In this issue:

Brazil: Record Surplus, Record Unemployment

Land Mines in Rio Slum Reveal Extent of Drug Empire

World Bank to Argentina: Banks Come First, Let People Die

Kirchner: Infrastructure Is an Investment, Not a 'Cost'

Brazil Proposes Tri-National Gas Development Project

U.S. Embassy Reported Out To Topple Bolivian President

Mob Violence, Demands for Separation, Erupt in Peru

Sendero Runs 'Human Rights' Campaign To Free Jailed Terrorists

From Volume 3, Issue Number 18 of Electronic Intelligence Weekly, Published May 4, 2004

Ibero-American News Digest

Brazil: Record Surplus, Record Unemployment

The Brazilian Central Bank proudly announced April 22 that the public sector as a whole (Federal, states, municipalities, and the state companies) obtained a record primary surplus (revenues minus expenditures, excluding debt payments) in the month of March: R$10.3 billion, or some US$3.4 billion. In the first quarter, the public-sector primary surplus hit R$20.5 billion. Put another way: the public sector removed US$6.8 billion from the economy in March—an amount equal to a stunning 5.41% of GNP—for debt payments, the largest amount since 1991.

The day before, it was announced that unemployment in metropolitan Sao Paulo, the industrial powerhouse of the country, hit a record 20.6% in March, a level only hit in three other months since the statistical series began in January 1985. The average income of those still employed, meanwhile, dropped by 3.3% in March, the second consecutive month it fell.

There are now officially 2 million unemployed in Sao Paulo. Industry, where the greatest job losses occurred, lost 87,000 jobs in March. And it was the food industry which suffered one of the biggest drops, reflecting the collapse of the most basic consumption.

While "this fiscal squeezing...[is] information to be celebrated by the financial market," Folha de Sao Paulo wrote April 22, it is also one of the reasons for the increase of unemployment. "This is because the money collected in taxes and saved for interest payments, is not being invested in public works or social projects which could revive the economy or generate jobs."

Paulo Pereira da Silva, president of the Forca Sindical trade union federation stated reality more starkly yet: Brazil is "bordering on social chaos," with one out of every five workers out of a job, he said. "This is the result of a government which bends before the speculators, and turns its back upon the workers."

Land Mines in Rio Slum Reveal Extent of Drug Empire

Drug-traffickers in the slums of Rio de Janeiro constitute a "parallel government" within this second-largest city of Brazil, warned Rio Archbishop, Cardinal Eusebio Scheid, at the conclusion of the annual meeting of the Roman Catholic National Bishop's Council (CNBB) on April 22. The city authorities cannot confront the problem without the help of the Federal government, Cardinal Scheid said, referencing the shooting war which broke out between rival drug gangs in Rocinha, one of the largest of Rio's slums, on April 9. The Cardinal named the infamous "Red Command," the leading drug gang nationally, which is behind many of the brutal prison uprisings which frequently occur in Brazil.

Police trying to retake control of the slum announced on April 20 that they had found an "incredible arsenal" stashed near the home of one of the traffickers—including eight land mines, the first time such weaponry has been found in the hands of drug traffickers. Defense Minister Jose Viegas announced that the Ministry is investigating where the traffickers got hold of them. More than 160 grenades, and 30,000 bullets of various calibers were found in the arms stash.

World Bank to Argentina: Banks Come First, Let People Die

World Bank chief James Wolfensohn was just one of several voices, from the IMF, U.S. Treasury, and European Union, who are threatening Argentina to either increase its primary budget surplus (PBI), or lose needed investments. Everybody wants to have social programs to help the poor, Wolfensohn said on April 22, but debt "obligations" come first. Argentina is like the irresponsible individual who doesn't want to pay his credit cards, or his mortgage, and uses that money to send his kids to college instead, he charged. Of course, he added, "telling the world to go to hell," is a very politically popular thing to do.

Leading up to last weekend's annual meeting of the IMF and World Bank, similar statements came from IMF acting Managing Director Anne Krueger (who argued that if Turkey can generate a 6.5% PBI, why can't Argentina?), U.S. Treasury Undersecretary John Taylor, and Irish Finance Minister Charlie McCreevy. Speaking April 25 for all European Finance Ministers, at the IMF meeting, McCreevy said that Argentina "should aspire to a more ambitious primary fiscal surplus in the coming years, as well as a more ambitious effort on structural reforms, in the medium term."

Argentine President Nestor Kirchner, however, remains adamant that his government will not raise the PBI above its current rate of 3% of gross domestic product. Cabinet Chief of Staff Alberto Fernandez told Radio Mitre April 21 that the surplus "will be used for Argentina's social development and to favor and promote development," because "there are still many things that need to be done."

Kirchner: Infrastructure Is an Investment, Not a 'Cost'

Speaking before a number of national and international companies bidding for four multimillion dollar contracts to revamp and maintain the national highway system on April 22, Argentine President Nestor Kirchner declared that spending on public works is not a cost, but an investment which feeds into greater economic growth, as reported in La Nacion April 23. "This is the Argentina we want to build, with millions of pesos for public investment. To have more infrastructure is fundamental for the growth of any country. For some, this is a cost, an expense, but for us, it means investment and jobs," he said.

