The Miami Herald editorial board commented on the recent reelection of Ecuador’s Rafael Correa earlier this week, noting that “opposition candidate Alvaro Noboa, whom Mr. Correa defeated 57 percent to 43 percent, has indicated that he might challenge the results, accusing Mr. Correa of rigging the election.”
Just one problem; Noboa actually received 3.7 percent of the vote, putting him in 5th place overall. In fact, even the second place finisher in the election received just 23 percent of the vote, putting him some 34 percentage points behind Correa. The results cited in the Herald editorial were actually the results of the 2006 presidential election where Noboa did in fact earn 43 percent of the vote.
Perhaps the editorial board should have consulted with their own reporters, who noted after the election that, “President Rafael Correa crushed the opposition Sunday, avoiding a runoff and winning the right to lead this Andean nation through 2017.” The article didn’t even mention Noboa.
The error is particularly striking since it is the opinion of the Herald’s editorial board, and so is presumably read by at least one other person on the board besides the author.
The Herald goes on to say that electoral authorities “have an obligation to hear Mr. Noboa out” because that “is what’s supposed to happen in a democracy.” And The Miami Herald has an obligation to fact check, because that is what’s supposed to happen at a newspaper.
On Friday, February 15, the International Monetary Fund (IMF) announced that it had concluded its most recent Article IV consultation with Honduras. The Fund’s recommendations varied little from those it has offered many other countries in recent years: cut public spending, reduce deficits, reform pensions and depress wages.
The IMF regularly conducts Article IV consultations with almost all of its member countries—with Argentina, which since 2006 has refused to take part in the process, being one notable exception. The official reviews are a way for the Fund to present its analysis of each country’s economic prospects and to advocate for a set of reforms. While it is difficult to precisely assess the influence of the consultations, it has been noted that in many cases the recommended policies have been adopted against popular public opinion. And in countries that end up borrowing from the fund, these policies are often preconditions for receiving future IMF loans.
The Fund’s recommendations on Honduras diverged little from the policies it is pushing in many other countries. Below is a selection from the IMF’s brief (347-word, to be exact) Executive Board Assessment of its most recent consultation with Honduras:
Directors . . . underscored the need to tighten macroeconomic policies and press ahead with structural reforms . . .. [They] welcomed the planned reduction of the budget deficit in 2013, and urged early adoption of the measures needed to ensure this outcome and avoid further central bank borrowing or accumulation of domestic payments arrears. They called for sustained medium-term fiscal consolidation . . . [and] supported plans to restrain the public sector wage bill . . . and emphasized the importance of reducing energy subsidies . . .. Directors concurred that monetary policy should be tightened . . . [and] regarded plans to reform state-owned enterprises as critical to strengthen the fiscal position and support growth, and encouraged timely implementation . . . and welcomed the ongoing reform of public pension funds.
It is difficult to overlook how much this assessment resembles the Fund’s recommendations to European countries struggling to emerge from the global recession. CEPR co-director Mark Weisbrot and Senior Research Associate Helene Jorgensen recently released a paper analyzing 67 Article IV consultations for European member countries between 2008 and 2012, in which the authors found that the lending body was pushing a “one-size-fits-all” approach that often included pro-cyclical policy recommendations. In the paper Weisbrot and Jorgensen summarized their findings, in part, as follows:
This content analysis finds a consistent pattern of policy recommendations, which indicates (1) a macroeconomic policy that focuses on reducing spending and shrinking the size of government, in many cases regardless of whether this is appropriate or necessary, or may even exacerbate an economic downturn; and (2) a focus on other policy issues that would tend to reduce social protections for broad sectors of the population (including public pensions, health care, and employment protections), reduce labor’s share of national income, and possibly increase poverty, social exclusion, and economic and social inequality as a result.
In early February, New York University professor Greg Grandin came across a map on the Washington Post’s web page highlighting in red the 54 countries from around the world that participated in one way or another in the U.S.’s extraordinary rendition program. Grandin, a well-known historian and Latin Americanist, quickly noticed that nations from every region had collaborated in the Bush Administration’s clandestine detention and interrogation program except for… Latin America. The fact that no Latin American country lent support to the program was in itself a remarkable fact that speaks to how much the region has evolved politically over the last two or three decades.
On February 18, Grandin published an insightful analysis on Tom Dispatch that provides some historical perspective on this “Latin American Exception.” Starting in the 1950s, the U.S. worked closely with the region’s military dictatorships to render their brutal security forces and intelligence services more efficient in clamping down on – and disappearing – civilians involved in left-wing movements. The U.S. then supported efforts to synchronize and internationalize the work of these repressive regimes. As Grandin writes,
The result was state terror on a nearly continent-wide scale. In the 1970s and 1980s, Chilean dictator Augusto Pinochet’s Operation Condor, which linked together the intelligence services of Argentina, Brazil, Uruguay, Paraguay, and Chile, was the most infamous of Latin America’s transnational terror consortiums, reaching out to commit mayhem as far away as Washington D.C.,Paris, and Rome. The U.S. had earlier helped put in place similar operations elsewhere in the Southern hemisphere, especially in Central America in the 1960s.
