risk. It is a danger to Latin America if we are not able to resolve the problems of the cities. We are the generation which restored democracy in the 1980s and 1990s, and we are the generation which has the obligation of consolidating democracy, reducing poverty and inequality, the which is tightly and inseparably tied to strengthening Latin American cooperation."

Scandal Orchestrated To Stop Uribe's Re-Election

With just a month and a half left before Presidential elections in Colombia, in which the re-election of the highly popular President Alvaro Uribe had been viewed as a foregone conclusion, a scandal was unleashed in early April designed to bury Uribe's re-election chances. Uribe, who has struggled to free the country from the grip of the narcoterrorist armies, has responded furiously to the attack, insisting it is nothing but a political maneuver, and that he will "not allow" his government's accomplishments to be diminished.

A corrupt former official of the DAS (state intelligence service), jailed 14 months ago for having "erased" arrest warrants against a group of drug traffickers, has lept into the media limelight by spinning a huge web of scandals involving former the DAS had Jorge Noguera, and, by close association, President Uribe himself. Not surprisingly, the publicity for the scandal was provided by two leading Colombian opposition publications—Semana, run by the son of former President and drug-cartel godfather Lopez Michelsen, and Cambio, associated with Cuba-allied novelist Gabriel Garcia Marquez.

Among the accusations—none of them proven but now the subject of a major investigation—is the charge that Noguera, who had been a regional campaign coordinator for Uribe in 2002, engaged in electoral fraud to steal the Presidency for Uribe in that year. Also, that the DAS under Noguera collaborated with paramilitary death squads in the assassinations of at least 24 trade-union leaders and university professors, and that Noguera and other DAS officials—presumably with Uribe's approval—plotted the assassination of Venezuelan President Hugo Chavez and other Venezuelan figures.

Every other Presidential candidate in the running has seen this as a golden opportunity to knock Uribe out of the race, and at least one candidate has called for Uribe to step down now. Making the most out of the scandal is Horacio Serpa Uribe, 2006 Presidential candidate of the opposition Liberal Party and close collaborator of former President Lopez Michelsen and the Medellin Cartel, back in the 1970s. Serpa, who lost his Presidential bid to Uribe in 2002, has issued a statement suggesting that Uribe's 2002 victory was stolen, claiming that Uribe's government has engaged in "state crimes," and warning that Uribe's re-election will consolidate a paramilitary dictatorship in Colombia.

Adding to the volatile situation is the demand of the Chavez government in Venezuela for an immediate clarification of the charge that Noguera was involved in plotting Chavez's assassination. The Chavez government had accused the DAS of conspiring for its overthrow months earlier.

London Financiers Threaten Brazil, Demand More Austerity

London is displeased with Brazil's Cabinet shakeup, despite the fact that the new Finance Minister, Guido Mantega, appointed after bankers' boy Antonio Palocci was forced out on corruption charges, has promised repeatedly since he took office on March 27, that the Lula government will continue its current destructive austerity policies. Furthermore, upon Palocci's ouster, central bank chief Henrique Meirelles (from FleetBoston) arranged that he would report directly to President Lula, instead of to Mantega, and he replaced two top officials with other bankers' boys: HSBC's chief economist for Latin America, Paulo Viera da Cunha, was named Director of International Affairs at the Central Bank, and the chief economist of ABN AMRO, former IMF official Mario Mesquita, will head Special Studies.

The Financial Times' Latin American editor, Richard Lapper, wrote on April 9, that London financiers are not satisfied. Continuing the same policy is not good enough; they want more looting, and they want assurances that accelerated looting will be locked in, no matter who is elected President next October, as Palocci had promised in May 2005. Mantega was grilled by the Financial Times on April 1, as to where he stood on Palocci's plans. Mantega's reply that there is no need for further "reform" of the pension system, nor to increase the primary budget surplus (the percentage of government revenue skimmed off for debt payment), nor for long-term commitments on fiscal policy, "leaves a big question-mark over Brazil's fiscal future," Lapper wrote. Lapper then called upon investors refrain from endorsing Brazil's current policies with their money.

The London Economist warned in its April 1 issue, that the ouster of Palocci makes it less likely that Lula will enact ambitious reforms if he wins a second term. Fitch credit rating sadist Roger Scher (infamous for his "Brazil is a dog" statement last year) complained to the Economist that Mantega is not likely to go "the extra mile" for reforms, as Palocci did. "No one knows who will run economic policy in Lula's second term—if there is one," the Economist added.

Vultures Demand Petrobras Be Handed Over

Mark Mobius, director of the London-headquartered emerging market fund of the Franklin Templeton financial group (one of the biggies of the vulture funds), told the Brazilian financial daily Valor, in an interview published April 11, that investors are watching to see what the new economic team will do, not what they say. And, to keep attracting investors, Brazil should privatize more state firms, including its state oil company, Petrobras, which he acknowledged is a "very well-run company."

Safe and Happy Return for Brazil's First Astronaut

Brazil's first astronaut, Lt. Col. Marcos Pontes, promised to fight for Brazil to have more astronauts, in the April 11 press conference given by three astronauts/cosmonauts after their return on April 8 from a stay on the International Space Station. Pontes carried a big Brazilian flag when he emerged from the Soyuz capsule upon return to Earth, as he had carried it when he entered the space station, and these pictures were all over the usually scandal-mongering Brazilian press.

As he wrote in a brief comment on the reentry, posted to his website, "I fulfilled my professional part for my country, and my promise to Brazilians to bring the Brazilian flag into space for the first time," joining Russians and Americans in "humanity's modern frontier."

Pontes said the space trip was better than he expected, and that he had been able to carry out all his experiments. With a big grin, he said he had only one regret: that he couldn't play soccer on the station, because of the lack of gravity. He had brought a soccer ball along—just in case.

Peruvian Election Surprise?

For EIR's evaluation of the results of the first round of Presidential elections in Peru, see "Peruvian Elections: Synarchist Advance Hits a Snag," in InDepth, this week.

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