Tuesday, March 30, 2010

ECLAC, poverty, inequality and the importance of social spending

Ok, so before you ask... no, this isn't the beginning of a regular maladjusted feature on poverty and inequality... or is it?

The Economic Commission for Latin America and Caribbean (ECLAC) has a great brief on poverty and inequality in Latin America over the last 30 years. Long story short, there’s been tremendous progress in fighting poverty since the 1980s. You know, those 1980s, when every country on the block was getting structurally maladjusted, discovering their love for free markets and hatred for import substitution and, oh, failing to achieve even the most minimum levels of per capita income growth.

As can be seen below, during this lost decade—as economists refer to the period—the regional poverty rate rose from 40.5% in 1980 and peaked at 48.3% in 1990. At the same time, indigence rose from 18.6% to 22.5%. But then, beginning in 1990, poverty and indigence rates began to drop.

[Latin America: Poverty and Indigence, 1980-2008 (percentages)]
This huge drop in poverty and indigence rates since 1990 was first and foremost driven by GDP growth. However, as the brief notes, starting in 2002 another significant factor came into play: a decrease in inequality. As can be seen below, between 2002 and 2008 most countries in the region became more equitable.

[Latin America: Gini coefficient, 2002-2008]
See that? The countries below the 45-degree line are those where inequality decreased. And also, note which country is the farthest away from the line… starts with a "V", just sayin'.

In any case, the brief offers a nice little explanation for why inequality has been decreasing since 1990, which takes me to this last graph below:

[Latin America: Total public spending and social spending, 1990-2008]

That red line on the top is total public spending and the bottom blue line is public social spending, which has more or less steadily increased from 12.4% of GDP in 1990 to 17.9% in 2008. However, more to the point, is the line in the middle, which shows the “fiscal priority of social spending.” This is basically the ratio of social spending to total spending. In other words, governments in Latin America have increased the priority of social spending, a lot, and it is showing results in the reduction of both poverty and inequality.

There’s a lesson to be learned somewhere in there.

Monday, March 29, 2010

The Second Most Unequal Country in the Americas?

I've seen this article from Mercopress a few places today, where it says that Latin America is the most unequal region in the world. The article is quoting from a UN-Habitat report, but unfortunately the report seems to have been released down at the World Urban Forum and isn't available online. The report looks at the what percent of all income goes to the top 10%. The article says that Brazil is the worst, with 50.6% going to the top 10%, followed by Mexico and Argentina, although in a later paragraph it appears that the numbers for Colombia and Chile are both higher than in Mexico. First off, I don't even think the report is looking at overall levels of inequality, the paper was presented at the World Urban Forum, and based on this IPS article from a few days ago, what the paper looks at is inequality in urban areas. But hey, for the purpose of this post lets assume these numbers are right. Based on a paper last year by a Emmanuel Saez from Cal Berkely, this would actually make the US the second most unequal country in the study. Using numbers from 2007, Saez finds that the top 10% in the US get 49.7% of the income. Pretty god damned amazing. Now not all measures of inequality are created equal, so this is a dangerous game, but I really wanted an excuse to post this graph, so there you have it.

Clearly, inequality in LatAm is still really bad and no doubt one of the main issues that needs to be confronted, but following the development path of the US and the economic policies that have been pushed on the region for far too long is not gonna get them there.

Also, I'd like to point anybody looking for good numbers on inequality in Latin America to the Socio-Economic Database for Latin America and the Caribbean (SEDLAC), and they just updated their database too!

If I Were Sean Penn...

First off, it pains me to even have to comment on anything Maria Conchita Alonso says. That said, this is just too much; Alonso wrote an "open letter" to Sean Penn, criticizing him for some comments he made on a late night comedy show. That alone would not have pissed me off so much since we all know she is a total nut, but the outrageous thing is that after getting bounced around the right-wing blogosphere all day yesterday the letter made it into the mainstream press. CBS News actually wrote an article about it; this has got to be near an all time low. You would think these hacks would at least check to see if she makes any coherent points, let alone isn't just straight making shit up before they write a story about it, I guess not. So, I'll take a stab at doing what I hope Sean Penn doesn't have to do, respond. Below is my fake response from Sean Penn to Alonso.

Dear Ms. Maria Conchita Alonso,

First off, I would like to say how much I enjoyed your role in "Predator 2", and of course how great it was working with you in "Colors". Also, for taking the time out of your busy schedule for responding to some comments I made recently. Honestly, I find your letter to be full of distortions, exaggerations, and down right lies; but given the fact that the media here seems to really enjoy propagating your lies, I feel as though I must respond. Unfortunately, I don't have enough time to respond to the dozens and dozens of lies in your letter, as I am currently in Haiti working to avert a real disaster. Therefore, let me just address a few of the most glaring and egregious parts of your "letter".

1) You take issue with my assertion that Chavez has won numerous free and fair elections. You disagree, but it would be worth pointing out that those bodies designated with overseeing elections agree with ME, not YOU. Also, you suggest to your readers a report by the US State Department, "The Fraudulent Elections in Venezuela"; that would be a truly interesting report, unfortunately IT DOES NOT EXIST.

2) You write that the government has "notoriously increased poverty (65% to 71%)". That would indeed be a shame, however, the government I support has notoriously DECREASED poverty. Poverty has been cut in half, while extreme poverty has been cut by some 70%.

3) You write that 92% of the media is solely owned by the government. Do you simply make these numbers up? The largest papers are nearly all opposition, and even buried in the Human Rights Watch report last year they acknowledge that opposition TV channels control the majority of the market.

