Map of the Western Hemisphere

Analysis Beyond the Echo Chamber

The Americas Blog seeks to present a more accurate perspective on economic and political developments in the Western Hemisphere than is often presented in the United States. It will provide information that is often ignored, buried, and sometimes misreported in the major U.S. media. For more information, sign up for our Latin America News Roundup or visit the archives.

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While Congress struggled to approve legislation to avert the much-hyped “fiscal cliff”, a bill addressing “Iran’s growing hostile presence and activity in the Western Hemisphere” quietly and smoothly swept through both houses before the end of the legislative session.  The bill, which requires the State Department to develop a strategy to address the Iranian regional “threat”, was signed into law by President Obama on December 28th.

If you haven’t heard of the “Countering Iran in the Western Hemisphere Act of 2012” (H.R. 3783), that may be because you aren’t a faithful reader of the neoconservative Commentary Magazine, which urged President Obama to sign the bill; or of the web page of the Heritage Foundation.  Nor did you receive the press release of the Zionist Organization of America (ZOA) that applauded the bill’s passage and noted that it would help “turn back Iranian attempts to establish bases, subvert the economic relationships between the US and Latin America, and the establishment of covert abilities to promote terrorism in countries close to our own US borders.”  The ZOA is an organization with links to Israel’s far right and counts among its members rightwing billionaires Sheldon Adelson and Irving Moskowitz, best known for their hardline pro-settlement and anti-Iran positions and their generous donations to Republican super Pacs during the 2012 presidential campaign.

Indeed, though the bill was approved nearly unanimously in both chambers, only far right organizations appear to have openly supported it. 

There is little doubt that Iran has sought to increase its diplomatic and economic presence in Latin America in recent years, as have China and Russia.  The Iranian government has opened up new embassies in the region and President Ahmadinejad has gone on several trips to Latin America.  But H.R. 3783, in its “findings”, alleges that Iran is involved in far more nefarious activities in the region. 

There is an epic battle going on, mostly in the shadows, over President Obama’s reported intention to appoint former Republican Senator Chuck Hagel as Secretary of Defense.  Robert Naiman describes some of the stakes here:  

“On Afghanistan, the AP notes- ("Pentagon front-runner Hagel has strong Obama ties, likely favors rapid Afghanistan withdrawal "):

Former Nebraska Sen. Chuck Hagel is a contrarian Republican moderate and decorated Vietnam combat veteran who is likely to support a more rapid withdrawal of U.S. troops from Afghanistan. [...] Often seeing the Afghan war through the lens of his service in Vietnam, Hagel has declared that militaries are "built to fight and win wars, not bind together failing nations." In a radio interview this year, he spoke broadly of the need for greater diplomacy as the appropriate path in Afghanistan, noting that "the American people want out" of the war. …

"On Iran, the AP noted that ‘Hagel has criticized discussion of a military strike by either the U.S. or Israel against Iran. He also has backed efforts to bring Iran to the table for talks on future peace in Afghanistan.’”

"On the Pentagon budget, a Washington Post editorial noted that in September 2011 Hagel called for cuts to the Pentagon budget. .."

And on the battle within the Beltway:

“The outcome of this battle is likely to be determined soon. If Obama nominates Hagel, easy Senate confirmation is expected. But it's possible that in the absence of a sufficiently broad and vigorous response, the neocon Swift Boaters could kick up enough dust to convince some of the Obama political people that, even though they could win the fight easily, it's not worth the fight, and life would be much easier politically if they would just appease the right and appoint someone the right won't object to, and move on to other things."

"That outcome would be a shame, because far more than any other likely Obama nominee, Hagel represents the foreign policy that the majority of Americans voted for in 2008 and 2012: less war, more diplomacy.”

And now New York Congressman Elliot Engel, former Chair of the Western Hemisphere Subcommittee and the new ranking Democrat on the House Foreign Affairs Committee, has publicly confronted his party’s President to oppose a Hagel nomination. 

