Ibero-American News Digest

Capital Flees Brazil, But Carry Trade Flourishes

June 16 (EIRNS)—While Brazilian Central Bank chief Henrique Meirelles is being interviewed by Reuters, Bloomberg, and the London Economist almost daily, on how Brazil is the world's economic poster child, capable of weathering any crisis, the Brazilian paper O Estado de São Paulo reports today that remittances out of the country by European companies were 76% higher in the January-April period, compared to the year before. European companies pulled $4.4 billion out this year to cover losses.

Foreign Direct Investment from Europe also fell by 29% in the same period.

O Estado drily noted that Spain and Portugal bought into Brazil in a big way during the era of privatizations, citing Telefónica, Eletricidade de Portugal (EDP), and the British Queen's favorite, Banco Santander, worrying that this might pose a problem. "Investments" by Spanish companies, for example, have fallen by 74% this year. Net, over this period, total remittances (not just to Europe) were larger than total foreign investment coming into the country ($7.88 billion in, against a record $7.93 billion out.)

The parasitical carry trade is doing quite well, however. The June 15 edition of Monitor Mercantil reported that, "with the country returning [to a policy] of increasing its interest rates, which are already the highest real rates in the world, investors are broadening their search for profits in Casino Brazil."

According to Treasury Under-Secretary Paul Valle, foreign purchases of Brazilian internal debt paper did not diminish with the crisis which is hitting Europe." This week, Valle will begin a road show to New York, Boston, and San Francisco to "sell" Brazil to foreign investors.

Haiti's Needs Not Being Met

June 18 (EIRNS)—What do you get when British puppet Barak Obama blocks what really needs to be done in Haiti? Certainly not the large infrastructure and industrialization projects Haiti needs; and certainly not moving 1.2 million people out of the flood-prone capital into stable, solid emergency housing.

Instead, the World Wildlife Fund's Mexican billionaire Carlos Slim and Canadian mining magnate Franck Guistra have announced the creation of a puny $20 million fund for reconstruction, to provide loans for small businesses. The fund will expect a rate of return on its investments, to make it "self-sustaining," or so the argument goes. It was announced by former President Bill Clinton, Slim, and Guistra after the first closed-door meeting yesterday of the Haitian Reconstruction Commission, chaired by Clinton and Prime Minister Bellerive.

The Commission is the result of the compromise made at the May 31 Donors Conference, between the backers of the British policy that says no money should be channeled directly through the Preval government, and the defenders of national sovereignty. The Commission also announced $45 million in grants from Brazil and Norway to help the government close its $170 million budget gap. The Clinton Foundation also announced a $1 million grant to build storm shelters in Leogane and Jacmel. The Commission will meet next on July 22.

The refusal to treat Haiti as a sovereign nation has produced chaos. For example, in remarks to the Miami Herald June 16, Bellerive warned that Haiti needed electricity in order to access such basic services as water, education, and health. We have to increase our capacity to produce electricity, he said. Before the earthquake, there was total chaos, he noted. Now, after the earthquake, there is "organized chaos."

Fight Over Water in Sonora Escalates

June 18 (EIRNS)—The "Citizens for Water Movement" in Mexico, led by LaRouche associate Alberto Vizcarra and others from the Pro-PLHINO Committee, brought in former Presidential candidate and political leader Cuauhtemoc Cárdenas to the border state of Sonora, as their next escalation, after organizing two marches, the most recent one with 30,000 people.

The citizens' movement aims to block the plan of state Gov. Guillermo Padrés, backed by billionaire Carlos Slim and his friends at the British monarchy's World Wildlife Fund, to transfer water out of the Yaqui Valle into the state capital, as the first step towards privatizing water. This would shut down agriculture altogether in the southern part of the state. Cárdenas called on the Governor to first build all the other water projects he's planning, and when he sees that there is not enough water, turn to projects such as the proposed desalination plant or the Northwest Hydraulic Plan (PLHINO), which Lyndon LaRouche has backed for years.

The PLHINO would bring water, via canals, from southern Mexico to the arid northwestern region.

One daily identified Cárdenas simply as "the son of the General," a reference to nationalist Gen. Lázaro Cárdenas, who was Mexico's President from 1934-1940, and quoted him saying, "I come as Cuauhtemoc Cárdenas, to support the fight for water of the Yaqui [Indians] and my farmer friends of the [Yaqui] Valley, and I will do so as often as they ask me to, and as far as I can help them in this just cause."