Ibero-American News Digest
Argentine President Meets Bush, LaRouche Youth Movement, in Washington
On July 19, U.S. and Argentine officials announced that President George Bush would receive Argentine President Nestor Kirchnernot at the end of September, as planned, but on July 23, immediately upon Kirchner's return from Europe. There was much speculation as to why Bush changed the meeting date, and certainly Argentina's current negotiations with the IMF are a factor, as Kirchner wants negotiations concluded with the IMF by Sept. 9, the date on which Argentina must pay the Fund $2.9 billion. Without an agreement, which the government hopes will include a rollover of all payments due between now and 2006, Argentina will be faced with the choice of using its own reserves to make the payment, or else defaulting.
The meeting between the two Presidents was said to be cordial, but all Kirchner appeared to get from it, was insane advice that he negotiate with the rotting corpse of the IMF, as well as noncommittal support for some distant "recovery"which will certainly remain distant as long as the IMF is involved. Unexpectedly for Kirchner, Bush was accompanied by U.S. Trade Representative Robert Zoellick and Treasury Secretary John Snow, presumably to lend weight to his message.
While Argentina remains a devastated economy, all Bush was willing to offer was, "We're with you all the way." Bush told Kirchner that he would give support to whatever agreement Argentina and the IMF "were capable of achieving." If "you help yourselves, we will also help you," he said, but in the end, "it is Argentina that has to negotiate with the Fund, and no one else." Kirchner told reporters after his meeting that he had received "unconditional support" and "an extended hand" from Bush for negotiations with the Fund, but the White House clarified that it supported an agreement, "but would not intervene to facilitate it."
The LaRouche Youth Movement (LYM), however, made sure the Argentine President learned that the IMF is not the only power in Washington. Kirchner was greeted by LYM members, who called out to him when he passed by an organizing table, and then had two encounters with Argentinian LYM members, who attended a reception the Argentine embassy held for the Argentine community later that afternoon. One organizer told Kirchner the LYM was there "to ask you to invite Mr. LaRouche to Argentina," adding, "We appreciate and agree with your mentioning of the New Deal of FDR. Mr. LaRouche is the only candidate talking about this in the United States." A copy of EIR's Special Report, "How To Reconstruct a Bankrupt World," was given to Kirchner before he left.
IMF Turns the Screws on Argentina
While Presidents Bush and Kirchner were meeting, back in Buenos Aires the IMF was spelling out its killer demands. On July 30, a 20-man mission will begin to elaborate an economic program (in "cooperation" with the Argentines), and negotiate a three-year agreement over the following three weeks. But whether the agreement is finally concluded, is contingent on the government's imposing, before Aug. 31, certain pending IMF demands. These include compensating banks for the forced pesification of their dollar debts in early 2002which the government cannot afford to do; passing legislation regarding Central Bank autonomy (and immunity of its directors from prosecution) and the operations of financial entities, as well as getting a commitment on raising rates of privatized utility companies, on which the government is balking. The government and the IMF will also have to agree on the content of a "sustainable" economic program, on which the two are still far apart.
The size of the primary budget surplus is a key bone of contentionKirchner wants it to remain at 2.5%, while the Fund wants it to go up to 4.5%, Brazilian style.
Neo-Con Brokers Oil Deal with Chavez Regime
A scandal is building over the contract negotiated last Januaryin the middle of the general strike against the Hugo Chavez regime in Venezuelabetween the Venezuelan Ministry of Mines and Energy and a little-known company bearing the subtle name of "Free Market Petroleum" (FMP). Under the contract, which runs for three years, Venezuela will sell FMP 50,000 bpd of oil, at under world market prices; FMP is to broker the oil into the U.S. Strategic Oil Reserves, and nowhere else. An integral part of the deal, reportedly, is that FMP is to raise a $1-billion bank loan for the Venezuelan government, backed by the revenues from the oil salesthat is, the Venezuelan government would be putting $1 billion of its future oil revenues into hock.
That is what has become public, so far, about the dealwhich is stirring up controversy in both Venezuela and the United States. Venezuelans ask why the government is selling at below-market prices to "a company in a suitcase." The Washington Times reported on July 15 the comments of a Petroleum Industry Research Foundation analyst who questioned the Free Market deal, as not being in the interests of either nation.
The chairman of FMP is Jack Kemp, the former football player, neo-con free-trader, HUD Secretary, and Vice Presidential candidate, associated with the international synarchists around world-currency advocate Robert Mundell (see "WSJ Editor Reveals Synarchist Plan for World Currency and Super-Bank," EIW #27).
FMP, which appears to have been created solely "as a vehicle to conclude oil and financing transactions ... with the Bolivarian Republic of Venezuela," is mainly owned by Free Market Holdings (FMH), which Kemp chairs also. FMH has interests in finance, real estate, telecommunications, and a gas and power project in Ghana.
The deal provides a fascinating example of how the "left" and "right" Synarchists are part of a single operation. The Cuba-aligned, leftist Chavez regime has been trying to set itself up as a strategic oil supplier to the Bush Administration for some time, without successuntil Kemp, reportedly a close friend of Venezuela's Ambassador to the United States, Bernardo Alvarez, stepped up to the plate.