What about Latin America?  It seems that there are objections from the right here too:

On Thursday that chorus was joined by Sen. Marco Rubio (R-FL), who is reportedly concerned about Hagel’s past support for ending the US boycott on Cuba’s communist regime. Rubio’s spokesman Alex Conant told the Washington Free Beacon that ‘promoting democracy in Latin America is a priority for Senator Rubio, and he’s put holds on other administration nominees over the issue. If President Obama were to nominate Senator Hagel, for a cabinet position, I’m sure we would have questions about Cuba positions.

So, it looks like people who care about the Western Hemisphere have a stake in this fight, too.  President Obama didn’t change policy in this hemisphere from that of the Bush Administration. But he paid a political price for that, as his administration was isolated from almost all of Latin America, e.g., for helping the coup government in Honduras legitimize itself.  In addition to the Cuba embargo, there is the  so-called “drug war” and other issues where the Obama administration may feel pressure to take some steps in a positive direction, and it would be good to have a Secretary of Defense who is at least more open-minded than a lot of Washington’s foreign policy establishment.  And of course, it would send a terrible message to the country and the world to see President Obama cave once again to the neocon right, as if elections here don’t really matter. 

The Los Angeles Times’ Tracy Wilkinson conducted a rare interview with Miguel Facussé Barjum, considered by many to be the most powerful man in Honduras, and also believed to be behind the killings of dozens of campesinos in the Aguan Valley, where Facussé has extensive land holdings. He has been the subject of much recent scrutiny, as Wilkinson notes, especially following the assassination of attorney Antonio Trejo Cabrera, who worked on behalf campesino organizations in the Aguan. Wilkinson describes some of the allegations and criticism leveled at Facussé from members of the U.S. Congress and human rights organizations:

In October, shortly before he lost reelection, U.S. Rep. Howard L. Berman (D-Valley Village) took the unusual step of singling out Facusse in a letter to Secretary of State Hillary Rodham Clinton. Berman demanded a major overhaul of U.S. policy toward Honduras, including suspension of aid to human rights abusers. He repeated Trejo's accusation, calling for an investigation of Facussé.

"It is breathtaking that Facusse has been so untouchable," said a House of Representatives staffer with knowledge of the issue, who spoke anonymously in keeping with Washington protocol.

The New York-based Center for Constitutional Rights, in filings with the International Criminal Court, alleges that Facusse may have committed "crimes against humanity" in the killings of Trejo and several peasant farmers.

As we have previously noted, Facussé has admitted the killings of some campesinos by his security forces. A 2011 human rights report from the FoodFirst Information and Action Network, the International Federation for Human Rights and other groups details a number of killings, kidnappings, torture, forced evictions, assaults, death threats and other human rights violations that victims, witnesses and others attribute to Facussé’s guards. In May this year, Reporters Without Borders declared Facussé to be a “predator” of press freedom. Facussé’s response has sometimes been to threaten to sue for defamation. As he explains in the LA Times article, “He said he considered suing Berman but was advised by friends that legal action would be a waste of time.”

Perhaps seeing the limits to suing for defamation when the allegations are supported by evidence, Facussé, it appears, wanted to sit down with Wilkinson in order to set the record straight. He explains that, while yes, his airplane was "was used to illegally carry the foreign minister out of the country against her will" during the 2009 coup d’etat; and yes, drug planes have used his property to traffic cocaine; and yes, he normally keeps a pistol on his desk; and yes, he “keeps files of photos of the various Honduran activists who are most vocal against him,” and yes, he was aware of the plans for the 2009 coup in advance – he’s misunderstood. One has to appreciate the tremendous pathos as Facussé laments, "My name is mud all over the world," he said. "I'm the bad guy in the world."

And

As for the allegations of involvement in the lawyer's killing?

"I probably had reasons to kill him," he said, "but I'm not a killer."

The overwhelming victory of Chávez’s party, the PSUV, in yesterday’s elections for state governors is another indication that the widespread prognostications of gloom and doom ahead for both chavismo and for Venezuela may once again be off the mark.  The PSUV won 20 of 23 states, increasing their total from 15 to 20 governorships.  They were able to do this without Chávez being able to campaign, which is interesting not only because he is an important political figure and campaigner, but also because by a law which predated Chávez, most TV stations are required to carry the president’s speeches (these broadcasts are called cadenas).  Since the government TV stations have only about 6 percent of the television audience, this was an important factor that helped in the October 7 presidential elections – without the cadenas the media would have been stacked against him, since most print media and radio are also privately owned and to varying degrees against the government.  This election, like the October 7 presidential election, also showed the superior organization of the president’s party, which in most of the 20 states that they won, they won by large margins.