4) You note my Jewish ancestry and the write that the Venezuelan government has "overtly stated its hatred against the Jewish community worldwide". First, criticizing a countries foreign policy is not the same as criticizing the people. Further, perhaps you should tell this to the President of the Venezuela Israeli Association, who, after the synagogue attacks awhile back, had the following to say: "We are grateful to the President of the Republic Hugo Chávez, to Foreign Relations Minister Nicolás Maduro, to Minister [of Communications and Information] Jesse Chacón, to the director of the CICPC, and to the whole professional team at the Attorney General’s office." He continued, saying "The national government has shown its commitment to struggle to eradicate feelings that are foreign to the Venezuelan people, and to restore peace and tranquility to our community." S

5) The crime problem in Venezuela is a serious one, and I hope that the recent reforms to the police force are successful. Part of the problem is surely the decentralized nature of the police in Venezuela, it would be hard to put all the blame on Chavez himself. Yet you write that "Many wonder if this situation isn't but a diabolic strategy by the part of the government". This is just plain ludicrous; surely you would agree that Chavez wants to remain the elected leader of the country right? This would definitely be the worst electoral strategy I've ever heard of.

6) You write that if parents do not agree with the education system, they will "lose custody of their children". Again, you really have descended into the deep end at this point. You point to Cuba where this allegedly has happened, but you fail to note that the separation and exodus of thousands of children from Cuba, in what was known as Operation Peter Pan, was coordinated by the US Government.

7) You write that Chavez supports a litany of terrorist groups, unfortunately, not even the head of the US Southern Command agrees with you here. General Douglas Fraser recently testified that he was not aware of any evidence of relations with the FARC or ETA, let alone Al-Qaeda or Hezbollah as you allege. While he recanted later, this was clearly a political decision, he would certainly have been aware of the evidence had there been any.

I'm afraid I have to end there, although I could go on for some time. Your outright lies and blatant disregard for anything even closely resembling fact does an extreme disservice to everyone. By saying the things you do you are actively leading an effort to go to war against Venezuela; for if a country is led by a dictator with ties to terrorist groups and who reminds people of Hitler, the response you are trying to get is nothing short of war. Lets not forget that lies and distortions are the reason why we wrongly went into Iraq. It would truly be a great tragedy if by giving a platform to voices like yours the media wrongly leads us into another war based on false pretenses.

-Sean Penn

(I saw this picture a lot of places, don't know who to credit)

Saturday, March 27, 2010

Bolivia, Argentina, Natural Gas and Doomsayers

Remember when the sky was going to fall down in Bolivia because Evo nationalized the natural gas industry? Well, it hasn't happened yet, and with a recent spate of investments and a nice lil contract with CFK, it looks like the doomsayers are going to have some 'splainin to do (or more likely they'll just keep lying through their teeth, but whatever). Reuters, with a pretty nice article really:

Bolivia will quadruple natural gas exports to Argentina by 2021 under a deal signed on Friday that extends the deadline by nearly a decade for the Andean nation to boost fuel exports to its wealthier neighbor.

But Evo's scaring off foreign investment you say? There's no way he will be able to do this with them, well Reuters continues:

But a consortium led by Repsol unveiled plans in late 2009 to invest $1.5 billion to boost natural gas output, and last month Total launched a gas exploration project, saying it may invest up to $500 million in the impoverished nation.

Friday, March 26, 2010

The Count


...is the number of selective killings in Honduras since the country supposedly returned to democracy a couple months ago.

A delegation of Honduran human rights lawyers was in Washington, DC this last week to testify before the Inter-American Commission on Human Rights (IACHR) about the grim climate of repression and impunity that continues to this day despite the election of president Pepe "national reconciliation" Lobo.

That's right, elections were held and the international media moved on but the repression and political murders continued. The delegation of lawyers reports that the pattern of selective killings under dictator Micheletti's rule has been normalized under Lobo's government. The killings continue to target journalists, academics, opposition organizers and, disturbingly, their family members as well.

Three of those killed were journalists, including a Nahúm Palacios, who was supposed to be under special protection by order of the IACHR. Just this last Tuesday, a vocal professor critical of the coup was murdered at his university in front of his students.

During their testimony at the IACHR, the delegation highlighted the impunity with which obvious human rights violations have been met by the Honduran legal system. They also pointed to the hypocrisy surrounding the application of the Amnesty Law, which was supposed to promote national reconciliation and dialogue. Indeed, it appears as though only golpista scum are receiving amnesty in Honduras as 111 people still face terrorism charges (terrorism!) for protesting against the dictatorship while no one associated with the coup has been brought to justice.

This is what whitewashing a dictatorship through phony elections and a hypocritical discourse of national reconciliation begets. The repression can continue as before, if not more deeply entrenched, and the international community can move on and feel good about the triumph of diplomacy.

Thursday, March 25, 2010

Heritage Makes Me Angry....

The Heritage Foundation blog has a post from some young 'un on how the Bolivian army will now use the slogan "Patria o Muerte, venceremos". Apparently they don't get the irony like we do. But in any case the post begins with "The Cold War is supposed to be over, and the murderous ideology of Marxist-Leninist revolution either tempered by capitalism and consumerism in China or Vietnam, or confined behind the grim ramparts of communist throwbacks like Cuba and North Korea." But really the only ones still fighting the cold war are the Heritage Foundation and their ilk. Get past a slogan, and you'll see that Bolivia is one of the most successful countries in the hemisphere, regardless of ideology or rhetoric.

Best economic growth in the region in 2009, yup, that belongs to Bolivia. So good that even the IMF, yeah, THAT IMF, is praising Bolivia for their economic policies. Unless Heritage thinks the IMF has all of a sudden gone the way of Marxism, they should seriously take a reality check and stop letting "young leaders" who don't know shit post on their blog.

The people in Bolivia who are still fighting the cold war, its not Evo, its the fascist assholes who are trying to overthrow the government because their president cares about people who aren't rich and white.

This "young leader" from Heritage writes that "Bringing back the ghost of Guevara is a great way to shore up support for Morales not only in Latin America but throughout the world." You know what else is a great way to "shore up support", implement policies that the majority of your country approves of. Oh and taking the lead role in pushing for better climate policy on the world stage might make just a few people happy "throughout the world".