By the time the Soviet Union collapsed in 1991, hundreds of thousands of Latin Americans had been tortured, killed, disappeared, or imprisoned without trial, thanks in significant part to U.S. organizational skills and support. Latin America was, by then, Washington’s backyard gulag. Three of the region’s current presidents -- Uruguay’s José Mujica, Brazil’s Dilma Rousseff, and Nicaragua’s Daniel Ortega -- were victims of this reign of terror.
But that was then. By the 1990’s most of these repressive regimes progressively gave way to democratic ones. Today, most of the governments of the region lean left and have adopted both domestic and foreign policy agendas that sharply differ from the U.S. agenda. In many ways, Latin America is today more independent of the United States than Europe is.
International media reporting ahead of Ecuador’s elections today has sounded familiar themes, understating the achievements of the Rafael Correa government and attributing Ecuador’s recent economic and social progress to “luck” or happenstance, and high oil prices. Correa is depicted as an enemy of press freedom, despite the fact that Ecuadorean media is uncensored and the majority of it opposes the government; and despite his granting of political asylum to Julian Assange. He is also depicted as a member of Latin America’s “bad left” who has ambitions of regional leadership should “bad left” leader Hugo Chávez succumb to illness or otherwise be unable to continue in office.
A common theme in press accounts is that the Correa administration’s social programs are “funded by the country's oil proceeds.” While some reporting has gone deeper and noted that “Correa has taken on big business and media groups, imposing new contracts on oil companies and renegotiating the country's debt while touting his poverty reduction efforts,” others have not. “High prices for oil exports resulted in higher revenues which the government invested in social programs and public infrastructure,” the Christian Science Monitor reported in a Friday article. The New York Times’ William Neuman presented a contradictory picture of the economic importance of Ecuador’s petroleum sector, writing that “Ecuador is the smallest oil producer in the Organization of the Petroleum Exporting Countries, yet oil sales account for about half of the country’s income from exports and about a third of all tax revenues, according to the United States Energy Information Administration,” just before stating in the next paragraph that “Mr. Correa has taken advantage of high oil prices to put money into social programs, earning him immense popularity, especially among the country’s poor.”
Petroleum exports have been important to Ecuador’s economy for a long time; this did not suddenly come about with Correa. While Correa was favored by high oil prices during most of his six years in office, the collapse of oil prices in 2008 was a major blow to the economy. Also, an important change during Correa’s first term has been the Ecuadorean government’s relationship with foreign oil companies. Correa notably has driven a much harder bargain than his predecessors, “imposing a windfall profits tax for concessions made to companies for the exploitation of domestic natural resources” that “raised over $500 million for the government in 2010,” as our latest paper notes. A raft of financial and regulatory reforms have also put a considerable amount of revenue in the government’s coffers, contributing to the increase from 27 percent of GDP in 2006 to more than 40 percent in 2012. Stimulus spending – 5 percent of GDP in 2009 – boosted the economy and allowed Ecuador to get through the global recession with minimal damage, losing only about 1.3 percent of GDP during three quarters of recession, despite being one of the hardest hit countries in the hemisphere by external shocks. Non-petroleum sectors such as construction, commerce and services have also been important drivers of growth in recent years, including in 2011, when Ecuador had some of the highest real GDP growth in the region at 7.8 percent, second only to Argentina in South America.
On Sunday Ecuadorians will head to the polls to vote for a president and vice president, members of the National Assembly, mayors, and other elected officials. As we’ve done ahead of other elections in Latin America, CEPR has published a report offering some economic context to help understand the choices that voters are likely to make.
The report, entitled Ecuador’s New Deal: Reforming and Regulating the Financial Sector, focuses on the innovative financial reforms that have been implemented since President Rafael Correa took office in 2007. The report explains how these measures helped Ecuador recover from some of the hemisphere’s worst shocks during the world recession. It also shows how the reforms contributed to a substantial increase in government revenue much of which has been channeled toward health, education, housing and other social spending. Given these advances, it is not surprising that the latest polls put Correa at 50 percentage points ahead of his closest opponent.
Earlier today, CEPR issued the following press release outlining the contents of the paper:
A new paper from the Center for Economic and Policy Research (CEPR) examines the financial reforms carried out by the Rafael Correa administration, reforms which the paper concludes are in large part responsible for the economic success Ecuador has experienced over the past several years, including its successful counter-cyclical policies during the global recession after 2008. The paper, “Ecuador’s New Deal: Reforming and Regulating the Financial Sector,” examines the Correa government’s taking control of the Central Bank, implementation of capital controls, increased taxation of the financial sector, and other regulatory reforms. It concludes that these played a major role in bringing about Ecuador’s strong economic growth, increased government revenue, a substantial decline in poverty and unemployment, and other improvements in economic and social indicators.
