U.S. to Hollman Morris: Stay Out!

Just in case you needed further evidence that the Obama administration is continuing with the same policies towards Latin America as the Bush administration, prominent Colombian journalist Hollman Morris, who Big 'Al Uribe once called a "an ally of terrorism," was denied a visa by the US embassy in Bogota, this according to Matthew Rothschild at The Progressive. Morris was headed to the US after being selected as a fellow by the Neiman Foundation at Harvard.

You may remember from a post awhile back, that Morris was the target of a smear campaign by the DAS. The link was to Plan Colombia and Beyond who had the documents outlining DAS movies against not only Morris, but other opposition groups and journalists as well. Adam Isaacson wrote at the time:

Here are the files obtained by Hollman Morris, with English translations. They go beyond surveillance and wiretapping to reveal what it calls a “political warfare” campaign of dirty tricks and threats against President Uribe’s political adversaries. They date from 2005, the last year of Jorge Noguera’s tenure as DAS director.

The guy digs deep, goes where people don't want him to go and is a verifiable bad ass.  As Rothschild writes, quoting heavily from Human Rights Watch, who gave him a "Defender of Human Rights" award in 2007:

“A journalist and human rights activist, Morris has dedicated his career to uncovering the truth about atrocities committed on all sides: by right-wing paramilitaries, left-wing guerrillas, and government authorities,” said Human Rights Watch in granting him the award. “Morris has faced serious harassment and death threats for his work. . . . Human Rights Watch honors Morris for his courage and unfaltering dedication to exposing Colombia’s most egregious human rights abuses.”

But I suppose he's been just a bit too critical of the US' favorite ally to be welcome into the States, eh? Lets get this right, guy exposes DAS misdeeds, the US needs to cut off assistance to DAS, Colombia needs figure out a new way to spy on the president of Ecuador, and run smear campaigns against their opponents, and then the US denies this guy a visa? Sure sounds like the State Department is on the right side of this one! In fact, if you look at the image above, you'll see "Gestionar la suspension de la visa" as one of DAS' courses of action against Morris...Really State Department? Really? Straight outta the DAS playbook? Damn, that's just low.


(image from Plan Colombia and Beyond)

Making the Case for Argentina

Not sure who to root for with the quarterfinals of the World Cup starting tomorrow? Well, Dave Zirin makes the case for Argentina, who in addition to playing "with the wicked grace of decades past", brings it politically as well:

At a training session in South Africa, the entire Argentine team unfurled a banner that read, "We Support the Grandmothers of the Plaza de Mayo for the Nobel Peace Prize." The group has in fact been officially nominated for the prize and Abuelas president Estela de Carlotto, is in South Africa, meeting with Nelson Mandela and other world leaders. She has also been publicly and literally - embraced by Maradona. The critical work that Abuelas has done will only receive a greater spotlight if Argentina continues to advance. This makes all those connected with Argentina’s dirty war, who still hold tremendous power in the country, increasingly, and deliciously, apprehensive.

I can certainly understand, and have heard from numerous people, that these kinds of political concerns shouldn’t play into our rooting interests when it comes to the World Cup. It should just be about the game. But this is like wishing a double cheeseburger didn’t have cholesterol. There is simply no sporting event on earth more entangled in politics than this brilliantly bombastic tournament. Anytime you have half the earth tuned in - as colonies play their former colonizers and dictatorships challenge democracies - politics follow like rainbows after rain. As long as politics are part of the mix, we might as well support a team that in addition to epitomizing the beautiful game stands with a beautiful cause. Viva Argentina!

I urge you to go read the whole thing, only Dave Zirin can quote from Galeano and Yahoo! Sports writers in the same piece. For those of us who enjoy our sports almost as much as our politics, Zirin is a must read. 


(image also from Zirin)

How Not To Normalize Relations in One Easy Step

This must have made for one hell of a phone call. Following Santos’ victory in Colombia's presidential elections last Sunday, Ecuadorian president Rafael Correa called him to congratulate him on his victory. Needless to say relations between the two countries are a lil rocky, I mean, a court in Ecuador recently issued an arrest warrant for the Colombia president-elect. In any case, following the phone call there was much hoop-la about the normalization of relations, yadda, yadda…well, how’s this for normalization (via Bloomberg):

Colombian police have been tapping the telephones of Ecuador’s President Rafael Correa and government and military officials since 2008

 But what's more is it’s not like Santos was an innocent bystander in any of this, the report includes this juicy lil nugget:

Colombian President Alvaro Uribe and incoming President Juan Manuel Santos have been briefed at least three times on the operation, which began in the aftermath of a Colombian raid on a rebel base camp inside Ecuador in March 2008

Which brings us back to that phone call. Can’t you just imagine Santos answering Correa’s call, while three giggling DAS agents in a sixth story apartment in Quito listen in? Yup, got it.

Not to worry though, it’s not like Ecuador is the only one to get this special treatment. From EUObserver:

A group of MEPs is calling for action as further details of an alleged covert operation conducted by the Colombian intelligence agency (DAS) continue to emerge, with one of its reported aims being to undermine the authority of the European Parliament.

Recently released documents that were confiscated from the DAS by the Colombian Attorney General's office highlight the nature of "Operation Europe."

Its objective was to "neutralise the influence of the European judicial system, the European Parliament's human rights sub-committee, and the office of the United Nations High Commissioner for Human Rights," reads one text seen by this website.

And yes, the “alleged action in Europe includes phone tapping and the interception of emails”.

Weekend Update

 

South America continues rolling through the World Cup, Uruguay and Argentina advance, Chile and Brazil meet tomorrow...

• This is some serious structural maladjustment shit right here: While calling for austerity in Greece and elsewhere, the IMF and World Bank approve "have pushed ahead with pay raises above the rate of inflation for thousands of workers". WaPo has the story.
  
  
• More Jessica Jordan is a good thing. The Telegraph takes a look at their native beauty's new role as "Director for Development of Frontier Zones and Macroregions" in Bolivia. For background, check out El Duderino's profile of Jordan from awhile back. 
  
  
• With the one year anniversary of the Honduran coup tomorrow, 27 US lawmakers sent a letter to Hillary Clinton concerning ongoing rights violations. The number of slain journos so far this year is 9, for those at home counting.
  
