Ibero-American News Digest

Brazilian President: Speculators Always Lose Eventually

Aug. 24 (EIRNS)—The cause of the current financial crisis is that people were looking for "easy money," and placed their bets on subprime debt, so they could "play in the casino," Brazilian President Luiz Lula da Silva commented in an Aug. 21 speech, inaugurating a biofuel plant. He shed no tears for the speculators who are now losing huge sums. "It is not fair that the Brazilian people should pay for the irresponsibility of those who want to make money by gambling," he said. "Those who try to speculate lose their shirts, and those who think it's possible to make easy money, without working, are always going to lose their shirts."

The President and Cabinet are putting out the public line, however, that Brazil, with its $160 billion in foreign exchange reserves and big domestic market, will be able to survive what they still call "turbulence" and "oscillations" in the international markets, refusing to face the urgency of replacing the international floating-exchange-rate system itself.

For all the government's studied calm, Lula recommended this week that an informal network of Ibero-American finance ministers be activated, to coordinate actions in the face of the global crisis.

Argentine Economist Calls for 'Genuine Financial Reform'

Aug. 23 (EIRNS)—Unlike many other Ibero-American professionals analyzing the current global economic meltdown, Argentine economics professor Alejandro Vanoli warns that the situation "cries out for genuine global financial reform." It is "myopic," in his view, to continue "with the reductionism of individually analyzing" each episode of crisis, rather than addressing the "global phenomenon of uncontrolled finances."

In an article published Aug. 16 in the daily Clarín, Vanoli accurately identifies the decades of unbridled speculation and deregulation which have created a "global casino." But, he asks, "is there the will to take steps that attack the root of the problem?" Without mentioning former President Bill Clinton, or the LTCM crisis of 1998, he notes that, at that time, "there appeared to be progress toward a new global financial architecture," which waned "once the markets calmed down."

Argentina's economy is stronger today than it was when the free-marketeers reigned in the 1990s, Vanoli explains, but how can it protect itself from current financial upheaval? It must "resist the siren song of those who seek to dismantle capital controls," and focus on policies of growth and internal savings, while advancing toward greater regional integration that will include new credit mechanisms to finance development.

But, while this is the best way to "immunize ourselves," more is needed, he adds. Without providing details, he states that the current financial turbulence actually "cries out for genuine global financial reform, to manage and redirect the uncontrolled financial flows ... [placing them] at the service of growth, productive development and fair global [income] distribution."

Vanoli's remarks sharply contrast with those of left-wing economist Raul Zibechi, who, in an Aug. 18 article, also accurately described the creation of the casino economy, but then impotently urged Ibero-American nations to act quickly to "decouple themselves from the global financial casino," so as not to be dragged down by the "inevitable" collapse of the United States.

Bolivian Journalist Harassed After Airing LaRouche Rep

LA PAZ, Aug. 23 (EIRNS)—Journalist Aníbal Aguilar, host of the weekly "Bolivia Is Viable" program on TV 13 Universitaria in La Paz and Radio Cruz de Sur, reports that he has become the object of a nasty and intensifying campaign of slander and threats, which seek to silence him. That campaign escalated since he aired a one-hour interview with EIR intelligence director Dennis Small on Aug. 8 on the international financial crisis, and Lyndon LaRouche's proposals for solving it.

Through his programs, Aguilar has sought for seven years to foster a sense of optimism that Bolivia can develop itself as a unified sovereign nation. He has interviewed Small on his program several times before, allowing him to provide his Bolivian audience with a detailed picture of the international developments which determine "local" events.

One theme which drew a strong response was that Dick Cheney is the Augusto Pinochet of the United States—both were put in power by the same financial interests.

These financial interests, specifically the circles associated with Cheney-controller George Shultz, publicly declared several years ago that they intend to carve up Bolivia into squabbling pieces, to thus trigger generalized war in the center of South America. Now that the South American nations are moving to defend themselves by a return to dirigist economic policies and the creation of a "Bank of the South" to finance regional development, the financiers have set Bolivia's separatist movements into high gear, to blow up South America, before it can help in the formation of a new international financial system, as LaRouche is proposing.

Aguilar's courageous efforts to expose the foreign forces behind the separatist drive in Bolivia have clearly drawn some blood.

Aftermath of Peru's Earthquake Is Similar to Katrina

Aug. 20 (EIRNS)—The aftermath of the massive earthquake, measuring 8.0 on the Richter scale, that hit Southern Peru on Aug. 15, had additional deadly consequences for the population, resulting from the government's failure to respond promptly and the lack of preparedness, due to decades of privatization and "free market" economics. The death count is over 500, but may increase as there is still a lot of debris covering large areas of the cities of Pisco, Ica, Canete, and Chincha Alta, among the most seriously affected.

According to EIR's Lima correspondent Sara Madueño, the situation in the country is not unlike what happened after Hurricane Katrina in Louisiana and Mississippi, because the Peruvian government reacted so slowly, that the initial effects were compounded during almost two days of non-response. Besides those who perished in the earthquake itself, the quake destroyed almost 90% of the city of Pisco, as well as other smaller towns in the area, where most construction is with adobe, mud bricks. Now, those areas are left without any communication whatsoever.

There are shortages of water, food, medicine, blankets, and other essentials, and as a result, looting has broken out in markets and pharmacies. The government has sent in 600 soldiers to help restore order, since the situation has overwhelmed the police.

The Pan American highway that links these coastal towns and cities collapsed in many places, so the towns remain unreachable by land. The phone lines, belonging to a Mexican company that bought it when the phone system was privatized, do not work, nor do cell phones, leaving the area totally incommunicado.

There are thousands of people living outdoors in virtual refugee camps, without enough tents. The reconstruction process will be the major task ahead, and EIR plans to publish its proposal to rebuild those cities.

Lagos: Nuclear Energy Must Be an Option for Chile

Aug. 23 (EIRNS)—Former Chilean President Ricardo Lagos used the occasion of an Aug. 20-21 seminar in Spain to promote the development of nuclear energy in his country. In an interview with the financial daily Diario Financiero, published Aug. 22, Lagos emphasized that while nuclear many not be a panacea, it is a clean, cheap source of energy, which shouldn't be "demonized." Even the greenies have been forced to recognize that nuclear energy doesn't pollute, he noted.

While taking jabs at Argentina for failing to honor contracts to provide Chile with natural gas—that country's growing internal demand affected its ability to do so—Lagos added that "we must continue to watch what Argentina and Brazil are doing. Nuclear energy is part of their energy matrix," and they've decided to upgrade existing reactors to expand their electricity-generating capabilities.

Businessmen and executives from diverse sectors of the economy, and across the political spectrum, have welcomed Lagos's statements. The head of the energy giant Endesa suggested that northern Chile would be an ideal spot for building a reactor. While President Michelle Bachelet has said she won't consider nuclear power development during her term in office, she has formed a committee of experts to study its feasibility. And Energy Minister Marcelo Tokman has admitted that "it is impossible to rule out nuclear energy."