From Volume 5, Issue Number 51 of EIR Online, Published Dec. 19, 2006

Ibero-American News Digest

Correa Denounces 'Mafioso' Central Bank Autonomy

Ecuadorian President-elect Rafael Correa dismissed the sanctity of central bank autonomy, one of the core axioms of globalization, in a Dec. 8 interview with Spanish news agency EFE, while he was in Bolivia for the South American Community of Nations summit. "Latin America has more than $200 billion in reserves in the rest of the world, which is absurd. Part of that absurdity is the autonomy of central banks, which take the reserves and send them abroad, and no one can say anything about it. That mafioso framework which has done us such harm must be dismantled, and those reserves brought back to the region," the Correa stated.

He reported that the heads of state would be discussing the creation of a South American Bank that weekend (an idea he discussed with Argentina's Nestor Kirchner when they met during his campaign), because "Latin America has the ability to be self-financing." The region could create a common fund "to keep our governments from having to kneel before the multilateral institutions and financial sources outside the region to ask for crumbs.... We have to assume common positions before regional threats, before a globalization which does not want us, which doesn't want us to become nations, but markets; which does not want us to become citizens, but consumers." Markets, he added, "are good servants, but terrible masters, which is why societies must regulate and control them."

The close working relationship developing between Correa, with his aggressive rejection of monetarism, and President Kirchner, who first demonstrated his willingness to fight when he stood down Argentina's foreign creditors, introduces a nonlinear potential for regional action, as the world system implodes. Correa described his lengthy meeting with Kirchner in Buenos Aires on Dec. 13, as "a fraternal meeting between two Presidents,... two governments, two brother countries" that intend to work closely together to consolidate South American integration. He praised Kirchner as a leader of "historic vision who, with other leaders, will build that united South America urgently required to prevail in this globalized world of the 21st Century."

As did Argentina, Ecuador will seek "a firm and sovereign debt renegotiation, for which we ask the solidarity of all of Latin America," Correa added. Asked whether he intended to dump the dollarization imposed on Ecuador more than a decade ago, Correa responded that while an exit from dollarization would be very difficult, one option for an orderly exit would be "to go to a regional currency. I hope that Latin America will help us in this because its historic destiny is not only trade integration, but also a political and monetary one."

Integration Tops Agenda of Community of Nations Summit

Physical integration and infrastructure development, and specifically what Brazilian President Lula da Silva described as the "urgent necessity" of creating a South American financing entity to fund economic and infrastructure development, were top priorities discussed by heads of state attending the South American Community of Nations summit in Cochabamba, Bolivia Dec. 8-9.

There was no public discussion of the global economic crisis. Rather, most of the speakers debated ways that the region could defend itself from the predatory trade and financial practices of advanced-sector countries. In this regard, Bolivian President Evo Morales proposed, and foreign ministers agreed, to set up a working group of energy ministers and representatives of IIRSA (Ibero-American Regional Infrastructure Initiative for South America) to discuss creating a regional entity made up of all state-sector energy companies that would be dedicated to promoting energy independence, particularly in oil and gas production.

As Lula pointed out in his opening speech, an independent South American financing entity to fund infrastructure projects could be established through coordination among regional and national development banks as well as through use of already-existing financial mechanisms. In order to further elaborate initiatives on infrastructure development and energy integration, which Lula characterized as the "two motors" of South American development, he proposed that there be an extraordinary meeting of heads of state and a meeting of Industry Ministers in early 2007. Industry Ministers must move toward creating regional industries and companies that will operate "in strategic areas," he said.

Ecuador Seeks South American Help for Refinery

Ecuadorian President-elect Rafael Correa announced that on the day after he assumes office (Jan. 15), Ecuador will start shipping oil to Venezuela, which has agreed to refine it at cost, so that Ecuador will not continue to pay $15-20 more per barrel of imported oil derivatives than what it earns per barrel of crude exported. Ecuador needs to immediately build a new, 300,000-barrel per day capacity refinery, Carlos Pareja, the incoming chairman of the state oil company, PetroEcuador, announced Dec. 5. But that would cost a minimum of $2.5 billion, and Ecuador simply cannot do it alone, Pareja said. We will raise with Argentina, Brazil, Chile, and Venezuela the idea of their state oil companies participating in the project. The details of how and what remain to be seen, but first we need to know their thinking on the matter, he added.

Drive for Separatism Explodes Again in Bolivia

Three Bolivian states declared their "independence" on Dec. 8, culminating weeks of protest, violence, and threats against the Morales government, allegedly over opposition to voting procedures in the new Constituent Assembly. This occurred as the South American Community of Nations summit was taking place in Cochabamba.

