Ibero-American News Digest
Imprisoned Argentine Patriot Colonel Seineldin Pardoned
Just days before leaving office, Argentine President Eduardo Duhalde signed a decree on May 20, pardoning Malvinas War hero Mohamed Ali Seineldin, along with terrorist Enrique Gorriaran Merlo, of the All for the Fatherland Movement (MTP). Seineldin, who had been transferred to house arrest for the past several months, is now a free man. Duhalde told the press the previous day, in announcing his intention to issue the pardon, that he wished, through this action, to contribute to the final pacification of the country. "I believe we have ended an era. In Argentina, the policy of weapons in hand, and confrontation, no longer exists. It is past history." Seven other military officers and 16 other terrorists linked to the MTP were included in the pardon.
Seineldin, an uncompromising patriot and friend of U.S. statesman Lyndon LaRouche, was sentenced to life in prison for his role in the Dec. 3, 1990 uprising against the Argentine Army High Command, in rebellion against its capitulation to the New World Order of globalization, which he opposes. Then-President Carlos Menem unsuccessfully sought Seineldin's summary execution, but settled (with the blessing of U.S. President George H.W. Bush, who arrived in Buenos Aires a day after the uprising), on a trial, in which Seineldin was given a life sentence, and over a dozen of his comrades in arms were given decades-long jail terms. Throughout the 1990s, he spoke out in defense of Argentine national interests and the integration and development of Ibero-America, as well as in support of LaRouche's efforts to bring about a change in the global financial and strategic situation, to the extent that his incarceration permitted.
Gorriaran Merlo, a leader of the terrorist Peoples' Revolutionary Army (ERP) in Argentina in the 1970s, later carried out terrorist operations in various Ibero-American countries, in coordination with Cuban intelligence networks. He was serving a life sentence also, in his case for his commanding role in the January 1989 armed attack on the La Tablada Army base in Buenos Aires. His release was sought on humanitarian grounds, as he suffers from cancer and isn't expected to live long.
Mrs. Marta Labeau de Seineldin had written President Duhalde on May 16, requesting he pardon her husband, on the grounds that he had already served 12 years and seven months in prisonfar longer than the four years that military junta leaders served for human-rights violations and illegal repression. "I ask that you free the patriot who had no qualms about risking his life in the Malvinas, when his Fatherland required it," Mrs. Seineldin wrote.
Bush Ups Rhetoric vs. Castro Regime
The Bush team has upped the invective against the Fidel Castro regime: President George Bush met May 20Cuban Independence Daywith 11 Cuban dissidents now living in the United States. White House spokesman Ari Fleischer ominously compared that meeting to Bush's meetings with Iraqi dissidents, announcing at the briefing that day that "the President has previously met with groups of people who have important stories to tell about the suffering that they have seen in their native countryIraq comes to mind." Bush wished to convey "his feeling that Cuba deserves to be free, that the Cuban people have suffered long enough at the hands of a tyrant, and the Cuban people, like people all around the world, deserve liberty and freedom," Fleischer added.
Bush also taped a message for broadcast into Cuba on Radio Marti, declaring that his "hope is for the Cuban people to soon enjoy the same rights and freedoms as we do. Dictatorships have no place in the Americas. May God bless the Cuban people who are struggling for freedom."
There was no announcement, however, of any new measures to be enacted against Cuba, as a result of the Bush Administration's reported review of its policy toward the island nation, as had been mooted. Fleischer downplayed the talk of the policy review itself, saying the Administration is always reviewing what the best policy is around the world, and that would include Cuba.
Brazil Proposes Regional Trade MechanismOutside the Dollar
Officials of Brazil's National Economic and Social Development Bank (BNDES) are readying the launch of a mechanism for carrying out trade with Argentina, and then the rest of South America, without using the dollar. The plan, discussed between the Finance Ministers of Argentina and Brazil on May 7, is for the BNDES to reestablish a mechanism used for regional trade, known as the Reciprocal Credits Agreement (CCR), which had been used in the 1990s. The CCR functions as a clearinghouse, wherein the exporters of one country or the other pay for their imports in local currency, with differences in trading balances then settled at regular intervals between the relevant central banks.
The purpose for reestablishing the CCRs is most immediately for trade between Argentina and Brazil, which would eliminate, or greatly reduce, the need for dollars to pay for trade between the two countries.
BNDES vice president Darc Costa calls the CCR the "best instrument for economic integration we could have in South America." Costa was in Buenos Aires, Argentina the week of May 19-23, and told O Estado de Sao Paulo that Brazil and Argentina will soon have a "common industrial policy," initially anchored in the $1-billion credit line BNDES is offering Argentina to finance its exports to Brazil. Another BNDES official said that CCR "reduces the use of the dollar, and exposure of this currency in the region's foreign trade, which traditionally suffered from the instability of strong currency [that is, dollared.] flows."
Some central banks in the region have limited CCR's use, but BNDES plans to change that, so that CCR can become the key instrument for Brazil-Argentina trade, and then, trade between these two countries and the rest of South America. It will make funds available to banks involved in financing these operations, and itself assume the "financial-commercial risk" should there be any problems, or if a bank fails. Discussion is also occurring on how to integrate Brazilian and Argentine "productive chains," in areas such as auto production, textiles, plastics, lumber, and agricultural machinery, and studies are underway on long-term strategies for common projects in these areas.