Personally, I think it is slightly amusing that the military slogan was changed, but why I think Evo is legit, is because his policies are legit. Maybe the folks at Heritage are the ones who should stop fighting the cold war.

Rant over.

Wednesday, March 24, 2010

The IDB gets more cash and stuff...

Hey remember back in the day when after a long period of soul searching and a bad existential funk the IMF was given a new lease on life by the global financial crisis, allowing it to reinvent itself, seize entirely new mandates and, of course, recapitalize like never before? No? Ok, whatever, cuz that was so 2009 anyway.

Nevertheless, not to be outdone by its institutional peer, the Inter-American Development Bank has just completed a round of soul searching of its own, and by "soul" I mean billions of dollars and by "searching" I mean meeting at a beach resort in Cancún.

But while it's cooler and hipper counterpart the IMF, with french "socialist" rock star Dominique Strauss Kahn (DSK) at its helm, is out reinventing the world's financial architecture and recanting on its long held dogmas, it appears the IDB got to the recapitalization party a bit too late, securing a mere $70 billion for itself. According to a report from IPS the IDB had previously sought more than twice as much:
"The IDB had been seeking a 180 billion dollar increase in capital, as the governors of the Bank - usually finance ministers or central bank directors from the member countries - had agreed at the last annual session in Medellín, Colombia in March 2009.

But 110 non-governmental organisations (NGOs) from 22 countries of Latin America and the Caribbean objected to that sum, arguing that the IDB had not justified that amount, had refused to share a draft of its replenishment proposal, and had failed to provide responses to recommendations for reforms."
Ouch! It looks like the IDB's governors didn't buy its idea to follow the IMF's lead and use the crisis to expand its operations. During the crisis the IDB increased it's annual lending significantly to help cushion part of the recession. Thing is, it looks like they wanted to keep up the new level of lending permanently but the governors just weren't going for it.

In any case, them NGOs have been pissed at the IDB for a while for, among other things, having a terrible environmental trackrecord, a chronic lack of transparency and accountability, and it's failure to learn from its mistakes and seek alternative regional integration models. Now, shockingly, it looks like the IDB's governors are, if not listening to the NGOs proposals, at least seem to be paying lip service to them. The IDB has 60 days to incorporate the recommended reforms before submitting the final recapitalization request to it's governors.

Time will tell if IDB management will follow through but the members of the NGO coalition are keeping their cool:
"The Cancun Declaration is a step forward, but is only that- one step... We hope we will not have to wait another 16 years until the next capital increase request for the Bank to fully take on the challenges of efficiency, accountability and environmental responsibility."

Bush Uses Clinton as Hand Towel in Haiti

This video is just priceless (the wipe is at about 15 seconds):

But it may not just be out of disrespect, turns out Bush is actually a clean freak. Obama describes meeting Bush for the first time in his book "Audacity of Hope":

“Obama!” he said, shaking my hand. “Come here and meet Laura. Laura, you remember Obama. We saw him on TV during election night. Beautiful family. And that wife of yours – that’s one impressive lady.”

“We both got better than we deserve, Mr. President,” I said, shaking the First Lady’s hand and hoping that I’d wiped any crumbs off my face.

The president turned to an aide nearby, who squirted a big dollop of hand sanitizer in the president’s hand.

“Want some?” the president asked. “Good stuff. Keeps you from getting colds.” Not wanting to seem unhygienic, I took a squirt.

On second thought, it might just have been out of disrespect both times....

Tuesday, March 23, 2010

The Ragin' Cajun Heads to Colombia

Yeah, thats right, James Carville is back in Latin America, this time in Colombia as an advisor to the even more hawkish (if that's possible) presidential favorite in Colombia, Juan Manuel Santos.

Carville, of "Old School" fame....oh right, he was also the lead strategist for Bill Clinton's presidential run, is not new to the region. For those who haven't seen "Our Brand is Crisis", well, I'll let the Democracy Center explain:

The film is a portrait of how a team of savvy, Machiavellian US political consultants parachuted into a country they knew nothing about and designed a strategy to return one of the nation’s most disliked political figures to the country’s highest office. When polling and focus groups show that Goni is unlikely to win any more than a quarter of the vote, the visitors from the US implement a strategy to knock down the support of anyone who might win more than that.

First off, go see the movie. Secondly, THIS GUY GOT GONI ELECTED. Yeah, Goni, wanted in Bolivia for his role in the in the killing of near 60 protesters, and now living a cushy lifestyle where else, but in the good ol' U.S of A. So far no love from any US administration on Bolivia's extradition request, not even from "Hopey and Changey" himself.

I just can't wait to see what Santos does with all that political capital Carville gets him.....

(h/t Justin Delacour.....image from ourbrandiscrisismovie.com)

Monday, March 22, 2010

The Echo Chamber

All it takes is one comment. There have been untold reports over the last week about how Chavez plans to "regulate" the internet, most articles mention twitter and facebook as the the eventual targets. It all stemmed from a comment Chavez made, saying "the Internet cannot be something open where anything is said and done. Every country has to apply its own rules and norms." Venezuelanalysis took a look at a sampling of headlines:

As a result, on Saturday Reuters headlined with “Venezuela’s Chavez calls for internet controls” while Associated Press headlined with “Venezuela’s Chavez: Internet should be regulated” and said that Chavez had called for internet regulation and demanded that authorities “crack down on a critical news Web site that he accused of spreading false information”.

The BBC reported that, “the possibility that Venezuela will introduce internet regulations seems to be closer than ever.” and most mainstream media used the issue to refer again to the supposed “repression” by the Venezuelan government when it refused to re-new the license of pro 2002 coup TV channel, RCTV.

Other Venezuelan and Spanish news headlines included, “Chavez: the Internet mustn’t be uncontrolled”, “Chavez on the verge of censuring the internet”, “...attacks freedom of expression”, “Attorney general asks that internet be regulated”.

