In this issue:

'LaRouche: Mexico's Ally Against Cheney and the IMF'

Markets Trash Mexican Peso, as PRI Rebels Against IMF Policies

Rio Group Begs for Reform of the Unreformable IMF System

Miami FTAA Trade Ministers Meeting Flops

U.S. Treasury Champions Dollarization for Dominican Republic

Argentina Is Paying Its IMF Debt

Vulture Funds Prepare to Confiscate Argentine Assets

Brazil-Chinese 'Strategic Partnership' Strengthens

Chavez Waves Banner of Che Guevara

Peruvian President Insists on Pushing Soros Line

From Volume 2, Issue Number 48 of Electronic Intelligence Weekly, Published Dec. 2, 2003

Ibero-American News Digest

'LaRouche: Mexico's Ally Against Cheney and the IMF'

Under that banner, U.S. Presidential candidate Lyndon LaRouche's message on how to defeat the financial predators out to destroy Mexico, was delivered to giant anti-privatization demonstrations held in Monterrey and Mexico City on Nov. 27. Trade union and Congressional leaders organized the simultaneous marches across the country in support of Mexico's Constitutional prohibition against energy privatization, as a nationalist show of force. Some 130,000 turned out in Mexico City, despite torrential rain, with thousands joining them with similar rallies in other cities around the country.

A contingent of the LaRouche Youth Movement (LYM) participated in the Mexico City march, and one organizer succeeded in reaching the podium, and the microphone, whereupon he told the crowd of almost 130,000 people that the crisis Mexico is undergoing, is just the result of the collapse of the international financial system, and that what is needed, is to replace it with a new one, such as that proposed by the U.S. Presidential candidate Lyndon LaRouche.

In the northern city of Monterrey, where LaRouche's local leader, Benjamin Castro, was invited to participate in the march organizing committee, LaRouche's ideas shaped the march from the beginning. The slogan, "Sovereignty, Yes; No to the Structural Reforms of the IMF," was adopted as the overall theme of the march. The banner which created the biggest impact, however, and which stole the attention of the local newspapers and TV news, was the one carried by the LYM contingent here: "LaRouche: The Ally of Mexico Against Cheney and the IMF!"

Castro read, in full, a message sent by LaRouche to the more than 7,000 people attending the rally. "The crisis that you in Mexico are facing today, is a result of the destructive disintegration of the IMF-led international financial system," LaRouche told them. "As the second leading Democratic pre-candidate for the Presidency of the United States, I have repeatedly warned about the danger of this systemic financial crisis, and how to solve it, as I also alerted the world that the pro-Synarchist bankers today controlling the Bush Administration, would launch wars of aggression around the world to impose their fascist globalist order....

"Either we turn the United States around, or Mexico won't exist, the Americas won't exist, and Europe won't exist. This is the choice: either the crisis is solved our way, or there will be no future.

"It is therefore of importance to publicly state opposition to these IMF policies, as you are doing today. Then we have a chance to win. So I support your efforts to defend your nation from destruction at the hands of the IMF, and look forward to coordinating efforts to solve the broader crisis I have identified," LaRouche wrote.

When one group attempted to stop Castro from reading LaRouche's message, others spontaneously began applauding and shouting "Viva LaRouche!"

Markets Trash Mexican Peso, as PRI Rebels Against IMF Policies

On the eve of the Nov. 27 national march against energy privatization, an extraordinary late-night meeting of the PRI Congressional faction was convoked, to discuss the urgent need to remove Elba Esther Gordillo as head of the PRI Congressional forces, because of her insistence that the PRI support Wall Street's demand that a minimum tax of 10% be slapped on all basic necessities, so that Mexico's poorest help pay the debt, too. Over 90 PRI Congressmen supported her ouster.

Gordillo had announced with great fanfare on Nov. 18 that the PRI delegation as a whole supported a proposal to impose a 10% tax on producers, importers, and intermediaries. The rebellion against that was so tumultuous, that PRI national chief Roberto Madrazo (no nationalist), joined those charging that Gordillo's 10% proposal had been drafted by Fox's Treasury Ministry.

At that point, the motion to remove her as PRI faction chief began—and so did a run on the peso, which drove the peso down to a record low. Spokesmen for various banks—ING Bank, BBVA Bancomer, Bank Boston Mexico, among them—declared straight out that "the lack of political agreement on the pending reforms [is] being penalized by investors." The bankers promised a "more drastic" response, should the PRI continue to hold the line against the reforms. Central Bank governor Guillermo Ortiz chimed in also that only if the PRI buckles to Wall Street, would "the volatility" of the markets stop.