Brazil's Lula Warned: Honeymoon Is Over; Act Now
"There are reasons to suspect that the surrender of Luiz Ignacio Lula Da Silva's government to the financial interests which dominated the Brazilian economy for more than a decade, is not just a tactical concession," Folha de Sao Paulo wrote in a bitter editorial on May 18. Folha speaks for the powerful Sao Paulo industrialists, but its warning to Brazilian President Lula da Silva reflects the broader political firestorm building against the Lula government's decision, thus far, to stick with the IMF:
"More than four months have passed since the inauguration, and the economic policy only has tightened the tourniquet on businesses and workers. Production is stagnating, per capital income is falling," Folha wrote, adding that during his campaign for the Presidency, Lula had promised to change economic policy. "He promised to put the country on the path of growth, of an increase in employment and of income distribution." A cautious policy, when first taking office, seemed reasonable, but, "To persist in this path is intolerable. Where is the promised alternative project, so talked about during the campaign?" asked Folha. This path only satisfies that minority of Brazilians who made fortunes lending money to the state.
"Which side is the Lula government on? That of the banks, or of production? Of change, or of the permanence of a model which has not responded to the demand for growth?" It remains to be seen how Lula will answer these questions.
Usurious Interest Rates Add to Policy Brawl in Brazil
Brazil's Central Bank decided, when its monetary policy committee met on May 21, to maintain the benchmark interest rate, the SELIC, at the stratospheric level of 26.5%, despite the enormous pressure from national interests to ease up. The high interest rates are killing the economy: The average rate paid by corporations in March hit 37.9%, while consumers are paying over 100% for loans. At those rates, domestic car sales were 17% less in March 2003 than the same month the year before, while overall retail sales were down 11%.
Vice President Jose Alencar took the point for those within the government demanding that interest rates be lowered, prior to the monetary policy meeting. He called the current rates "counter-productive," and benefiting only a "speculative" market. Alencar is a textile industrialist, and is reflecting the views of a broad grouping of industrialists whose businesses are going under. And while Alencar is not from the ruling PT (Workers Party), but the right-wing Liberal Party, his objections were echoed by Aloizio Mercadante, who heads the PT faction in the Senate.
But two top IMF vultures descended on Brazil this week: vice director Anne Krueger and the head of the Western Hemisphere division, Anoop Singh. In the course of several meetings with cabinet officials, they delivered the message, that the IMF does not want to see any controls put on foreign speculative capital, nor does it want the government interfering with interest rates, which they insist should be set by financial markets.
So, the Wall Street-allied economic team told President Lula da Silva that his Vice President had crossed the limit when he questioned the "competence" of the Central Bank, and that the President had to stop the "friendly fire." According to Folha de Sao Paulo, that message was delivered, but Alencar told Folha he thinks his "criticisms contribute," and he will keep up his campaign. A 17.5% interest rate would "satisfy the market," and save the government R$90 billion (about $30 billion!) in interest on its debt, he told Folha.
Malaysia-Style Capital Controls Planned in Argentina
Argentine Finance Minister Roberto Lavagna is said to be studying possible implementation of Malaysia-style capital controls, as a way of avoiding sharp currency fluctuations caused by the continuing collapse of the U.S. dollar. Whether this would actually be implemented, and what it would mean in the context of the next government's overall policy, is unclearespecially since President-elect Nestor Kirchner's program hasn't yet been spelled out. Last year, a delegation of Malaysian officials and businessmen visited the country and met with Lavagna.
The plan would entail establishing a minimum time period, during which incoming capital would be required to stay in the country, probably between 45 and 90 days. At a Council of the Americas seminar in Washington in early May, Central Bank President Alfonso Prat-Gay said that developing-sector nations should be able to use "instruments to defend themselves from violent shocks of capital." Last week, Lavagna warned that new capital flows going into Ibero-American countries posed the risk of creating "speculative bubbles" that would be damaging to those nations' economies, including the fragile Argentine economy.
Behind NAFTA's Boxcars: Billions To Pay Debt
Nineteen of more than 100 men, women, and children from Mexico and Central America stuffed into an airless semi-tractor-trailer truck discovered in Texas on May 16, died from dehydration, hyperthermia, and suffocation; several, including one five-year-old boy, are believed to have suffocated under people who were piled on top of them. They were not the first to die in the rail and truck boxcars used by migrant smugglers, but those responsible for these gruesome deaths are the people who support NAFTA and the IMF systemthe policies that have so destroyed the economies of Central America and Mexico that thousands of people risk their lives daily to make their way north to the United States. It is well known that hundreds die every year doing so491 migrants from Mexico alone are known to have died in 2000; 371 in 2001because they have no way to make a living in their own countries.
The big money in this business doesn't go to the smugglers, but to the major financial institutions. Mexico and the Central American countries use the money sent back home by those who survive the trip, to meet their debt payments. Mexicans sent a record $2.74 billion in remittances back home from the U.S. in the first quarter of 2003, a 26% rise from the first quarter of 2002, Mexico's Central Bank recently reported. Annualized, that rate would total $11 billion. Remittances are now approaching 2% of Mexico's GDP, second only to oil exports (about $4.9 billion) and the maquiladoras ($4.57 billion), as a source of foreign exchange.
Remittances to Mexico and Central America, combined, grew at 12.3% a year between 1999 and 2001. The big banks are fighting to get their hands on a larger chunk of this business, too, which until recently was largely handled by the money transfer companies, which charge exorbitant fees. A November 2002 study, produced by the Pew Hispanic Center and a division of the Inter-American Development Bank, estimated that, in 2001, Ibero-American immigrants in the U.S. (some 14.5 million) paid $3 billion in commissions, to send remittances totalling $23 billion back to their countries of origin. According to the Financial Times of May 15, the U.S. Treasury estimates that more than $1 billion were paid in commissions by Mexicans alone in 2002.
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