Ibero-American News Digest
Brazil's Youth Urged To Develop 'Spirit of Republican Solidarity'
Addressing students at the law department of the University of Sao Paulo on March 6, Brazilian nationalist Carlos Lessa lamented President Lula da Silva's continuing attempt to do the impossible: to satisfy both the people and the bankers.
For example, Lessa told the students, if the government were to go along with the financiers' demand that the law be rewritten so that pensions no longer automatically increase in tandem with increases in the minimum wage, it would shorten the lives of Brazil's elderly, "and killing old people is like what the Nazis did in the concentration camps."
There must be "a spirit of republican solidarity" between Brazil's people, to guarantee the quality of life and longevity of all Brazilians, he said. The Central Bank's high interest rate policy is an impediment to this needed republican solidarity, because billions and billions of reals which could fund social security and growth are channeled off into interest payments. Lessa called for the Central Bank to be revamped, putting representatives of labor, business and agriculture on its board.
The youth will determine Brazil's future, Lessa told them, expressing his "great satisfaction" at speaking with them, instead of only to his "white-haired friends."
Lessa headed the national development bank, BNDES, under Lula until international financiers gave orders he be fired, or else. When dumped in November 2005, he charged that the problem in Brazil is a national elite which wants nothing to do with the Brazilian people, which maintained slavery for as long as possible, and which throughout Brazil's history has crushed every attempt to former a counter-elite.
This is precisely this deep-seated oligarchical outlook against the poor in Brazil which Lyndon LaRouche pointed to, in a discussion with the EIR staff March 6, as the reason Brazil is the hardest country on the continent to change, even though it is the most powerful in potential. Recalling his 2002 trip to Sao Paulo, LaRouche spoke of the favelas (giant urban slums), where even the police don't dare venture, contrasted with the walled estates of the better-off. There is more opportunity, in Bolivia, Peru, Ecuador, and to some degree, Colombia, LaRouche commented.
Brazil To Join 'Bank of the South' Commission ... with Caveats
Brazilian Finance Minister Guido Mantega announced at a March 9 press conference with his Argentine counterpart Felisa Miceli, that the Lula da Silva government has accepted Argentina's invitation to join the technical commission that will work out the mechanics of setting up a new regional development bank. Argentine President Nestor Kirchner and Venezuela's Hugo Chavez created the commission when they met in Venezuela on Feb. 21.
The Lula government, however, has yet to commit Brazil to this regional project to which international financiers object. In a display of the deadly pragmatism which cripples Brazil's development, Mantega was quick to point out that his government's "preference" was to strengthen and "transform" existing regional financing entities, such as the Andean Development Corporation and the Financial Fund for the La Plata Basin Development (Fonplata), rather than create an entirely new entity. He limited his remarks on the Bank of the South to portray it as an institution that would foster Ibero-America's "financial integration." Other sources have reported that Lula was stalling on joining the Bank of the South, saying that other financial initiatives should be implemented first. In an attempt to keep one foot in each camp, Mantega said that of course Brazil would join the commission with no preconceived ideas, and open to all options.
The concept underlying the Bank of the South project which oligarchs fear, is that the nations of the region would exercise their sovereignty, and use their foreign reserves as the seed-capital for a regional development bank oriented towards financing cross-border infrastructure projects, without monetarist criteria.
Argentine Biochemist: Biofuels Push Is Colonialism
The imposition of biofuels on developing nations is colonialism, says Argentine energy expert Federico Bernal, whose great-grandfather Enrique Martin Hermitte discovered oil in Argentina in 1907, Argenpress reported March 6. Bernal, a biochemist, slams the European Union, whose "energy security" policy is to "fill our mouths with biofuels, hydrogen, wind, and solar energy. They are reserving for us the centuries-old role of satellite countries, mere exporters of energy. They want us to become the biofuel- and hydrogen-producing farms to satisfy their demand."
The energy debate shouldn't be limited to establishing a time frame for implementation of alternative or renewable resources, Bernal says. The interest of Ibero-America should be taken into account, focussed on "technological sovereignty ... energy sovereignty," with nationalized resources.
Hedge Funds Eye Ibero-America as New 'El Dorado'
Global Hedge funds salivating over the looting potential in Ibero-America, view Brazil, which accounts for 90% of hedge-fund managers in the region, as the juiciest target. "It's the flagship market for the whole region," said one analyst, while Florian Bartunek of Constellation Asset Management in Sao Paulo brags that "we are in a sweet spot," as one of the largest offshore hedge funds in the country, as reported in two hedge fund reports, dated last September and October. The more volatile, the better. Bartunek is thrilled that U.S. and European investors are moving into Brazil in search of "higher returns," or because they want to dump their dollar-denominated assets. Former Central Bank president and Soros Quantum Fund partner Arminio Fraga has one of the most successful Brazilian funds, Gavea, which recently passed the $2 billion mark.
These vultures wax ecstatic over the fact that the defaults that occurred in Ecuador and Argentina, and Brazil's "economic slump" of the late 1990s, really "opened up" the region, because they provided opportunities for "distressed and event-driven strategies." Also, "years of reform"thanks to the International Monetary Fund"paid off." While Mexico and Chile are seen as facilitating hedge fund and private equity investment, Argentina is considered a big problem. Hedge fund managers whine about the Argentine government's "excessive" regulations and monitoring of foreign investors, which hinders their looting. Javier Guerra of Bulltik Capital Markets in Miami warns that the time for getting into Argentina may be pastit should have been done a few years back "when you could strike gold, buying companies at 10 cents on the dollar." In contrast, Guerra chirps, Brazil is a dream, going through a "modernization" process that makes it a "very easy country to work with."
Nuclear Power Advances in the Region
Mexico will spend $605 million to up-rate its Laguna Verde nuclear power plants. Mexico's Federal Commission of Electricity has signed a contract with France's Alstom and Spain's Iberdrola to supply new high-pressure steam turbines and new generators to the two units at the Laguna Verde plant. The two boiling water reactors were built in the 1980s by General Electric. When the work is completed, in 2010, each reactor will be able to produce 785 MW of power, as compared to 654 MW now, a 20% increase.
Further south, Russia's offer to cooperate with Chile on nuclear power development spurred Peruvian nuclear scientists to raise Peru's need to revive nuclear programs which had been wrongly dismantled. (See Russia Digest for details.)