Ibero-American News Digest
Fitch: 'If Market Says Brazil Is a Dog, It Is'
"Brazil is still a prisoner of market sentiment. If the market says Brazil is a dog, then Brazil is a dog," Roger Scher, head of Latin American Sovereign Ratings at the British rating agency, Fitch, arrogantly told an investors conference in London on June 8.
Brazil will need to get some US$33 billion in foreign financing in order to meet debt payments from now to December, and therefore, the Lula government should announce now that it will negotiate a new IMF program when the current package at the beginning of 2005, Scher asserted. "This would make us feel more comfortable." The Lula government would like to announce that it has "graduated" from needing IMF support before municipal elections in October, Scher added, "but we think that would be an error," because "market sentiment" would turn against them.
He named Argentina, Colombia, and Mexico as also vulnerable to "market sentiment."
Scher should know about "market sentiment." Fitch, along with Moody's and Standard & Poors, issues the credit ratings on governments and companies which determine whether their debts are bought or sold, and at what price. When top financiers want to rig the market in a certain way, they go to people like Scher to get the job done.
Brazil Development Bank Dumps 'Invisible Hand'; Returns to Strategic Planning
The National Economic and Social Development Bank (BNDES) has returned to a policy of state intervention, based on long-term "strategic planning of the economy," BNDES Vice President Darc Costa announced June 3. The model adopted by BNDES in the 1990s of "the invisible hand which does all," without state intervention, will be replaced by the concept which guided the bank before that: that it is important to plan the economy. BNDES will no longer act as the investment bank to which it had been reduced under the market model, but as the development bank which it was founded to be.
Costa declared: "As a development bank, we begin from the premise that we should be an active instrument of development, and that long-term planning of the economy is something important.... We are, indeed, more willing to take risks."
Rather than passively waiting for the private sector to present the projects for which "the market" wishes funding, the BNDES staff will produce annual, and triennial action plans, which set overall goals, and identify projects which must be built to boost production and resolve "structural bottlenecks" in economy as a whole, with a special emphasis on infrastructure, he said. BNDES loans will be differentiated, with lower interest rates and longer terms granted to areas where the need is greatest. And job creation will be made a priority.
Costa gave the hypothetical example, that should BNDES determine that the country needs to nearly double its steel-making capacity to 60 million tons a year, from its current 34 million tons, it would issue credits to those in the private sector willing to get the job done. By the same token, the electricity crisis of 2001-2002 exemplifies the effects of BNDES failing to plan, he said.
Strategic planning is now underway, Costa reported. BNDES's staff and executives have been divided into 43 working groups, assigned the job of "mapping" the economy, to prepare a plan of action by the end of 2004.
Brazil Defends Right To Develop Full Nuclear Cycle
Brazil wants to develop new partnerships with the United States, but a "strategic partnership" is not desirable, Brazil's new Ambassador to the United States, Roberto Abdenur, told a meeting at the Center for Strategic and International Studies (CSIS) on June 3.
Although the Ambassador did not say so, the concept of a "strategic partnership" in the history of Brazil-U.S. relations, is associated with Henry Kissinger's 1970s revival of the Teddy Roosevelt period, when Anglo-American interests used Brazil to enforce the financiers' policies upon its smaller neighbors. The special friendship developed between the two countries under Presidents Franklin Delano Roosevelt and Gertulio Vargas, provides a beautiful reference for how relations can improve today.
Ambassador Abdenur explained that he had played an important role in negotiating Brazil's strategic partnerships with Germany and China, which he described as project-driven platforms which inspire our relationships. There is no intrinsic reason for hostility between the U.S. and Brazil, but the asymmetry of power between us would make a strategic partnership uncomfortable.
The Ambassador defended Brazil's right to develop the full nuclear-power cycle, when questioned by an CSIS official about Brazil's uranium-enrichment program. Brazil is to begin operating the first of four modules of a nuclear enrichment plant which has been planned for 15 years, he said. All nuclear materials in Brazil are under international safeguards, and Brazil is committed to the peaceful use of nuclear energy. Brazil has every right to its plans, Abdenur said. It intends to supply its own power plants, and to enter the growing global market for low-enriched uranium for nuclear power.
The International Atomic Energy Agency (IAEA) insists on its right to have a broader look at the machinery used in Brazil's uranium-enrichment process, but Brazil considers this proprietary information, he said. Abdenur did state, however, that the plant will not begin operating until credible IAEA safeguards are in place, which means that full functioning of the plant, planned for May, has been held up, de facto, by the accelerated drive of the Cheneyacs to place nuclear power worldwide under world government control.
Electronic Voting Scandal Looms in Venezuela Recall
The Venezuelan Electoral Council announced on June 4 that the opposition had succeeded in collecting the required 2.4 million signatures favoring a recall referendum against Venezuelan President Hugo Chavez, and the referendum was scheduled for Aug. 15. If more voters vote to remove Chavez than the 3.76 million who elected him to a six-year term in 2000, new elections are to be called within 30 days of the referendum results. The divided opposition, thus far able only to unify around their opposition to Chavez, would then face the reality that to defeat the mentally unbalanced President, they require a positive program to offer the country, and a single candidate behind whom to rally.