  
• Earlier in the week, various places got nose deep in some stats on cocaine production in South America. Bottom line, the UN and US have very different numbers, Colombia is doing better, Peru much worse...down in one place, up in another...how long are the suits really going to keep up this nonsense "war on drugs", seems like they "learn" the same lessons every few years or so.
  
  
• The vultures are circling again after the latest round of debt swaps in Argentina.  Finance Minister Bodou says that that "a total of 92.4 per cent of the nearly $100bn on which the country defaulted in 2001 has been restructured after including the results of an earlier swap in 2005." But fear not, billionaire hedge fund managers and all around douchey-douche vulture funds are still bitching and moaning about evil Argentina.
  
  
• The Huff Post is a wonderful place, but they need some better oversight. On Friday they let Nancy Soderberg use their space for pure propaganda without even identifying who she represents. Soderberg is the former US ambassador to the UN under Clinton (which the Huff Post says), but she also represents the American Task Force Argentina, a group led by vulture funds that has continually railed on and brought litigation against Argentina for the better part of the last decade. On Friday, she wrote:
  
  
  

  Last month, Argentina put forward its Global 2017 bond offering but the markets are not buying, forcing the government to extend its offer until June 22, a stunning vote of no confidence in the policies of President Kirchner. The international message to Argentina was loud and clear: No deeds, no prize. Investors don't trust you, or your policies. Looking over Argentina's record on financial responsibility, it's no wonder why.

  
  Nevermind that Argentina has reached an agreement with 92.4% of bondholders; these assholes bought in late for cheap and intend to reap massive profits no matter how they get 'em, and Nancy Soderberg has been enlisted to do their bidding. It's a shame the Huff Post allowed this without having her disclose her troubling ties.
  
  
• Juan Forero in the WaPo takes a look at the daunting back log of human rights cases facing Colombia, and the implications for both Santos and the US. I know Maladjusted has ragged on Forero before, but he does a nice job of showing how the US support for Colombia despite the serious rights abuses has prevented improving relations with other countries in the hemisphere. Money quote:
  
  
  

  But Washington's closest ally in the region, Colombia, has been the source of the most serious cases of abuse before the commission, investigators familiar with the cases said. In all, the commission is evaluating 1,055 cases. Dozens of the cases of serious violations took place during Uribe's administration. 

• Finally, as a follow up to this post from last night, and for a good laugh, a picture of the best mis-pic in recent memory...maybe even better than the old dusty farts at WaPo not knowing who Evo is, courtesy of The New York Times, via Howard Kurtz:
  
  

Presidential edition of Whats Wrong With This Picture?

UPDATE BELOW

Last Wednesday the Washington Post style section ran a story on the front page about Oliver Stone's new movie "South of the Border". The story included a picture of the six current South American presidents that Stone interviewed. But, wait, there was one tiny little problem...take a look at the picture below:


(Top, Chavez, Correa and de Kirchner. Bottom, Lugo, Morales and da Silva)

You may have noticed, something is amiss.....got it yet??? Answer and more after the jump.

The Count: childhood poverty

45 and 17.9...

...are the percentages of children and teenagers in Latin America living in poverty and extreme poverty defined in terms broader than simple income. That's right, ECLAC has a new research bulletin out giving us a sneak peek of an upcoming ECLAC and UNICEF report on poverty trends throughout the region.

The idea is simple. Much like the World Bank's Human Opportunity Index (HOI), which sets out to measure access to the resources that grant a child the opportunity to succeed in life, this new measure of childhood poverty is based on the notion of human rights--both social and economic. In other words, going beyond the mere notion of income, a child is considered poor if any of his or her basic rights are violated. The six rights explicitly considered are:

1. Nutrition: defined in terms of weight and size by age.
2. Clean drinking water: taking into account it's origin, supply and accessibility.
3. Sanitation: defined as relative access to a sewer system.
4. Housing: considering the number of people per room, the building materials of the roof, floor and walls.
5. Education: in terms of assistance and number of completed school years.
6. Information: defined as access to electricity and having a radio, tv or telephone.

So how much of a difference does this new measure make? A LOT. The pie chart below shows the percentages of different poverty classifications for the whole region. Light blue is outside of poverty, dark gray represents income poverty, light gray is poverty in terms of both income and the absence of rights, and green is poverty just in terms of the violation of rights. In other words, without the new methodology, we'd be ignoring all of the green chunk and a big part of the light gray chunk.



Now, as usual, the Count asks: what does the country breakdown look like? And you'll find just such a thing right below, courtesy of Maladjusted Graphs™.

[Percentage of children and teenagers living in poverty and extreme poverty, circa 2008]

As can be seen above, the top five on the list are, in order, Costa Rica, Chile, Uruguay, Argentina and Venezuela. On the other extreme, the five countries where children are worse off are, again in order, El Salvador, Guatemala, Nicaragua, Bolivia and Peru. (so much for Peru's economic miracle, no?)

Well there you have it folks. Yet another welcome attempt to challenge the misleading simplifications of standard statistical indicators.

Cocaine+Futbol+World Cup=Great Documentary

If the equation above confuses you, or pops up on your screen when your boss is looking over your shoulder, apologies. But bear with me here. First off, I'm back and props to my comrade Gringo Juan for holding it down while I was off gallivanting through the woods. I also got to catch up on some reading and watching, the reading recommendation is still a few days off, but let's get to the movie recommendation: "Two Escobars".

It's a documentary by Jeff and Michael Zimbalist which aired as part of ESPN's 30 for 30 series. I know, ESPN, not exactly who you would turn to for your documentary needs, but this one is well worth the time.

It traces the rise of Pablo Escobar and Colombian futbol (and star player Andres Escobar, the only Colombian ever to be offered a spot on Inter Milan). Everyone knows Pablo, but not everyone knows he was a futbol fanatic and also played a huge role in the barrios in Colombia, especially Medellin. In his more formative years, he donated soccer fields in poor neighborhoods throughout the country, but even in his later years the passion for soccer never left him. Colombia was far from a soccer powerhouse and much of the top talent often left for bigger money and more fame overseas in Europe....until the cocaine cash started to flow, that is.

All of a sudden not only could club teams keep the top talent, but players from all over the region were coming to play in Colombia. Turns out a soccer organization is a really good way to launder money, ticket sales being in cash and all. Every drug lord had a team, or two. Pablo was no exception, and the other Escobar, Andres was quickly rising to the top of his profession.

