In this issue:

Venezuela: Municipal Elections Could Be Flashpoint for Crisis

Mass Protests in Colombia vs. IMF Austerity, Free-Trade Pact

IMF Man in Peru Sent Fleeing by Furious Pensioners

Trade Tensions Build Between Chile and Bolivia

Watch Out for Luigi Einaudi!

Lula Survives Mid-Term Elections, But for How Long?

Brazil: PRONA Party Builds National Base

Rato Names Aznar Associate to IMF Post

From Volume 3, Issue Number 42 of EIR Online, Published Oct. 19, 2004

Ibero-American News Digest

Venezuela: Municipal Elections Could Be Flashpoint for Crisis

Mayoral and gubernatorial elections are to be held in Venezuela Oct. 31, two days before the U.S. elections. The apparatus of President Hugo Chavez is prepared to take over most of the 23 state governments which are up for election, as well as more than 300 mayoralties throughout the country. The opposition currently controls state governments in major states, but they are likely to lose them all, as a demoralized middle class is expected to abstain from voting, in the wake of the failed Aug. 15 recall referendum. Learning nothing from that loss, the opposition parties disbanded their umbrella organization, Coordinadora Democratica, after the recall, and began fighting each other over individual candidacies, despite the fact that unifying forces would be the only potential route to win anything, given Chavez's full control over the electoral institutions.

Meanwhile, the radical opposition in the "Bloque Democratico"—whose Secretary General Alejandro Pena Esclusa publicly supports Spain's leading Francoite fascist, Blas Pinar—is holding weekly meetings in middle-class neighborhoods in Caracas and other state capitals, recruiting those demoralized by the abject failures of the democratic opposition, to the Bloque's strategy: abstention, and throwing up street blockades to sabotage the elections.

Adding to the tension, was the Oct. 11 decision by a military court that Gen. Jose Uzon—who was Chavez's Finance Minister until he resigned during the April 11, 2002 coup against Chavez—was guilty of "defaming" the Armed Forces for his denunciations of interference by Cuban intelligence officers in Venezuelan barracks. He was given a five-year prison sentence. From the "underground," another anti-Chavez officer, Gen. Nestor Gonzalez, promised that Uzon's sentence would receive the response it merits, at the appropriate time, and called upon people to reject the regional electoral process.

Mass Protests in Colombia vs. IMF Austerity, Free-Trade Pact

Hundreds of thousands of Colombians took to the streets in a dozen cities across Colombia Oct. 12, to protest the Alvaro Uribe government's foolish embrace of IMF austerity, which is rapidly eroding the anti-terrorist President's popularity. Particularly targetted by the protesters, was Uribe's newly-submitted "reform" legislation, which was allegedly designed to redress a serious budget deficit, but which will in fact drive a population already estimated at 60% below the poverty line, into abject misery and even violent upheaval under narco-terrorist orchestration.

The major labor federations, students, indigenous rights groups, human rights NGOs, and the opposition Liberal Party had organized the "national strike" to both protest Uribe's economic policies and ongoing negotiation of a Colombia-U.S free-trade agreement, and his campaign to win a constitutional reform that would allow his re-election.

Somewhere between 100,000 and 300,000 marched in the capital city of Bogota alone, and while the anger in the ranks and among the labor unions was most clearly directed against Uribe's tax increases, privatizations, and shredding of the public health, pension, and other general welfare protections, the most organized groups in the marches were dominated by the narcoterrorist FARC-linked coalition of left parties, the only visible anti-IMF force in the country, and by the degenerate Lopez Michelsen wing of the Liberal Party. In combination, the FARC-allied left and Lopez's political spawn are intent on building up a power base designed to take back the government for the narcoterrorists, in the next Presidential election.

IMF Man in Peru Sent Fleeing by Furious Pensioners

In early October Peruvian Finance Minister and Wall Street's best friend in Peru, Pedro Pablo Kuczynski, was driven out of the state of Arequipa by retirees, members of the Macro Sur Federation, enraged at his efforts to (un-)constitutionally effect a so-called "pension reform," which casts pensioners as useless eaters and, according to Macro Sur Federation president Jorge del Carpio Lazo, "represents the expropriation of our just rights."

The pensioners had set up a picket line outside a building where both PPK, as Kuczynski is known, and Energy Minister Jaime Quijandria, were holding a meeting with mining company officers, and threw eggs and stones at the ministers, forcing a suspension of the meeting. The ministers were then escorted out of the city by an armed police guard.

Arequipa was the site of mass strikes in 2000 which succeeded in halting the privatization process ongoing at the time.

Trade Tensions Build Between Chile and Bolivia

Trade conflict is the latest manifestation of the building tensions related to Bolivia's claim on the Pacific Coast territory seized from it by Chile during the 1879-81 War of the Pacific. Two weeks ago, the Chilean government withdrew its consul Emilio Ruiz Tagle from Bolivia—its only diplomatic representative in that country—after he had stated publicly that Bolivia's territorial claim was reasonable.

Bilateral tensions have grown in the recent period, over higher rates being charged at the Chilean port of Arica—some, as much as 300% higher—after Chile sold the port to private interests; Bolivia ships 70% of its exports through the port. Bolivia was granted free access to the port in the 1904 Peace and Friendship Treaty signed between the two nations, and Bolivia is now requesting that the port privatization be annulled. In response, the Chilean government cancelled an agreement for preferential import of 12,000 tons of Bolivian sugar, which was to go into effect in January of 2005. Bolivian Foreign Minister Juan Ignacio Siles said he hopes relations between the two countries don't come "to blows."

