From Volume 7, Issue 52 of EIR Online, Published Dec. 23, 2008

Ibero-American News Digest

Mexico's Reality: It's the 'PLHINO or Chaos'

Dec. 19 (EIRNS)—As mass layoffs spread across Mexico, the LaRouche Youth Movement in Mexico City today began distribution of 5,000 copies of an expanded version of the pamphlet issued last month by the Sonora-centered Pro-PLHINO Committee of the 21st Century. Titled "PLHINO or Chaos," the pamphlet lays out the choice that Mexico faces: Either decide to build such great projects as the PLHINO (Northwest Hydraulic Plan), the tri-state water management project that would create hundreds of thousands of jobs and open a million more hectares of irrigated land for cultivation, or be plunged into economic and social catastrophe as the global economy disintegrates.

Citing leaders of the Pro-PLHINO Committee—LaRouche associate Alberto Vizcarra and state leader Adalberto Rosas—two Sonora dailies reported today that the PLHINO will be presented during the Congressional debate on a National Emergency Plan scheduled to be held in the Senate either in late January or mid-February.

The Calderón government has refused to carry out the PLHINO feasibility study mandated (and funded) by the Federal Congress this year, but economic reality will force society to wake up. The United States is expected to deport between 600,000 and 700,000 Mexicans a year in this crisis, and the PLHINO could create the construction and farm jobs required to give them employment, the Pro-PLHINO Committee leaders emphasized.

The Mexican free trade model is disintegrating. Mexico's official statistical agency reported on Dec. 17 that the collapse of the U.S. export market is forcing mass layoffs nationwide. Industrial output was 2.7% less in October than the year before, the sixth straight month of decline. That includes a drop of 2.9% in construction; a fall of 2.2% in overall manufacturing (with more than a 10% fall in computer output); and even a 0.2% drop in electricity, water, and gas supply output. Some 5% of the manufacturing workforce was laid off through November of this year, as factories cut some 175,000 salaried jobs. Layoffs are now accelerating as one of Mexico's remaining steel companies, Altos Hornos, announced layoffs of 8,500 workers, and U.S. carmakers announced "temporary" shutdowns of their assembly plants.

With the price of oil now below $40 a barrel, the last prop under the Mexican government budget, more than one-third of which comes from oil, is now gone, too.

Argentine President Outlines Infrastructure, Jobs Program

Dec. 19 (EIRNS)—On Dec. 15, Argentine President Cristina Fernández de Kirchner announced that her government will spend $32 billion over the next three years, to build infrastructure projects around the country. The goal of this ambitious program, she said, is to create 380,000 jobs, most of them in the construction industry, and to make Argentina's economy more dynamic and productive.

The list of projects involve transportation, energy, housing, and sanitation, including the completion of the Atucha II nuclear plant. The President emphasized that there is nothing about this plan that is improvised. These projects are part of the government's "Strategic Territorial Plan," released in 2003, when her husband, Néstor Kirchner, was elected President. "For this Administration," she added, "this is not a contingency plan" thrown together to respond to the current global crisis. "It is a conviction, a structural political concept," that dates back many years.

With the funds invested, she said, Argentina will be spending a record 5% its of Gross Domestic Product on infrastructure, a figure not seen in the country in decades. This is apparently not to the liking of some of the President's political opponents, who are grumbling that the government intends to use recently re-nationalized pension funds for these projects.

In fact, while pension funds will be used to some extent, most of the financing is already lined up from other sources. And if the pension funds are used, "what's the problem?" asked Planning Minister Julio De Vido. Speaking yesterday at the presentation of the Master Plan for the Rio Paraná Navigation System, he noted that private pension funds were used in the past on programs that helped people buy electrical appliances. Now, he explained, in the State's hands, these funds will finance "large infrastructure projects," such as the dredging and deepening of the Paraná River, or for building electricity plants. These leave the electrical appliances in the dust.

Chile's CUT: Dump Pinochet's Private Pension System

Dec. 20 (EIRNS)—Chile's CUT labor federation has launched a campaign to shut down the private pension system imposed on the nation by force in 1981 by the brutal Pinochet dictatorship, and held up as a successful model by the blood-sucking free-marketeers at the University of Chicago.

In reality, this profit-based system has been a disaster in Chile, denying workers any semblance of a decent pension—many are forced to work well beyond retirement age—while managers of the private funds, known as AFPs, earn juicy profits from the outrageously high commissions they charge enrollees.

Under the slogan "No More AFPs!" the CUT is calling for a new system based on the basic principles of solidarity and full protection for workers. There must be universal coverage for everyone, the CUT demands, both during workers' productive years and after they retire. The CUT is also demanding that the government of Michelle Bachelet immediately intervene in the private system, both to restrict the AFPs' ability to invest workers' funds, and to investigate the full dimension of losses incurred over the past year.

In that time frame, as a result of speculative investments abroad, the private system has lost $28 billion out of a total of $110 billion. The private economic think tank CENDA estimates that if calculated at 517 pesos to the dollar, the exchange rate in effect a year ago, the latter figure would amount to more than $36 billion.

According to CENDA economist Manuel Riesco, at least 91% of the private system's enrollees have their money in the riskiest of the AFPs. This includes 320,000 people over the age of 55, 40% of whom are close to retirement age. On Dec. 18, the CUT filed lawsuits against four private pension funds, demanding that they return losses to enrolled workers.

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