Colombia became one of the favorites to win the 1994 World Cup, and as violence raged at home, the national soccer team became the Colombian government's best PR tool. The team was a way to show the world that Colombia was not just about violence and to give Colombians an escape from the everyday hardships. But, just as Pablo's notorious run came to a crashing halt, so did Colombian soccer.

I really don't want to give much more away, it's a tragic and fascinating story, and incredibly informative to boot (not bad for an ESPN docu). As much as the story can carry the movie on its own, the historic footage is really the icing on the cake. Colombia, in their bright jerseys, played some beautiful futbol back in the day and they've got the footage to prove it. As an example of some of the team's flair, here's a clip that you may have seen before, Colombian goalie Rene Higuita's infamous scorpion kick:



Damn. Unfortunately, Higuita was not on the team for the '94 World Cup, for reasons that you will find out when you watch the movie. Not only is there amazing footage of the national team, but also of the brutally deadly drug war, including some footage of Pablo that is really stunning. Pieced together with interviews with such characters as Pablo's right hand man (in jail for murder) and his cousin, it makes for a must watch. It doesn't paper over the massive atrocities that Pablo is responsible for, but neither does it just give you one side of the story. Footage from his funeral shows the thousands and thousands of grieving Colombians, mostly from the barrios, who had lost one of the only men who had truly provided for them. Nor does it overlook the heavy hand of Carlos Castano and Los Pepes (later of AUC paramilitary fame), and their support from El Norte. Perhaps, since its a sports network, the political considerations don't weigh as heavily, but good for ESPN for airing this informative, entertaining, and deeply tragic documentary.

Here is a 5 minute introduction to the movie, and below, the upcoming schedule for when it will be on ESPN, ESPN deportes, and ESPN classic.



Saturday June 26, 10PM ESPN Classic, Friday July 2, 1am ESPN 2, Sunday July 4, 1pm ESPN 2. Check your local listing, all times EST.

For the record, I was not paid to shill for this movie, it just kicks ass.

Pinera's approval rating now 54%

Chile's Center for the Study of Contemporary Reality (CERC, for it's spanish initials) today released the results of it's new public opinion poll. It shows Piñera's approval rating at a solid 54%. Though not directly comparable, this is one point higher than the Adimark poll released last month.

Not surprisingly, Piñera's approval rating is significantly lower in the areas most affected by last February's earthquake, coming in at 48%.

On an interesting side note, the CERC poll also shows that while Piñera's approval is high, 68% still want Bachelet to be president again. This is the bizarre state of affairs of Chilean politics today. One of the most successful political coalitions in the history of Latin America is voted out of office and replaced by a centrist conservative pledging change...who then proceeds to behave exactly like the coalition he replaced while his predecessor remains as popular as ever.

The impact of large natural disasters on economic growth

In the aftermath of the earthquakes in Haiti and Chile it is natural to wonder what impact these two terrible events will have on these countries' future economic growth. Will the damage permanently lower output and burden future generations with the reconstruction bills? Or will the post-disaster construction boom and opportunity for structural change act as an economic stimulus, ushering in a new period of rapid growth?

Well, the folks over at the Inter-American Development Bank have clearly pondered these two questions more than I have. And their results are not exactly what one would expect.

Using a large comparative sample of severe natural disasters, the authors take advantage of the fact that natural disasters are a random event to tease out their causal effects on growth. In other words, the paper attempts to approximate a laboratory setting by also putting together a "synthetic" counterfactual of what would have happened in disaster countries if the natural disaster had never happened (they do this by grabbing a bunch of similar countries and weighting them to approximate the initial conditions of the disaster countries).

The results can basically be summarized with the graph below. It shows the path of real GDP per capita in actual disaster cases and in the counterfactual cases. Real GDP per capita is set to zero on the year of the crisis.

So what does this tell us? Well, disasters appear to have no effect on per capita income. In fact, the path of real GDP per capita following disasters perfectly mirrors the counterfactual index.

There were, however, two exceptions to the rule:

"Contrary to previous work, we find that natural disasters, even when we focus only on the effects of the largest events, do not have any significant effect on subsequent economic growth. Indeed, the only two cases where we found that truly large natural disasters were followed by an important decline in GDP per capita were cases where the natural disaster was followed, though in one case not immediately, by radical political revolution, which severely affected the institutional organization of society. Thus, we conclude that unless a natural disaster triggers a radical political revolution, it is unlikely to affect economic growth."

So there you have it. From the perspective of GDP per capita, a profoundly flawed but nevertheless indispensable measure of economic welfare, even the most severe natural disasters do not have an effect. So what's the moral of the story here? Is this a tale about human resilience in the face of calamity? Or is it another sobering lesson in the perils of statistical abstraction?

Chávez serenades Hilldog...sorta

Translates roughly to:

"I'm unloved...
by Hillary Clintooooooooon.
I don't like her eitheeeer....
dahdahdaaaah."

Weekend Update

In the woods and out of touch, but never too far away for a 'lil weekend update. This weeks theme, must read blogs.

• But before we get to that, in case anybody missed it, Santos will be Colombia's next president. According to the LA Times, "With 99% of votes counted, Santos had garnered 69% of the votes in the runoff election to his challenger's 27%." So maybe the polling companies aren't quite as bad as we had thought....
  
  
• But wait, thanks to a diligent Huff Post investigation, it seems Colombia's new president isn't any stranger to controversy....I guess he should fit in fine in the Casa Narino. The whole article is a must read, but here is the intro to give you a taste: "The man most likely to become Colombia's next president this Sunday has played a previously undisclosed role as a corporate officer of the company hired to run the nation's elections over the last decade, while he was a political leader, business records obtained by the Huffington Post Investigative Fund show."
  
  
• Now to our week's theme. We start with a blog I've been meaning to introduce for a long time, Gerardo Esquivel's El Placer de Disentir. He's a Mexican economist who knows his shit. Yeah, it's in Spanish, but if that's in the cards then definitely go check it out. His latest post is a rundown on the electoral scene in the DF, but make sure to check out some of his previous posts as well, especially the ones on inequality.
  