At the end of January, I blogged about a Congressional letter to Secretary of State John Kerry and Attorney General Eric Holder asking, among other things, for a U.S. investigation into the May 2012 killing of four Honduran indigenous villagers in Ahuas, Honduras during a counternarcotics operation that involved agents from the U.S. Drug Enforcement Administration (DEA). The letter, signed by 58 House representatives, argues that a credible U.S. investigation of the incident is necessary given the “deeply flawed” nature of the investigation carried out by Honduras’ Public Prosecutor and that, according to media reports, Honduran police agents stated that “they took their orders from the D.E.A.”
On February 12, the Washington Times reported that despite “pleas from liberal lawmakers on Capitol Hill, the State and Justice departments have no intention of investigating purported human rights violations and misconduct by Drug Enforcement Administration agents in Honduras.” Times’ correspondent Guy Taylor spoke to an anonymous State Department official who indicated that the Department was satisfied with the Honduran official investigation and stated that “there will be no separate investigation.” Furthermore,
In a statement last month, DEA spokeswoman Dawn Dearden told The Times that the investigation conducted by Honduran authorities “concluded that DEA agents did not fire a single round” and that “the conduct of DEA personnel was consistent with current DEA protocols, policies and procedures.”
The anonymous State Department official reaffirmed this position stating, “as we have confirmed previously, DEA agents were involved in a supporting role, and did not fire their weapons.”
The basis for this determination, as the DEA spokeswoman made clear in her previous comments to the Times, is the report summarizing the conclusions of the Honduran Public Prosecutor’s office. Though cited by the DEA and State Department, this report has not been made public. However, there is abundant evidence that the investigation that generated the prosecutor’s report was indeed “deeply flawed.” Last year’s in-depth report on the May killings, co-authored by CEPR and Rights Action, explained how key forensics tests were performed long after the incident occurred and how the autopsies of the victims took place a month after the incident and, according to numerous eye witnesses, were carried out in a stunningly unprofessional manner. Key participants in the counternarcotics operation – including at least ten DEA agents and several State Department contractors – were never questioned, nor were their weapons submitted to ballistics tests.
Most importantly, the report’s apparent findings – at least as they have been represented by the State Department and the DEA – are directly contradicted by another report produced by the Honduran National Human Rights Ombudsman. This report, which we also discussed in a previous post, is largely based on the testimonies of the Honduran police agents of the “Tactical Response Team” (TRT) that participated in the counternarcotics operation. Whereas, according to State and DEA, the prosecutor’s report confirms that the DEA merely played a “supportive role” during this operation, the Ombudsman’s report concludes that the DEA essentially led the entire operation:
All members of the TRT have stated that they only receive orders from American superiors and that they don't report anything, neither before nor afterwards, to their legal Honduran superiors, given that they ultimately don't deal with orders or logistics of any sort.
Furthermore, though State and DEA adamantly claim that the DEA agents “did not fire their weapons,” the Ombudsman’s report suggests that the DEA was directly responsible for the discharge of one of the helicopter’s high caliber automatic mounted guns against the boat carrying those who were killed in the incident. The report states that:
According to the account of various TRT (Honduran Tactical Response Team) members, as the Barra Patuca pipante was approaching the pipante transporting the drugs, which in that moment was adrift down river, a burst of fire could be heard, supposedly coming from the boat coming from Barra Patuca causing the member from the FAST Team of the DEA to communicate by radio with the foreign pilot on helicopter number four, who proceeded to give the order to the artilleryman from Honduras who was on the same helicopter to support his teammates by opening fire on the boat with the victims that was coming from Barra Patuca.
In other words, according to the testimony of Honduran police agents, the helicopter pilot – identified as non-Honduran – gave instructions to the helicopter gunner to open fire on the “boat with the victims” after being contacted by one of the DEA agents involved in the operation. Given this second “official” version of events, which appears to directly contradict the conclusions of the Public Prosecutor’s report and suggests that the DEA may bear much responsibility for the lethal outcome of the May incident, it is difficult to see how U.S. officials can continue to maintain that there is no need for a separate, U.S. investigation.
Venezuela devalued its currency today, from 4.3 bolivares fuertes to 6.3 at the official exchange rate. As with most economic news from Venezuela, it was not well reported. A Reuters news article stated, as though it were a fact, that the move will “spur galloping inflation.” But the biggest devaluation during the Chávez years, in January 2010, produced no increase in the core rate of inflation, and only a temporary increase in the headline rate; it then fell for more than two years, even as economic growth accelerated to more than 5 percent in 2012. Annual inflation was 19.5 percent in 2012. At the time of the devaluation in January 2010, there were reports in the Washington Post predicting 60 percent inflation as a result of the devaluation.
Of course we would expect some temporary increase in inflation from a devaluation, as there was in 2010 – because the devaluation will increase the price of imports – but how much and how long it lasts depends on other government policies as well.