Go figure that leading New York Times hack Simon Romero introduced his article on Saturday about the popular Venezuela site El Chigüire Bipolar with, "This may be a perilous time to operate a Web site focused on politics here, given President Hugo Chávez’s recent push for new controls of Internet content." But then again, Romero is almost always late to the game. It even prompted press groups, like Reporters Without Borders to issue strong condemnations of the move.

But what the fuck? Do reporters read the news? Do they do any research of their own? Or is it all just an echo chamber?

A week ago, a leader of the PSUV clarified things a bit, or at least you might think he did, saying:

“Chavez didn’t demand that the internet be regulated, rather the president said that there are laws and that it’s necessary to act in accordance with the law.”

On the same day, Manuel Villalba, the head of the science and technology commission in the National Assembly responded to the accusations that Facebook and Twitter were on the verge of being shutdown, saying:

"That is made up. They are looking to generate opinion. This has never been planned. It's not true."

Seems pretty clear, unless you happen to be a reporter. To be fair, yesterday, AP reported that, "Venezuela's Chavez denies plans to control Internet, backtracks on talk about regulations." So all it takes is one comment, taken out of context, and there is your media coverage of Venezuela for the week. And my guess is that most people read the first round of articles, chalked it up to ol' dictator Chavez and then tuned out. Safe to say in the eyes of many, it is now fact that Chavez is planning on regulating the internet.

And on a somewhat different note, Chavez is starting his own blog! You can put me on the list of bloggers anxiously awaiting the first post....

Just Another Week in Sunny Colombia

So last week a human rights defender and a journalist were killed in Colombia, making it, well, your average spring week in our favorite LatAm client state. Shockingly, Big Al, made a statement condemning the death of journalist Clodomiro Castilla:

"We have made every effort to stop the threat of assassinations against journalists," he said. "Just when we thought we had overcome the tragic situation, more killings of journalists appear."

Very interesting, as this statement from RSF makes it seem like "every effort" was most certainly not made:

Reporters Without Borders urges the Colombian authorities, especially the interior ministry, to explain why they recently stopped providing protection for Clodomiro Castilla Ospina, a magazine editor and radio reporter who was gunned down in the northern department of Córdoba on 19 March.

Really, it all is not terribly surprising, Big Al has shown himself time and time again to not be the biggest fan of so called "human rights defenders" and "journalists". Just check this video out, one of my personal favorites, from Adam Isacson at Plan Colombia and Beyond.

Sunday, March 21, 2010

Bolivian Army unveils new logo

OK, so I'm a bit late on this one but the Bolivian government has unveiled the military's new logo, which as reported here a few days ago, features the indigenous wiphala. I've gotta say, it certainly looks far cooler than the stoic, ugly ass symbol of republicanism they had before. Great symbolism all around in the new one but instead of wasting your time while I try to unearth what little I remember from my liberal arts education, I'll leave all the artsy, visual interpreting stuff to vice president Alvaro García:
"The emblem brings together several elements that represent the nation, there's our three colors, the insignia of our nation, there's the wiphala, which captures the diversity of our peoples, of the cultures and regions of Bolivia... I celebrate this proposal that attempts to synthesize our vital forces, maintains what has been built in 180 years of republican life, the three colors with which we live and die to defend."

Friday, March 19, 2010

The Count


...Is the percent of lost GDP in Chile due to last month's earthquake. Today Chile's new Interior Minister gave the reconstruction effort a hefty $30 billion price tag, 3.6 to 4 billion of which will go to repairing the 14 hospitals across the country that were destroyed by the earthquake. The government also announced a revised tally of the earthquake and subsequent tsunami's casualties, which has reached 452 dead and 97 missing.

Yes indeed, much remains to be done and the debates over how to fund the reconstruction effort as well as holding construction companies accountable for damaged properties is in full force. The gov. is currently considering a proposal to pay for the reconstruction effort by raising royalty fees on mining companies. That's right, Piñera is contemplating going against his campaign promises in the interest of... common sense! And, of course, raising royalties on extractive industries pretty much makes him Evo Morales' BFF even more, no?

On a more serious note, Mr. Lorenzo "tower of pisa" Constans, the president of the Chilean Chamber of Construction (CCC), has issued a (sorta) mea culpa on behalf of Chile's construction companies for maybe kinda sorta possibly violating building codes:
"I'm not ruling out that at some stage, during the geological survey or during calculations or even the construction phase, there could've probably been an error."
Meanwhile, the CCC has signed an agreement with the metropolitan authorities of Santiago to provide the city with technicians to evaluate the damaged buildings and assess possible building code violations. In other words, under this agreement the same construction companies facing lawsuits will provide the city with experts in order to evaluate their own shitty collapsed buildings. What's more, as the excellent CIPER has dug up, the Mayor of Santiago, Fernando Echeverría, owns one of the construction companies in question, Echeverría Izquierdo, which built at least 3 of the damaged buildings. BEST. CONFLICT OF INTEREST. EVER.

The Presidential Island

From the always hilarious Chigüere Bipolar:

Thursday, March 18, 2010

The Ultimate Comeback

So last week the State Department released their annual Human Rights reports, and every year the voices from around the world criticizing it get louder and louder. So in the Western Hemisphere we already have Brazil, Ecuador and Venezuela speaking out and probably more. Perhaps more surprisingly Big Al had some choice words about the US report on Colombia, calling the report both biased and politically motivated. That’s right, the US’ main ally in the region agrees with Chavez, Correa and Castro that these reports are total bullshit. Then today we get Haitian President Preval with some harsh words for the US, even though he needs every friend he can get right now.

Lat/Am Daily noticed that Correa suggested Ecuador put out its own report, on human rights in the US, but one country already does this, China.

Yeah, China ain’t new to the game, they’ve been pissed about this before it was the cool thing to do and this is their 11th report on human rights in the US. So take a look at excerpts from this years report, from Xinhua:

The report is "prepared to help people around the world understand the real situation of human rights in the United States," said the report. 

The report reviewed the human rights record of the United States in 2009 from six perspectives: life, property and personal security; civil and political rights; economic, social and cultural rights; racial discrimination; rights of women and children; and the US' violation of human rights against other countries. 

