In this issue:

Mexican Lawmakers File Suit vs. Electricity Privatization

Another Soros Operative Named Prime Minister in Peru

Colombia's Uribe Clashes with UN Over FARC Terrorists

Brazilian Neo-Con Worries Over Bush Dealings with Lula

Mont Pelerinites Say: Turn the Screws on Argentina

Brazil Unemployment Approaches 1930s Levels

From Volume 2, Issue Number 27 of Electronic Intelligence Weekly, Published July 8, 2003

Ibero-American News Digest

Mexican Lawmakers File Suit vs. Electricity Privatization

Senator Manuel Bartlett, joined by Congressman Salvador Rocha Diaz, filed a suit on June 25 before the Federal Superior Accounting Office, demanding that that body investigate and audit 225 licenses to generate electricity granted to private parties under the former Zedillo and current Fox governments, in "flagrant violation" of national laws and the Constitution. The 206-page suit is a bombshell, documenting, case by case, how a reform passed in 1992 to permit individual industrial companies to produce electricity for their own use, has been abused by government officials and foreign interests, to implement a de facto privatization of Mexico's national electrical industry, to the detriment of national production. Seventeen companies, all subsidiaries of foreign companies, now generate 19% of the capacity of the state's Federal Electrical Commission (CFE), the suit documents.

The abuses constitute a threat to national security, as well as national production, the suit charges. Singled out as particularly egregious are six licenses granted by the Fox government for the production of electricity in northern Mexico, for export to the United States. The 1992 law was never intended to permit "the maquilization of electricity with imported natural gas, nor the extension of the U.S. electrical system into national territory," the suit states. It seeks the cancellation of 44 licenses granted to companies proven to have been set up on fraudulent grounds, and demands criminal charges be filed against those parties found to be in violation of the law. Among those named in the suit are Energy Secretary Ernesto Martens, and CFE director Alfredo Elias Ayub. In a press conference following the filing, Bartlett warned foreign interests that violate Mexico's laws that, sooner or later, they would face criminal charges.

One of the cases documented in the voluminous report is that of Enron's activities in Mexico.

Some attempted to downplay the suit, saying it represented two "individuals" only, who lack the backing of their party, the PRI. This is whistling past the graveyard. Bartlett and Rocha Diaz head the Constitutional Issues committees of their respective chambers of Congress, and Bartlett headed the successful Congressional fight which last year killed President Vicente Fox's bill to modify the Constitution to permit the privatization of energy.

Another Soros Operative Named Prime Minister in Peru

Don't look for a change in policy from the new Prime Minister of Peru: She's from the stable of international megaspeculator George Soros, as is President Alejandro Toledo, who seems to have an inexhaustible supply of Soros agents to direct his government. On June 28, six days after his Cabinet had resigned, Toledo finally appointed Beatriz Merino as Prime Minister, to preside over a Cabinet virtually identical with the previous one. Key ministers—Foreign, Defense, and Finance Ministers included—were reappointed, and Merino, proclaiming herself to be a firm "liberal" economist, promised she would ram through the tax increases which Toledo's own Peru Posible party had refused to even consider, thus provoking the fall of her predecessor as Prime Minister.

"There is no free lunch," Merino said; the time had come to face the need for a "serious" reform of the State. Merino announced she intends to "co-govern" with Toledo.

How she will succeed in imposing the full liberal policy which the Toledo government has been unable to ram through for 23 months, is an open question. She brings no mass political base with her, as she headed the national tax agency before her appointment. What she does have, is connections to the bankers' international legalization machine, and George Soros, who put Toledo in power in the first place. Harvard graduate Merino is a member of the Inter-American Dialogue. She was a member of the board of the Soros-funded and directed Andean Commission of Jurists, and she was one of the signers of Soros's 1998 Open Letter to the United Nations, calling for an end to the war on drugs worldwide.

Colombia's Uribe Clashes with UN Over FARC Terrorists

In a Kafkaesque communiqué issued June 30, the UN High Commission on Human Rights chastised Colombian President Alvaro Uribe for calling the FARC "terrorists," instead of "combatants," under the 1949 Geneva Convention, and protested Uribe's failure to define the narcoterrorist war against the Colombian nation as an "internal conflict." By refusing to identify the FARC as "combatants," and the terrorism as a "conflict," the communiqué charged, President Uribe is allowing the FARC to circumvent the international law strictures imposed by the Convention!