The devaluation will increase the cost of capital flight, and by making imports more expensive, provide a boost to import-competing industries. For this reason, and because it reduces the black market premium and reduces capital flight, the move will overall be good for the economy.
It is widely reported, as in the Reuters article, that the devaluation will help with government finances because each dollar in oil export earnings will now exchange for more domestic currency; in fact this is often stated as the reason for the devaluation. But government spending in domestic currency is not dependent on the exchange rate.
A front-page article in the print edition of today’s Washington Post details how New Jersey Democratic Senator Robert Menendez twice approached federal health-care officials about Dr. Solomon Melgen’s outstanding $8.9 million debt to the Centers for Medicare and Medicaid, which the doctor claims was the result of being overbilled. Melgen, personally and through his ophthalmology company, has made major contributions to Menendez’s political campaigns.
This is the latest news to follow reports that on Wednesday, January 30, the FBI raided Melgen’s offices, soon after which the senator’s office described the doctor as “a friend and political supporter of Senator Menendez for many years.” Two days later, following John Kerry’s resignation from his seat as chairman of the Senate Foreign Relations Committee to become Secretary of State, Menendez took over the position, one of the most powerful and prestigious in Congress.
Menendez, who is Cuban American, has taken a hard line against easing travel restrictions to Cuba and has been described as “fiercely pro-embargo.” The New Jersey Democrat has also worked closely with lawmakers across the aisle on policy towards Iran, including his co-authorship of sanctions legislation with Republican Senator Mark Kirk last year.
Early reports of the FBI’s search focused on allegations that in 2010 Senator Menendez accepted free flights to the Dominican Republic from Dr. Solomon Melgen and had sex with prostitutes during these trips, a claim he has vehemently denied. It was also noted that Menendez is not married, and that prostitution is legal in the Caribbean nation. The Senate Ethics Committee is investigating the senator, who in January of this year wrote a $58,000 personal check to reimburse Melgen for two trips.
It started in Colombia in 2000, moved on to Mexico in 2008 and now rages in Central America. Since the beginning of the century, the U.S.-backed “war on drugs” has progressively spread throughout the northern part of Latin America, leaving tens of thousands of lost lives in its wake. An in-depth investigative piece published by the Associated Press over the weekend explains how this so-called “war” – which relies on U.S. funding, training, equipment and troops – has grown in recent years to become “the most expensive initiative in Latin America since the Cold War.”
The article, authored by Pulitzer-prize winning reporter Martha Mendoza, describes how the U.S. has “spent more than $20 billion in the past decade” and deployed U.S. army, marine and navy troops to support a heavily militarized campaign to fight drug trafficking throughout the region. The fact that the efforts have been accompanied by soaring violence – with, for example, 70,000 Mexican lives lost in the last six years – doesn’t seem to trouble the U.S. officials in charge of implementing U.S. drug policy internationally. In fact, they seem to consider spikes in violence to be a sign that the “strategy is working.”
William Brownfield who heads the State Department’s Bureau of International Narcotics and Law Enforcement Affairs, told Mendoza that “the bloodshed tends to occur and increase when these trafficking organizations… come under some degree of pressure.”
For others in Washington, the shocking number of lives lost suggests that the strategy is in fact not working. New York Congressman Elliot Engel, a moderate Democrat who is now the ranking minority member on the House Foreign Affairs Committee, told the AP that he supports a congressional review of counternarcotics programs in the Western Hemisphere.
On January 30th, incoming Secretary of State John Kerry and Attorney General Eric Holder received a letter from fifty-eight members of Congress asking for a U.S. investigation into a DEA-led counter-narcotics operation in Ahuas, Honduras that went badly wrong. Four indigenous Mosquitia villagers, including at least one pregnant woman and a 14 year-old boy, were shot and killed in a small boat in the Patuka River during the May 11, 2012 operation. Three other passengers were critically injured. CEPR visited the site of the killings last Summer and, together with Rights Action, published a detailed report describing the central role that the DEA played during that operation and the flawed nature of the Honduran official investigation of the incident. The Honduran human rights group COFADEH and the Honduran government’s Human Rights Ombudsman have asked the U.S. to carry out its own investigation, but so far U.S. officials have rejected the idea.
This letter, initiated by Georgia Democrat Hank Johnson, marks the first time that members of Congress have publicly called for a U.S. investigation of the shooting and shows that, despite the U.S. Administration’s attempt to brush the incident under the rug, the issue continues to fester. The surviving victims and the victims’ families have received no form of compensation and have great difficulty obtaining vital medical care (one of the wounded victims’ hands would probably have been amputated had COFADEH not helped pay for surgery). As our August report described, the killings generated outrage and a strong sentiment of injustice among members of the communities near Ahuas, and as a result, resentment toward U.S.-led counternarcotics operations has grown stronger in the Mosquitia region.
