In this issue:

Looking Towards Malaysia: Argentina Suspends Negotiations With IMF

Kirchners Recommend: Ignore IMF 'Whims'!

A 'Friendship' Bridge To Build South American Unity

Who's Out To Trigger a Rerun of the 1879-84 War of the Pacific?

Chavez Says He Has Christ in His Corner

From Volume 3, Issue Number 33 of Electronic Intelligence Weekly, Published Aug. 17, 2004

Ibero-American News Digest

Looking Towards Malaysia: Argentina Suspends Negotiations With IMF

A showdown is once again underway between Argentina and the International Monetary Fund. On Friday evening, Aug. 6, Argentine Economics Minister Roberto Lavagna announced that his country was suspending further talks with the IMF on a new program, until at least December or January. The following Monday morning, Lavagna announced a 10% increase in pensions of all retirees who receive 1,000 pesos, or less, a month, effective September. The measure benefits 95% of Argentina's retirees, 3 million people who have been trying to survive on $325 a month.

While Argentine officials publicly insist they have not broken with the IMF, nor do they have any intention of doing so, their actions speak for themselves: They suspended negotiations with the IMF to put off the fight over the new conditionalities, which were to apply for 2005-2006, so that, in the time gained, they could take measures to reactivate the economy which the IMF would not permit.

"We want to follow the example of Malaysia, which kicked over the chessboard of orthodox IMF policies, without breaking with the IMF," a high-level official of Argentina's Economics Ministry told La Nacion on Aug. 11. "That way we can gain a margin of action. An energy company, or a development bank could be created, retirees paid more, or the dollar [N.B.: not the peso] could be allowed to revalue."

President Kirchner's Chief of Cabinet, Alberto Fernandez, announced Aug. 10 that the President's office is studying how to raise wages, in both the private and public sector. Interior Minister Anibal Fernandez told Radio 10 the same day that a raise in private and public sector wages is "inevitable," and a meeting of the Minimum Wage Council would meet to consider the amount "in the short term."

Likewise, Federal Planning Minister Julio De Vido stated on Aug. 10, that an increase in electricity rates "is not on the agenda," and that for the moment, there is "no possibility" increases will be granted. The privatized electricity companies were demanding a 30%-40% "seasonal adjustment" for the Aug. 1-Oct. 31 quarter—and the IMF was backing them up.

Each of those measures violates the conditionalities which the IMF is demanding. These include, that Argentina (a) not spend any money on pensions, wages, and public works, but instead "improve" its offer to the creditors, by giving them cash up front; (b) revalue the peso now pegged at slightly over $3.00, to $2.30; (c) impose sanctions on provinces which violate the "Fiscal Austerity Law" which forbids them from spending more than their revenues, the which would require a change in the Constitution; and (d) raise the primary budget surplus—the money extracted from the national economy for debt payments—from today's 3% of GNP, to 4%.

Kirchners Recommend: Ignore IMF 'Whims'!

Senator Cristina Fernandez de Kirchner—who is also the wife of President Nestor Kirchner—told a Buenos Aires audience Aug. 9, that Argentina should act like the United States, which has "never heeded the IMF." By ignoring it, the country "will do better than the rest of the countries which have paid heed to the IMF," Senator Kirchner pointed out. Argentina should "follow its own model, which is to make policy which suits Argentines."

President Kirchner told a ceremony opening a new facility at a plant of the German company Siemens two days later, that Argentina is going to discuss with "firmness and total rationality" with the IMF. "It costs us too much to pile one coin on top of another, to continue accepting the twists and turns, or the whims of the international organizations, who have not acted very well with Argentina," he said, reportedly with a vigor which set some of the German and Argentine businessmen present squirming—particularly given the crowd of Peronist activists invited to the event, who were cheering Kirchner on.

A 'Friendship' Bridge To Build South American Unity

Inaugurating two bridges linking their three nations on Aug. 11, the Presidents of Brazil, Peru, and Bolivia spoke of creating "a great South American nation." Presidents Lula da Silva, Alejandro Toledo, and Carlos Mesa met in the Amazon city of Cobija, Bolivia to open a binational bridge, named "Friendship," which is to connect Cobija with the Brazilian city of Brasilea, in an area where 101 years ago their nations were at war. The US$2-million bridge is being financed by Brazil, as part of the South American Regional Infrastructure Integration (IIRSA) initiative, which aims to connect the South American continent, from the Pacific to the Atlantic, by 2010.

From Cobija, the Presidents flew by helicopter to the Brazilian city of Vila Asis, which borders both Peru and Bolivia. There, they laid the cornerstone for another bridge, this one uniting Vila Asis with the Peruvian city of Inapari, which also lies near to the Bolivian city of Bolprea. The three Presidents and their Foreign Ministers held a long meeting to discuss the feasibility of building a complex of petrochemical and power plants in that undeveloped region of the Amazon, which could use Peruvian and Bolivian gas supplies to supply domestic needs, and perhaps provide for energy exports.