This criminal UN declaration comes in direct response to statements made by Uribe to the Colombian daily El Espectador one day earlier, where he insisted that the FARC are indeed terrorists. The UN's insistence on calling the FARC "combatants" is intended to equate them with the Colombian armed forces (the "other combatants," who are attempting to defend the nation of Colombia from the narcoterrorists), and is a response to Uribe's biting criticism, several weeks earlier, accusing the UN of being "afraid of the FARC," and demanding that the UN "stop saying that they are an impartial body before two parties."

Brazilian Neo-Con Worries Over Bush Dealings with Lula

Before Lula da Silva was elected President of Brazil, the Hudson Institute's Constantine Menges penned a series of hysterical articles demanding the Bush Administration do whatever it took to keep Lula from winning, warning that a Lula government might build an atomic bomb and use it to defend a Castro-centered Ibero-American "axis of evil." Lula's cordial meeting with President George Bush June 20, drove Menges into action again.

Lula may be implementing market policies, but he "is also taking open and secret actions to assist his allies, who are also Fidel Castro's allies, to take power in other Latin American countries, just as I warned," Menges charged in a Washington Times op-ed June 27. The article was full of Cold War stridency, warning against the danger of a Brazil being "ever more aligned with Communist China," and the like. "This does not yet require an open confrontation," Menges wrote, in an admission that calls for war against the Lula government would not fly in Washington at the moment. However, "President Bush needs to be given the facts about the new pro-Castro axis."

Mont Pelerinites Say: Turn the Screws on Argentina

Argentina's crisis is "of its own making," and it should kill off its population with more insane measures. This is the message in a June 2003 report on the Argentine crisis prepared by the Joint Economic Committee of the U.S. Congress. Bearing the endorsement of JEC Vice Chairman Jim Saxton, Republican of New Jersey, the report was written by longtime JEC fixture Kurt Schuler, who, along with Mont Pelerinite Steve Hanke, is a rabid proponent of dollarization as a solution to Argentina's crisis. Saxton has been a strong supporter of George Bush's tax-cut mania, and a critic of IMF bailouts of developing-sector countries.

Schuler's fundamental thesis is that the country's problems "are of its own making," and not "a failure of free markets." He rejects any notion of a systemic financial crisis, alleging absurdly that Argentina's crisis occurred "when the rest of the world was experiencing slow growth, but not recession and certainly not depression." When Adolfo Rodriguez Saa defaulted on the foreign debt, instead of "presenting the default as a reluctant step by a debtor willing but unable to pay its bills," he presented it "as an act of defiance to creditors."

How to get out of the crisis now? Argentina "could dollarize," Schuler argues, citing the "success" Ecuador and El Salvador have had. A floating exchange rate won't work, but a real "orthodox" currency board of the kind Hanke defends, would.

He then goes on to endorse a list of policies which, were they to be implemented, would finish off Argentina entirely—and that is obviously the intention—by destroying any commitment by the government to the principle of the general welfare. Above all, "property rights" and the "rule of law"—looting rights of foreign companies—must be respected. The Federal government should "get tough" with the provinces, and not share revenues with them, since they are all bankrupt anyway; pensions and wages of government employees should be slashed, and "inflexible" labor laws eliminated, as they are the real cause of unemployment, crazy Schuler argues.

Brazil Unemployment Approaches 1930s Levels

Official unemployment in Brazil rose in May to a 14-month high of 12.8% nationally, an increase of 0.4% from April. Unemployment has risen every month since Lula da Silva came into office, and with interest rates still at 26%, economic activity continues to shut down. The major auto companies, for example, have announced that they will temporarily shut down their factories in July, because inventory is piling up. If two other categories are added in—the 5.2% of the population working in informal jobs, because they can't find real ones, and the 1.9% who have given up looking for jobs—unemployment in greater metropolitan Sao Paulo, the industrial heartland of the country, was actually 20.6% in the months of April and May, the highest rate since 1985.

Illustrating how explosive this has become, police in Rio de Janeiro had to deploy tear gas and truncheons to control 20,000 people who lined up to apply for 1,500 street-sweeping jobs which the city had announced it would open over the next two years; jobs which will pay all of 610 reales a month (around $210), including meals and benefits.

All rights reserved © 2003 EIRNS