Ibero-American News Digest
Brazil: Call For FDR-Style Productive Policy, Capital Controls
Following a "National Forum for a State Project" on May 10, the Liberal Party (PL) of Lula da Silva's Vice President, Jose Alencar, issued a dramatic manifesto, "Development and Social Commitment," outlining the radical change in economic policy needed to "save" the country. The documentbased upon the speech Alencar gave to open the party forum, reviewed by him before its release, and backed by the party's 44 Congressmensent shockwaves through the Wall Street faction within government.
Brazil faces the "gravest social crisis" in its history, comparable to that which occurred in the industrialized countries in the 1930s Great Depression, when great unemployment and liberal policies led some countries to take "the fascist or Nazi route," the PL's document warns. The levels of unemployment and sub-employment in the country have no parallel in our history, and are the direct consequence of the economic policy adopted by the previous government, and deepened by this government.
"Our message to the world must be: We, indeed, fulfill our obligations, but we do so, by increasing production, increasing employment, increasing exports, and not through a reduction of domestic consumption and mass unemployment in Brazil's cities." Franklin Roosevelt's New Deal is referenced as the model: "In the face of high unemployment and the fall in workers' income, it is fundamental, therefore, that recourse be taken to a full employment policy, in the manner of that practiced throughout four decades, during the New Deal and in the post-war period, by the advanced industrialized countries."
The government must reduce interest rates "drastically," and increase public investments in infrastructure and job-creation programs. In order to defend itself from the capital flight which would follow such measures, short-term capital controls must be imposed. The party suggested high taxes on dollars which leave the country, or regulations which do not permit capital to leave before a given period of time. As if that were not enough to panic Wall Street, the PL document says Brazil would have no problem paying for all this, if it used its primary budget surpluswhich now exclusively goes to pay the debtto finance this program.
Speculators and financiers "who have benefitted from the unlimited freedom of capital flows" will not be happy, but "the economic policy which we are proposing is that which we promised during the electoral campaign: the transfer axis of capitalist accumulation from the speculative financial system, to the productive system."
"The Liberal Party believes ... that we face a situation in which, either we continue to please the speculators, which has been done since the last government, or we face the social crisis provoked by the high unemployment, by regulating, in some fashion, the capital movements so that an expansionary fiscal-monetary policy becomes possible."
Synarchists Attack Kirchner for Defense of General Welfare
For the second time in a week, Spain's ABC daily, representing the right-wing Synarchist crowd which seeks to restore the old Spanish Empire, threw a rug-chewing fit over Argentine President Nestor Kirchner. The first attack came on May 7, when ABC denounced him as a former terrorist, "who hasn't forgotten the old anti-Western credo of the 1970s and 1980s," when one faction of Peronism "assumed the Marxist vision of society's problems, and ... took the path of terrorism, kidnappings, and armed struggle." This is precisely the line put out by the friends of Spain's fascist Blas Pinar, in Argentina's Maritornes apparatus.
A week later, on May 14, ABC went berserk over Kirchner's defense of the general welfare, accused him of allying with the Jacobins "piqueteros"protesters specializing in blockading highwaysin attacking Spain's Repsol oil company. ABC equated Kirchner's (truthful) accusation that Repsol was practising extortion against the Argentine government, with the piqueteros's May 12 Molotov cocktail-throwing attack on the company's headquarters. ABC charged Kirchner with engaging in a "dangerous strategy of confrontation" against "the international community," proving that Argentina is still the same old untrustworthy country, that makes life unpleasant for multinational corporations, and blames them for all of its problems.
With the economy improving, the government won't have any trouble meeting International Monetary Fund (IMF) targets, unless it wastes money "in a substantial increase of social expenditures, or on infrastructure," they raved. "Argentina is playing with fire," as is the rest of Ibero-America, because they haven't found the means to "compete with the Asian economies in the international market" for sale of commodities or attracting foreign capital. Kirchner should deal seriously with foreign bondholders and companies instead of resorting to "nationalist protectionism," ABC rants. The creation of a state oil companyEnergia Argentina, S.A. (Enarsa) will only "cronyism and a public deficit," and ally with the Venezuelan, Bolivian, and Brazilian state oil companies, which are totally "devoid of virtue or productivity."
War College Study Warns vs. Disintegration of Americas
An Army War College study warns that the U.S. needs more than military might to keep the nations of the Americas from disintegrating. While the study, "Security in the Americas: Neither Evolution Nor DevolutionImpasse," written by War College Professor of Military Study, Col. Max Manwaring (ret.), and published by the College's Strategic Studies Institute (SSI) in March 2004, addresses the situation in the Americas, it makes clear that this is but a part of a broader battle to force a return to a traditionalist approach to U.S. national security. Last December, the SSI published a scathing attack on the "dangerously indiscriminate and ambitious Global War On Terror" and the "unnecessary and unrealistic" Iraq war.