Brazil's President Lula, in particular, located their endeavors as part of a broader vision, that of "the construction of a great South American nation, which passes through its physical integration.... I want to end my life seeing South America transformed into a true, single nation," Lula stated. This is the vision first launched in August 2000 in Brasilia, at the first ever South American Heads of State summit by then Peruvian President Alberto Fujimori, who was promptly overthrown.

Bolivia's President Mesa echoed Lula, calling the three countries companeros in this effort. "My shoulder, President Lula, is with yours; my shoulder, President Toledo, is with yours." Capitalizing on the presence of Bolivia's Brazilian big brother, Mesa added an undisguised message to Chile, which last week held military war games simulating a war with Peru and Bolivia, near its border with both of those countries. While not mentioning any specifics, Mesa said that "any country which invests in armament excessively, I believe is going down a mistaken path in relation to the integration [of the region].

Who's Out To Trigger a Rerun of the 1879-84 War of the Pacific?

Since Venezuelan President Hugo Chavez's November 2003 declaration that he dreams of bathing at a Bolivian beach on the Pacific Ocean (which Bolivia has not had since Chile seized its territory during the British-instigated War of the Pacific), the foolish talk of reopening old border conflicts among Chile, Peru, and Bolivia has become a self-feeding process, which has reached the dangerous point of Chile's military holding exercises to practice scenarios for war with its neighbors.

The Mesa government, fighting for its existence since it took office in October 2003, first foolishly linked Bolivia's exports of natural gas to achieving its historic demand for access to the sea. Then, this past July 28, Peru's President Alejandro Toledo, a Soros-owned playboy, whose own hold on power is tenuous, joined the fray, with the announcement in his Independence Day speech, that Peru was giving Chile 60 days to open negotiations on its maritime border with Peru. His Defense Minister, Gen. Roberto Chiabra, stated that Peru was in condition "to confront a war with Chile," a provocative lie which Peru's Foreign Minister requested he retract, but which was then supported, and repeated, by Toledo's Second Vice President, David Waisman (the same man who, as Defense Minister in 2001, purged Peru's Armed Forces, and cut Peru's military budget by close to 65%).

Ecuadoran Foreign Minister Patricio Zuquilanda added to this insane discussion, by declaring on Aug. 3—from Santiago, Chile, with the Chilean Foreign Minister at his side—that Ecuador sided with Chile in its dispute with Peru. Zuqilanda was rapidly "corrected," however, by Ecuadoran President Lucio Gutierrez, who stated that Ecuador had nothing to do with Peruvian-Chilean border issues.

The Chilean government's position is that the maritime border was settled by treaties in 1952 and 1954, and will not be reopened. A planned visit by Chile's Foreign Minister to Peru in August was cancelled.

Then, Chile, the best-armed country in South America, outside of Brazil, and still close to the British who instigated the original War of the Pacific, added a military show of force. On Aug. 4, the Chilean military's most modern tanks were deployed in a military exercise in the northern Iquique desert, a few miles from the Peruvian border. The scenario for the war games, saw Chilean forces containing the advance of a coalition of two enemy countries, one of which had "an aspiration for an access to the sea to be able to export its gas reserves"—i.e., a war game against Peru and Bolivia. Defense Minister Michelle Bachelet and Army Commander in Chief, Gen. Juan Emilio Cheyre, personally oversaw the exercise.

Chavez Says He Has Christ in His Corner

With the countdown toward the Aug. 15 recall referendum raising the levels of tension in Venezuela, the levels of lunacy are also rising. Venezuelan President Hugo Chavez addressed a rally of hundreds of thousands of supporters in Caracas Aug. 8, where he insisted that the referendum was a contest between himself and U.S. imperialism. He declared that a vote against his recall, in fact, would be "Christ's vote against imperialism."

Chavez also warned that, should he be defeated in the referendum, the result could be instability in Venezuela which would send already high oil prices shooting up to well over $100 a barrel. "Only we can guarantee peace," Chavez insisted.

Whether he has the high-level religious backing he claims to have, the crazy Venezuelan Jacobin does have significant backing from foreign financiers and oil multinationals. The Financial Times put out the line with its Aug. 9 headline, "The Oil Industry Seeks Decisive Chavez Poll Win," a story echoed by the New York Times on Aug, 12. As one oil analyst summed up the case: The oil companies "have become convinced that Mr. Chavez is a man they can do business with." Wall Street's Bloomberg wire service, projecting on Aug. 13 that Chavez will survive the referendum, cited the evaluation of Nicolas Field, a top executive at London's WestLB Asset Management, that "a victory for Chavez would boost confidence in Venezuela ... because he has shown a commitment to paying interest on the nation's $22 billion foreign debt."

Should the opposition win the referendum, Presidential elections are to be held within 30 days. The opposition forces, however, have no single candidate. So, they say they will organize a national "primary" among their contending power-hungry representatives, and then campaign behind him—all within 30 days! Meanwhile, national election officials in Venezuela brag that the results of the election may be made known within three hours of the polls closing, because the vote is being counted by touch-screen electronic voting machines. But should the vote be a close one, they say they may not release any results until the full four days the law permits are up.

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