The signers of the letter include Representative John Conyers who is the ranking Democrat on the House Judiciary Committee, Rep. Meeks who is a high-ranking Democrat on House Foreign Affairs and Rep. Van Hollen who is the ranking minority member on the House Budget Committee. As State Department titled helicopters and contractors were a key part of the operation along with at least ten DEA agents, the letter is addressed to the top officials of both State and the Department of Justice. Eric Holder, the Attorney General, has proven to be a staunch supporter of the current course of the so-called “war on drugs”. John Kerry, however, has been critical of human rights abuses allegedly perpetrated by Honduran security forces, and recently backed the limiting of U.S. police assistance to Honduras. His quick and disconcerting mention of Honduras during his confirmation hearing last week provides little indication of whether he intends to review any aspect of policy toward that nation as chief diplomat of the U.S.
Image: This satire of El País' publication of a fake photo of President Hugo Chávez on its front page last week captures the quality of much media reporting on Venezuela. El País is the most influential paper in Spain and has much influence also in Latin America.
In writing about the media’s ongoing hate-fest for Hugo Chávez, I pointed out that the major media’s reporting had been effective, in that it has convinced most consumers of the Western media – especially in the Western Hemisphere and Europe – that Venezuela suffers from a dictatorship that has ruined the country.
But there is an important sense in which it has failed. Of course it has failed to convince Venezuelans that they would be better off under a neoliberal regime, and that is one reason why Chávez and his party have won 13 of 14 elections and referenda since he was first elected in 1998. Perhaps of equal importance, it has also failed to persuade other governments that President Chávez is motivated by some kind of irrational hatred of the U.S. – as the media generally reports it. Most foreign ministries have some research capacity, and although they are influenced by major media, at the higher levels they have better information and make their own evaluations.
That is why Chávez has been able to play a significant role in the growing independence and regional integration of Latin America, despite his vilification in the media, and years of effort by the U.S. government to isolate Venezuela from its neighbors. For example, the governments that decided to form the Community of Latin American and Caribbean States (CELAC) – a new hemispheric organization including all countries other than the U.S. and Canada – don’t care whether the media dismisses it as “Chavez’s project.” When Brazil, Argentina, and Uruguay decided to admit Venezuela as a full member of the trading bloc Mercosur, they didn’t care what the media in any of their respective countries would say about it.
The World Bank has joined the “doom and gloom” chorus on Venezuela’s economy. And in Haiti, the Washington-based institution again appears overly optimistic.
On Tuesday, January 15, the World Bank released its latest global economic forecast, which projects 2013 global GDP growth at 3.4%, up 0.4% from its preliminary estimate for 2012 and down a half a percentage point from its previous forecast in June. The Bank emphasized that the low rates were largely a result of sluggish growth in the U.S. and Europe. As for Latin America and the Caribbean, the regional predicted growth for 2013 is listed at 3.6%, up more than half a point from the estimated figure for 2012.
As with many media commentators over the past few years, the World Bank predicts that Venezuela’s economic recovery from the global recession cannot hold up. The Bank forecasts 1.8% growth in 2013, a sharp drop from an estimated 5.2% last year. Since the Venezuelan economy is not slowing, there is no obvious reason to predict a collapse in economic growth.
Furthermore, we can see that the projection numbers follow a trend. Both the World Bank and the IMF have been consistently underestimating growth projections in Venezuela.
Senator John Kerry, President Obama’s nominee for Secretary of State, spoke for close to four hours at his Senate confirmation hearing on Thursday. He discussed U.S. policy in the Middle East and Asia at length, mentioning Afghanistan thirty-five times, China thirty-three times, Iran twenty-four times and Vietnam twenty-one times, according to the Wall Street Journal. With the exception of Mexico – which came up a total of twelve times – hardly any of the hearing touched on the Western Hemisphere, which was mentioned only four times. Senate Foreign Relations Chair Bob Menendez, who is of Cuban-American descent, was the only one to ask a question about Kerry’s vision for relations with Latin America.
Menendez started off his question by saying “2013 will be a year of great change in the Western Hemisphere,” then mentioned “the impending change of leadership in Venezuela,” the new PRI administration in Mexico, and the recently-launched peace talks in Colombia. “So,” he asked Kerry, “can you briefly talk to me about your views and vision as it relates to what I think is a new and momentous opportunity in the hemisphere?”
Kerry’s response [PDF] was indeed brief and elicited no reaction from his Senate colleagues. His statements suggested that, with Kerry as chief diplomat, U.S. policy toward the region will remain on automatic pilot, cruising along on more or less the same course that the State Department has followed since the Bush administration. His response also showed a startling disregard for the perspectives and policy priorities of the governments and peoples of Latin America. Here’s what Kerry replied to Menendez:
Well I agree with you, Mr. Chairman. It is an opportunity that's staring at us, and I hope that we can build on what Secretary Clinton has done and the Obama administration has already done in order to augment our efforts in that region.