  
• Keeping with Spanish language blogs, check out Politica y Economia, economics and politics from a heterodox perspective. The most recent post takes a detailed look at Ecuador.
  
  
• Next, on to Triple Crisis, not exactly Latin America oriented, but well worth your time. Its run by a host of well known and distinguished academic types, including my personal favorite Kevin Gallagher, whose breakdowns of everything NAFTA are simply the best. This week, one of the contributors of Triple Crisis, Martin Kohr, has a nice article via the South Center on the Bolivia climate summit.
  
  
• Finally, another link to FiveThirtyEight, they simply do numbers better than anyone and we should all be encouraging them to do more and more about Latin America. This week they look at the World Cup as South America continues to rip through the field. I can't say I agree with everything in their analysis, but this is pretty interesting, "The five teams this year are from the continent's five southernmost countries, which, incidentally, are among its richest and (excluding Paraguay) rank highest on the human development index."
  
  
• Onto some actual news; Brazil has suspended their WTO retaliation against the US. FT got the story, "The deal will extend until 2012 a holding arrangement in which the US pays Brazilian farmers $147.3m a year and promises to cut subsidies in future. In return, Brazil will hold off imposing blocks on imports or ignoring patents and copyrights, which it is entitled to do after a World Trade Organisation panel declared the US cotton support programme illegal."
  
  
• Staying with the WTO, and keeping with this weeks theme of plugging blogs, Timothy Wise at Triple Crisis has a real great breakdown of the hypocrisy of developed countries in trade negotiations...and surprise, the criticism isn't just directed at the US: "But what about middle-income hypocrisy? Isn’t Brazil one of the world’s largest agro-export powers with a well-cultivated reputation for defending the interests of other countries’ small-scale farmers? Isn’t Brazil also guilty of hypocrisy? Absolutely. In fact, as part of its side agreement on cotton with the United States, Brazil got a multi-million dollar fund for investment in its cotton sector. Talk about hypocrisy: Africa’s Cotton 4 will now have to compete in global markets not only with subsidized U.S. cotton but with Brazilian cotton subsidized by the United States!"
  
  
• Via Just the Facts blog, a new paper released last week takes a look at the ongoing DAS scandal in Colombia. Check out the linky to read more, but the title says it all...."Far Worse than Watergate"...How Uribe has managed to stay in the presidency with such a high approval rating is beyond me...Tricky Dick must be mad jealous.
  
  
• Ricky Singh in the Jamaica Observer, writes on the hypocrisy of the US' extradition policies. Singh compares the US' requests for Christopher "Dudus" Coke from Jamaica, to their systematic denial of Venezuela's requests for Luis Posada Carriles. "Posada and Bosch have long been identified as the chief plotters of the bombing of the Cubana aircraft on October 6, 1976 when all 73 people on board -- 57 Cubans; 11 Guyanese and 5 North Koreans -- died. Instead of facilitating their extradition as fugitive terrorists from justice, then President Bush, in response to urgings from the anti-Fidel Castro lobby in Miami and Washington as well as from his son Jebb Bush, then governor of Florida, granted a Presidential Pardon to Bosch." Hopey and Changey hasn't sung a different tune either, for the record. Singh makes the case for CARICOM taking a leading role in all this...very compelling.
  
  
• Finally, for some entertainment, check out these two videos from the Larry King Show. Oliver Stone is joined by Jessie "The Body" Ventura and Florida Republican and all around douche-bag Connie Mack. The real purpose was to discuss Stone's new movie South of the Border, but it quickly becomes a hilarious shouting match between Ventura and Mack. I mean, it takes a hell of a panel to make Stone look like the level-headed guy in the room. So go check it out.

Be back in a few days, until then enjoy Maladjusted's better half.

Chile's new ambassador to Argentina

Last week maladusted brought you the controversy surrounding the idiotic and neanderthal comments made by Chile's now former ambassador to Argentina. Long story short, Mr. Otero told people the Pinochet dictatorship wasn't a big deal or anything, cuz, you know, "most chileans didn't feel its impact."

Piñera proceeded to fire his ass and now hired a new guy named Adolfo Zaldívar. Well, courtesy of the always irreverent The Clinic, here's what Zaldívar had to say about his new boss late last year:

"Sebastian Piñera is the purest expression of the concentration of wealth and speculative capital that rules the world. He is not in a position to guarantee a behavior in line with what Chile needs from its head of state."

Awkward. Awkward indeed.

The Count

8...

...is the number of years it takes workers to reallocate into new industries after a 30% drop in manufacturing tariffs. Or at least according to simulations ran by researchers at the World Bank, the University of Virginia and Koç University in Istanbul.

Ok, perhaps we should back up for a second. Everyone knows that freer international trade is good cuz of stuff and junk. And by stuff I mean lower prices for consumers and by junk I mean efficiency gains from exposing domestic firms to international competition. The aptly named "gains from trade" can be bountiful, economists say, but reaping it's benefits involves adjustment costs as the less productive firms that can't compete "exit" the market (this is a euphemism for going out of business and firing workers) and the newly freed up resources (read: the newly unemployed) are reallocated.

Trade liberalization, in other words, produces both winners and losers, and the overall gains, proponents of free trade hold, outweigh the costs incurred by displaced workers.

But did you know that while every economist and their semi-literate grandmothers have attempted to estimate the value of the gains from trade, virtually no one has set out to comprehensively estimate the associated costs?

Well, Bernard Hoekman and Guido Porto, from the World Bank and the University of La Plata, respectively, have a nice summary of the most recent research on the subject. While the gains from trade can be huge, their collection of recent research shows that in practice workers displaced by liberalization often find it extremely hard to resettle into new and more productive work.

And this takes us to today's count. One of the studies cited by Hoekman and Porto, using data from the U.S., sets out to simulate the impact of a 30% reduction of manufacturing tariffs on labor adjustment costs. They find that the costs of moving between industries are very large, often several times a worker's average annual income. Perhaps more importantly, after liberalization it takes up to 8 years for 95% of the displaced workers to settle into a new line of work. This dramatic and lengthy period of adjustment implies sudden and large movements in wages, with displaced workers experiencing lower wages in both the short and long-run.

