Ibero-American News Digest
Brazil Retakes Majority Control of Giant Mining Co.
Brazil's state-owned development bank, BNDES, announced Nov. 11, that it would increase its share of holdings in the giant Companhia Vale do Rio Dulce (CVRD) mining and industrial company, specifically to head off any possibility of a foreign multinational company gaining control over what was, before its privatization in 1997, the most valuable and productive of Brazil's state-sector companies. The purchase of 8.5% more of the shares of CVRD's holding company, Valepar, went ahead two days later, giving the State a majority of six of the 11 seats on CVRD's board of directors. "Our general concern is to keep control in national hands, of companies which are strategic for development," the director of BNDES's industrial affairs division, Fabio Erber, explained.
Merrill Lynch and J.P. Morgan attacked the purchase as not financially justifiable, because the Lula government paid more to repurchase shares than the Cardoso government had made by selling them. J.P. Morgan's report, however, made clear that what really worries the financiers, is the Brazilian government's assertion that economic activity is subordinate to national interest. J.P. Morgan complained, nervously, that this is a movement away from privatization, and "a return to the past."
Similarly, on Nov. 17, Communications Minister Miro Teixeira announced that the government will closely follow the re-sale of Embratel, the former state-sector telecommunications company which was privatized in 1998 by the Cardoso government. Bankrupt WorldCom Inc., which currently owns a controlling interest in the company, has announced that it intends to sell its shares in the Brazilian company. The Communications Minister defended the government's right to be involved in the sale, on the grounds that Embratel owns a network of satellites whose orbital positions belong to the Brazilian state, and which provide for secure communications for the Brazilian military. Furthermore, the government is concerned about the potential interest of Citibankone of Brazil's largest creditorsin buying the company.
Brazil Finance Ministry Squeezes State Sector Companies
The impulse of Brazilian President Lula da Silva's government to protect national sectors of the economy continues to be limited to only that which is deemed possible, without breaking with Wall Street and the IMF system. Thus, the Finance Ministry is now demanding weekly financial reports from Petrobras (the state oil company) and Eletrobras (the state electricity company), demanding they prove that they are "doing their share" in helping the government meet the IMF's primary budget surplus conditionality. The Finance Ministry has been hounding the companies, to get them to further cut back investments.
A furious Eletrobras President Luiz Pinguelli charged his company was being victimized by "rogue" Finance Ministry officials, who manipulate Eletrobras's statistics, whichever way helps the Treasury statistics look the best. If the Treasury counted government revenues earned from the giant Itaipu dam as part of Eletrobras's income, as they should, it would be seen that Eletrobras had "done its part" for the overall government surplus, and that would permit the company to make 1.5 billion reais in needed investments, Pingueilli said.
The primary budget surplus is calculated as public revenues minus all expenditures except debt payments; i.e., it is the surplus generated in order to pay the debt. The Lula government had sought to get the IMF to permit it to exclude capital investments made by the state companies from its calculation of current expenditures for the surplus, to thus free up revenues for desperately needed investments in infrastructure. But when the new IMF accord was announced Nov. 5, it became clear that battle had been lost.
Mexican Budget Proposals: 'Same Filth, Different Flies'
With this description, a PRI Congressman from the state of Oaxaca summarized the response of PRI nationalists to the latest attempt by allies of the corrupt free-trade fanatic, former President Salinas de Gortari, in the leadership of the PRI Congressional faction, to line the PRI up behind a tax reform acceptable to Wall Street's Fox Administration.
The 2004 budget plan sent to Congress by President Vicente Fox's government proposes to extend the VAT tax to currently exempted categories (including food and medicine, public transportation, books, magazines, and private schools), at a hefty rate of 10%. Initially, the head of the PRI delegation, Salinista Congresswoman Elba Ester Gordillo tried to get the PRI to back a 5% to 8% tax on food and medicines, instead. Unable to round up sufficient support for that travesty, she announced with great fanfare on Nov. 18, that the PRI would no longer vote for any VAT tax whatsoever being placed on these basic necessities.
Gordillo, however, offered a "new" tax proposal, for which she claimed she had the support of the entire PRI delegation: a 10% tax on production, and intermediary sales. This, she had the effrontery to claim, would not affect consumers!
This latest "proposal" is likely to have the same short lifespan as her 5%-8% tax on food and medicine plan. Her enemies exposed the fact that she was handed this "proposal" at a private meeting with Treasury Secretary Francisco Gil Diaz (a University of Chicago-trained butcher). Various Congressman publicly rejected the idea that the whole PRI delegation supported this proposal, which they labelled as nothing more than poorly "disguised VAT tax."
Or, as Congressman Elipidio Concha so elegantly put it: "This is the same filth, but with different flies."
Mexican Ambassador to the UN Dumped Under U.S. Pressure
Mexico's Foreign Relations Secretary Luis Derbez announced Nov. 18 that Adolfo Aguilar Zinser would be removed as Ambassador to the United Nations as soon as Mexico's rotation on the Security Council concludes on Jan. 1, 2004. President George Bush reportedly had complained twice, personally, to President Vicente Fox over Aguilar Zinser's open organizing, at the UN, against the war on Iraq.