Rio Group Begs for Reform of the Unreformable IMF System

The Rio Group, which includes the leading Ibero-American and Caribbean nations, announced at the Ibero-American Heads of State Summit in Bolivia on Nov. 15, that they are requesting an urgent meeting with IMF and World Bank representatives, to tell them: "Latin America cannot withstand the financial asphyxiation any longer, and we need to build—together, not unilaterally, together, and without falling into populisms, in an innovative way—some financial architecture which gives a respite, in order to increase public investment."

That is how Peru's President Alejandro Toledo, speaking on behalf of the Rio Group (Peru is the current chair), summarized the request, after meeting with UN Secretary General Kofi Annan during the summit. Annan reportedly agreed to press for the proposed meeting. Mexico's Vicente Fox and Brazil's Lula da Silva are charged with presenting a document outlining this proposal at the next meeting of the Group of Eight industrial nations.

The proposal to negotiate a softening of IMF conditions is hardly daring, and can't work, but it reflects just how desperate the debtors are. The overthrow of the Bolivian government was the writing on the wall for every government in the region; they know it is simply no longer possible to continue to stay in power, with current policies.

The Rio Group gave four parameters for proposed changes in the global "financial architecture": the creation of a mechanism to finance the construction of highways to integrate the region; that capital investment be excluded from current expenditures, when fiscal deficits are calculated; that debt service to the Paris Club be "recycled"; and that attention be paid to meeting to social expectations, in order "to guarantee democratic governability."

Miami FTAA Trade Ministers Meeting Flops

Trade Ministers of the Americas attending the latest round of negotiations on the Free Trade Accord of the Americas (FTAA) in Miami Nov. 16-21, finally agreed to disagree on the scope of the FTAA, declared their negotiations as success, packed up their bags, and left Miami a day early, on Nov. 20. The face-saving "compromise" reached, dubbed a "FTAA light" by the Ibero-Americans, was the only way the United States could get Brazil, which co-chairs the FTAA negotiations with the United States, to sign anything. The agreement allows nations to pick and chose which clauses of the FTAA that they would accept, and which not. Everyone knows the FTAA is now a dead duck, but it was considered too politically dangerous for the free-trade agenda, to have the Miami negotiations end without even a piece of paper to show for it, which is what happened with the World Trade Organization (WTO) talks in Cancun, Mexico in October.

U.S. Treasury Champions Dollarization for Dominican Republic

The Wall Street Journal's Americas column editor, Mary Anastasia O'Grady, trumpeted Oct. 31, that U.S. Undersecretary of Treasury for International Affairs John Taylor says the U.S. Treasury would support a move by the Dominican Republic to drop its peso, and adopt the dollar as its currency, as have Ecuador and El Salvador.

On Nov. 22, Taylor paid a 24-hour visit to the Dominican Republic, in which he met with the President, the Finance Secretary, the Central Bank Governor, the Industry and Commerce Minister, leaders of three political parties, and prominent businessmen. His visit coincided with an "important meeting" to evaluate whether the country should dollarize, one newspaper reported. Finance Secretary Rafael Calderon was reported to have admitted that dollarization was on the agenda, only to claim later, disingenuously, that he had been misquoted by the newspapers. He did not retract, however, his statement that the country would sign a new accord with the IMF, "in coming days."

According to El Nacional, some say that dollarization could occur immediately, if the Dominican Republic received a $4 billion loan, because the peso is so devalued. (It has lost 40% of its value since September. 2002). Since the Constitution specifies that the country have a sovereign currency, one scheme being discussed is for the Central Bank to simply suspend monetary emission, leaving the dollar, de facto, as the only currency in town.

There is strident opposition within the Dominican Republic to giving up its sovereignty, and becoming, as one columnist put it, "another Commonwealth," like Puerto Rico. One columnist mocked the proposed move as equivalent to killing the dog, to get rid of the rabies. Others charge that the government let the peso devalue, unchecked, in order to create acceptance for the dollarization plan. Dollarization won't solve the underlying economic problems, but it makes it easier to buy up the country, dirt cheap, they point out.

Argentina Is Paying Its IMF Debt

Argentina is not only paying interest on debt it owes the IMF, but also principle, making the Fund a "privileged" creditor: i.e., one who gets paid. By September of 2004, the Kirchner government has committed itself to paying $800 million in principle, in addition to interest payments that come due in February, May, and August. The first $300 million payment was made in September, using Central Bank reserves. Apparently this arrangement is included in the agreement signed with the Fund in September, the duration of which is actually only 12 months, and not the three years reported in official dispatches. At the end of the first year, the government is expected to sit down again with the IMF and negotiate new goals for 2004 and 2005, of which the primary budget surplus will obviously be one.