Colombia, Venezuela and Exports: Biggest Loser Edition

A Bloomberg article today touches on how the diplomatic dispute with Venezuela is affecting Colombia’s economy, as it has resulted in plummeting trade with their second most important trading partner. Maladjusted wrote awhile back about how a Mockus presidency could be good for business if it means a reopening of trade between Venezuela and Colombia. Well, it doesn’t look like Mockus has a snowball’s chance in hell to actually win this thing, but as updated numbers are out from Colombia’s DANE, it’s worth taking a look to see how continued diplomatic problems (almost assured with Santos) will continue to weigh on the economy. Already, as Bloomberg points out, Colombia has the second lowest growth forecast in the region, and the collapse in trade is at least part of the problem. So, lets run some numbers through Maladjusted Charts and see what we can find out, has Colombia found new markets for these goods? What sectors are the worst hit?

First off, lets get the basics down, just how much has trade with Venezuela collapsed, and who has picked up the slack?



Before the drop off from Venezuela, the US was still Colombia’s largest trading partner, but was followed by Venezuela (all alone in second place), Ecuador and of all places, Switzerland. But through the first 5 months of this year, the US has remained its dominant position, while China has catapulted from obscurity to accounting for nearly 8% of total exports, about double that of Venezuela or Ecuador, as the chart below shows.



So from the above, it does seem that Colombia has fared pretty well finding alternative markets for their exports to Venezuela, indeed total exports increased over the same period last year. Unfortunately for some, looking at the breakdown of goods reveals a slightly different picture. Some 23% of exports with Venezuela during the period of Jan.-April 2009 were animals and animal products, a sector that accounted for around 5% of Colombia’s total exports. This year, however, Venezuela has stopped buying these products, and the sector has taken an extreme hit, making up less than 1% of total exports so far this year. The chart below shows how while exports to the US have skyrocketed, none of it has come from animals and animal products.



So what has accounted for the rapid rise in exports to the US? Well, simply, oil. Colombia has increased their oil production this year, and coupled with a rise in prices from last year, exports of combustibles accounts for nearly the entire rise in total exports, with most of the surplus going to the US.



Another sector that seems to have taken a hit from the Venezuela dispute is textiles. Overall, despite being a smaller component of total exports, textiles accounted for the second largest drop from last year to this year after animals and animal products. Exports to Venezuela of textiles dropped by $125 million, while overall exports of textiles fell by $105 million. As the chart below clearly shows Colombia has been unable to replace the Venezuela market for textiles.



In the end, what this means is summed up nicely in a quote from the Bloomberg article referenced earlier, “Colombia is selling more oil to the U.S.,” said Sandy [an economist with Credit Suisse Group AG]. “For the industrial sector and food producers, more sales to the U.S. don’t do anything.”

So while total exports have increased over 2009, it’s really not saying much as 2009 was clearly not the best year. And although trade has increased greatly with China and with the US, there have been sectoral shifts more so than straight replacement. I would say that the increased trade with China is definitely a good thing for Colombia, since before the recent increase Colombia exported less to China as a percent of total exports than just about every other country in South America. On the other hand, increasing dependence on the US may not be the most desirable outcome here. I’m sure the US will be happy to buy up Colombian oil…especially over Venezuelan oil, but look at Mexico…do you really want to be that tied to the US economy? Not to say that being tied to Venezuela’s economy right now sounds very good either, but looking at the next few years up north is not very promising. The UCLA Anderson Forecast was just released and projects growth for the next three years below the 3% long-term nominal growth rate. And yes, unemployment is expected to still be over 8.5% by 2013. Not exactly a booming export market.

But more importantly, and certainly more importantly for those most affected in Colombia by the trade fall off, are the sectoral shifts that will occur over the medium term if exports to Venezuela don’t return, or if new markets for those products can’t be found. While the overall export picture doesn’t seem dire, the industries that have been most affected, animal farmers and textile producers have been severely hit. Farmers, while they account for a smaller percent of GDP, make up nearly 20% of the workforce and have been the worst hit by the dispute with Venezuela.

Well, I’m sure this is WAY more than you ever wanted to know about trade between Venezuela and Colombia, I think it may be more than I wanted to know, but there ya have it. Next time maybe we can see if Venezuela has found new markets to import all that food that they no longer get from Colombia….then again, it’s probably just rotting in a container somewhere anyhow…

Import Substitution vs. the Washington Consensus: Dani Rodrik knows his shit

Dani "master of development policy" Rodrik has a nice breakdown of a recent Inter-American Development Bank report on productivity changes in Latin America. Discussing the changes in productivity during the years of import substitution and then during the Washington Consensus, Rodrik writes:

"For all its faults, IS promoted rapid structural change. Labor moved from agriculture to industry, and within industry from lower-productivity activities to higher-productivity ones. So much for the inherent inefficiency of IS policies!

Under WC, firms and industries were able to accomplish a comparable rate of productivity growth, but they did so by shedding (rather than hiring) labor. The displaced labor went not to higher-productivity activities, but to less productive lines of work such as informality and various services. In other words, the WC ended up promoting the wrong kind of structural change."

Good thing I was too lazy to read that IDB report when it came out, because instead of giving you another dose of my ramblings, I could instead bring you Rodrik's far more insightful account. In any case, go check it out, here.

Stop the presses!

Maladjusted has just received breaking news that's sure to overturn everything we know about market efficiency: privately operated airports in Latin America are not more efficient than publicly operated ones! According to a study published by the World Bank! THIS. CHANGES. EVERYTHING.

That's right, the authors of the new World Bank working paper, Sergio Perelman and Tomas Serebrisky, set out to address a seriously urgent shortcoming in the obscure airport efficiency literature (usually filed in academic journals under the "who the fuck cares?" category). In their words:

"To the best extent of our knowledge, there has not been any study that computes the efficiency and performance of a representative sample of airports in Latin America. The main objective of this paper is to fill this gap in the literature."

But just imagine their surprise when they realized that they had accidentally stumbled upon research that is vaguely interesting to more than three other people who study the subject. From the report:

"Probably the most unexpected result is that privately operated airports in Latin America have not outperformed publicly operated airports. Given the wide variety of private participation schemes used by Latin American countries, this result should lead to more detailed and case by case research to assess the effects of private participation on airport performance. In addition, future research should also assess the impact of private sector participation on the financial efficiency of LAC airports as well as on the quality of service they deliver."

