In this issue:

IMF Vultures Circle Argentina, Prepare To Land When Presidential Elections Over

Climate Tense in Run-up to Argentine Elections

Fallout from Chile's Financial Scandals Far Greater Than First Reported

Is Someone Worried About Chile Paying Its Debts?

Meetings Between Chilean Foreign Minister and Brazilian Officials End in Call for Closer Cooperation

4,000 Coca-Producers Converge on Lima in National Show of Force

UN Human Rights Commission Votes Down U.S.-Backed Resolution Condemning Cuba Crackdown

From Volume 2, Issue Number 17 of Electronic Intelligence Weekly, Published Apr. 28, 2003

Ibero-American News Digest

IMF Vultures Circle Argentina, Prepare To Land When Presidential Elections Over

As of April 26, no candidate has emerged as a frontrunner in Argentina's April 27 Presidential elections, with the leading candidates said to have between 12% and 18% of the vote, depending on who pays for the polling. Thirty-five percent of the voters are undecided. With no majority candidate in sight, the two top vote-getters will face off in a May run-off, and the winner of that contest will assume the Presidency on May 25.

An International Monetary Fund mission will descend on the country on April 28, to once again monitor the nation's books, and meet with whichever candidates emerge for the May run-off election. Heading the mission will be John Dodsworth, Deputy Director of the Western Hemisphere Division under Anoop Singh, who has just been appointed the permanent IMF representative in Argentina—an unusually high-level appointment for such a post, leading the Argentine daily Clarin to comment that in his new post, Dodsworth "might carry as much weight as the new U.S. Ambassador, Lino Gutierrez."

The current IMF agreement ends in August, and the Fund is already making demands for the next one: immediately raise rates of privatized utility companies, to be done through passage of new legislation in Congress; and a quick resolution of private debt restructuring.

But while the question of what to do with the foreign debt has been a hot topic during the elections, no candidate has had anything useful to say on the topic.

Here's what the candidates have been saying on the debt issue:

Mont Pelerinite Ricardo Lopez Murphy argues that debt has to be paid; austerity is the watchword, and government can be made more "efficient" by eliminating "unnecessary" public employees. The Peronist former President Carlos Menem promises to "honor the country's debts in full," but says he'll ask for a reduction in interest payments, and a lengthening of maturities. Peronist Nestor Kirchner will continue with the current government's policy—essentially to keep paying, while Peronist Adolfo Rodriguez Saa, who declared a debt moratorium in his one-week period of government in December 2001, calls for the Congress to determine what portion of the debt is legitimate, a somewhat more reality-based stand. ARI Party candidate Elisa Carrio, who used to be tough on the IMF issue, has toned down her rhetoric considerably, reportedly following the lead of some officials of Brazil's Workers' Party, who have advised President Lula da Silva to "live with" the IMF. Now, Carrio won't go beyond saying that neoliberal policy is "wrong."

Climate Tense in Run-up to Argentine Elections

The last days of the Argentine Presidential election campaign were marked by incidents of violence. Two violent incidents occurring April 20-22 underscore the Argentine electorate's concern with constant protest demonstrations, in which the Jacobin "piqueteros" movement, known for blocking highways and for other protest actions around the country, are a key factor.

On April 20, fans of two opposing soccer teams savagely confronted each other near the city of Rosario, when buses in which they were riding stopped at a toll booth, and two people were killed—one of them beheaded. The fans, among whom there were provocateurs, were armed with guns, knives, and other weapons. In a second incident, in downtown Buenos Aires, when police removed workers from the bankrupt Brukman clothing factory, which they had occupied for some months, other "demonstrators" and "piqueteros" showed up to support the workers, and the action turned violent. Several people were hurt and hundreds arrested.

Leaders of the "piqueteros" movement are recipients of World Bank funds, which they access through the Bank's financing of the "Heads of Households" anti-poverty program.

Fallout from Chile's Financial Scandals Far Greater Than First Reported

The situation underscores the fragility of the country's financial system. The government of President Ricardo Lagos was badly shaken March 10 by the illegal transfer of more than $110 million in state securities from the state development bank CORFO, to the bankrupt Inverlink brokerage firm, which then traded them on the open market, in an attempt to bolster its own finances. In the panic that ensued—the illegal CDs ended up in many mutual funds—the state-owned BancoEstado had to pump $400 million in liquidity into several financial institutions, including foreign banks.

The crisis is being compared to 1982, when Chile's entire banking and financial system blew apart. Analysts are demanding that new contingency "mechanisms" be set up, to deal with such crisis situations. In free-market Chile, where virtually everything is privatized, debate has even emerged on the usefulness of having state banks such as BancoEstado.