Once again it seems that Jamaica and the IMF are on the verge of a new lending agreement. And once again, it sounds like more of the same failed policies as before. Last week, after a three-day retreat with Cabinet members, the AP noted that Prime Minister Portia Simpson Miller “said the Cabinet recently signed off on all fiscal consolidation matters to forge a new IMF deal.” Reason to celebrate? Not so fast. As Jamaican analyst Dennis Chung was quick to point out, “further expenditure cuts and tax increases will only pave the way for further economic contraction.” The Economic Commission for Latin America and the Caribbean (ECLAC) is predicting even more job cuts in 2013 precisely because of the impending IMF agreement. Unemployment is already nearly 13 percent.
As Chung notes, also relevant to the discussion is the recent research by the IMF showing that austerity policies have much larger negative effects than previously thought (at least by the IMF). But one need not look outside Jamaica or do a regression analysis to see the deleterious effects of austerity. Faced with extremely high debt payments, and having spent the last few years trying to court the IMF by cutting spending (following a previous IMF agreement which mandated such austerity), Jamaica has been a prime example of the pitfalls of this failed economic policy making. Debt levels haven’t come down, economic growth hasn’t returned, and the downward spiral has continued apace. Even a few dissident IMF directors have expressed concern.
Jamaica was the only country in the Latin American and Caribbean region to see three consecutive years of negative growth from 2008-2010 according to ECLAC, and it hasn’t exactly rebounded nicely since. GDP actually shrank in the first half of 2012 compared to 2011 and ECLAC predicts a paltry 0.1 percent growth rate for 2013, “assuming that an agreement is signed with IMF,” as the Jamaica Gleaner reported.
Unfortunately, while Jamaica needs serious debt relief in order to free up resources for the type of investment that will get the economy moving again, that seems to have already been taken off the table. Last week Finance Minister Peter Phillips stated, “[l]et me make it clear, since there are lot of rumours around, no haircut is contemplated.” The rumors concerned the possibility of a second debt exchange, but the main problem with the first one was that it never went far enough and there was no haircut. Just like with the continued austerity policies, the IMF in Jamaica is providing a great example of how not to learn from past mistakes.
The Associated Press recently reported that General Romeo Vásquez Velásquez, who led the military-backed coup against democratically elected president Manuel Zelaya in June 2009, would himself run for president in this year’s election. The move has been anticipated since late 2011, when Vásquez, along with a number of ex-military officers, formed the new Honduran Patriotic Alliance party.
Putting aside the irony of Vásquez’ candidacy, his announcement serves as a reminder of the political violence and institutional breakdown that has plagued the Central American country for the three-and-a-half years since he executed the coup. In November 2009, 5 months after Zelaya was dispatched, the illegitimate government proceeded with national elections, hoping these would in effect white-wash the coup. The Obama administration did all it could to ensure that this effort was successful, and current president Lobo was elected under a cloud of repression and impunity.
Today, violence against dissidents, journalists, women, union leaders, activists, the LGBT community and others continues unabated. And while the State Department has withheld some aid to the Honduran military and police, it continues to work closely with the government on counternarcotics efforts with little accountability. The U.S. government has still not conducted an investigation into an incident on May 11, 2012, in which the DEA was involved and in which State Department helicopters were used, that left four innocent people dead.
Though political repression still runs rampant, the opposition LIBRE party, led by the former president and his wife Xiomara Castro, continues to organize in advance of upcoming elections. Party leaders have announced that they will escalate their presence through a series of public demonstrations, the first of which is slated for today, January 24. Yet as long as the U.S. government keeps supporting the Honduran armed forces and working directly and without oversight in drug interdiction efforts, those in power in Tegucigalpa may have little incentive to address the dire human rights situation.
On January 14th, a day marking the one-year anniversary of his administration, Guatemalan president Otto Pérez Molina presented his first annual report on the state of the country. In his speech, Pérez Molina, a former general, graduate of the School of the Americas and accused of being a war criminal implicated in the systematic use of torture and acts of genocide, hailed a “historic 10 percent reduction in violent crime” and “an almost five point drop in the homicide rate per every 100,000 inhabitants” from the previous year. Guatemala currently has one of the highest murder rates in the world (41 murders per every 100,000 inhabitants); it had a total of 5,122 murders in 2012. Ironically, while President Pérez Molina was reporting back to the nation on crime statistics and murder rates that morning, the mayor of the town of Jutiapa had just been shot down, dying almost immediately of sixteen bullet wounds.
In the 1980s, the “scorched-earth” campaign of the Guatemalan military tortured, slaughtered and massacred entire villages, resulting in the deaths of over 200,000 people. Under the dictatorship of General Efraín Ríos Montt from 1982-83 state violence in Guatemala has been said to have been the most brutal. A year ago, after years of attempts by human rights defenders to put him on trial, Ríos Montt was charged with genocide in Guatemalan courts. He has since filed two petitions to acquire amnesty from the law, the second of which is still awaiting a ruling. Last month Pérez Molina, who himself served under General Ríos Montt during the 1980s, issued and then suspended a decree stating that it would stop adhering to the Inter-American Court of Human Rights on cases of crimes against humanity and genocide that occurred before 1987, which human rights defenders say could be an attempt to prevent legal challenges from taking place.
