Ibero-American News Digest
Colombia-Venezuela Crisis Feeds Cheney-Rumsfeld Regional War Drive
The eruption of political, economic, and social chaos in South America's Andean region this past month, demonstrates how quickly the Synarchist financier interests and their left/right thugs are moving to drive the Western Hemisphere into "ungovernability" and war, the policy exposed in an article in last week's EIR Online entitled "Rumsfeld Prepares 'One, Two, Many Pinochets' in the Americas" (see Indepth).
It is only from the standpoint of that policy intention that the break in trade relations and potential for outright conflict between the neighboring nations of Venezuela and Colombia can be correctly evaluated.
With the apparent blessings of the Bush Administration, the Uribe government in Colombia in mid-December paid reward money for the capture in Caracas of fugitive Rodrigo Granda, who called himself the "Foreign Minister" of the narcoterrorist FARC. Despite his criminal status, Granda had been granted Venezuelan citizenship, and was attending a "Bolivarian" continental meeting in the Venezuelan capital sponsored by the Chavez government. Granda was reportedly seized on the street, and transported across the border into Colombia, where Colombian authorities took him into custody.
Charging that Granda was "kidnapped" by bounty hunters, who were "bribed" by the Colombian government, and that Venezuela's national sovereignty was violated by Colombia, President Hugo Chavez recalled his ambassador to Bogota, and froze all economic and trade relations, and, on Jan. 14, dramatically demanded an admission of culpability, and a personal apology from Colombian President Alvaro Uribe, before relations could be reestablished. Uribe countered that Venezuela's longstanding practice of harboring terrorists like Granda has violated Colombian sovereignty, and is demanding a multinational face-off on the issue. He says he will make public the names of seven other FARC leaders now in Venezuela, and the presence of FARC camps there.
Chavez's Attorney General announced he is considering pressing formal charges of kidnaping against Colombia's Defense Ministerand then requesting his extradition to Venezuela. Venezuelan troops are mobilized along the Colombian border, and Chavez's political party is revving up its Jacobin ranks for demonstrations against Colombia in coming weeks. Meanwhile, the Colombian population is closing ranks around Uribe, while on Jan. 15, U.S. Ambassador to Colombia William Wood endorsed Uribe's action, prompting Chavez to accuse the U.S. of "a conspiracy to undermine South American unity."
Despite offers from Brazil and others, to facilitate "a dialogue" between Colombia and Venezuela, the crisis threatens to spill across other Andean borders. For example, it is known that the FARC's Granda had illegally acquired citizenship papers in Ecuador, and had been living there with his wife for some time. Ecuador is also where another leading FARC terrorist, "Simon Trinidad," was discovered and detained. Ecuador's border with Colombia has proven as geographically and politically porous as Venezuela's.
The day after George Bush's Jan. 20 Inaugural address promising the United States will fight "tyranny" anywhere and everywhere, the Americas editor of the Wall Street Journal, Mary Anastasia O'Grady, published a call for the Bush Administration to use the Granda case to turn its sights on Venezuela, and declare the Chavez regime a state sponsor of terrorismwith all the military adventures such a designation could bring with it. There have been unconfirmed reports in the U.S. for some time, that anti-Chavez Venezuelans are training "urban warfare" paramilitary forces for a Bay of Pigs-style invasion scenario against the Chavez regime. Such reports cohere with U.S. Defense Secretary Donald Rumsfeld's demand, at last November's Defense Ministerial of the Americas in Ecuador, that the existence of growing areas of "ungovernability" in Ibero-America be used to legitimize the concept of limited sovereignty, and demand multinational interventions across national borders.
Will Bolivian President Mesa Be Overthrown?
EIR's warning, in its July 9, 2004 issue, that the Cheney-allied neo-conservatives at the American Enterprise Institute were deliberately fomenting the disintegration of the nation of Bolivia, in order to blow up all of South America, is now seen playing itself out in the country. The pincer movement of cocaleros vs. the Santa Cruz oligarchy described there, is precisely what is being thrown against Bolivia today.
At the end of two weeks of mass protests, triggered by fuel-price increases decreed by the government (see last week's Ibero-American Digest), the government of President Carlos Mesa offered to reduce the increase in the price of diesel fuel from 23% to 15%, but the Santa Cruz Civic Committee, which represents the financial, oil, and business interests of that region, still refused to call off their strike. Demonstrators took over a dozen public buildings in the city of Santa Cruz on Jan. 20, and some 200 hunger strikers from the city's upper class, then set up operations in the buildings. The military this morning took over the local oil refinery and Santa Cruz airport.
Heating up the situation are:
1. The charge by the radical COB labor federation that former President Sanchez de Lozadaousted in October 2003, after he ordered the military to shoot protesters in the middle of a similar mass strikehad flown back to Bolivia, to run the Santa Cruz operation (his party's base), and organize for a military coup. Spokesmen for both the (anti-Sanchez) government and Sanchez's MNR party deny the report.
2. The announcement by cocalero leader Evo Morales that he intends to meet Hugo Chavez when the Venezuelan Synarchist President visits Bolivia in March, at the invitation of the government, and he has invited Chavez to address a mass meeting of cocaleros, because they want Chavez's advice on how to control the planned Constituent Assembly in Bolivia, given Chavez's success in rewriting the Venezuela's Constitution. [Nota bene: Chavez's Constitution is based upon the theories of Hitler's Crown Jurist, Carl Schmitt.]