It criticized the United States for taking human rights as "a political instrument to interfere in other countries' internal affairs, defame other nations' image and seek its own strategic interests." 

China advised the US government to draw lessons from the history, put itself in a correct position, strive to improve its own human rights conditions and rectify its acts in the human rights field. 

This is the 11th consecutive year that the Information Office of China's State Council has issued a human rights record of the United States to answer the US State Department's annual report. 

"At a time when the world is suffering a serious human rights disaster caused by the US subprime crisis-induced global financial crisis, the US government still ignores its own serious human rights problems but revels in accusing other countries. It is really a pity," the report said. 

You should really click through and read the whole thing, here is the link again just in case.

Drug Money and Banks

So Wachovia got stuck with a $50 million dollar fine and has to forfeit another $110 million, just for laundering some Mexican drug money. This really isn’t surprising, I mean drug cartels and banks are tight and the banking industry may remind a lot of people of a cartel. But really we should actually be thanking the cartels, since drug money saved the world from the brink. All the banks were in dire need of liquidity, and where was the help coming from? Drug cartels, that’s where. Just listen to the UN:

Antonio Maria Costa, head of the UN Office on Drugs and Crime, said he has seen evidence that the proceeds of organised crime were "the only liquid investment capital" available to some banks on the brink of collapse last year. He said that a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result. 

Just to be clear, Costa adds:

"Inter-bank loans were funded by money that originated from the drugs trade and other illegal activities... There were signs that some banks were rescued that way." 

Actually, Wachovia was processing money transfers from exchange houses on the US-Mexico border and it probably had a whole lot more to do with making a buck then saving the bank. Never the less, it’s a good opportunity to point out that the global banking system is flush with drug money, and if anyone wants to get serious about cracking down, they are going to make some serious enemies….I mean drug cartels are bad, but banks? The worst.

Wednesday, March 17, 2010

Piñera's first "uh oh" on Human Rights

Greg over at Two Weeks Notice reports that the Valech report, an important document on torture during the Pinochet dictatorship in Chile, has gone missing from the Ministry of Interior's website. It's not immediately clear why the new Piñera administration decided to remove such an important document from the Ministry's website but it has certainly angered the Association of the Families of the Disappeared, who referred to the removal as an "unacceptable aggression" and a "step backwards on human rights."

This type of insensitivy concerning human rights isn't exactly a shocker. As some might recall, last year during the presidential campaign Piñera was caught assuring retired army generals that human rights trials would come to an end under his government. In his words (my translation):
"In our government we're going to make sure that justice is applied to all our citizens, including those who are in active service or have retired, promptly and fairly, without perpetuating processes ad aeternum that never end."
Yes, that was a bit redundant. But more to the point, this speech behind closed doors to a room full of retired generals was met with outrage in Chile, prompting one senator to accuse Piñera of facilitating impunity in the country.

To be fair, and I'm no Piñera fan, this statement and the removal of the Valech report fits neatly into the right's discourse of moving forward and leaving the past alone. And yes, that has it's merits but, nevertheless, moving forward and pursuing reconciliation is different from forgetting and any government that is serious about human rights should be able to openly talk about them, especially when its members are perceived to have ties to a history of abuses.

Tuesday, March 16, 2010

patria o muerte, venceremos!

There's been a bit of controversy in military circles in Bolivia during the last few days over Evo's order to make the socialist chant "patria o muerte, venceremos" (homeland or death, we will triumph) an official military slogan. That's right, the army that famously captured and executed Che Guevara will now be required to chant a slogan traditionally associated with the deceased guerrilla. Oh the Irony.

But this rebranding of Bolivia's military doesn't end there. Evo has ordered the military to confer official military honors on the wiphala, an indigenous emblem that has come to represent the new plurinational state of Bolivia. The symbolism of requiring an institution that has historically been an instrument of repression to wear an indigenous emblem and chant a slogan associated with the struggle for social justice couldn't be any clearer.

So props go out to Evo for showing the military who's boss and dishing out a bit of historical justice, no?

New Bolivian mining law will share royalties with indigenous communities

Word has it that the latest draft of Bolivia's new mining law would share royalties from mining operations with nearby indigenous communities, according to a report by La Razón this morning (sorry no English link on this one).

Royalties from mining operations are currently divided between the prefecture and the municipality the project takes place in, with 85% going to the former and 15% to the latter. Under the new law, however, the prefectures would now only receive 80%, giving the remaining 5% to local indigenous communities.

The draft law also includes a mechanism for redistributing royalties among neighboring municipalities if annual royalty payments are larger than $600,000. If this is the case, the prefecture would only receive 70%, with 20% now going to poorer neighboring municipalities and 5% going to the local municipality. Now, if annual royalties top $600,000 the indigenous share drops to 2% and the remaining 3% goes to... the Armed Forces? Sounds to me like a compromise gesture to members of the military upset over ongoing institutional reforms.

Monday, March 15, 2010

The Patent Breaker

Adding to the growing pile of evidence that Brazil don't take no shit, we get this, from Bloomberg:

Brazil will seek to break intellectual property rights on U.S.-made prescription drugs, music, books, software and movies in a bid to force the U.S. government to end cotton subsidies that violate global trade rules.
This is all because the US, while preaching free trade to the developing world has some of the largest agricultural subsidies in the world, depressing international prices and making it virtually impossible for developing countries to compete. Ya know, standard fare. In any case, the WTO ruled in Brazil's favor last year, and Brazil isn't going to take it lying down:

“We want to show the U.S. that it doesn’t matter if you are big or small, or how much money you have as a nation,” Lula said on March 10. “We all want to be respected and to be treated fairly.”

Politics Trumps Truth, Venezuela Edition

In case anybody wanted further proof that the US just goes ahead and makes shit up when talking about Venezuela, lets take a look at recent statements by SOUTHCOM commander Douglas Fraser.