While there is some debate over whether Chavez could win the referendum, there is little question that he will not go easily. In a televised speech, hours after the figures were released, Chavez announced, "I accept the challenge. We're ready for the Presidential referendum. The battle has just begun. The game starts now."
The three Chavezista members of the National Electoral Council quickly announced that the referendum will be tallied on touch-screen computers supplied by the Bitza corporation, which the Chavez government happens to have a 28% financial stake in! It turns out that Bitza, founded by a Venezuelan engineer, was on the verge of bankruptcy in 2003, when a venture capital fund called SBC, a wholly-owned creature of the Chavez government, poured in a lot of money to revive and control it.
The two anti-Chavez members of the five-man electoral council protested. One of them, Ezequiel Zamora, said the council's 3-2 vote in favor of using these particular machines and prohibiting a parallel hand-count of the voting slips the computers generate, was "extremely grave," and would cast "serious doubt" on the results.
Smartmatic, also founded by a Venezuelan engineer, is the Florida-based company which will supply the Italian-made computerized voting machines. The executive boards of Bitza and Smartmatic are, apparently, interchangeable.
U.S. Presidential candidate Lyndon LaRouche has called for the use of electronic voting machines to be banned in United States elections, given the well-documented ease with which the vote results can be rigged.
Uribe Opens Negotiations with ELN Narcoterrorists
Mexico will help mediate negotiations between the Colombian government and the largely defeated, Cuba-linked National Liberation Army (ELN) terrorists, at the request of the Uribe government in Colombia, both governments announced at the beginning of June. President Alvaro Uribe, who is seeking a second term of office and who is pushing for a constitutional amendment to make that possible, is anxious to conclude an easy peace pact with the ELN, in hopes of proving that his "hard line" against terrorism is "flexible." The leadership of the ELN, alleged to be "5,000 strong," is largely in jail already.
The Mexican government is preparing a list of "experts" to sit on the mediation panel; these experts are to be drawn from prominents with experience in mediating previous "conflicts" such as El Salvador and Guatemala. The Uribe government must approve the proposed mediators, but so too must the ELN, which is being represented by jailed spokesman Francisco Galan. Galan was released from jail on June 4, for a 24-hour period, during which he met with the Mexican Ambassador to Colombia and with Colombia's Vice President Francisco Santos.
The largest of the three narcoterrorist forces operating in Colombia, the FARC, has shown no interest in participating in these talks, and isaccording to various analystslaying low, rebuilding its forces, and waiting for Uribe's term to end.
Ibero-American Leaders To Create Joint Oil Company
The Presidents of Bolivia, Brazil, and Argentina will meet to discuss the creation of a joint state oil company, Petro-America, Bolivia's Foreign Minister, Juan Ignacio Siles, announced on June 9. The threeCarlos Mesa, Lula da Silva, and Nestor Kirchnerare to meet on July 5, in Bolivia, to debate how this might be done. The project is reportedly the brainchild of Carlos Lessa, the head of Brazil's National Economic and Social Development Bank (BNDES), who originally proposed that Venezuela's state company, PDVSA, and Brazil's Petrobras unite. Venezuela is part of the project, but Venezuelan President Hugo Chavez apparently has not been invited to the Bolivian meeting, or could not attend.
Both Bolivia and Argentina have recently announced plans to revive their state-sector oil companies, which were largely privatized in the great rape of the region in the 1990s.
Bolivian President Mesa has called a referendum for July 18, on his plans for the state to gradually retake control of the nation's huge energy resources, but the Soros-backed coca growers and other desperate Jacobin forces oppose the referendum, saying the oil and gas industry should be immediately nationalized wholesale, and Mesa should be overthrown for refusing to do so.
Russian President Vladimir Putin Visits Mexico
President Vladimir Putin paid a state visit to Mexico June 7-8, the first Russian head of state to do so, since Russia and Mexico established diplomatic relations in 1891. The central issue of the visit appears to have been discussion of opening up Mexico's power industry to foreign investors.
The two Presidents announced that Russia would build a plant to repair and assemble helicopters in Mexico, and plans would move ahead for a second plant to assemble heavy construction equipment and military materiel. In recent years, Mexico has begun buying military helicopters from Russia, which now need repair.
Putin called these projects "concrete and interesting, but small." What Russia is really interested in, is investing in Mexico's energy sector, he said, mentioning that a Russian company had won an auction, along with its partners, for the construction of an electrical plant in Mexico, and that last year, Russia signed an accord to supply Mexico with nuclear materials. He offered Russian investment and expertise in developing liquid natural gas plants in Baja California.
Mexico's Constitution establishes that the nation's power resources and industry are strictly under national control, a mandate which the Fox government has violated by every scheme it can get away with. Putin joined Fox in calling for a greater liberalization of Mexico's energy sector, to open it to foreign investors. Fox took the occasion to rant against the nationalist opposition which has blocked efforts to change the Constitution, to permit this foreign looting, lamenting that Mexico is the only hold-out, "as Chile, Brazil, Argentina, Cuba, Russia, the U.S., Canada, all of Europe, and all the other countries operate under a system of total openness to investment."
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