Ibero-American News Digest
New Argentine President Defends FDR Model
Argentina's new President Nestor Kirchner delivered an optimistic speech at his inaugural ceremonies May 25, promising to make the state an active agent again in securing national development, and in restoring to the citizenry those basic rightsjobs, health care, education, and dignitywhich had been so brutally stripped from them, under the past decade of neo-liberal policy.
With 12 foreign heads of state in attendance, Kirchner asserted that the success of policies will now be judged by different criteria: Whether they "approximate the goal of concretizing the common good." While promising to maintain a policy of "fiscal responsibility," he also promised that domestic consumption "will be at the center of our strategy of expansion." The state must exercise its regulatory capacity, and help to build "national capitalism." There is nothing extremist about this, he said: Look at how developed countries "protect their producers, their industries, and their workers."
The centerpiece of the government's new platform will be an aggressive public-works program, the President said. The state must, "with urgency, become an active economic subject," to ensure completion of "unfinished projects, generation of genuine employment, and big investment in new projects." Neo-liberalism called these "unproductive investments," he said. But "we aren't inventing anything new. In the decade of the 1930s, the United States overcame the deepest economic-financial crisis in a century by such means," under Franklin Delano Roosevelt's government. Kirchner underscored that projects for building highways and railroads, housing, "new and modern hospitals, education and security infrastructure, will profile a country productive in agro-industry, tourism, energy, mining, new technologies, transportation, and will generate real employment."
Whether Kirchner can or will follow through, remains to be seen. Bankers are waiting to see, as the chief economist for Ibero-America of ABN Amro bank, Fernando Losada, put it, in a May 26 La Nacion article, whether the change in course signalled by Kirchner in his inaugural speech, will be "purely rhetorical, or a reality." The City of London's Economist magazine reminded the new President, in its May 26 edition, that no country "can afford to behave like a pariah state," and it is up to Argentina to make the first move towards "easing tensions" with the International Monetary Fund. Kirchner will have to understand that he won't attract foreign investors and new financing, unless Argentina gets the "IMF seal of approval." And, it adds, the Fund has made very clear that there are still "outstanding issues to be resolved" before any new program can be put in place.
Brazilian Infrastructure Diplomacy Extends to Ecuador
The Presidents of Ecuador and Brazil have agreed to cooperate on South America's physical integration, and in many other areas pertaining to economic and social development. Following their meeting in Brasilia on May 27, Ecuador's Lucio Gutierrez and Brazil's Lula da Silva signed a joint declaration which reflects Brazil's ongoing offensive to forge continental integration (see article in INDEPTH, EIW 20.) The declaration underscores the importance of achieving the physical integration of both nations, in the context of the South American Regional Integration Initiative (IIRSA). Special emphasis was placed on the Amazon Multimodal Axis, "to accelerate the integration of the Amazonian and Andean regions and facilitate a bioceanic interconnection." The two Presidents agreed to hold a ministerial level meeting, including IIRSA experts, as soon as possible to discuss specific projects related to the Multimodal Axis.
Other aspects of the declaration included a commitment to seek financial cooperation for infrastructure and development projects considered priorities by the Ecuadorean government, such as water treatment facilities for rural communities. Ecuador also wants to keep current, although non-operational, the credit line offered by Brazil's National Economic and Social Development Bank (BNDES) through the end of this year. Great emphasis was placed the fact that South America's physical integration would be crucial in determining a "model of development" able to provide social justice for all citizens.
Brazil's Budget-Slashing Pleases Bankers
Despite its active diplomacy, emphasizing development and infrastructure projects, the Lula government's continued attempt to satisfy international creditors, has led it to slash its own budget, including for key infrastructure projects. Wall Street's Bloomberg wire service enthusiastically reported on May 28 that the budget cuts have increased "investor confidence" in the country. Cutting budgets at most ministries, which delayed projects such as the Sao Paulo-Rio de Janeiro railroad, and road, hospital, and subway improvements, reportedly increased the primary budget surpluscalculated as revenues minus all expenditures except debt serviceto a record $4 billion for April, and led to an inflow of $2 billion in short-term foreign investments this year. Financial sharks and the IMF are happy about this because they say it means Brazil will be able to keep paying its foreign debt on time for a few days more. As one economist at UBS Warburg chirped, Lula "is positively surprising everyone with his prudence in spending."
BBC News also happily reported on the newly sealed alliance between Lula's Workers Party (PT) and the Brazilian Democratic Movement Party (PMDB), which alliance they expect to put through IMF-dictated cuts in state pensions and "simplify the tax system," seen "as crucial to prevent Brazil from going bankrupt."
However, even Bloomberg had to admit that the combination of budget slashing and high interest rates, which still remain at an astronomical 26.5%, is taking a huge toll on economic growth. First-quarter GDP is the slowest since June of 2002, and analysts are estimating that the second quarter will be worse.
Under pressure at the same time from domestic interests which its economic policy has betrayed, the government announced just in the past few days, that it would unfreeze some previously frozen funds to finish specific road, port, and defense projects.
Toledo Government Orders Military Out Against Protesters
Peruvian President Alejandro Toledo declared a 30-day "national state of emergency" on May 27, and called out the troops to repress hundreds of thousands of teachers, doctors and nurses, state workers, farmers, and others who are striking nationwide to demand higher wages and lower taxes. Toledo insists these demands cannot be granted without violating his pact with the IMF. His government claims that the strikes and protests will drive the nation "to the devil." International financial mouthpieces like the Inter-American Development Bank's Enrique Iglesia have warned that the country must not abandon its "fiscal discipline."