The Chavez regime clearly intends to parlay this deal into bigger deals with U.S. oil interests. Its embassy organized a symposium in Washington, D.C. July 17-18, on "Venezuela, A Reliable Partner: Securing U.S. Energy Needs, Enhancing Business Opportunities," during which Venezuelan Energy Minister Rafael Ramirez urged foreign investment in Venezuelan energy development, "because private capital is a friend for the Venezuela government."
Venezuela: The Entire Nation Is Unemployed
Venezuelan unemployment stands at nearly 24%, with almost 2.7 million of the economically active population (EAP) out of work, according to the trade-union-linked Documentation and Analysis Center (CENDA). The government admits officially that 19.2% of the EAP is unemployed. But those figures do not include the 5 million who lack stable jobs, and survive in the so-called "informal sector"street sales, off-the-books cottage industry, etc. The result is that of every 10 people 18 years or older, eight do not have work, or only work "informally," says Jorge Bolti, president of Consecomercio, Venezuela's services and trade association.
Oil, construction, and agriculture were the sectors hardest hit this year. Three out of four agronomists in the country are without work in their area of specialty. Construction activity fell 64% in the first quarter of the year, according to the Central Bank, leading to the loss of some 600,000 jobs. The Chavez government fired, and never rehired, 18,000 oil workers and technicians during the national strike in early 2003.
The head of the National Economic Council projects that average per capita income will fall from $5,300 in 2001, to $2,200 by the end of 2003.
Brazil's Jacobin 'Homeless Movement' Opens New Urban Front
Some 3,200 people invaded five buildings in the center of the industrial city of Sao Paulo in the dawn hours of July 21, threatening to occupy them until the government agrees to provide housing for the 3,500 families represented in the seizure, plus another 2,000 families by the end of the year. The operation was organized by the so-called "Homeless Movement," which in Portuguese has the same initials as the Landless MovementMSTof which it is, in fact, an integral part. MST leaders claim all five buildings have been unoccupied for the last two years.
This is the largest operation yet mounted in a major city by this Jacobin movement, which, as EIR has documented, is heavily supported by the British Crown, and linked to the Colombian narcoterrorist FARC.
Over the weekend, MST forces also invaded a property owned by Volkswagen in Sao Bernardo do Campo, a city in the industrial belt of Sao Paulo province.
Brazilian Judges To Join Strike Against Pension Reform
Angry over reneging by the Brazilian government of Lula da Silva on last-minute revisions to the IMF-dictated pension reform, the Association of Brazilian Magistrates (AMB), some chapters of the National Association of Labor and Justice Magistrates, and some military judges have voted to strike Aug. 5-12, joining the ongoing strike of other civil servants in Brazil. Judges are irate that late on July 17, the government suddenly reversed an agreement that would have kept judges' pensions at 90.25% of the salary of a Supreme Court judge, reducing them instead to 75%. The change negatively affects pension parity between state and Federal judges, among other things.
There is not total unanimity among the judges regarding the strike. Supreme Court magistrate Mauricio Correa appealed to other judges not to strike, warning that it would be unconstitutional. But AMB president Claudio Bladino Maciel said a strike is the only alternative, warning of an attempt to dismantle the judiciary, weaken its independence, possibly leading to a reform that would damage the separation of powers, and even remove the Brazilian judiciary's "Constitutional right of expression." Francisco Fausto, president of the Supreme Labor Tribunal, who last week identified the IMF as the author of the pension reform, said the latest reform means "the dismantling of the Brazilian judiciary."
Denouncing charges that judges are only worried about their "privileges," Maciel said the government has deliberately sought confrontation. Calling the reform an "affront," he explained it is now structured such that future pensioners will be forced to go to private pension funds, backed by powerful financial interests, whom he identified as the real winners in this fight.
Attack on Argentina's Sovereignty: Military Extraditions One Step Closer
Arrests began around July 23, of 46 former Argentine military officers, whose extradition has now been officially requested by Spanish magistrate and One-Worldist Baltazar Garzon, to prosecute them in Madrid for alleged human rights abuses. Their extradition won't necessarily be immediately guaranteed. President Nestor Kirchner overturned the decree prohibiting automatic extradition in such cases on July 25, and so the final decision is left in the hands of the justice system, where there is an openness to sending the officers abroad for trial, even though it violates Argentina's judicial sovereignty.
The arrests, combined with other recent actions, reflect one of Kirchner's key vulnerabilities, which could backfire on him very badly: his willingness to let Transparency International agents within his government proceed with a campaign against such national institutions as the military, other security agencies, and the justice system. This is not unlike Brazilian President Lula da Silva letting MST agents run amok inside his government. In an interview published in the July 24 Washington Post, Kirchner argued, fallaciously, that tracking down officers charged with human rights abuses during the 1970s war on terrorism was the same as the search for Nazi war criminals over the past several decades.
"There can be no impunity in Argentina," he vowed, promising also to have an independent and "transparent" court system. These actions are provoking serious unrest among the Armed Forces and the police, seen in the public statement July 22 by former Army Chief-of-Staff, Lt. Gen. (ret.) Ricardo Brinzoni. There is no reason "to return to the past on the military issue," he said, "and it doesn't seem useful to me to pose things that happened 25 years ago to public opinion now, when the Armed Forces are looking toward the future."
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