Well consider me among those whose worldview has just been shattered. Snark aside, I was pleasantly surprised that what seemed like an otherwise trivial and pointlessly obscure research brief (measured against other World Bank research papers, which are usually in a triviality league of their own) turned out to be modestly insightful.

Weekend Update

It's not the weekend anymore, but shouldn't everyone just get the next month off for World Cup anyway? I mean, just read this, why bother pretending to work?

• Thanks to Adriaan Alsema of Colombia Reports for responding to Maladjusted's post on the Colombian government misquoting Hillary Clinton. CR had linked to the Colombian government statement that used the misquote.
  
  
• A Wall Street Journal editorial praises Hillary Clinton's "diplomacy" as it relates to Honduras. Congrats Hillary you and the down right deranged WSJ editorial board are in agreement...at least if Hillary were the president she wouldn't be secretary of state.
  
  
• Meanwhile, the sun rose in Honduras and just as unsurprisingly there was another attack against someone opposed to the coup. Porifirio Ponce, the VP of STIBYS (large, influential union), was attacked when traveling with some family members, one of them was killed. Must be the "strong and consistent commitment to democratic governance and constitutional order," that Hillary was talking about.
  
  
• Also on Honduras, Daniel Altschuler expands on a point Maladjusted brought up a little while back on the similarities between the US' policy towards Israel following the flotilla attack and the US' policy after the coup in Honduras. Altschuler writes, "In fact, the United States predictably shielded Israel from harsher United Nations Security Council condemnation and has expressed preliminary support for Israel's internal inquiry. The United States ultimately played a similarly unhelpful role in Honduras, removing pressure at a critical moment for Zelaya's reinstatement as a condition for recognizing the November elections."
  
  
• An interesting article in the New York Times about coca cultivation in Peru. Pretty simple point, when production decreases in one place, it increases in another...might demand be the issue here? Article includes this nice graph though...and wait, which one of these countries is considered to be "failing demonstrably" in the war on drugs? Nah, it couldn't be political!
  
  
  
  
• We linked to Justin Delacour's take down of Phil Gunson awhile back, well, it seems like Gunson responded, which prompted a response, which prompted a continued debate in the comment section. Delacour gives the predominantly incoherent Gunson a thorough take down. Read the original, then read this...and make sure to check out the comments.
  
  
• Hillary Clinton, while pledging her undying love, er, "support" for Colombia, also promised a "very intensive effort to try to obtain the votes to get the free trade agreement with Colombia finally ratified”. From vowing to re-open NAFTA to an intensive effort to pass something that much of the democratic party has blocked for years because of human rights abuses....hopey and changey for real.
  
  
• I wholeheartedly support Fernando Lugo giving all public workers the afternoon off today to watch the match against Italy....I mean c'mon, nobody was going to work anyway.
  
  
• Bloomberg cites a recent Datanalisis poll on Chavez's approval rating. Maybe Democrats in the US could learn something from him, he went after the speculators and financiers and saw a 6 percent increase in his approval rating last month, up to 48 percent. [Read: go after the damn bankers dems] This means we are probably within a few days of the next Jackson Peep rant, and surely there will be plenty of commentary about his popularity crumbling because it's below 50 percent, which, ya know, means he has the exact same approval rating as Obama. Also worth pointing out that Datanalisis is about as reliable as the Colombian press secretary, and it's no secret they're not the biggest Chavez fans, and I mean even the head of the organization doesn't think their polls are accurate!
  
  
• Bloomberg also has the recent Gallup numbers from Colombia, where the all of a sudden uneventful presidential run-off election will go down next weekend. Santos is favored 66.5 to 24.7. But hey, given how far off the first round was, that's still practically in the margin of error!
  
  
• In ongoing news concerning Maladjusted's new favorite movie, The Cove, haters are censoring it in Japan. Also, an investigation by the UK's The Sunday Times, apparently shows that Japan offers up prostitutes (among other things) to get countries to vote their way at the IWC. Among the countries who had been offered such sexy treats were two Caribbean countries referenced in the documentary, St. Kitts and Nevis and Grenada.
  
  
• More importantly than anything else though, its the fuckin' World Cup! Go get something with your team's colors, make a friendly wager, drink too many beers during the day, and celebrate The World.
  
  
  
  
  
  
  
  
  

The Count: LAC 2009 unemployment

0.8...

...is the percentage point rise in unemployment in Latin America and the Caribbean during 2009. That's right folks, ECLAC and the International Labor Organization have a new report out, showing that contrary to fears about the potentially grim effects of the global financial crisis, unemployment in Latin America and the Caribbean only increased from 7.3 percent to 8.1.

Following almost a decade of decreasing unemployment rates, the onset of the global crisis posed the threat of erasing all that hard-earned progress. Indeed, during the first quarter of 2009 many countries saw an alarming spike in unemployment rates. So then what happened next? To quote ECLAC:

"Although the crisis caused a drop in employment, an increase in unemployment rates and the deterioration of the quality of employment, the impact was mitigated by the signs of economic recovery as of mid-2009 around the globe, the countercyclical policies adopted in many countries and the stability of the purchasing power of wages due to decreasing inflation, which restrained the fall in domestic demand."

But how did each country fare individually? Well, below are the ECLAC/ILO numbers presented all pretty like courtesy of Maladjusted Charts™:

[South America: Percentage point change in unemployment, 2008-09]

For a while now the Count has been getting a little bored of seeing Chile "bestest-society-ever" scoring highest in every freaking social indicator around (except inequality, haha!). So it is surprising to see it leading the pack in unemployment increases. But what's most remarkable about this picture is Uruguay on the opposite end, showing unemployment actually decreasing by 0.2 points.

Not bad Uruguay. Not bad at all.

Early warning crisis indicators: truth in orthodoxy?

With the main drama of the world financial crisis behind us policy makers have lent increased urgency to coming up with ways to anticipate and thus prevent future crises. In other words, governments from around the world are looking for improved "early warning indicators" to keep this mess from ever happening again. Because, of course, NO ONE saw this crisis coming, right?

Whatever. The National Bureau of Economic Research has a new working paper out this week taking a fresh look at the early warnings literature. Unlike most papers studying the issue, which focus on particular variables specific to each past crisis in question, this paper approaches the 2008-09 crisis as if it didn't know anything about it before hand--prioritizing the variables most often identified in the past.