It thus appears that if Chávez is unable to complete his term, the most likely scenario would be that his endorsed candidate, Nicolás Maduro, would win the presidency in the special election that is required to take place 30 days after a presidential resignation.  Polls taken before the last election showed Maduro trailing by 6 points behind the opposition candidate Henrique Capriles Radonski; but that is before the recent endorsement from Chávez, and of course the boost that Chávez would give him with any further appeals to the electorate.  Capriles avoided disaster by winning the governor’s race in Miranda, but it was not by a huge margin (50 - 46), especially considering the massive media exposure he had during his presidential campaign. 

Of course, many things are possible, but the wishful scenarios that one sees in much of the media, “that a deeply polarized and de-institutionalized Venezuela will be both turbulent and unstable for the foreseeable future,” is looking increasingly unlikely.  For a relevant comparison, Lula da Silva finished his second term in 2010, and had relatively little trouble getting his chosen successor, Dilma Rousseff – who had never before held elective office – elected president.  The major media, and the anti-Chávez commentators that have a near monopoly on discussion of Venezuela, tend to exaggerate the role of Chávez’s personal charisma in Venezuelan politics, and tend to underestimate the importance of the unprecedented improvement in living standards – real (inflation-adjusted) income, employment, poverty reduction, and increased access to health care, public pensions, and education.  These gains have been at least as big in Venezuela under Chávez as they were under Lula in Brazil, and will likely determine the outcome of any special election – if there is one -- as they did the election of October 7. 

Yesterday the Senate passed a slightly amended version of a House bill designed to limit Iran’s dealings and interests in the Western Hemisphere. The bill, H.R.3783, the “Countering Iran in the Western Hemisphere Act of 2012” calls for a plan that would, among other things, “address any efforts by foreign persons, entities, and governments in the region to assist Iran in evading United States and international sanctions” and

support United States efforts to designate persons and entities in the Western Hemisphere for proliferation activities and terrorist activities relating to Iran, including affiliates of the IRGC, its Qods Force, and Hezbollah, under applicable law including the International Emergency Economic Powers Act; and

 (D) to address the vital national security interests of the United States in ensuring energy supplies from the Western Hemisphere that are free from the influence of any foreign government that would attempt to manipulate or disrupt global energy markets.

The historic trajectory out of which the legislation emerges is clear in the first two sections under the “Findings” (background):

Congress finds the following:

(1) The United States has vital political, economic, and security interests in the Western Hemisphere.

(2) Iran is pursuing cooperation with Latin American countries by signing economic and security agreements in order to create a network of diplomatic and economic relationships to lessen the blow of international sanctions and oppose Western attempts to constrict its ambitions.

In other words, the members of Congress who have passed this legislation want Iran to stay out of “our little region over here” as U.S. Secretary of War Henry L. Stimson referred to the Western Hemisphere in 1945. Such policies go back to the Monroe Doctrine, which declared the Western Hemisphere to be exclusively the United States’ sphere of influence. Apparently the U.S. Congress did not get the memo that even the Council on Foreign Relations considers the Monroe Doctrine to be dead- an anachronistic framework for an age in which Latin America has found a new independence from the United States and increasingly seeks out business and political arrangements with countries such as China and India.

The Washington Post editorial board has long been one of the most shrill voices in the U.S. against the left governments of Latin America, and of course most apoplectic about Venezuela.  I have often suspected that they write these editorials for the right-wing press in Latin America, which often picks them up, and especially since most of the Post’s readers could care less about Venezuela or the other governments that they hate so much, such as Bolivia, Ecuador, Argentina, etc.   This is a nice favor for their friends down South, because there are still many people who don’t know that the Post’s editorial board has been taken over by neocons, and so “Fox on 15th Street” still has a reputation in some quarters as a “liberal” voice.