In 2011, when presidential elections were held, Guatemalan and international human rights organizations warned of the danger in electing a former general implicated in “scorched earth” campaigns and extrajudicial executions, pointing out that militarization and repression would likely escalate if Pérez Molina were to win.
Earlier this month my colleague Dan Beeton noted that the major media, after incorrectly predicting a close race in Venezuela’s presidential elections, had quickly reverted to the familiar “gloom and doom” predictions for Venezuela’s economic future. Additionally, many recent opinion and news pieces have echoed the Venezuelan opposition’s view that the decision to postpone Chávez’s inauguration was legally questionable. On January 8th, a Chicago Tribune editorial neatly summarized the prevailing wisdom: “Venezuela after Chavez will likely be plagued by political turmoil and economic struggle.”
Just as it appeared that the current conventional wisdom on Venezuela had spread and hardened irreversibly throughout the major media, on Monday the UK daily The Guardian published an editorial entitled “Venezuela, defying predictions – again.” The piece deftly takes on a few commonly held views found in much of the media coverage of Venezuela.
The postponement of Chávez’s inauguration “is not a coup,” the Guardian states. In fact, “the constitution allows for a president-elect to be sworn in by the supreme court, and the postponement has now been endorsed by the court itself.” It’s worth noting that head of the Organization of American States José Miguel Insulza, the government of Brazil and a number of other regional governments have also publicly agreed with this assessment, which we explored in detail last week. Few U.S. media reported on the international acceptance of the decision to postpone Chávez’s swearing-in, instead preferring to focus on the views of members of the Venezuelan opposition, some of which lack consistency. For instance, opposition leader Henrique Capriles called on the Supreme Court to rule on the constitutionality of the postponement, only to later reject the Court’s determination that the move was constitutional.
The Guardian editorial also points out that the frequent predictions that rivals within the pro-government coalition “would begin falling out have not materialized” and that:
dire warnings about a mismanaged economy, with soaring inflation, crumbling infrastructure and currency control problems, also need examining with care. After all, the Venezuelan economy has grown for nine successive quarters, has a relatively low debt burden, and the fall in inflation indicates a government with the ability to control inflation while maintaining growth. Oh, and Venezuela is sitting on the world's largest oil reserve.
Honduran newspaper El Heraldo reports that a plan for the creation of “model cities” was reintroduced in the Honduran congress yesterday, months after the Supreme Court declared earlier such plans to be unconstitutional. Congress President Juan Orlando Hernández said that he did not expect the plan to run into the same legal problems as last year because he had taken into account the Supreme Court’s arguments for its decision.
According to El Heraldo, the bill proposes the creation of the 12 special regimes of various kinds which “shall enjoy operational and administrative autonomy.” Among these are “ciudades autónomas.”
Earlier this month, NPR’s This American Life profiled the “model cities” or “charter cities” concept for Honduras in a report that only presented one side of the debate. The report follows reporters Chana Joffe-Walt and Jacob Goldstein’s previous account of the Honduran “model cities” concept for NPR’s Planet Money, and an early examination of the plans in The New York Times Magazine by Planet Money co-creator Adam Davidson.
There is much important context that the This American Life “model cities” profile left out. First, the proposed “model cities” could impact the land rights of Garifuna (Afro-indigenous) communities in the area. There was little mention of opposition to the “charter cities” idea inside Honduras, outside of lawyers and the Supreme Court decision. And crucially, Honduras has been in a state of relative chaos since the coup, with a breakdown of institutions and the rule of law leading to, among other things, Honduras having the highest murder rate in the world (now at 91 per 100,000 people, according to the UN) (a fact that the This American Life report does note).
As The Americas Blog readers know well, there is a strong political dimension to this violence. As human rights organizations from Human Rights Watch to Amnesty International to the International Federation for Human Rights have described, there has been political repression since the coup, targeting opponents of the coup and of the current Lobo government with assassination, forced disappearance, torture, rape, kidnapping, and other abuses. Journalists, lawyers, opposition party candidates, the LGBT community, and women have also been targets, with attacks against each of these groups spiking since the coup. The Garifuna communities are another targeted group, with, e.g., land barons in the Zacate Grande region attacking community groups and radio stations. Honduras is now widely recognized as one of the most dangerous countries to be a journalist, with some 23 journalists murdered since President Lobo took office in January 2010 according to the Committee to Protect Journalists.
The Venezuelan government announced Tuesday that President Hugo Chávez will miss his swearing in on Thursday, January 10, when his new term is set to begin. The Supreme Court ruled today that his swearing in tomorrow would not be necessary for “continuity” of his administration, and that he could be sworn in before the Court at a later date.