On Thursday he testified before the Armed Services Committee that "We have not seen any connections specifically that I can verify that there has been a direct government-to-terrorist connection." Then John McCain's head nearly exploded as he demanded Fraser acknowledge the magic laptops.
(note this picture was not from the briefing)

This led Fraser to say, "So there has been some -- some -- some old evidence, but I don't see that evidence. I can't tell you specifically whether that continues or not." And I'm thinking you know, this guy is alright, he's not full of shit like the rest of these guys, he's just giving his honest assessment, far out!

And then Friday....

Fraser, after meeting (being told what to say by) Assistant Secretary of State Valenzuela, offers this darling of a statement:

There is indeed clear and documented historical and ongoing evidence of the linkages between the Government of Venezuela and the FARC.
Whhhhaaaaat?? That must have been some crazy evidence that the State Department didn't share with their top military brass. Or another example of how when it comes to Venezuela, politics trumps truth.

Saturday, March 13, 2010

Original Sin no more

It seems that Latin American countries are starting to atone for their original sins, or at least according to a new policy brief by the Inter-American Development Bank.

Original sin, the tendency among developing countries to borrow excessively in foreign currency (yes, academic economists like to come up with dramatic names for seemingly boring subjects), was a common culprit in economic crises during the 1990s. Long story short, countries found themselves with a lot of cheap foreign capital at their disposal and tended to borrow heavily in foreign currency and usually at very short maturities. The problem is that global capital flows can be rather fickle and often come to a sudden stop, unpredictably, leaving countries strapped for cash. Throw in a domestic currency crash and all of a sudden the value of your foreign debt explodes (a so-called "balance sheet effect"), leaving countries bankrupt.

So, the IDB now reports that Latin American policymakers have taken a "step in the directions of "safer" debt composition." Between 1997 and 2009 foreign currency debt as a share of total public debt has plummeted from 64% to 37%.

What is more, this "safer" level of foreign currency debt has not reversed since the onset of the global financial crisis, when the U.S. Fed started to flood the market with cheap funds. In other words Latin American debt managers have resisted the temptation to revert to old patterns and take advantage of all 'em cheap dollars. Now this is the part where someone else would tell you that this shows how the region is "maturing." But don't worry, I find that kinda talk far too patronizing and rather anthropomorphic since these are COUNTRIES we're talking about, not children for fucks sake. Anyway, RANT OVER.

The Outstanding Success of NAFTA...

Yes, it has been so amazingly successful that last week 27 representatives introduced legislation that would withdraw the US from the trade agreement entirely. Kudos!

Why, might you ask, would a legislator want to withdraw from this famously fruitful agreement? Most likely because it HASN’T BEEN and their constituents are a little pissed off that over the last 15 years NAFTA has caused over one million lost jobs (and that was in 2006).

Aha, you say, we lost some jobs, but what about Mexico? These free trade agreements are all about helping the developing world, right? And Mexico has benefited tremendously, right?

Not so says a study from the Carnegie Endowment for International Peace. The authors conclude, quite bluntly:

“After 15 years, it seems clear that Nafta’s promise of broad-based dynamic growth did not come true in Mexico.”

The failures include, but are not limited to:

1.6 percent per capita growth between 1992-2007 (low even for Mexico).
2.3 million less agricultural jobs, compared to just 500,000 more manufacturing jobs.
The wage gap between the US and Mexico is BIGGER than it was pre-NAFTA.

Remember, while still a candidate Obama pledged to open up NAFTA and make reforms. Once in office, well, maybe next year.


Look no further then the LA Times to see some other lovely consequences of NAFTA. Knowing that opening up would mean devastation to the poorest farmers, Mexico created a fund that would help farmers get by. The LA Times reports:

Today, the fund -- far from helping the neediest -- is providing large financial subsidies to the families of notorious drug traffickers and several senior government officials, including the agriculture minister.

Friday, March 12, 2010

The Count


...Is the number of tarps distributed to those in need of shelter after the Earthquake in Haiti. Sure sounds like a lot right? Unfortunately, this will only provide the most basic shelter for less than half of those in need. The earthquake, which is estimated to have killed over 200,000, also left 1.3 million Haitians homeless and in need of shelter. The earthquake was an unprecedented tragedy, but the upcoming rainy season (always dangerous in Haiti even absent the most devastating earthquake ever) will likely lead to a second humanitarian crisis. The rainy season will begin in earnest within a month, and rain has already begun to fall (leading to at least 13 deaths already). Shelter is the most pressing need right now in Haiti.

Wait, does anyone really believe that a tarp or two is going to be sufficient? Really?

Thursday, March 11, 2010

Solidarity Fútbol

Yesterday Chile's new president Sebastian Piñera and Bolivia's Evo Morales played a "solidarity" game of fútbol. The speedy Otto over at IncaKola beat me to the scoop and also posted a great video of the whole affair. So go check it out, here.

On a completely unrelated note, Chile was hit by a 7.2 richter scale aftershock during the beginning of Piñera's presidential inauguration ceremony. Let's hope this isn't some sort of bad omen.

Tuesday, March 9, 2010

Is Sarah Palin in Bed With Hugo Chavez?

Now that is a particularly truthy headline and you may be asking yourself what I am currently smoking, and that’s fair, but consider this from the WaPo Politics and Policy blog:
But Palin's anti-Venezuela sentiments do not appear to extend to her husband, whose snowmobile racing team was sponsored by a division of Citgo, the retail arm of Venezuela's state-owned oil and gas company.

Todd Palin's Iron Dog snowmobile team competed this year under a sponsorship from Mystik Lubricants, which was founded in Texas in 1922 but now resides under the Citgo corporate banner.
Oh snap!

So Sarah might not be in bed with Chavez, but her husband’s snowmobile team is! Or at least is in bed with an obscure subsidiary of the Venezuelan state owned oil company.

The real question though is who is more pissed about this connection? I mean neither is much of a fan of the other.