The hierarchy of the Catholic Church has offered to mediate between the parties to end the crisis, but the President's problem is that his always-small political base is disappearing. Congress, a majority of whose members oppose the President, censured four of Mesa's cabinet ministers on Jan. 20; now he has to decide whether to dump them, or defy Congress.
A Bolivian diplomat in Washington, D.C. confirmed on July 21 that Mesa's Presidency is on the line. He called the President's situation "very complicated." We are under great pressure, and it's not clear exactly where it is all coming from, he said, pointing to the "strange" alliance of Evo Morales's cocaleros and the Santa Cruz oligarchy. "Our hands are tied."
Maras Crisis Building Up in Central America
In the wake of the Christmas massacre of passengers on public bus in Honduras, by a group of members of maras (gangs under the control of organized crime and the drug trade), public bus drivers who service a large, poor neighborhood of over 200,000 in Guatemala City, Guatemala, went on strike Jan. 18, demanding the government guarantee their safety from the maras. The strike was provoked by death threats delivered to bus drivers and inspectors who refuse to pay an increase in the "war tax" the maras "charge" on every run in and out of the neighborhood of El Milagro. The maras are demanding that the bus inspectors collect the "tax" from the drivers for them! Guatemala's National Policea force only 21,000 strong in a country of nearly 12 millionare now providing bus service for El Milagro, but even with reinforcements of 5,000 soldiers in major cities, they can't possibly guarantee protection in any part of the country.
A team of FBI agents, with California law enforcement officials included, will be visiting Central America this month, to compare notes. El Salvador's Bush-loving, free-trade President Tony Saca on Jan. 17 called for a regional response modelled on his "Super Hard-Line" policy, suggesting that a U.S., Mexican, and Central American summit on the maras be held.
Italy Threatens Sanctions vs. Argentina Over Debt Restructuring
Italian Deputy Foreign Minister Giampaolo Bettamio, from Premier Silvio Berlusconi's Forza Italia, told Argentine Ambassador Victor Taccetti that if the majority of bondholders "reject Buenos Aires' unilateral proposal, this will cause an unprecedented international conflict which will force the Group of Seven, the IMF, the Club of Paris, and the European Union's Council of Ministers to intervene to make Argentina respect international rules." Bettamio didn't rule out that the EU might impose sanctions on Argentina, "as was done with Libya and Cuba."
Simultaneously, after hearing a presentation from vulture fund representative Nicola Stock, the Italian Banking Association (ABI) voted to reject the Argentine restructuring offer. Speaking on behalf of the bondholders' Task Force Argentina, Stock said the Argentine offer was no good because it didn't "respect the criteria of equality among creditors."
As Taccetti pointed out, the ABI and Stock want the restructuring proposal to fail, because they fear that passage of a bill now before the Italian Parliament, which holds the banks co-responsible in the Argentine default, will force them to fork over money to the pensioners and other small bondholders whom they cheated. Congressman Guido Rossi has sponsored a bill which would make the banks pay Italian bondholders at least 50% of the capital they invested in Argentine debt paper. The bill has already been voted up in committee, but it's unclear whether it will pass the full Parliament, as it is opposed by Berlusconi.
Noteworthy is the fact that an Italian court recently ordered the Venice branch of Deutsche Bank to repay a couple the entirety of the amount they had invested in Argentine bonds in 1998. The court ruled that Deutsche Bank was responsible, as it had not informed its clients of the risky nature of the bonds. The Jan. 19 edition of La Nuova Venezia reported that the court rejected the bank's argument that the couple were seasoned investors and should have known about the risk.
Brazil Raises Interest Rates, as Debt Soars
Brazil's Central Bank raised the benchmark interest rate 0.5% on Jan. 20, to 18.25%, a rate which is said to be the highest real interest rate (interest minus inflation) of any nation in the world. This was the fifth increase in as many months, a 2.25% increase since September. Although Economics Minister Antonio Palocci defended the decision, reports are that he and President Lula da Silva are getting worried. The political costs of the Central Bank policy are rising, as leaders from every major industrial, commercial, and trade-union federation in the country issued statements protesting the increase, as a measure which favors only speculative interests, not those who produce.
Every hike in the interest rate also jacks up the government's total debt. The Federal government's total public domestic debt rose by 11% in 2004just under $30 billionin large part because of Brazil's usurious interest-rate levels. The impact is exacerbated by the fact that over half52.5%of all Federal domestic bonds offer floating interest rates. The debt increase over the year would, in fact, have been greater, except that some 10% of the debt is dollar-indexed, and the real has revalued relative to the dollar by 18.5% since May 2004.
City of Sao Paulo Is Bankrupt
The world's third-largest city, Sao Paulo, Brazil, is bankrupt, Folha de Sao Paulo reported Jan. 20. Officials of the new administration, which took office on Jan. 1, insist the city won't default, but they called in its largest suppliers on Jan. 19, and asked them for "tolerance," because they won't be paid back debts for at least two to three months. Mayor Jose Serra told TV Globo that he has 1 billion reals to cover 6 billion reals in expenditures. The city's financial secretary called the financial numbers "frightening." All payments have been frozen, except those for health and education programs, which are required by the Constitution.