Mass demonstrations occurred in Santa Cruz, Beni, and Tarija, located in the oil-rich eastern part of the country, where these state governments announced that unless the government changed its position by Dec. 11 on voting procedures for approval of the new Constitution, (being drafted in the Constituent Assembly), they would take the necessary steps to establish their autonomy. Santa Cruz is prepared to set up committees in less than 15 days that will write "statutes on autonomy," and Tarija and Beni will do the same. One official in Tarija warned that "the regions are operating on the assumption of future self-determination." Public meetings (cabildos) on autonomy were held in these provinces on Dec. 14.

These actions have little to do with voting procedures in reality, but are part of the ongoing destabilization of the Morales government by political and financial factions linked to international Synarchist circles. Vice President Alvaro Garcia warned that the government will tolerate no action that threatens Bolivia's territorial integrity. "Unpatriotic interests" are behind this move, he said.

Pinochet Follows Milton Friedman Down, Way Down

There is a certain irony in the fact that former Chilean dictator Augusto Pinochet died on International Human Rights day, on Dec. 10. Within an hour of his death, Chilean citizens poured out onto the streets of the capital, Santiago, and cities around the country, to express their joy at the passing of the man who overthrew elected President Salvador Allende in the bloody Sept. 11, 1973 coup, and established a 17-year fascist dictatorship which to this day is lauded for creating a "model" free-market economy.

Typical of the open support for Pinochet's "work" from globalization's liberal champions which followed his death, was the editorial in Lazard Freres's Washington Post on Dec. 12, which baldly proclaimed: "Augusto Pinochet tortured and murdered. His legacy is Latin America's most successful country." It admitted he murdered more than 3,000 people and had tens of thousands tortured, and enriched himself from public coffers along the way, even as it argues that (deposed and murdered) President Salvador Allende made him do it. But, lying that Chile's precarious economy and democracy is a great success, the Post asserts: "Mr. Pinochet had something to do with this success.... [H]e introduced the free-market policies that produced the Chilean economic miracle."

In Chile, however, tens of thousands of people flowed to plazas and streets throughout the city, spontaneously marching, waving flags, leaning on their car horns, and drinking wine, champagne and beer. Makeshift memorials were set up at several locations to memorialize the names of those kidnapped, disappeared or murdered by Pinochet's Operation Condor killing machine.

President Michelle Bachelet ordered that no state funeral be held, nor any official period of mourning or flags flown at half mast. Due to his remaining power within the Army, however, Pinochet was honored with a military funeral, at which Defense Minister Vivienne Blanlot represented the government. Pinochet's grandson, Capt. Augusto Pinochet Molina, used the funeral as the occasion to make a political speech, justifying the 1973 military coup and praising the fascist policies it imposed so brutally. Captain Pinochet's remarks, for which he was cashiered shortly thereafter, were a defiant challenge to President Bachelet. General Pinochet, he said, "was one of the most prominent leaders of his time internationally, because in the middle of the Cold War, he defeated the Marxist model that was to be imposed by force of arms...." To wild applause, he then attacked those judges who tried to prosecute the former dictator, claiming they "sought fame more than they did justice."

The Dec. 12 funeral was an orgy of praise for the old Nazi, complete with fascist salutes and the provocative act of placing a Presidential sash on the coffin, in defiance of the government's refusal to grant Pinochet a state funeral. However the festivities were interrupted when Francisco Cuadrado Prats walked up to the dictator's coffin and spat on it. Cuadrado Prats is the grandson of Gen. Carlos Prats and his wife Sofia Cuthbert, whose 1974 assassination in Buenos Aires was ordered by Pinochet.

Tri-Border Countries Reject Bush-Cheney 'Terrorist' Campaign

Argentina, Brazil, and Paraguay rejected U.S. "evidence" of terrorist activities, or financing of terrorism, in the tri-border region where the three countries meet, during the Dec. 4-7 meeting in Buenos Aires of the "3+1" mechanism, of representatives of the three nations plus the U.S. State Department Counterterrorism Coordinator Virginia Palmer provoked a sharp response from the other three governments when she alleged that "a network operates [in the tri-border region] in charge of sending funds and recruiting members of the Lebanese terrorist organization, Hezbollah." She presented a list of nine individuals and two organizations she said the U.S. intended to charge with financing terrorism.

The alleged existence of Hezbollah operations in the tri-border region has been used for years by the U.S. exert intense pressure on regional government to join Bush's "war on terror." The Brazilians in particular don't want the U.S. military or security personnel mucking around in the area. In a joint communiqué issued Dec. 7, the three South American governments firmly asserted that "the information presented by the United States offers no new elements that would allow them to affirm the existence of terrorist activities in the region, including the financing of terrorism" (emphasis added). The delegations stated that "according to available information, no operating terrorist activities have been detected in the area of the Triple Border."

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