Chile's much-ballyhooed international reputation as the model of "corruption-free," free-market efficiency, is blackened. The Corfo-Inverlink scandal is only one of many involving corruption among businessmen, former government officials, and legislators close to President Lagos. Lagos himself may be called to testify in the case of a former Public Works Minister accused of accepting kickbacks on government contracts. All of this has affected the stability of Lagos' ruling Concertacion coalition, with some, such as the Washington Post on April 22, suggesting that the scandals could bring down the government altogether.

Is Someone Worried About Chile Paying Its Debts?

Chile has sizable foreign reserves of $16.5 billion, which it maintains at that level to guarantee its ability to meet its foreign debt obligations, "in the event this becomes necessary," the leading Chilean daily El Mercurio reported on April 21. Apparently there is some doubt about its ability to pay its foreign debt, which now amounts to 50% of GDP. Former Finance Minister Rolf Luders argues that, were these normal times, it wouldn't be necessary to have such large reserves. But, since the coming period will not be normal, better to keep the reserves high. "The last thing we need now is to increase the level of uncertainty."

Meetings Between Chilean Foreign Minister and Brazilian Officials End in Call for Closer Cooperation

Following on the heels of the accords signed during Peruvian President Alejandro Toledo's April 11 visit to Brasilia (see IBERO-AMERICA DIGEST, EIW #16), Chilean Foreign Minister Soledad Alvear held long discussions April 14-15 with her Brazilian counterpart, Celso Amorim, and was received by President Lula da Silva, who renewed his invitation for Chilean President Ricardo Lagos to pay a state visit before the end of June. In addition to discussing international matters such as Iraq, and their nations' agreement on the importance of the United Nations and of respect for international law, especially the principles of sovereignty and the territorial integrity of nations, the governments reaffirmed their commitment to regional integration.

The communiqué issued on April 14 at the end of Alvear's visit specified the importance of "the strengthening of physical integration, in the context of the South American Regional Integration Initiative (IIRSA)."

4,000 Coca-Producers Converge on Lima in National Show of Force

Some 4,000 coca-producers converged on the Peruvian capital of Lima on April 21 in a national show of force, after marching for several days from various parts of the country. The march of the cocaleros is being led by Nancy Obregon, the second-in-command of the national coca producers' association, who was a star at the George Soros-financed hemisphere-wide drug legalization confab in Merida, Mexico last February. That this is part of a coordinated, regional deployment by the narco crowd, is also seen in the fact that Bolivian cocalero leader Evo Morales (an ally of the Colombian narco-terrorist FARC) came to Lima last week, to meet with the Peruvian cocaleros to coordinate strategy.

The cocaleros are demanding a meeting with President Alejandro Toledo; the release of the head of the national association of coca producers, Nelson Palomino, who was jailed on terrorism charges earlier this year; and an end to the government's coca eradication program and restrictions on coca sales. Obregon threatened that the cocaleros will stay in Lima until their demands are met, and will "radicalize" their protests, if the government does not respond.

UN Human Rights Commission Votes Down U.S.-Backed Resolution Condemning Cuba Crackdown

The UN Human Rights Commission voted down a U.S.-backed resolution condemning the recent crackdown in Cuba, which has included three executions and the handing down of numerous sentences of 10, 20, and 25 years, to dissidents.

On April 17, the Commission voted 31-15 against the resolution sponsored by Costa Rica and promoted by the United States, which would have condemned Cuba for the recent mass arrests of dissidents, and called for their immediate release from jail. The vote is a testament to the anti-American mood internationally, which is stronger than the widespread shock over the Castro regime's brutality in executing three hijackers, and giving wildly lengthy jail sentences to nearly 80 dissidents. The vote occurred despite U.S. pressure, and the backing of George Soros's Human Rights Watch for the resolution.

The Anglo-American war against Iraq is a "unilateral violation of human rights," said Argentine President Eduardo Duhalde, in explaining his government's abstention on the resolution. In reversing Argentina's 12-year record of voting with the U.S. to condemn human rights violations in Cuba, Duhalde explained: "We consider it inopportune" to condemn Cuba, "considering that this war in Iraq is a unilateral violation of human rights," in addition to which, he said, the Bush Administration has begun to threaten Syria.

After the condemnation was voted down, the Commission did pass a resolution, 24-20, which urged Cuba to accept visits by a special UN Rapporteur on Human Rights. Cuban Foreign Minister Felipe Perez Roque told reporters the next day that Cuba would not allow the UN to send any such delegate. Calling Peru, Nicaragua, Costa Rica, and Uruguay, the countries that sponsored that resolution at U.S. urging, "disgusting lackeys," Perez Roque stated that "Cuba will not collaborate with the mandate of this spurious and illegal resolution. Cuba will not collaborate with the High Commission's representative and will not allow her to come to Cuba. Cuba will not be pressured."

Cuba is thinking of withdrawing a request to join a preferential trade agreement with the European Union, following last week's condemnation of the newest Cuban crackdown by EU Foreign Ministers, he said, and he hinted that the U.S. diplomatic mission in Cuba might be shut down as well.

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