Vulture Funds Prepare to Confiscate Argentine Assets

New York Federal Judge Thomas Griesa has ruled that the Argentine government, and creditors holding bonds on which the government defaulted in 2001, must begin talks to identify which Argentine assets can be seized to compensate those creditors, most of whom are in reality the infamous vulture funds. In October, Griesa had given Argentina until Jan. 30, to get its debt restructuring plan moving. Since bondholders say that they won't accept the plan, because the its 75% writedown of their debt is "unfair," it is unlikely that it will get underway by the January deadline.

During the "discovery" process that Griesa is now authorizing, the vultures will indicate their desired timetable, as well as the scope of the search for assets. Argentina will have a chance to counter this, but the stage appears set to let the vultures move in for the kill. Argentine lawyers have already conceded that only government assets based in the U.S. and used for commercial purposes, may be sought out. But the financial predators have other ideas. A lawyer for one of the bondholders warned, "It's a little broader than this. If Argentina owns or controls a company that does business in the United States ... their assets are fair game." If by January, nothing is moving on the restructuring plan, it's clear there will be a wholesale vulture assault on Argentine assets, wherever they may be.

Brazil-Chinese 'Strategic Partnership' Strengthens

After meeting Brazilian Defense Minister Jose Viegas Filho during his visit to China, Chinese Vice President Zeng Qinghong spoke of the great importance China attaches to developing its strategic partnership with Brazil, which benefits not only the two peoples, but also regional and world peace, Xinhuanet reported on Nov. 25. Zeng praised the aerospace cooperation between the two countries (which have a joint satellite program), and said the cooperation in this field provided a sound basis for further cooperation in other high-tech fields.

Chinese Vice Minister of Agriculture, Faan Xiaojian, meanwhile, visited Brazil from Nov. 23-26. He signed a memorandum of understanding with his Brazilian counterpart, Jose Amauri Dimarzio, outlining cooperation on everything from agricultural biotechnology, to food processing. The Vice Ministers announced that a joint committee on agricultural cooperation will be formed, to coordinate these efforts.

China is now the second-largest export market for Brazilian goods.

Chavez Waves Banner of Che Guevara

The lunatic Venezuelan President, Hugo Chavez, invoked the name of Che Guevara and called for an Ibero-American-wide "revolution" as "the only path" for the continent, during the closing session of the Nov. 15-16 "alternative" conference to the Ibero-American Heads of State meeting, taking place simultaneously. The "alternative" conference was called by Bolivia's narco-insurgent Evo Morales in Santa Cruz. Chavez shared the podium with Morales, and with Cuban Vice President Carlos Lage. Speaking to 10,000 peasants, after purported rites to the "Incan gods" were performed, the three called for a continental insurgency to defeat neo-liberalism and "U.S. imperialism." Morales said that he, Chavez, and Lage had decided to organize for "the coming battles in the region," and proceeded to proclaim Chavez and Fidel Castro as the "commanders of the liberating forces of America."

These ravings are in contrast to the message delivered to Evo Morales by Brazilian President Lula da Silva, who urged Morales to be patient, and give the new Bolivian government of Carlos Mesa time to address Bolivia's pressing needs.

Lage made brief remarks hailing Bolivia's role in "digging neo-liberalism's grave." But the Cuban Vice President was far surpassed by Chavez, who, in his rambling three-hour speech, announced that "Latin America has raised the revolutionary banner." Chavez quoted that icon of guerrilla movements, Che Guevara, as to how "the present is the battle, but the future belongs to us." "There is only one path to follow in Latin America," he said, pointing to the Venezuelan "revolution" as the model "that the people must follow." Two hundred years ago, he said, "the revolutionary wave that liberated America began in Caracas [with Simon Bolivar]. Today, ... a new wave has been born in Caracas." In Bolivia, he concluded, "the land where Che Guevara took his last breath, Latin America has arisen once again, and let us see whether anyone can stop it." (Guevara was killed in Bolivia in 1967.)

Peruvian President Insists on Pushing Soros Line

On Nov. 23, Peru's President Alejandro Toledo issued a public "apology" for the 70,000 deaths which allegedly occurred in the country during the 20-year rampage against the population by the narcoterrorist Shining Path. But instead of condemning the narcoterrorists, Toledo targeted the armed forces, echoing the lying report published three months ago by the George Soros-financed "Truth and Reconciliation Commission." Toledo, whose Presidency is hanging by a thread, vowed to punish Army officers who, he said, had committed "painful excesses," in the war against Shining Path, and he promised to incorporate aspects of the Commission's fabricated findings in school textbooks.

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