From Volume 6, Issue Number 6 of EIR Online, Published Feb. 6, 2007

Ibero-American News Digest

'Jubilee 2000' Team Scrutinizing Ecuador's Debt

According to the Quito daily El Comercio Jan. 21, seven ministers and/or top officials in President Rafael Correa's Cabinet are associated with the Jubilee 2000 movement, an international network of organizations initially set into motion in the late 1990s by the Vatican under Pope John Paul II. The Pope at that time had called for the Year 2000 to be celebrated by the declaration of a general debt moratorium for developing-sector nations.

A number of British Fabian-type and Jacobin organizations jumped onto the debt moratorium bandwagon at that time, including the ATTAC militants and the World Social Forum. But whatever the network and baggage they may carry around, the Ecuadorian Jubilee 2000 networks have led the investigations into the illegitimacy of the foreign debt, and fought to break the grip of usury over Ecuador.

The founder and coordinator of the Jubilee 2000 movement in Guayaquil, Ecuador, in 1999 was Ricardo Patino, today the Minister of Economics. Correa's Minister of Energy, Alberto Acosta, also with the Jubilee, has written "innumerable" articles on the illegitimacy of the foreign debt. The manager of the National Development Bank (BEDE), Leonardo Vicuna, was both with Jubilee and a member of the "Committee to Investigate the Foreign Debt," established in April 2006 by the previous President, Alfredo Palacios. Other members or participants in the Jubilee network include the director of the tax agency, the Secretary of National Planning, the Minister of Social Welfare, and the Minister of Foreign Relations.

In a study presented in September, 2006, Hugo Arias, a leader of the Guayaquil branch of the Jubilee 2000 group, documented that Ecuador has been the victim of a "criminal indebtedness." The study showed in gory detail that between 1975 and 1980, Ecuador's foreign debt multiplied by eight times, going from $560 million to $4.6 billion, of which 25% was owed by private sector. Then, after the debt crisis of the early 1980s, it continued to increase, through:

* "Usury"—jacking up interest rates;

* Illegitimate "socialization of private debts" (at the International Monetary Fund's urging, the government assumed the dollar debt of the private sector in 1982);

* Trading worthless bonds for higher-interest performing debt. In 2000, the old Brady bonds were exchanged for new so-called Global bonds, at 66% of their face value, when they were trading at 25% on the market, and at higher interest;

* Contracting new debt, solely to service old debt.

Arias points to what EIR calls "bankers' arithmetic": From 1985 to 2005, Ecuador received $93 billion in debt, paid out $103 billion in service on that debt, and yet its total debt stock rose from $7.6 billion to $19 billion.

The upshot? In 1980, 40% of the general budget was spent on health and education, and 15% on debt service. In 2005, that had inverted: debt service now takes 40% of the budget; health and education, 15%. Ecuador, with Nicaragua, has the lowest expenditure on education in the region ($28 per person, in Ecuador). And, less than 5% of the budget was spent on physical infrastructure.

Mexican President Is Belle of the Ball at Davos

Mexico's usurper President Felipe Calderon sashayed around the Davos World Economic Summit held in late January, portraying Mexico as the "hope for the future of Latin America," and offering foreign investors unlimited opportunities to loot his country. In both his Jan. 26 speech at Davos, and in subsequent interviews given in Germany and Spain, Calderon repeatedly stressed that Mexico will only progress through free trade, open markets, and offering investors total "security" to do as they please. Mexico, he underscored, offers the greatest "insurance against populisms." How fortunate, he said, that in the July 2, 2006 Presidential elections (which defrauded candidate Andres Manuel Lopez Obrador), Mexico "decided in favor of democracy ... in favor of the market ... in favor of responsible social and environmental policies.... In other words, Mexico chose in favor of the future."

This is real "democracy," Calderon raved. There can be no return to "the dictatorial regimes of the past, of closed and centrally planned economies, controlled by governments through expropriations." While not mentioning Venezuela, Bolivia, and Argentina by name, as examples of these "regimes of the past" in his Davos speech, Calderon did attack them in more informal settings and in discussions with foreign business magnates. He was immediately slammed by Venezuelan President Hugo Chavez and by Brazilian President Lula da Silva, who defended Brazil's alliance with Venezuela and their joint plans to build energy infrastructure in South America. Bolivia is the poorest nation in South America, Lula reminded Calderon, and its natural resources are its only source of wealth. Nationalizing them makes perfect sense.