Brazil Proposes Tri-National Gas Development Project

Citing the petrochemical complex which Brazil and Bolivia are building on their mutual border, scheduled to go into operation in 2009, as a model, Brazilian Mines and Energy Minister Dilma Rousseff proposed on April 26 that Argentina, Bolivia, and Brazil create a tri-national gas development project. Speaking at the Fourth Latin American and Caribbean Gas and Mining Conference, Rousseff pointed to the "great advantages in our integration, both with respect to [natural] gas supplies, and to economic development which integration can offer to all three countries."

Brazil's proposal comes in the midst of growing regional tensions between Chile on the one side, and Argentina and Bolivia on the other, over energy. Due to its own energy crisis, Argentina has reduced its natural gas exports to Chile by 15%. The Chilean government is screaming that Argentina has failed to live up to international commitments, and is threatening to impose anti-dumping sanctions on Argentine imports. Joaquin Lavin, head of the right-wing Chilean opposition, is demanding that the government of President Ricardo Lagos show a "much harsher" response to both Argentina and Bolivia. Bolivian President Carlos Mesa just signed a deal with Argentina to provide that country with 4 mn. cubic meters of natural gas a day, for six months, on the condition that "not one molecule" of that gas be exported to Chile. As a result of this, all trade and economic talks between these two countries have now been halted.

U.S. Embassy Reported Out To Topple Bolivian President

High-level military sources in La Paz, Bolivia report that the U.S. Embassy there is pressing for a "constitutional" coup against President Carlos Mesa, only six months after he took office in the wake of a popular uprising which drove his predecessor, Gonzalo Sanchez de Lozada, out. The pretext is that Mesa is said to have brought "recalcitrant leftists" and people close to coca-producer Evo Morales into his government. The U.S. Embassy reportedly does not want a military coup, but wishes to see Mesa replaced by the head of the Senate, whom they "suggest" could then call new elections.

Should that occur, the sources add, Bolivia would likely become unsalvageably polarized between poor supporters of the George Soros-linked narcoterrorist leader Evo Morales, and middle-class and wealthy backers of the World Bank's favorite privatizer in Bolivia, Jorge Quiroga. Quiroga, a U.S.-educated yuppie, served as interim President from July 2001-August 2002, after then-President Hugo Banzer developed terminal cancer.

Since taking office last October, Mesa has been caught between mass protests led by Morales and crew, demanding economic relief, and Bush Administration ultimata that he make no concessions, either on coca eradication, or free trade economic policy. As soon as Mesa came in—before he had made any concessions to the popular uprisings he faces—neo-conservatives in Washington added Bolivia to the regional "axis of evil" they have invented of Lula da Silva's Brazil, Hugo Chavez's Venezuela, Fidel Castro's Cuba, and Nestor Kirchner's Argentina.

This Bush team operation is not a strategy for stability, but will hand the country over to Evo Morales and crew. Given the current conditions of advanced economic devastation, should Mesa be driven out, as the U.S. Embassy reportedly envisions, it could detonate not only civil war in Bolivia, but throughout South American, a war in which the Andean nations of Bolivia, Peru, Ecuador, Colombia, and Venezuela would be reduced to ungovernable regions run by narco-terrorists.

Mob Violence, Demands for Separation, Erupt in Peru

As strikes, marches, and protests against the Toledo government's IMF policies spread across Peru, a protest in one of the poorest areas of Peru, near the border with Bolivia, exploded into bestial violence and demands for separation from Peru altogether.

Aymara Indians and area farmers in Ilave, Puno, had been protesting the lack of any attention from local, regional, or central government authorities since April 2, demanding the mayor of the town, in particular, be removed from office for corruption. On April 26, mobs moved into a meeting of the mayor and supporters, and seized and bound the mayor and three councilmen. Dragged out, the mayor was beaten to death and hung. Fifty policemen in the town were also cornered in their headquarters by the mob, but were eventually rescued by forces sent in from outside to disperse the mob. The leader of the protest is reported to have been jailed in 1996 for terrorism.

As of April 29, some 2,000 Aymara Indians had gathered in Ilave, and were demanding the formation of an independent "Aymara nation," in coordination with their Aymara neighbors in Bolivia.

Sendero Runs 'Human Rights' Campaign To Free Jailed Terrorists

The narco-terrorist Sendero Luminoso (Shining Path) of Peru, one of the most bestial forces ever to operate in the Americas, is demanding that the Human Rights Court of the Organization of American States (OAS) and the Human Rights Commission of the United Nations take up their defense, to force the weakened Toledo government to release hundreds of their fellow-terrorists from prison. Manuel Fajardo, lawyer for Sendero's imprisoned "president" Abimael Guzman, insists that the rights of the defense in Peru have been "unduly restricted," and has gone to UN headquarters in Geneva to plead for a visit from the UN high commissioner and intercession on his client's behalf.

Police Gen. Marcos Miyashiro, head of Peru's anti-terrorism agency, known as Dircote, has warned that Sendero is exploiting loopholes in Peru's anti-terrorist legislation to try to force an international ruling from the OAS human rights court "through which all the terrorist prisoners are going to be freed."

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