In this issue:

FLASH! LaRouche Interviewed on Argentine National Radio

If Uruguay Is the Model...

National Strike in Uruguay Against IMF Banking Law

Chavezista Paramilitaries Surface, in Grave Escalation of Venezuelan Crisis

New Colombian President Faces Daunting Task

Colombia: EIR's Londono Challenges Wall Street Bankers

New Bolivian President Promises Jobs, Infrastructure

IMF Demands Weakened Paraguay Enact 'Fiscal Austerity' Law

From the Vol.1,No.23 issue of Electronic Intelligence Weekly

IBERO-AMERICAN NEWS DIGEST

FLASH! LaRouche Interviewed on Argentine National Radio

U.S. Democratic Party Presidential pre-candidate Lyndon LaRouche was interviewed live Aug. 9 on one of Argentina's leading national radio stations, Radio Splendid, for almost 30 minutes. Talk show host Mr. De Renzis asked LaRouche about a wide range of topics, from what Argentina should do to get out of its crisis, where more than half the population now lives in poverty, to what would be the effect on the world, and the world economy, if U.S. President George W. Bush orders an attack against Iraq.

De Renzis then advertised, throughout the day, that his interview with LaRouche would be re-broadcast on Sunday, Aug. 11, and highlighted LaRouche's explanation that the IMF package is a bailout of the banks, not of Brazil.

If Uruguay Is the Model...

On the eve of U.S. Assistant Secretary of State for Western Hemisphere Affairs Otto Reich's visit last month to South America, a State Department official, giving the background briefing on Reich's July 7-12 visit, stated that Reich believes "Uruguay represents what we hope the hemisphere will become." Uruguay is now blowing apart, along with every other Ibero-American nation. See below.

National Strike in Uruguay Against IMF Banking Law

Uruguay's labor unions struck nationwide Aug. 7, shutting down schools, hospitals, government offices, and halting transportation. Five thousand people marched in downtown Montevideo, the capital. The protest was aimed at the IMF-imposed banking law which froze three-quarters of people's fixed-term dollar deposits at the public banks, and closed several insolvent banks. Depositors waited all week in long lines to withdraw funds from the Banco de la Republica, the nation's largest state-owned bank, with over 500,000 account-holders nationwide.

Julio Garcia, president of the electrical workers union, estimates as many as 2,500 jobs will be lost at the four banks which have been closed. The bank bill "will kill the state bank in the long run, and leaves the financial market in the hands of the private banks," he charged.

A mid-level manager from one of the banks that have been closed, the Banco Caja Obrera, warned that the shutdowns would disrupt payments in Uruguay, particularly in small farming towns. His particular bank, for example, handled the finances of cattle auctions, and its closure "will snowball and halt payments across several provinces."

Unemployment in the country was already officially 15.6% at the end of May.

Aside from financial restructuring, the IMF wants social-security "reform" (read: privatization) and greater fiscal austerity, which also implies deep budget cuts and more privatization. As the Argentine daily Clarin noted on Aug. 5, while the government was issuing statements that the crisis is over, "in reality, the air in Montevideo would seem to indicate that this is just the beginning."

Chavezista Paramilitaries Surface, in Grave Escalation of Venezuelan Crisis

On Aug. 4, two days after unknown gunmen ambushed a police car in Caracas, and then fired military-issue, armor-piercing bullets at a police vehicle, reporters were invited to a dimly-lit apartment in a poor neighborhood, which is known as a stronghold of Venezuela's demented President Hugo Chavez. There, a group of hooded men, outfitted in camouflage uniforms and holding automatic assault rifles, presented themselves as members of a so-called "Carapaica Revolutionary Movement," and announced they were responsible for the attack on the police.

Speaking for the group was one "Comandante Murachi," who claimed they were not associated with the Chavez government, but admitted to being its supporters. They call themselves Marxist followers of Che Guevara. "Murachi" threatened those who betray "the people," that they will be treated as "military targets." "We are like cats; we crouch and wait. To each one, will come his time," he warned. "Murachi" specified that threat applied to the "vanguard" of the opposition movement against Chavez, and to leaders of the Chavez movement who break with him, and then singled out four Congressmen in the latter category by name, whom he recommended "reflect" on their "disrespect for popular sovereignty." "Murachi" also threatened the Metropolitan Police should they attempt again to repress protestors.

This new paramilitary capability surfaced as President Chavez, personally, and other top members of his government, have stated numerous times over the last few weeks, that "the people" will not tolerate the Supreme Court finding against the government on the two major cases now before it: 1) the government's attempt to try for treason four top military leaders who sided with the opposition on April 11, and 2) a lawsuit brought by the opposition, which seeks to try Chavez, Vice President Jose Vicente Rangel, and Attorney General Isaias Rodriguez, as personally responsible for the deaths which occurred on April 11. Mobs were back out on the street on August 8, and more than seven people, mostly policemen, were shot and wounded in the melees which resulted.

New Colombian President Faces Daunting Task

Alvaro Uribe Vélez was sworn in as President of Colombia on Aug. 7, in the midst of mayhem wrought by the FARC narcoterrorists in one of the poorest sections of the capital. The FARC's intention had been to stop the Presidential inauguration altogether, and possibly assassinate the new President. Unable to accomplish this, the FARC resorted to brutal attacks on the population itself, and lobbed mortar bombs during the inaugural ceremony at a slum, just four blocks from the Presidential palace. A vast area was reduced to rubble, and the death toll had risen to 19 by Aug. 8, with another 69 wounded.