The pretext chosen to finally get him out, was a Nov. 12 speech he gave at the Ibero-American University in Mexico City, in which he said that Washington wanted a "relationship of convenience and subordination" with Mexico, and "sees us as a backyard." Hardly the stuff of an international incident, but he made his remarks on the eve of the annual Binational Meeting between the two governments, and Bush's Secretary of State Colin Powell demanded his head, protesting that, "we never, ever, in any way would treat Mexico as some backyard or second-class nation." President Fox immediately issued a disclaimer; Aguilar Zinser was called in to account for himself, and his removal was announced. Aguilar Zinser responded by resigning, effective immediately, on Nov. 20, with a nasty open letter to President Fox, protesting his removal.
Aguilar Zinser, a '68-er leftist "intellectual," had happily joined the synarchists' Fox team, along with his good buddy Jorge Castaneda, in the run-up to the 2000 election, for which supportlike Castenadahe was rewarded with a government post. He and Castaneda had a falling out, however, over Castaneda's abject capitulation to the Bush-Cheney imperial war policy. His removal, at the U.S. government's behest, is already feeding into building rage against the United States inside Mexico.
Morales Claims Bolivia Will Have an 'Indian Government,' Soon
Megaspeculator George Soros's Bolivian asset, cocalero leader Evo Morales, told UN Secretary General Kofi Annan, when they met on Nov. 14, that the international community should support an "indigenous government," which would be installed in that country very soon. Annan met with Morales during the Ibero-American Heads of State summit, held in Santa Cruz, Bolivia, and invited the drug-legalization advocate to attend an upcoming conference of the Permanent Forum of Indigenous Peoples, to be held at UN headquarters in New York.
Attending the meeting with Annan, also, was Mexican Marcos Matias Alonso, president of the Fund for the Development of the Indigenous Peoples of Latin America and the Caribbean, an overtly separatist operation set up by the IMF-subordinated Inter-American Development Bank in the mid-1990s. "Judging from what Morales said, the change [of government] will occur in the short term," Matias told the press after the meeting, "and a new government is taking shape." He did report that Annan had advised Evo to be patient, and give President Carlos Mesa a chance to solve the country's problems.
Matias's presence shouldn't be underestimated. In an op-ed published in Argentina's La Nacion Nov. 7, Matias warned that "a new network of indigenous leadership is being woven together, which can result in a conflictive supranational situation." The conflict will be unleashed very soon, he said, "even in countries of apparent calm." It is like a river of impressive strength, "which will drag other countries along" with it. Countries with large indigenous populations are going through "cyclical situations, which can collapse at any moment."
Who's Reviving a New 'War of the Pacific' Scenario?
Venezuelan President Hugo Chavez has succeeded in provoking border tensions between Bolivia and Chile. The Chilean government recalled its ambassador from Venezuela, after Chavez declared Nov. 15, while in Bolivia for the Ibero-American Heads of State Summit, that "Bolivia once had a coast, and I dream of bathing at a Bolivian beach." This provocation, suggesting that Chile should give back the Pacific coast territory that once belonged to Boliviaseized by Chile in the British-instigated and financed 1879-1881 War of the Pacificwas strongly denounced by Chilean Foreign Minister Soledad Alvear as a clear intervention into Chile's internal affairs. The Chilean Senate also passed a resolution condemning Chavez's remarks. The recall of the ambassador "is a signal regarding expressions [Chavez] should not have made," said Alvear. "We, as a country, take care of our own bilateral affairs, and we don't like third parties getting involved."
Venezuelan Foreign Minister Roy Chaderton tried to backtrack by saying that Chavez's remarks were only "symbolic," and that all Venezuela would like to see is a negotiated solution to the sea access issue.
Reopening border conflicts at this time is extremely dangerous, given the unprecedented economic and political instability suffered by every Ibero-American country. Yet, UN Secretary General Kofi Annan, too, brought up the Bolivian-Chilean border dispute, in his Nov. 13 meeting with Bolivian President Carlos Mesa, offering the UN's "good offices" to mediate between the two countries, to help Bolivia gain sovereign access to the sea. The issue is a highly emotional one for Bolivia, but it does not address why the country is impoverishedthe IMF did thatand is not the most pressing matter to be dealt with.
In recent discussions on Ibero-America, and particularly the danger represented by the cocalero rebellion in Bolivia, U.S. Democratic Party Presidential candidate Lyndon LaRouche pointed out that the same forces that unleashed the first War of the Pacific, are seeking to create new ones today.
New Armed Guerrilla Group Emerges in Venezuela
Vowing to take up arms to prevent Hugo Chavez's ouster, the "Nestor Zerpa Cartolini Tactical Unit" revealed on Nov. 12, from an unknown location west of Caracas, that were President Chavez to be deposed through a referendum, it would take up arms to prevent him from leaving office. This is the third such group to emerge in the country. The Miami Herald reported Nov. 13 that a spokesman of the hitherto unknown group told that daily that it would appear on the streets on Nov. 28 and Dec. 1, the days on which signatures for the referendum will be collected, with light arms to confront the "bourgeois coup-mongers serving imperialism." The group also says that while it is currently restricted to the Caracas area, it plans to set up "popular militias" around the country.
Thus, the conditions for all-out war of "terror against terror" are in place. From the right-wing synarchist opposition, Democratic Block leader Alejandro Pena is calling for the military to intervene now to oust Chavez, and for people to practice "civil disobedience," which he defines as armed defense.
Some faction in Wall Street, however, would appear to want Chavez to stick around. Both Fitch rating agency and Credit Suisse First Boston just lavished praise on Chavez's neo-liberal policies, and his firm commitment to paying the foreign debt. They also predict that the referendum will fail to oust him, and he'll complete his Presidential term.
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