From Volume 36, Issue 41 of EIR Online, Published Oct. 23, 2009

Ibero-American News Digest

'Bolivarian' Economic Strategy Crumbling

Oct. 14 (EIRNS)—Venezuela's "Bolivarian" strategy to build Ibero-American integration using the country's oil profits, is falling apart. Due to his country's own economic turmoil and the global financial meltdown, President Hugo Chávez is no longer able to spread oil revenues around Ibero-America and the Caribbean.

The country where this is most evident is Cuba, where Fidel Castro's socialist system is undergoing a draconian deconstruction under the austerity regime imposed by President Raúl Castro. The first in a series of measures to be taken gradually over the next few months is the shutting down of all workers' cafeterias located in four government ministries, which provide meals at no cost.

Instead, workers will receive a salary increase of 15 pesos a day, a 150% increase in their current salary of 10 pesos a day. However, that wage increase will be wiped out completely, as workers will now be forced to pay for meals.

In addition, in what the official daily Granma calls a "fight against state paternalism," the government intends to eliminate the monthly rations it has historically provided to all workers to supplement their pitiful wages. For decades, workers tracked the rations received in their official record book, but these have now been labeled a "deeply rooted vice" among Cubans. Raúl Castro has warned that the subsidized rations, the record book, and the workers' cafeterias, are "irrational and untenable."

The same thing is happening with the financial aid that Venezuela has provided to Argentina over the past two years, in the form of several purchases of the latter's debt paper. Venezuela effectively became cash-strapped Argentina's chief banker, allowing that country to distance itself from the International Monetary Fund (IMF) and survive while cut off from international lenders.

But today, Venezuela is issuing bonds for the sole purpose of rolling over its own debt, and covering ever-increasing internal deficits. Most consumer goods are imported. As for Argentina, it is now seeking improved relations with the IMF, and is negotiating with the Paris Club of debtors to repay it the $7 billion in defaulted debt it owes.

Stiglitz to Ibero-America: Embrace the 'New' IMF

Oct. 14 (EIRNS)—There is a kinder and gentler International Monetary Fund, said economist Joseph Stiglitz, speaking from a conference in Copenhagen on Oct. 12.

Stiglitz, who poses as an opponent of monetarism, stated that under director-general Dominique Strauss-Kahn, the Fund has developed a new "vision," not at all like the "old" one, which bludgeoned Argentina, both during and after its 2001-02 debt and financial crisis. In fact, he stated, it is largely Argentina's refusal to accept the IMF's austerity conditionalities that forced the Fund to change. He added that the lending institution has improved so much, that now would be a good time for Ibero-American governments to establish closer ties with it.

Stiglitz rejects Lyndon LaRouche's demand that the global financial system be put through bankruptcy reorganization, arguing instead that "reforming" it is the way to go. Since the former chief economist for the World Bank has served as an informal economic advisor to both current Argentine President Cristina Fernández de Kirchner and her predecessor, and husband, Néstor Kirchner, perhaps Stiglitz is the reason why Fernández de Kirchner has decided to seek a friendlier relationship with the Fund, possibly including allowing the IMF to "monitor" the country's economy.

Brazil's Health System Being 'Asphyxiated'

Oct. 14 (EIRNS)—Brazil's state-run Single Health System, or SUS, is being "slowly asphyxiated," warned Health Minister José Gomes Temporão on Sept. 25. In the midst of the H1N1 flu pandemic, he told the BBC from London that unless the vastly underfunded SUS were properly financed, "we run the risk of creating a new social apartheid here in Brazil, this time in the area of health."

Brazil's Constitution states that health care is a universal right, which the state must guarantee. Yet Gomes has been forced to lobby for a bill to create a 0.1% tax on financial transactions, the annual revenue from which would be earmarked for the SUS.

Gomes to London with a large delegation of government officials and businessmen, reportedly to observe Britain's National Health Service (NHS), on which the SUS was modeled when it was created 20 years ago. But given the murderous budget-cutting and euthanasia which the NHS practices under the "guidance" of the National Institute for Health and Clinical Excellence (NICE), Gomes isn't likely to find any solutions there.

He came away from the trip with a signed agreement with the huge British pharmaceutical company GlaxoSmithKlein, to create a public-private partnership between that multinational firm and Brazil's Oswaldo Cruz Foundation, to produce a vaccine for dengue.

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