In this issue:

Brazilian Congress Defends Nation-State vs. the NGOs

Narcoterrorism Revives in Peru

Fox Slammed for Promising Foreigners Mexico's Energy

Castaneda Joins Soros's Human Rights Watch Board

Powell Offers Argentina's Kirchner Free-Trade Ploy

Industrial Collapse in Brazil Raises Political Heat

From Volume 2, Issue Number 24 of Electronic Intelligence Weekly, Published Tuesday, June. 17, 2003

Ibero-American News Digest

Brazilian Congress Defends Nation-State vs. the NGOs

The final report issued for 2002 by the special Parliamentary Commission of Investigation (CPI), established in 2001 to investigate "irregular activities" by Non-Governmental Organizations (NGOs), marks a major blow to Prince Philip's Worldwide Fund for Nature's attempts to drive Lyndon LaRouche's influence out of Brazil. The work of the CPI was shaped from the outset by LaRouche's work, as reflected in its decision to invite EIR correspondent Lorenzo Carrasco as the first witness from which it took testimony. The final 2002 report includes a section of Carrasco's testimony (including his warnings on the FTAA), and identifies Carrasco as an author of the Green Mafia book, which identifies the "world oligarchical forces," which control the environmental movement.

The WWF, as the Worldwide Fund for Nature is best known, sought, unsuccessfully, for the courts to prohibit circulation of the Green Mafia book, on the grounds that it damaged their reputation.

The stated premise adopted by the CPI in its report, is that the nation-state is necessary, to defend the common good. The report refutes the assertion by NGO activists that the concept of the nation-state has been replaced by that of "local and world governance." NGOs, supranational bodies, and multinational corporations are "symptoms and agents of the weakening of the modern, sovereign, nation-state, which has been adhered to since the Treaty of Westphalia, of 1648," the report states. The idea that this historical change "has been, on balance, advantageous to humanity, could be illusory. Before a hypothetical world government arrives, the state is, still, the alternative to tribal anarchy."

The classic state permits the interests of society to be addressed in "a comprehensive and coherent way," the CPI elaborates. Particular interests, "the mono-visions" typically promoted by most NGOs "cannot substitute for the single and strong voice on behalf of the common good, which only the state can provide." If "civil society" is stronger than the state, this will bring "fragmentation and loss of common purpose.... [T]here are more than enough reasons for [the state] to exercise control and vigilance over NGOs," it asserts.

The environmental and indigenist movements put forward a "post-industrial" view embued with "scorn for the merely industrial," the report warns. Not only is the factory chimney despised, but so are highways, electricity plants, waterways, mining, lumbering—"indispensable activities for those who are still trying to build themselves as a modern nation."

The environmental and indigenist NGOs are acting against the interests of society, interests which are strongly established in Article 3, Clause II of the Constitution, which says that the fundamental objective of the Brazilian Republic, is to "guarantee national development. The which, it must be noted, is the irreducible condition for the creation of jobs and for the overcoming of poverty," the CPI writes.

Narcoterrorism Revives in Peru

The narcoterrorist Sendero Luminoso, nearly driven to extinction under former Peruvian President Alberto Fujimori, has resurfaced with a vengeance, under the Presidency of ex-World Bank employee Alejandro Toledo. Sendero carried out a FARC-style mass kidnapping of 71 people, including eight foreigners, at a gas-pipeline construction site in Ayacucho department, on June 9. The kidnappers demanded a $1-million ransom from Argentine oil company Techint, which is building a section of pipeline there to carry natural gas from Peru's Amazon jungle across the Andes to the Pacific coast.

Sendero released their hostages the next day. While President Toledo claimed on a national television broadcast that quick government action led to this success, and that no monies had been paid, that claim was quickly contradicted by various hostages, who reported the company involved paid some ransom, after negotiations in which the government was involved.

The terrorists' show of force, intended to demonstrate that the government can be made to capitulate, was accompanied by an escalation of the political campaign to legalize Sendero Luminoso and the MRTA—the other narcoterrorist force which the Fujimori government had crushed. The center of this operation is none other than the U.S. State Department-financed "Truth Commission," whose purported mandate is to clarify human rights violations under Fujimori's war against terrorism. On June 6, the Truth Commission sponsored a seminar in Lima, titled "From Negation, to Recognition," which featured Colombia's "repentant" M-19 commander Antonio Navarro Wolf as one of its principal speakers. Wolf used his speech to send "fraternal greetings of solidarity" to jailed MRTA commander Victor Polay Campos, with whom he had fought in the 1980s in the jungles of Colombia. Both were involved in the continent-wide "Battalion America" terrorist force. Wolf assured the Truth Commission that Polay is ready to accept "democratic rules."

Meanwhile, Sendero's hostage-taking provided Toledo with the pretext needed to extend the state of emergency imposed to crush the national rebellion against his IMF policies.

Fox Slammed for Promising Foreigners Mexico's Energy

Visiting Stockholm, Sweden at the beginning of June, Mexican President Vicente Fox once again offered to open up the nation's energy sector to foreign takeover. During a June 3 address to Swedish businessmen, Fox committed his government to opening up the oil and electricity sectors, despite the fact that these sectors are fully protected from foreign encroachment by the Mexican Constitution, and the Congress has refused to reform to permit it.

Nonetheless, Fox promised that the legal reforms he has repeatedly proposed will be approved "this same year," and invited "any company to be a provider in the chain of production, industrialization, transformation, or distribution of oil or electrical energy."