Uribe's response has been to order a 2000-man increase in the Bogota police force, and to immediately launch his promised 1-million-man civilian militia. Initially, these are to be volunteers who will work against the narco-terrorists, either as informants for the military and police, or as armed auxiliary soldiers and policemen. Eventually, many of these volunteers may be absorbed formally into an expanded Armed Forces, which Uribe has pledged to double under his mandate. Asked by reporters if it weren't risky to turn civilians into informants for the authorities, Uribe responded that the real risk was to Colombia's 40 million citizens, who are being ravaged by narco-terrorism.

Colombia: EIR's Londono Challenges Wall Street Bankers

EIR's bureau chief in Colombia, Maxmiliano Londono, brought a dose of reality on July 25 to the 1000 or so Colombian and U.S. bankers, members of the Colombian elite, and U.S. Embassy officials attending the annual "Colombia in the Eyes of Wall Street" seminar organized by ANIF (National Association of Financial Institutions), the Fedesarrollo think tank, and the New York-based Council of the Americas.

The moderator permitted EIR's Londono to brief the gathering, wherein he made the following points:

The title of the seminar, "Colombia in the Eyes of Wall Street," is a mistake, he said. It were more appropriate this forum be called "Wall Street in the eyes of Colombia." The foreign debt cannot be paid; the New Economy bubble has collapsed; and the U.S.'s huge deficit is about to blow up. Lyndon LaRouche forecast the end of the system, and that the dollar could collapse by 40-60%, that the housing bubble will pop at any moment. Were the "clash of civilizations" crowd to be neutralized, however, there could be a reorganization of the international financial system just as LaRouche has proposed.

Lastly, Londono warned that President-elect Alvaro Uribe has only two options: he can either be a Colombian Herbert Hoover, or a Colombian Franklin D. Roosevelt. The latter option means building infrastructure projects, and issuing cheap credit and create millions of jobs.

Londono's remarks were met with a round of applause from the audience, and an executive from Deutsche Bank, Jose Luis Daza, stood up to respond that "this man" (Londono) should be here as a speaker, because he knows what he's talking about. Of course, he added, there are things I don't agree with, but he knows very well what the situation is with the world financial system at this time.

New Bolivian President Promises Jobs, Infrastructure

A new President was inaugurated in Bolivia, on Aug. 6, mining baron and Inter-American Dialogue favorite Gonzalo Sanchez de Lozada, who served as President also from 1993-1997. Congress elected the new President, after a marathon session of more than 24 hours, dominated in large part by mutual recriminations and insults, because no candidate won more than the required 50%— nor even 25% — of the vote. His opponent was cocalero Evo Morales. Sanchez de Lozada's MNR party struck a deal with the MIR party of Jaime Paz Zamora, eventually garnering 84 votes to Evo Morales' 43.

In a press conference after the inauguration, Sanchez de Lozada emphasized that controlled spending and reduced investment were going to be key to his Presidency's success in winning international credit, while, at the same time, insisting he has plans to use the next 90 days to launch a jobs-creation program based on infrastructure: highways, rural electrification, irrigation, housing, etc. He said his would be a government of "intervention" in the market economy, given the delicate state of affairs of the economy, and claimed he would not impose the economic shock treatments that were the hallmark of his own activity as Planning Minister in the 1985-89 Paz Estenssero Presidency.

Were he to fail to provide new jobs, his government would face political disaster, quickly. Denouncing the new MNR-MIR alliance that put Sanchez de Lozada into the Bolivian Presidency as "a mafia," coca-pusher Evo Morales, de Lozada's opponent, declared himself the real winner of the national elections. He added that he would name a cabinet and rule from the Congress.

The "people's movement" that Evo Morales calls his followers has declared that its primary intention is to stop coca eradication in the drug-producing zone of the country known as the Chapare. This is the same region where the Bush Administration has insisted on continued coca-eradication as the sole litmus test of the new government.

IMF Demands Weakened Paraguay Enact 'Fiscal Austerity' Law

The IMF is squeezing Paraguay to impose "fiscal austerity" as a conditionality for a standby loan. This occurs in the midst of extraordinary instability, and immense poverty, characterized by one opposition leader as "like Biafra or Bangladesh." Scenes reminiscent of Argentina, where heads of households have to dig in garbage dumps to find food, are now becoming commonplace. Industry Minister Euclides Acevedo spoke out against the IMF program being negotiated by Finance Minister James Spalding and Central Bank President Raul Vera, arguing that the IMF had no right to dictate policy to the country, and demand tax increases, as if Paraguay were just a colony. "We are a sovereign state," he said. The country can't tolerate more tax increases, he added. "You can't keep drawing blood from someone who's anemic." Similar attacks came from the president of Paraguay's Industrial Union, and the head of the Chamber of Advertisers.

The IMF-dictated fiscal-austerity law to be presented to Congress demands huge budget cuts, an increase in the VAT tax, from 10 to 13%, an increase in a tobacco and alcohol tax from 10 to 20%, plus additional tax hikes. This austerity is intended to reduce the fiscal deficit to 1.3% of GDP this year, with the goal of reaching a "zero deficit" in 2003— the same crazy policy which helped destroy Argentina. The Fund also wants a "financial reform" law passed in the Congress, for the purpose of dealing quickly with banks that fail.

It is against this backdrop that a mass demonstration was planned for Aug. 4 in Asuncion, by Unace, the movement founded by former Gen. Lino Oviedo. The protest was to demand the resignation of current President Luis Gonzalez Macchi.

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