Watch Out for Luigi Einaudi!

Known as "Kissinger's Kissinger" for Ibero-America, Luigi Einaudi assumed the post of Secretary General of the Organization of American States (OAS) on Oct. 16, after a convenient "corruption scandal" forced out the previous chief. Former Costa Rican President Miguel Angel Rodriguez submitted his resignation as OAS Secretary General barely 20 days after assuming it, when the Costa Rican government suddenly charged that when Rodriguez was President, he had taken a half million dollars from a French company, in payoffs for awarding them the cellular telephone service.

While EIR has not yet confirmed the corruption charges, we do know something about Luigi Einaudi, with whom we have battled since exposing his role in 1976 in attempting to foment a new war between Chile and Peru. His specialty since the late 1960s, when he worked for the RAND Corporation, has been manipulating border wars, to the end of establishing supranational regional governments. He served as a top official in Policy Planning for Ibero-America in the State Department for more than 20 years, proudly bragging that he "came in with Kissinger." As George Bush, Sr.'s ambassador to the OAS, he was the architect of the "democracy" clauses which were used later to overthrow Peruvian President Alberto Fujimori, and he did everything he could to defend the synarchist, Cali Cartel-linked then-President of Venezuela, Carlos Andres Perez.

When Bill Clinton, much to Einaudi's chagrin, won the U.S. Presidential election in 1992, Einaudi returned to the State Department, only to be removed entirely from State in the second Clinton Administration. He set up shop in the Inter-American Dialogue for a number of years, before being tapped by Bush, Jr. as the U.S. choice for Deputy Secretary General of the OAS.

Einaudi's job as chief of the OAS should be temporary, if OAS rules are followed. An Extraordinary General Assembly of the Foreign Ministers is be called to elect a replacement, although no date is yet set.

Lula Survives Mid-Term Elections, But for How Long?

The first round of mid-term municipal elections in Brazil on Oct. 3, were the first elections held since President Lula da Silva won the Presidential elections in October 2002 with an overwhelming mandate to break with IMF policy, which his government then refused to do. Candidates from Lula's Workers Party (PT) received the largest number of votes nationwide of any party (16.1 million), and doubled the number of cities and towns where they will occupy the Mayor's office, from 193 four years ago, to at least 388 of the nation's total 5,562 muncipalities. Victory in several key elections eluded them in the first round, most particularly in the City of Sao Paulo, where the PT incumbent mayor (a former sexologist) will square off against a candidate from the PSDB (Social Democratic) party of Lula's predecessor, Fernando Henrique Cardoso, in the second round of elections, on Oct. 31.

There is much talk of Cardoso's PSDB emerging from these elections as the PT's major challenger for the 2006 Presidential elections, and much chatter from banking circles that the fact that the PT survived these election gives Lula the opportunity to now rip up labor protections and finalize autonomy of the Central Bank, but under current world conditions, such political projections are foolhardy.

Brazil: PRONA Party Builds National Base

The PRONA party, founded by Dr. Eneas Carneiro 15 years ago, won seven mayoralties, and 128 municipal council seats, across 15 states, in Brazil's Oct. 3 national elections. Eneas, as he is known, is the cardiologist-turned-political-fighter whose party organized Lyndon LaRouche's June 2002 visit to Brazil, where LaRouche was awarded an Honorary Citizenship by the City Council of Sao Paulo. In October 2002, Eneas received over 1.5 million votes in his race for Congress, a historic record, which stunned Brazil's political elite, and won PRONA, under Brazil's electoral system, six Congressional seats.

PRONA calls the latest municipal election results yet another surprise for the political system, because their victories demonstrate that the party is developing a national machine, despite the political games in Brasilia, which led to four of the five PRONA Congressmen elected on Dr. Eneas's coattails leaving PRONA for other parties which appeared "more successful" in late 2003.

Dr. Eneas and the Congressman who remained with PRONA, Maximo Damasceno, continue to hammer at the need for national economic sovereignty in more serious ways. In a June 2004 speech on the floor of Congress, Damasceno detailed how it is a lie that Brazil does not have the resources to develop, because those resources are being wasted on interest payments on the domestic and foreign debt. Damasceno reiterated PRONA's call for Federal investments in infrastructure, interest rates of 1-2%, and capital controls, among other measures necessary for a nationalist economic policy which must replace the "evil neo-malthusian policy" reigning today. In August, Damasceno also spoke out against the 1997 law which opened Petrobras's (the state oil company) operations to foreign multinationals, a law PRONA insists must be revoked, as unconstitutional, and a threat to Brazil's energy security.

Rato Names Aznar Associate to IMF Post

A close collaborator of former Spanish Premier Jose Maria Aznar has been tapped to be the IMF's delegate for Ibero-America. IMF Managing Director Rodrigo Rato, formerly Aznar's Finance Minister, requested that Congressman Juan Costa, from Aznar's Francoite Partido Popular party, join him in Washington, to help oversee the Fund's dealings with Ibero-America. Costa served as a Secretary of State and Science and Technology Minister in Aznar's government. It is noteworthy that just before taking up his post of Managing Director, Rato invited former Argentine Presidential candidate Ricardo Lopez Murphy, a rabid neo-conservative monetarist, to join his staff. Not wanting to be distracted from his task of overthrowing the Kirchner government, Lopez Murphy declined.

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