The Office of the President in Mexico confirmed that he made these statements, insisting that these sectors are fully open to foreign investment.

Opposition legislators, who hold a majority in the Congress, charged Fox with outright lying. "Stubborn," "impertinent," "incompetent," and "fantasy-ridden," were some of the accusations made against Fox on the floor of the Congress, by Senators and Deputies from the PRI, PRD, and PVEM parties. Fox and his Finance Minister Francisco Gil Diaz are part of a group of "stubborn neo-liberal fanatics, who insist on continuing on this path" of promising foreign investors something which will not become a reality, Sen. Jesus Ortega (PRD) noted. "Lies aren't going to convince anybody, but will just continue to grow."

Summing up the opposition sentiment, Sen. Manuel Bartlett Diaz (PRI), who led the fight to block Fox's proposed bills to open up the energy sector, observed: "There hasn't been a single trip [abroad] by the President, since he was a pre-candidate, in which he has not sought to give away the oil or the electricity. It is truly alarming that the President is telling lies, saying that the reform he seeks is about to be approved. That reform is dead.... This reflects a kind of autism about the national reality. Either he doesn't know what's going on, or his Secretary of Government isn't telling him."

Castaneda Joins Soros's Human Rights Watch Board

Former Mexican Foreign Relations Secretary and drug legalization lobbyist Jorge Castaneda has been invited to join the board of George Soros's Human Rights Watch for the Americas, as one of a select few non-Americans to be so "honored." According to HRW/Americas director Jose Miguel Vivanco, the invitation to Castaneda came in recognition of his role in moving Mexico's government away from its "mistaken concept of sovereignty" and "nearly total obstructionism" of human rights advocacy, toward an active international leadership role in defense of human rights.

Vivanco took care to add: "We are associating ourselves with Castaneda, not with [the Mexican] government," which he insisted still had "an enormous distance" to cover in addressing "chronic and persistent" human-rights problems.

As reported in the Ibero-American Digest of EIW #23, Castaneda is busily wooing the international corporate and financial community, for support for his hoped-for Presidential bid for 2006. In an interview with the Spanish daily El Pais June 10, Castaneda repeated his argument that the only way to get through the kinds of "structural reforms," such as privatization of the energy sector, that the Fox regime has pledged to achieve, is to first ram through the "institutional reforms" that will make the former possible. Specifically targetted by these so-called reforms is the Mexican Congress, which is today a key obstacle to the efforts of the financier-backed Fox regime to hand over Mexico's oil and hydroelectric wealth. Castaneda would replace Congress with a parliament under the heel of the next head of state, namely, himself.

Powell Offers Argentina's Kirchner Free-Trade Ploy

The Bush Administration may try to lure Argentina into a bilateral free-trade agreement, similar to the one finally signed with Chile on June 6, to break up any possibility of a strong Brazil-Argentina alliance or a more vibrant Mercosur. Secretary of State Colin Powell reportedly made the proposal to Argentine President Nestor Kirchner, when the two met for an hour in Buenos Aires on June 10. Washington is nervous about the discussions between Kirchner and Brazil's Lula da Silva on the need for a strong alliance between the two countries, along with their support for South American integration. Kirchner campaigned on the promise that his government would not follow former President Carlos Menem's policy of "carnal relations" with the United States.

Powell made his proposal just as Kirchner was preparing to travel to Brasilia, to meet with his counterpart Lula to further consolidate the "strategic alliance" which both Presidents say is a crucial policy goal of their governments. During the one-hour discussion with Powell, Kirchner took pains to distance himself from U.S. foreign policy, saying that Argentina would only send peacekeeping forces to Iraq under the aegis of the United Nations, and he pointedly refrained from making any response to Powell's insistence that Cuba be "democratized."

As EIRNS] predicted, the pressures on both Argentina and Brazil are intensifying, and Anglo-American dirty tricks can be anticipated to play on Lula's and Kirchner's weaknesses—their unwillingness thus far to break with IMF policy.

Industrial Collapse in Brazil Raises Political Heat

Brazil's industrial output fell 4.2% in April, over the same month a year ago, the government's statistical agency announced on June 9. The fall, the first in 11 months, is blamed on Brazil's stratospheric interest rates. With a benchmark rate of 26.5%, a mid-sized company pays around 60% annually for a one-year loan, while rates for consumers caught in problem loans can hit 220%. At those rates, it is no surprise that production of transport equipment was down 11% over the year before; manufacturing of electrical and communications, 13%; clothing and shoes, a stunning 28%.

High interest rates were already one of the biggest political headaches faced by President Lula da Silva. Ironically, it is Vice President Jose Alencar, a right-wing businessman, who is leading the rebellion against the rates imposed by the leftist Workers Party members on the government's economics team.

While Lula was in France for the expanded Group of Eight summit, Alencar called for a national "crusade" against these "surreal" and "absurd" interest rates. And just as Lula was assuring the G-8 leaders that his government would not intervene with the markets, back home, Acting President Alencar was telling Brazilians: "We need political decisions.... This is not a decision for the economist. It is a decision for the politician, to be taken in the political realm." He denounced the interest rates as "robbery," and charged that "never in the history of Brazil has there been a greater transference of profit generated by work, to the benefit of the financial system."

Lula's economic team is now concerned that such an open split over economic policy within the government, is going to worry "the markets," and affect the "economic indicators," Tribuna da Imprensa commented on June 5.

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