The authors, Jeff Frankel and George Saravelos from the Harvard Kennedy School, essentially ask the question: without the benefit of hindsight, would the standard crisis indicators have been able to successfully predict the 2008-09 crisis?

The paper starts with a very thorough review of past empirical studies to identify what indicators have most often been found to be statistically significant crisis predictors. Reviewing over 80 studies, the authors come up with these numbers, presented here courtesy of Maladjusted Charts:

[Number of times found to be statistically significant]

As can be seen above, there's no real shockers in this list as most of the top variables are the usual suspects. Foreign reserves has been found to be statistically significant by 50 different studies, followed by the real exchange rate (48), GDP (25), credit (22) and, of course, the current account (22).

Now, quite naturally, this on its own says more about the state of the economic literature than it does about what variables actually predict crises more accurately. The more orthodox variables have probably been studied for longer and hence more papers have found them significant. Similarly, variables like debt composition and capital flows only began to receive attention in the wake of the Asian crisis and the literature surrounding their role in financial crises has really only picked up in recent years.

So given this conceptual issue, a thorough empirical investigation--using innovative measures of crisis severity and incidence--might give less importance to the orthodox indicators, no? After all, a pattern in recent studies is that traditional indicators like foreign reserves to GDP or real exchange rate overvaluation do not predict crises as powerfully as previously thought.

Well, not so fast the authors of this paper say. After crunching the numbers they find that, without the benefit of hindsight and ignoring the particulars of the 2008-09 crisis, the two variables that predicted it's impact the best were foreign reserves and real exchange rate overvaluation.

Truth in orthodoxy? I wonder... That's really too bad though. I was kinda rooting for debt composition and capital flows.

Diplomacy Colombia Style, Starring Hillary Clinton

So this post was going to be about the irony of Hillary Clinton acknowledging Colombia's advancement in human rights at the same press conference that Big Al' Uribe criticized the sentencing of former Army Colonel Alfonso Plazas Vega to 30 years in prison. I mean all the guy did was get convicted for the forced disappearances of 11 individuals in 1985. Or, as Uribe described it "someone who was simply trying to fulfill their duty", adding, "That hurts. That makes me sad." Awww. Just fulfilling your duty eh? Is that what you have to say about killing peasants and dressing them up as guerrillas to fulfill quotas too? Whatever, in any case, as ridiculous as his statements may be, the post was ruined because, well quite simply, Hillary Clinton didn't exactly say what I thought she had.

So what happened?

I read this Colombia Reports article that included this line, "Clinton also recognized advances that Colombia had made in terms of human rights." And where did that link take me? Well, the website of the President of Colombia of course! Where I read that Clinton said:

“Reconocemos los avances en derechos humanos que ha hecho Colombia, los retos que aún persisten y la necesidad de la vigilancia, del compromiso en ese tema"

Or, loosely translated:

We recognize the advances in human rights that Colombia has made...blah blah blah

And I'm like damn, Hillary Clinton is recognizing some advances, at the same press conference that Uribe slams the jailing of a human rights abuser and a few days after the International Trade Union Confederation announced that half of the killings of unionists in the WORLD happened in COLOMBIA. But because it's the Colombia government, there is just this hint of doubt about everything they have to tell me, so I check the quote with the State Department's transcript (more trustworthy? Eh, probably), and this is what I find:

We also discussed Colombia’s efforts to enhance human rights, the strides made, the challenges that remain, the ongoing need for vigilance and commitment.

Wait, what? "We discussed Colombia's efforts to enhance human rights"? I mean, even loosely translated that's not "We recognize the advances in human rights". At least she did include discussing "the strides made", but fair to say this statement from the Presidents website is grossly overstated, right?

So not exactly the post we set out to write, but hey, on the same day Uribe criticizes the jailing of a big time rights abuser, the President's press secretary grossly exaggerates the US secretary of state's comments concerning so called "advancements" in human rights....yes, just another day in sunny Colombia!

Venezuela, Millenium Development Goals, and Graphs...lots of Graphs

Below, a series of fascinating graphs ripped from a report from Venezuela's INE (the nat'l stats institute) looking at Venezuela's progress towards achieving the Millennium Development Goals.

As can be seen in almost all these charts there are large spikes during the 2002-2003 period, which no doubt had its fair share of hardships, including the coup in April 2002 and the opposition oil strike in 2003. Just something to keep in mind.

Poverty and extreme poverty:


Gini coefficient:

Unemployment:

Primary education:


Literacy rate:

This and oh so much more, all available here. Check it out to find out way more than would be possible to put here.

Chile: Another Public Relations Victory

Before his election last December, many commentators on the left expressed concern at the possibility of a Piñera presidency. And yet, despite it all, Piñera's first few months in office haven't turned out all that bad as he has largely stuck to Concertación policies. Robert Funk quite poignantly commented that Piñera's State of the Union address to Congress even sounded more like a fifth Concertación government than the return of the right.

So then why the concern before Piñera's election?

Well, because he's surrounded by people who say things like this:

"The majority of Chile didn't feel the impact of the dictatorship. On the contrary, they were relieved. Because before you couldn't buy anything imported, you had to pay for what was produced in Chile--expensive and bad. Over night, you started to find out what was missing. The people won. Then the streets were cleaned and people started to have jobs."

And who's the dumbass who said that? It's Miguel Otero, Chile's ambassador to Argentina and Renovación Nacional insider. Maladjusted has argued before that Piñera and his government lack a certain sensistivity when it comes to human rights and addressing the dictatorship's legacy, but this is just too much.

Will Piñera act with the same swiftness as in past scandals and fire Otero? Let's hope so.

Update:

Otto at IKN has the scoop: Piñera has booted Otero out of his post as ambassador. Props are definitely in order.

Photo of the Day: Haitian Farmers Burn Monsanto Seeds

For the background, check out this brief video report from independent journalist Ansel Herz, who has been providing some great reporting from Haiti.

Weekend Update

(Update below)

Enough about military spending, what else is going on??