Returning from a meeting with Venezuelan Vice-President Nicolás Maduro, Brazilian Foreign Minister Marco Aurelio Garcia said Tuesday that Brazil regards as constitutional the extension of time needed to swear in Chávez as president for his new term, saying the current debate can be solved through "constitutional means,” as Venezuela’s El Universal newspaper reported. Several heads of state or other high level officials from Latin American governments will be present at events at the presidential palace in Caracas tomorrow.
Despite some confusion and deliberate distortions in the media and among Venezuela observers, the Venezuelan constitution (English PDF version here; Spanish version here) is clear on procedure regarding what is allowed if the president-elect is unable to be sworn in in Caracas.
For example, Rep. Ileana Ros-Lehtinen (R – FL), who has infamously called for Fidel Castro’s assassination in the past, issued a hyperbolic statement accusing Chávez of attempting to subvert the constitution:
The delay of his swearing-in is yet another example of the trampling of the constitution by this despot. The Venezuelan constitution states that the leader of Venezuela needs to take the oath of office on January 10 in front of the National Assembly or the Venezuelan Supreme Tribunal of Justice.
But Article 231 states, in part, “If for any supervening reason, the person elected President of the Republic cannot be sworn in before the National Assembly, he shall take the oath of office before the Supreme Tribunal of Justice.” No deadline is mentioned, contrary to what Ros-Lehtinen claims. Ros-Lehtinen also stated:
William K. Black, former deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement and now Associate Professor of Economics and Law at the University of Missouri – Kansas City takes on Alvaro Vargas Llosa and other “neoliberal” pundits in a long post today at Huffington Post. Noting how Vargas Llosa, P.J. O’Rourke and others have condemned the left-leaning heads of Latin American states as “idiots” and “stupid,” Black examines the track record of the neoliberal economic model versus the alternatives being pursued by countries such as Ecuador:
We have run what economists refer to as a "natural experiment." At the same time that Latin Americans were overwhelmingly rejecting key neo-liberal aspects of the Washington Consensus the Eurozone and the United States moved rapidly in the opposite direction by adopting ever more extreme neo-liberal dogmas. These dogmas created what criminologists refer to as a criminogenic environment -- an environment where the incentives are so perverse that they can produce epidemics of "control fraud." These fraud epidemics directly drove the financial crises in the United States, the United Kingdom, Ireland, and Iceland and indirectly triggered crises by causing global systemic shocks. AVL does not wish to discuss the predation by the world's most elite bankers.
The loss of the young (through emigration), employment, output, income, and wealth and the growth of poverty and inequality that resulted from the most extreme neo-liberal policies are staggering. In the U.S., over 10 million Americans lost their jobs or could not obtain jobs that would have been produced by a healthy economy. Spanish unemployment is nearly 5 million. The crisis is so great that it is now common for Irish and Italian citizens to emigrate as soon as they earn their university degrees. The Financial Crisis Inquiry Commission reported that the loss of U.S. wealth in the household sector alone was estimated at over $12 trillion -- a trillion is a thousand billion.
As we have previously noted, many pundits and much of the international media predicted a close presidential election in Venezuela in October, if not an actual victory by opposition candidate Henrique Capriles Radonski. But in the end, the vote was not close, as we had predicted it would not be in a paper we released on October 4. Chávez won by 11 percentage points – just a little over the 10.7 point victory that poll averages had suggested. As we have also noted, the conventional wisdom on Venezuela in the U.S. media and the economics profession (including the IMF) has repeatedly predicted sharply more negative outcomes for the Venezuelan economy than have materialized.
Now, as speculation runs rampant over the state of Hugo Chávez’s health, many of the same voices that predicted a close election in October are again predicting doom and gloom for Venezuela.
For example, in an op-ed just before the October election, the Inter-American Dialogue’s Michael Shifter wrote that “the election appears to be very tight.” In the New York Times’ Room for Debate today, Shifter details a list of problems that he says Chávez’s successor will need to tackle, “gradually” and tactfully in order to avoid some kind of catastrophe:
By now, it is easy to recite the litany of problems facing Venezuela.
At the top of the list are a huge fiscal deficit (around 20 percent) and high inflation (just under 18 percent), decaying infrastructure, mismanaged petroleum sector, shortages of basic goods, periodic blackouts and widespread crime and insecurity. All of these derive in some measure from severe institutional weaknesses, a product of Hugo Chávez’s one-man, 14-year rule. Whether his successor comes from his camp or from the opposition, reform and improved governance will be essential.
In a quickly-dated October 5 op-ed titled “How Hugo Chávez Became Irrelevant,” blogger Francisco Toro wrote, “Mr. Chávez is facing a tight re-election race against Henrique Capriles Radonski, a 40-year-old progressive state governor who extols the virtues of the Brazilian model,” and a little over a week before that wrote “Two weeks out, though, two of Venezuela's three best-regarded pollsters show him in a statistical dead-heat with the president. By crafting a message to appeal to a truly nationwide audience, he's given himself a real fighting chance to pull off a stunning upset on Oct. 7th.”