"History is replete with instances when military victory did not lead to strategic success, and military and civilian leaders complained that they had 'won' militarily but had 'lost' politicallyas if there were no connection," Manwaring writes in his study on the Americas. "The French experience in Algeria, the U.S. experience in Vietnam, and the recent coalition experiences in the Gulf War and the Iraqi War immediately come to mind."
Manwaring goes after "the U.S.-mandated, myopic, ad hoc, piecemeal, tactical-operational, and primarily military solutions to the so-called 'drug war' and/or 'narco-terrorism,'" the which are said to producing victories, even as Colombia and the Central American nations disintegrate. While the U.S. is busy in the "GWOT," Colombia has become the paragon of a failing state, and "Central America is sliding back into chaos and bloodshed that is vaguely reminiscent of the 1980s."
"Nothing less than a paradigm change" is required, Manwaring writes. He does does not elaborate what that should look like, but he references our American roots as the direction in which to look: "Civilian and military leaders today must understand the force of the arguments made by Hamilton, Madison, and Jay that flow through The Federalist Papers. That is, the price of peace is justice, the price of justice is the rule of law, the price of law is government, the price of government is stability and order, and, finally government must apply to all men and women within a polity, not merely to those who are overtly willing to accept a given regime," Manwaring argues.
(See In-Depth this week, for several articles analyzing the threat of generalized war in the Americas.)
Guatemala To Cut Military by More Than One-Third
The Guatemalan government began dismantling military bases last week, implementing its plan to cut the military by more than a third by June 30. The demilitarization policy may quickly push the country over the edge into chaos: Instead of turning the military into the engineering force urgently needed to build the basic infrastructure the country desperately needs, it threw 11-15,000 soldiers into the waiting arms of the drug gangs, and right and left terrorist insurgencies, at a time when whole towns and regions of Central America are already in the hands of such criminals. Guatemala's military, despite its awful problems, had historically provided what logistical capabilities the country had.
The Strategic Studies Institute of the U.S. Army War College published a monograph in March 2004 (see above), which warned that Central America is collapsing into the same levels of "chaos" resulting from the drug trade and drug gangs, as suffered by Colombia. The United States' failure to develop a coherent political-military strategy for the region following the civil wars of the 1970s and 1980s, author Max Manwaring argues, is part of the problem. He identifies as a particular problem, the fact that both the security forces and the insurgents of those 1970s/1980s wars have been given no options but to turn to crime.
Uribe Gov't Caves In to Narcoterrorist AUC
The Colombian government is moving to carve out "demobilization" zones, to be occupied by thousands of the country's drug-trafficking "paramilitary" terrorists, known as the AUC, in what would be a disastrous parody of the previous Pastrana government's "Grasso Abrazo" with the FARC narcoterrorists. The AUC are a "right-wing" version of the "left-wing" FARCsame type of animal, different smell. The government's negotiator, Luis Carlos Restrepo, has already all but promised that the AUC leaders will not be extradited to the U.S., if they agree to demobilize and disarm.
While the government is also demanding that they give up their ill-gotten gains, and that the worst of the criminals do jail time, the AUC leaders are insisting on keeping their assets and merely doing some time in their own homes. To sweeten their side of the negotiations, the latest AUC offer is to "allow" the government to swap FARC prisoners for the FARC's kidnap victims, something the AUC had earlier sworn to prevent.
The Uribe government is calling for international donations of up to $150 million, to facilitate the demobilization and re-education of the 15-20,000 armed paramilitaries, and the U.S. is said to be "considering" offering some financial support. The reality is that President Uribe would never have even considered taking up this doomed strategy of setting up demobilization zones for the paramilitaries, without Bush Administration "encouragement."
'South-South' Role Needed in Middle Peace Efforts
"South-South" cooperation must support the Quartet's peace efforts between Israel and Palestine, Brazilian Foreign Minister Celso Amorim told the World Economic Forum, meeting in Jordan on May 15. Brazil's Foreign Ministry (Itamaraty) reported that participants at the WEF debated how to resolve the Middle East conflicts, including discussing the need for economic growth and development in the region. Amorim emphasized that international involvement to aid a peace agreement should not be limited to the developed countries, but must also include South-South cooperation, and he proposed that developing countries form a support group for the Quartet (U.S., Russia, EU, and UN), suggesting Brazil, South Africa, and India as potential members.
The proposal to bring in key developing countries was made by Palestinian President Yasser Arafat and Prime Minister Ahmed Qurei, during Brazilian President Lula da Silva's December 2003 tour of Arab countries.
Before arriving in Jordan, Amorim held discussions with the Arab League in Cairo, on Lula's proposal to convene a South American-Arab Summit. A schedule of meetings to prepare the summit was agreed on, starting with a Foreign Ministers meeting on the sidelines of next September's UN General Assembly. Arab League Secretary General Amr Moussa emphasized the importance of the proposed summit in remarks to the WEF meeting, noting the Arab countries' readiness to begin a structured process of cooperation with South America.
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