On the one hand you have Sarah Palin, who described Chavez as a “dictator” during her veep run. Them are certainly fightin’ words, and her connection to Chavez might make Glenn Beck’s head explode, which would actually be a net positive for the rest of us.

On the other hand you have Chavez, who described Palin as "a beauty queen that they've pulled out to be a figurehead." Well, I would replace “beauty queen” with “local Alaskan sports reporter”, but point well made.

It’s a tough call really, but I would have to say Chavez has more to be upset about being connected to Sarah Palin then vice versa. What do you think?

Who should be more pissed about being connected to the other?

Adimark poll: Bachelet remains popular after earthquake

Today the polling company Adimark reports that president Bachelet's approval rating remains at an impressively high 84% percent, despite cries that the government mismanaged the emergency relief effort. This poll provides a unique opportunity to determine the impact of government handling of the crisis on its approval rating since it was originally completed on Feb. 24, right before the earthquake. Instead of releasing the report on March 1 as originally scheduled, Adimark decided to a second round of polling to capture the public's response to the earthquake.

The report provides a breakdown of the data by social strata, showing that Bachelet's approval rating has taken a hit among the wealthy (group ABC1, below) even though this is the group presumably less affected by the earthquake--all those images of looting and populous rage following the earthquake must have really done a number on them.

[Independently of your political orientation, do you approve or disapprove of the way Michelle Bachelet is conducting her government?]

Interestingly, Bachelet's approval was the highest among the least wealthy, C3 and D/E, where her approval rating actually increased. Adimark also reports that, predictably, that Bachelet's approval rating was significantly lower in the areas most heavily affected by the earthquake (although the sample size for each area was too small to be worth reporting independently).

Significantly, Bachelet's handling of the emergency, though lower than her general approval rating, was also quite high at 75%. Now this takes me to my next point...

Who's this above you might ask? That's Alf Landon, the 33rd president of the United States, or at least according to the now defunct Literary Digest, whose infamous poll wrongly predicted Roosevelt's electoral defeat in 1936. Instead of losing the 1936 election, as Literary Digest predicted, Roosevelt defeated Landon by a landslide. The reason for this epic polling fail? Literary Digest conducted its poll by consulting mostly it's own readers, who were primarily wealthy, and through telephone interviews, which also biased the results.

But what does this classic textbook example of sample selection bias have to do with Chile's earthquake and Bachelet's handling of the emergency response?

Adimark's poll is based on phone interviews. Now, although Adimark is a reputable polling company and assures us that the results were corrected for "the level of telephone penetration in each region," I can't help but wonder if it properly accounts for the views of the most affected by the earthquake who, presumably, are in no position to complete a phone survey.

Of course, we shouldn't completely disregard the results of this poll and overstate the potential effect of this bias. It's just that a one sentence explanation of the methodology used in the report isn't exactly reassuring...just saying. In my opinion Bachelet has done a decent job and has exuded confidence throughout both the financial crisis and now the earthquake. It is also possible that there are widespread negative reactions to the government response but that these are limited to other members of the administration and simply haven't stuck to Bachelet herself. Whatever the case, it seems the voices on the Right predicting that the emergency response will forever stain Bachelet's legacy have been silenced for now.

Monday, March 8, 2010

Africa Gets Structurally Maladjusted by the IMF...

Funny or Die heads to HBO, and teaches an invaluable lesson in international relations:

CIPER Chile on the earthquake aftermath

Great coverage of the earthquake aftermath coming from CIPER Chile (Center for Information and Investigative Journalism). CIPER has put together a list of shame of all the construction companies whose new buildings, some of which still have for sale signs in front, collapsed after the earthquake because they cut corners on safety standards. Sorry but no English link on this one but as a consolation prize I linked to CIPER's excellent photo-gallery of the earthquake/tsunami devastated south.

Contagion Time

Ah, remember the good old days, back in the early 2000s, when the certain and ever lasting benefits of "free trade" with the U.S., extolled as a sure route to development-freedom-democracy-and-awesomeness, offered us comfort from the anguish of our fleeting, uncertain and all around unknowable world? Well that was then and this is now.

According to a new study by the IMF, Central American contagion from the global financial crisis is largely due to increased trade integration with the U.S., which was caused primarily by, you guessed it, the Dominican Republic and Central American Free Trade Agreement (DR-CAFTA). In other words, DR-CAFTA countries have become more dependent on U.S. markets and thus more vulnerable to recessions from up north. According to the study:

"A one percent shock to U.S. growth shifts economic activity in Central America by 0.7 to 1 percent... Shocks to advanced economies associated with the 2008-09 financial crisis are found to have lowered economic activity in the region by about 4 to 5 percent, on average, accounting for a majority of the observed slowdown."

Well, there you have it: "freer trade" with the U.S. has amplified the transmission of recessions to Central America. Hey at least free trade agreements still have all those other wonderful provisions on intellectual property, industrial policy, environmental and labor standards and... oh wait, never mind.

Sunday, March 7, 2010

Oh The Irony

So it appears that Chavez and Uribe are close to another reconciliation man hug, with Uribe even defending the Venezuelan Government from the Spanish court's accusations about involvement between the ETA, FARC and Venezuela. Never mind that the accusations are based on the infamous magic laptop of right wing lore. According to Colombia Reports, Uribe said:

"The fact is that if it is necessary to investigate a government official for participation in terrorism, that doesn't mean that that government or that state are terrorists or even participating," Uribe told a Medellin forum.

Honest Al, coming to the defense of his Venezuelan brothers. Or just defending his actual brothers? The Colombia government's connections aren't to left wing terrorists, so no big deal, but Al has got his own ties to worry about. I mean if someone wants to equate a Venezuelan government official with ties to terrorism to the Venezuela state sponsoring terrorism, they are going to have some tough questions to answer about Colombia. Shit, two weeks ago big Al's cousin (and former president of Congress) was arrested for ties to paramilitaries (right wing groups can be terrorists too!). Colombia Reports takes it from there:

The arrest took place after the Supreme Court gave an order to detain him on charges of conspiring with various members of paramilitary organizations to commit crimes. Uribe is allegedly linked with former paramilitary Jairo Castillo Peralta, aka "Pitirri," and Salvatore Mancuso, who commanded the Northern Bloc of the AUC (United Self-Defense Forces of Colombia).
No big deal though, because as Al says, "to investigate a government official for participation in terrorism…doesn't mean that that government or that state are terrorists…"

Hugs all around!