Undeterred, Calderon boasted that Mexico will not hang its head, will not close its borders, but will "compete." And, he bragged, it has the marvelous advantage of being next door to the " most powerful economy in the world," the United States (turning on its head the well-known maxim that it is Mexico's misfortune to be "so far from God and so close to the United States"). In a seminar with Lula, he defiantly announced that he will follow the same "successful" free-market policies of his predecessor Vicente Fox and of former PRI President Ernesto Zedillo, both of whom share major responsibility for the wreckage that is Mexico's economy today.

What Calderon calls the policies of "the future" will in fact drive even more Mexicans out of the country into the United States. According to the Congressional Migration Group led by PRI Federal Deputy Edmundo Ramirez Martinez, the increase in the price of tortillas, and of many other basic staples of the Mexican diet (corn, chicken, eggs, etc.), plus declining income, "will generate a wave of emigrants" to the United States. The PRI Deputies estimate that the dire conditions in which the majority of Mexicans live will cause emigration to the U.S. to jump to 650,000 in 2007, compared to 500,000 in 2006. The PRI legislators warn that the largest emigration will come from those states whose rural populations live on a dollar a day. "The promised jobs will not materialize and people's welfare will continue to be deferred," the Deputies charged.

Brazil and the U.S. on the Ship of Biofools

The Bush Administration and the Brazilian government are reportedly forging a "Biofuel Strategy for Latin America and the Caribbean." Argentina's right-wing daily La Nacion gleefully reported Jan. 29 that the "strategic alliance" between the two governments to promote biofuels is "aimed at [Venezuelan President] Hugo Chavez." Although the State Department responded defensively, saying only that "cooperation is natural" given that Brazil and the U.S. are world powers in ethanol production, it would appear that this initiative is well beyond the planning stages.

Under Secretary of State for Political Affairs Nicholas Burns, and Assistant Secretary for Western Hemisphere Affairs Tom Shannon will be travelling to Brazil and Argentina this month to pin down the details according to La Nacion. Lula's speech at the Davos World Economic Forum Jan. 26 included a major push for biofuel development, particularly urging the U.S. to help poor countries finance those crops used in ethanol production, which, he claimed, would not only produce clean fuel, but also generate jobs and income in those nations. Word is that the "Strategic Biofuel Program" already has financing commitments of $5 million from the Inter-American Development Bank, $1 million from the U.S. Mission to the Organization of American States, and additional funds from the United Nations Foundation as well as the U.S. government. El Salvador, Guatemala, Honduras, Haiti, the Dominican Republic, as well as Peru and Colombia will reportedly participate initiative.

An interesting question is how the Inter-American Ethanol Commission, founded last December by former Florida Gov. Jeb Bush, among others, might play into this initiative. Bush argues that "exuberant ethanol" will be crucial in "knocking down barriers to free trade" in the Western Hemisphere.

Interpol Doubts Argentine Evidence in 1994 AMIA Bombing Case

Interpol is reportedly skeptical about the arrest warrants issued by Argentine prosecutors for nine Iranians, charged with responsibility for the 1994 bombing of the Jewish Social Welfare Center (AMIA) in Buenos Aires. In late January, the two Argentine prosecutors in charge of the case and their Iranian counterparts met at Interpol's international headquarters in Lyon, France where each side presented their arguments. Argentina wants Interpol to act on the warrants that were issued a few months ago, and order its agents to arrest the nine Iranians, including former President Hashemi Rafsanjani.

According to Argentine lawyer Juan Labake, who has challenged the assertion that Iran was behind the bombing, instead of acting on the arrest warrants, Interpol referred them to its Executive Committee, which will not meet until some time in March to discuss them. Labake notes that after the bombing, when Argentina demanded that Interpol arrest 22 Iranians supposedly implicated in the case, Interpol refused on grounds that there was insufficient evidence. Great Britain also refused to order the extradition to Argentina of the former Iranian ambassador to Buenos Aires, who was then in London, also citing lack of evidence. Interpol's action in the current situation suggests that Interpol might disappoint Argentina again, Labake estimates.

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