Ibero-American News Digest
Argentina, Brazil Agree To Dump Dollar for Bilateral Trade
In a Sept. 1 press conference in Rio de Janeiro, Argentine Finance Minister Felisa Miceli and her Brazilian counterpart Guido Mantega announced they would present a pilot project at the December 2006 meeting of Mercosur (Common Market of the South) Presidents, by which trade between them would be conducted in their own currencies and not the dollar.
On the assumption that the Presidents approve the plan, it would go into effect by no later than mid-2007. Paraguay and Venezuela have already indicated their interest in becoming a part of the arrangement that Miceli and Mantega are calling a "new exchange-rate engineering." Other governments are expected to join the arrangement also at the Dec. 15 meeting in Brasilia. Brazil and Argentina feel strongly that trading in their own currencies will eliminate dependence on the dollar, simplify trade transactions, encourage expanded participation by small and medium-sized businesses which currently are excluded from foreign trade, and facilitate the integration process. "This is a measure that will strengthen the entire bloc," Miceli said.
Mercosur Finance Minister Denounce IMF Policies
Each of the Mercosur Finance Ministers took the microphone during the concluding press conference of a Sept. 1 meeting of Finance Ministers of the Mercosur countries, to sharply denounce the IMF's policies, and its interference in the region. This followed the announcement by Argentine Finance Minister Felisa Miceli that at the IMF/World Bank annual meeting in Singapore Sept. 15-20, Mercosur would demand that the IMF issue credit lines to nations experiencing financial emergencies, without any austerity conditionalities attached to them. Miceli and Brazilian Finance Minister Guido Mantega also stated that the reform of the IMF must be substantive, granting greater participation in the decision-making process to the governments of developing nations. Current participation "is not proportional to our economic importance," Mantega emphasized.
During the Finance Ministers summit in Rio de Janeiro, Uruguay's Daniel Astori did, however, request a waiver to allow his government to sign bilateral trade deals with the U.S., India, and China. But since discussion among the ministers focussed heavily on assisting Uruguay and Paraguay in accessing the full benefits of the customs union, Miceli and Mantega asked that Astori provide details on the kind of "flexibility" Uruguay is requesting, and assurances that Mercosur would not be harmed by such arrangements, before making any decision on the matter.
Hedge Fund Energy Grab in Argentina Stopped
Argentina's National Electricity Regulation Agency, ENRE, blocked the Enron-linked Eton Park hedge fund from purchasing 50% of the company that manages Argentina's national power grid. In May, EP Primrose Spain, controlled by Eton Park hedge fund, bought up the shares that the Brazilian company Petrobras owned in the Argentine generator Transener for $54 million. But now, with the apparent blessing of Planning Minister Julio De Vido, ENRE charges that EP Primrose Spain has no experience in the energy fieldit was created only two months ago. Moreover, ENRE indicated it is not prepared to leave such a strategically important company as Transener in the hands of a hedge fund, whose only interest is in short-term (i.e., speculative) investments, rather than the long-term investment that a company like Transener, which provides a crucial public service, would require.
This is a wise move. Eton Park is part of the Ashmore Investment Management hedge-fund consortium, which paid $2.1 billion in May for all of the assets that the Enron Corp. had owned in Ibero-America, under the name of Prisma Energy. There is no indication that Eton Park would do anything other than follow Enron's model of doing "business" in managing Transener, to Argentina's detriment.
Concertacion Coalition Parties Say Chile Must 'Go Nuclear'
All of the parties belonging to Chile's ruling 'Concertacion' coalition have now come out for Chile to develop nuclear power. Leaders of the Socialist Party, the Christian Democracy, the Radical Social Democracy (PRSD), and Democracy Party have all recently publicly advocated study and development of nuclear energy, given that Argentina cannot provide the required amounts of natural gas, and Chile doesn't have sufficient hydroelectric and other resources to meet growing demand. Argentina's recent announcement that it will expand its nuclear program has provoked many leading members of Chile's scientific community, as well as legislators, to also urge the government to act quickly to start the process of building a nuclear plant.
Commenting on President Michelle Bachelet's Sept. 4 statement that she would order feasibility studies on the issue, but not adopt a nuclear-energy program under her administration, physicist Jose Maldifassi of the Adolfo Ibanez University warned that such an approach would mean that Chile could not have a nuclear plant ready before 2015 or 2016. If the energy crisis is bad now, given oil prices and natural gas shortages, "it will be far worse in ten years," he said. "Authorities must go with a short-term approach for nuclear development," he urged.
Dario Jinchuk, head of international relations for Argentina's Nuclear Energy Commission (CNEA), also rejected arguments from Chilean environmentalists that the country's seismic activity would make nuclear plants unsafe. Nonsense, he said. Look at Japan or California, both of which have significant seismic activity, he responded. They have adopted appropriate safeguards that only slightly increase reactors' costs, but make them perfectly safe.
Dominican Republic Turns to Argentina for Nuclear Power
Argentina's Ambassador to the Dominican Republic, Jorge Roballo, reported on the latter nation's Aeromundo show Sept. 4 that discussions are underway between the two governments for purchase of a small reactor of the kind that Argentina has already sold to Egypt and Australia, capable of generating between 25 and 100 MW. The deficit of electricity-generating infrastructure in the DR is so acute, that brownouts and blackouts occur daily, sometimes for most of the day or night, not even at predictable intervals, making life miserable.
Ambassador Roballo emphasized that his country possesses "magnificent" nuclear technology with a proven safety record, and also indicated a number of ways in which trade between the two countries could also be expanded in other areas. Rather than looking to the North, he suggested, the Dominican Republic should join the Common Market of the South (Mercosur) and strengthen its ties with those nations.
Will Argentina's De Hoz Spend His Final Days in Jail?
An Argentine Federal judge's ruling paves the way for prosecution of Synarchist Jose Martinez de Hoz, the former Finance Minister of the 1976-83 military dictatorship. On Sept. 4, Judge Norberto Oyarbide ruled unconstitutional the pardon granted in 1990 to David Rockefeller's friend De Hoz, and his butcher collaborator, Interior Minister Albano Harguindeguy. Both were implicated in the 1976 kidnapping of businessmen Fernando and Miguel Gutheim, carried out for reasons of extortion to aid De Hoz's business operations in Hong Kong. Refusing to cooperate, the two were released after five months of illegal imprisonment.
Harguindeguy had already been charged separately for his role in the Operation Condor murder apparatus, in which he was a key operative. But until now, De Hoz had escaped being charged with or prosecuted for any crime associated with the military dictatorshipdespite his open support for barbaric and illegal repression. The significance of the judge's ruling goes well beyond the specific case, however. "We have to take this further," said Human Rights Undersecretary Rodolfo Mattarollo. "Here, specifically, we have the criminal participation of Martinez de Hoz." But more broadly, he said, "there were huge civilian responsibilities" in the crimes committed by the dictatorship, including horrific human rights violations. The ruling on De Hoz makes it likely that pardons granted to other criminals of the dictatorship will also be soon overturned.