Attempts by students in the city of Puno to reenter their university May 29, after it was occupied by troops, were met by gunfire and tear gas, leading to 40 injuries, and one student killed. Hundreds of arrests and injuries have occurred in a score of cities across the country, following clashes with troops and/or police, as strikers are refusing to crawl away, and instead are gathering in town plazas, marching in the streets, gathering in front of the Congress, taking over public buildings, blocking highways, and more. Said one teacher, "If the government doesn't change its policy of kneeling before the IMF, if it does not look the Peruvian people in the face, it's going to have to go." The CGTP, the largest trade-union federation in the country, is considering calling a general strike in July, if not sooner.
The state of emergency and military repression has been backed by the country's creditors. Exemplary is a spokesman for Pacific Investment Management of California, which handles Peruvian debt, who intoned, "Our view is that this action [state of emergency] is consistent with preserving the strengthening of the macroeconomic situation, which is reflected in high economic growth and a responsible fiscal policy. Having said that, it's important that the government restore confidence across the spectrum of the population."
Toledo's claim of strong growth has yet to be reflected in people's paychecks, reports one journalist, and Toledo's popularity rating has fallen to a record low of 14%. Toledo had campaigned for the Presidency with promises to double salaries.
Brazilian Rightwing Nut Freaks at LaRouche Exposés of Chickenhawks
The growing hegemony, within the Brazilian elite, of Lyndon LaRouche's evaluation of the neo-con coup d'état against the U.S. Presidency, appears to have driven one of Brazil's most rabid neo-cons, Olavo de Carvalho, a hired pen of the World Wildlife Fund, over the edge. His May 24 column in O Globo, entitled, "World Coup D'État," reveals how much damage LaRouche's Ibero-American Solidarity Movement (MSIA) in Brazil has done through the wide circulation of its pamphlet, exposing the Straussians' Imperium Insanum.
"That there is a neo-globalization in action, a new empire whose expansion puts national sovereignty at risk, no one in Brazil doubts. All of our political, intellectual, and military leaders are said to be aware and alert as to this point," Olavo writes. The problem is, he says, that they've got it all wrong as to what the real danger of empire is. Brazilians are preparing to fight the Marines in the Amazon, but "the world government which is taking shape in front of our eyes, is not American: It is an alliance of the old European powers, with the Islamic Revolution and the world leftist movement. The centers of command are the international organizations, and the only resistance force which opposes the most ambitious imperialist formula ever seen in the world, is American nationalism." England was resisting, but capitulated. The only country where this "world governance" plot is discussed openly, is in the United States, claims Olavo.
"The war between the U.S.A. and world government has begun. If U.S. sovereignty falls, all will fall."
The only reason Brazilians don't understand this, says Olavo, is because of active disinformation put out by people like "Mr. Lyndon LaRouche, who passes himself off as an anti-globalist hero, selling anti-American prescriptions in the Third World, and who is widely read in Brazil. In a recent pamphlet, he goes so far as to associate Bush's foreign policy with the plans for world government laid out by Herbert George Wells, in a 1928 book, The Open Conspiracy."
William Kristol's New American Century, which Olavo insists is misreported and attacked in the Brazilian press as proof of the expansionist objective of the Bush government, is "only a late and partial proposal for possible reaction to an imperialist scheme already implanted in Europe, and in full process of extension to the rest of the planet. The war for the domination of the world has already begun. And Brazil has taken the wrong side," he raved.
Top Brazilian Anti-Nuclear Activist Gets Nervous
Former Brazilian Science and Technology Minister Jose Goldemberg blasted the new United States nuclear posture as a "new colonialism," in a Washington Post commentary published on May 28. Goldemberg, who personally oversaw the takedown of the Brazilian nuclear weapons programs in the 1990s, is worried that his successes in suppressing Brazil's technological capabilities could be overturned, by the backlash developing against far-out doctrines of the neo-con crowd which has seized control in Washington.
Goldemberg wrote that at the time that Argentina and Brazil agreed to drop their nuclear weapons programs, those who argued that nuclear nonproliferation was a "new colonialism" by the nuclear powers, were overcome on the grounds that the nuclear powers would only use nukes in response to a nuclear strike. Thus, the only threat was that Argentina or Brazil would use them against each other. Although India and Pakistan did not fall for it, Brazil and Argentina did. Goldemberg complains that the U.S. threat to use nuclear weapons against Iraq, Korea, and others has led to the "remnants of the old nationalistic and military groups ... reviving their advocacy of national nuclear weapons programs." He calls on the U.S. to "abandon nuclear threats," and to pursue nuclear disarmament.
Central America's Role in World Land-Bridge Project
Included in this week's INDEPTH section is an exclusive interview with a member of El Salvador's National Development Commission, Roberto Turcios, in which he outlines the regional economic benefits which should result from the construction of a deep-water container port in La Union, on that country's Pacific Coast, if undertaken as part of a broader regional effort to construct a cross-isthmus "Dry Canal." In her introduction to the interview, EIR's Christine Bierre points to the new port's even greater potential, when conceptualized as part of Lyndon LaRouche's proposal for extending the Eurasian Land-Bridge into the Americas via a tunnel running under the Bering Strait. Then, the construction of rail lines running across Central America, surrounded by full-set development corridors, becomes a necessity, to link the entire Americas to the explosion of economic development foreseen in the Eurasian region.
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