Friday, March 5, 2010

The Count


...Is the percentage of all mining lawsuits by international investors against governments currently taking place in Latin America.

Free Trade Agreements and Bilateral Investment Treaties often include provisions that allow investors to bypass domestic courts and sue governments directly in the International Court of Settlement and Investment Dispute (ICSID), housed at the World Bank. That's right, with these provisions in hand investors can seek compensation for lost profits resulting from, say, laws pertaining to the environment, public health, labor rights or controls on dangerous capital inflows.

In recent years, as the big "61" above suggests, mining companies in Latin America have taken particular advantage of this shady legal mechanism, accounting for 20 of the 33 ongoing ICSID cases.

Chile: Public Relations Victory

Last Saturday's earthquake in Chile has left much of the country in shambles and countless recent homeowners are angry at the poor construction quality of their homes and apartments, many of which have been rendered uninhabitable by the earthquake. It is increasingly starting to look like building standards were an until now unnoticed casualty of Chile's economic boom during the last 20 years. Many new buildings, presumably well equipped to withstand a major earthquake, will now likely need to be demolished for safety reasons, leaving many appalled homeowners demanding answers and accountability.

In this context, the president of the Chilean Chamber of Construction, Lorenzo Constans, had this to say on the matter:

"There are many buildings that are tilted, the most obvious example being the leaning tower of pisa which has remained that way for centuries without falling over."

Thanks dumbass! I'm sure all the people who lost their homes thanks to construction companies' negligence and greed will find this very comforting and informative.

Is Hillary Clinton the Geeky Kid From Grade School?

Hillary Clinton is in the midst of a tour of Latin America, making the rounds, doing the meet and greet thing, and of course, trashing Venezuela. But the most important stop was clearly Brazil, where the US is looking to gain support for UN sanctions against Iran. Well that went well; before Hillary could even get in the door, Lula had closed it:

"It is not prudent to push Iran against a wall," Silva told reporters hours before meeting with Clinton. "The prudent thing is to establish negotiations."

Foreign Minister Celso Amorim’s words were even stronger:

"We will not simply bow down to an evolving consensus if we do not agree," Amorim said. "We have to think by ourselves and with our values and principles."

Man, that has got to really hurt! First a regional grouping without the US, and now Brazil thinking by themselves! Based on values and principles! Not to worry Brazil, Hillary totally agrees with that. Today, while being as preachy as ever in telling Latin American countries that "they don't really ask much of themselves in order to produce the outcomes they say they seek," Hillary concluded by saying she was not interested in preaching, but that "It's a realistic and respectful relationship."

Speaking of realistic, by far the best comment from Hillary was during a town-hall (the State Department press release called it a “townterview”, no joke) type meeting in Brazil. Desperate as ever to make friends, Hillary let this fly:

"I believe that Brazil and the United States are the two countries more alike than any two countries in the world."

The response was pretty great also:

MS. BELTRAO: Why is that so?
SECRETARY CLINTON: Because we are big –
MS. BELTRAO: Oh, yeah. (Laughter.)
SECRETARY CLINTON: -- we are pluralistic. We are dynamic. We’re mostly happy.
MS. BELTRAO: Mostly.
SECRETARY CLINTON: We are two countries that have so much in common and I want to bring us closer together.

Ah yes, reminds me of those days in the school yard, where the geeky kid nobody likes keeps sucking up to the cool kid….only to be laughed at.

Thursday, March 4, 2010

OAS: Venezuela has made "major achievements" on socioeconomic rights

Last week the the Organization of American States' Inter-American Commission on Human Rights (IACHR) released a scathing report on the supposedly grim state of democracy and human rights in Venezuela. Buried in the 300-plus page report, in between page after page of criticisms towards the government, the IACHR admits that the Chavez' administration has made remarkable progress on the socioeconomic front, promoting literacy, reducing poverty and lowering inequality, among other things. Here's the excerpt:

"On the other hand, in this report the Commission highlights the Venezuelan State’s major achievements in the fields of economic, social, and cultural rights, through legally recognizing the enforceability of the rights to education, to health, to housing, to universal social security, and other rights, as well as by implementing policies and measures aimed at remedying the shortcomings that affect vast sectors of the Venezuelan population. The Commission emphasizes that the State has succeeded in ensuring the majority of its population is literate, reducing poverty and extreme poverty, expanding health coverage among the most vulnerable sectors, reducing unemployment, reducing the infant mortality rate, and increasing the Venezuelan people’s access to basic public services.

The IACHR also congratulates Venezuela on being one of the countries that has made most progress toward attaining the Millennium Development Goals. It has also brought about a major reduction in the disparity between the groups at the extremes of income distribution, to the point that the country now reports the lowest Gini coefficient in Latin America, according to the Economic Commission for Latin America and the Caribbean (ECLAC). In addition, according to the United Nations Development Programme (UNDP), Venezuela moved from having a medium level of human development in 2008 to join the group of countries with a high level of human development in 2009. In the IACHR’s opinion, the priority the State has given to economic, social, and cultural rights is fundamental in ensuring the decent existence of the population and is an important foundation for the maintenance of democratic stability."

Now, everything in this report should by no means be taken seriously, but this admission on the part of an institution that in the past has been largely hostile to the Chavez government underscores how difficult it is to deny the recent social gains in Venezuela. A grain of truth, as they say.
Starting a blog is a tricky thing and so in the spirit of sparing you the awkward introductions and all the silly fanfare, how about we just skip all the formalities and just get going with this thing, no?