• Okay, so maybe not totally off the military spending subject since I just saw this....Greg at Two Weeks Notice picks up a statement from Arturo Valenzuela arguing that there IS NOT an arms race in the region. He even says that "in fact, if you look at the statistics, the data, that there has actually been a significant decline in expenditures on armaments". Well, take a look at Otto's post, and Maladjusted's post from earlier in the day, where we do exactly that....look at the data. While Greg disagrees with Valenzuela's analysis, and sure total spending has increased, if you look at spending as a percent of GDP, most countries HAVE decreased spending over the last decade. Only Ecuador, Colombia and Uruguay have increased spending as a portion of GDP since 2000. Maybe Valenzuela knew that...or maybe he just realized the US looked like a bunch of jack-asses since they spend more than the entire world on military shit and their fav client state is increasing spending more than anybody else in the region.
  

• Next, a movie recommendation, The Cove. A really disturbing, astonishing, moving, impressive, (insert laudatory adjective here), documentary about the slaughtering of dolphins in Japan. Led by the guy behind the TV show Flipper, a group of activists go all Mission Impossible on the slaughterers, hide secret cameras in the rocks and catch the seriously disturbing shit on video. Highly recommended.
  
  
• Although the movie is about Japan, there are some regional implications. The International Whaling Commission (dolphins are whales), is where Japan goes to defend itself and convince others to end the ban on whaling. In any case, the area where Japan has found its most support seems to be the Caribbean. The documentary shows how Japan uses their foreign aid programs to influence Caribbean countries (sound familiar...think USAID). Well, I did a little googling, and it seems to be true. Check out this commentary in the Jamaica Observer today on issue. The author writes:
  
  

  When people around the world think of whale-hunting nations, the Caribbean is the last place that crosses their minds. Yet, the governments of Suriname and the six independent members of the Organisation of Eastern Caribbean States (OECS) are in a pivotal position to end or continue a moratorium on commercial whaling that has been in place for 24 years
  
  ....

  Several authoritative reports suggest that Japan pays the membership fees of Suriname and OECS governments to the IWC and also pays the costs of their delegates' attendance at IWC meetings, directing how they vote. In return, these countries get fisheries complexes from Japan.

• The other reference to the region was that while Dominica has supposedly withdrawn their support, Japan has some new allies, including Ecuador. I know Correa has come under some heat from enviros in the country, but after watching the documentary, this shit is seriously disturbing. I was glad to see then, that ahead of the upcoming IWC meeting, Latin American countries (including Ecuador), have made a strong statement against the loophole that allows the killing of whales for scientific research. Hopefully the stand will extend to blocking all commercial whaling.
  
  
• Boz reports on the Brazilian presidential election and how it may relate to foreign policy. Read the post, very interesting. We'll just post Lula's FA adviser's statement in response to presidential candidate Serra's comments: "Serra is intent on being the exterminator of Brazil's foreign policy. He destroyed Mercosur, wants to destroy relations with Bolivia and treats Ahmadinejad like a Hitler. That is not prudent conduct for someone who wants to be president."
  
  
• Delacour is back at Latin America News Review and provides a nice 'lil round-up. An invaluable source, so hopefully the dissertation is done, and he's back at it.
  
  
• AP reports on a Chavez foe who has been barred from competing in upcoming elections....and I mean why would someone who was just sentenced to two years in jail for fraud NOT be able to run, right? You know where else opposition candidates are getting barred from running? Mexico...
  
  
• From a recent Jeremy Scahill piece on US Special Operations forces being deployed all over the world, we learn that Obama (Mr. Hopey-Changey) has actually increased the deployment of these special forces. Regional take: countries where they have been sent include Bolivia, Ecuador, Peru, Paraguay.
  
  
• The New York Times remembers that just because Zelaya isn't in an embassy, the political conflict continues...and continues to divide the region.
  
  
• Just in case you also forgot, check out this statement from Friday from Reports Without Borders, "300 soldiers and police storm community radio in continuing coup against media". Reconciliation Lobo is really coming through eh?
  
  
• For more on Honduras, check out RAJ and RNS at Honduras Culture and Politics. A series of interesting posts over the weekend are well worth your time.
  
  
• Finally, by the time of the next Weekend Update the World Cup will have started, so happy World Cup everybody! Productivity the world over is sure to see a strong decline over the next few weeks. Personally, I'm expecting (hoping) for an African team to make a deep run this year, and for Messi to break every scoring record possible. Enjoy the games!
  
  
• UPDATE: Check out Abiding in Bolivia, who picked up on the Scahill article, and has a nice comment on that. Also a link to the Peruanista with a video montage for the one year anniversary of the Bagua massacre. We are all thankful that Abiding is back...
  
  

More on Military Spending in South America

First off, props to Otto. I had a whole post ready to roll with pretty charts and data on military spending in South America when my RSSy turned blue and up pops "Military Spending in Latin America, 2009". So due props, but while the whole SIPRI study isn't available, the military expenditure database has been updated with numbers through 2009. So I'll add my two cents with a bit of a historical run-down. First, a look at total regional military expenditure 2000-2009 (in million US$, all $ figures are in constant 2008 dollars):



So there is clearly an increase in spending on military shit over the last ten years, but where is it coming from? Well, this provides some indication, as we break each year down by a country's share of the total:



It is a bit tricky to see since Brazil is such a large proportion, but that yellow one that gets much larger and the light blue above it...those are the only two countries who have seen their share of total regional military spending increase over the last 10 years. The countries, Colombia and Ecuador. The darker blue, all the way at the bottom (Venezuela), increases a bunch in 2006-2007, but is now at a lower level than in 2000.

Onwards; lets take a look at the major players but with some context, how about, spending per person (population numbers are from the IMF):



Again, as Otto points out, Hillary's scare stories about Venezuela just don't pan out in the data. Chile blows everyone else out of the water, spending over $300 per person. Next comes Colombia, followed by Brazil. In fact, both Ecuador and Uruguay spend more per person than Venezuela, but I wanted to include Venezuela in the above chart to make the point. Also interesting is that over the last four years, Chile's per person spending, while still significantly higher than anyone else, has been decreasing steadily. Not easy to take money from the Chilean military, who still have quite some clout, but well done by Ms. Bachelet, we'll see if Pinera can keep it up. On the other hand, Colombia continues to just spend more and more no matter how you look at it...how's that for "democratic security"? Poverty doesn't drop, military spending just keeps on rising...

Finally, as if to just hammer home the point, check out The Count breakdown how little money it would take to bring all the children in the region above the poverty line...hmm, wonder where they could come up with that....