As it has been doing without success for more than a decade, the Board in its latest editorial forecasts economic doom in the near future:

To win the election, the government spent wildly, running up a budget deficit of 20 percent of gross domestic product.  The next president consequently will be forced to devalue the currency, giving a boost to inflation that is already in double digits and worsening already-severe shortages of consumer goods.

According to the October estimate of the International Monetary Fund (IMF) – no fan of Chávez – the government budget deficit for 2012 is forecast at 7.4 percent of GDP.  The Post doesn't give a source for it's 20 percent number, but a recent Wall Street Journal article attributed the number to Barclays.  This is the big investment bank that embarrassed itself and cost some of its investors a lot of money by telling them just two days before Venezuela’s October 7 election than “an opposition victory looks likely.”  Chavez won by 11 percentage points, which was just about the average of pre-election polling.

Also it is not clear why a budget deficit, as the Post argues, would force the government to devalue the currency.  After all, the government is mostly borrowing and spending in domestic currency, not dollars.  As for inflation, it is true that it has picked up in the two months since the election (October and November), but inflation over the past year has been 17.9 percent, as compared with 26.1 percent for 2011 and 28.2 percent for 2010.  So the trend over the past two years has been downward, despite the fact that the economy was recovering from a recession.

The Post Editorial Board also argues that if Chávez were to become incapacitated, it “could tip Venezuela, one of the largest U.S. oil suppliers, toward a prolonged period of turmoil or even violence.”  It’s not clear why this would be the case; Chávez has already asked his followers to vote for his Vice President, Nicolás Maduro, if he can no longer serve – indicating his desire to follow the constitution, which would mandate an election within 30 days of his leaving office. It’s possible that it could take more than 30 days to get things prepared, depending on events – but there’s no indication of potential turmoil or violence. There were similar predictions in much of the press regarding the October presidential election, but instead there was a record voter turnout, a clean election, and a peaceful acceptance of the results.

In a New York Times article over the weekend, Simon Romero and Emily Schmall report on the “battle” between the Argentine government and Grupo Clarín, the country’s largest media conglomerate. The “battle” centers on the implementation of a 2009 media law that would require Grupo Clarín to divest some of its TV, radio and cable broadcast licenses. In 2009, their licenses amounted to 73 percent of the nationwide total, a level that would not be allowed in the United States.

The reporters give readers the opinions of the two sides: the CEO of Clarín contends that “[t]his is about more than Clarín; this is about democracy,” while government officials respond that the law is about guaranteeing a “plurality of voices.”

Yet the Times fails to include the voice of Frank La Rue, the Special Rapporteur for Freedom of the Expression for the UN, who has described the Argentina media law as “a model for the continent and other regions of the world,” adding that "the principles of media diversity and pluralism are fundamental" in freedom of expression. 

As is generally the case when center-left governments challenge the media, there is reason to believe that the Argentina law is not about an attack on freedom of expression, but rather about democratizing a media landscape dominated by heavily-monopolized media conglomerates that are often opposed to the forces of change under way in the country. The Special Rapporteur agrees; and the Times’ readers would have benefited from hearing his opinion as well. 

CNN and much of the Spanish language press regaled in an apparent “aha!” moment last week when, in an interview with CNN’s Erin Burnett, WikiLeaks’ founder Julian Assange referred to Ecuador as an “insignificant country.” CNN en español immediately reported on the incident on its Spanish-language news program. “For Julian Assange, Ecuador is an irrelevant country. Textual quote,” the anchor said, making quote signs with his fingers for added effect.  “The founder of Wikileaks belittles President Rafael Correa in an interview on this network,” he added, before broadcasting a very short excerpt of the interview in which Assange made the offensive remark.

Other Spanish-language news outlets quickly chimed in, eager to inform their audience that Assange, who has spent the last five months in Ecuador’s London embassy, gravely disrespected the country that has offered him asylum.  “Assange doesn’t mince his words, and calls Ecuador ‘insignicant’ ” headlined El Comercio, Ecuador’s leading daily.  Spanish online newspaper Libertad Digital stated:

Despite being six months now in their embassy in London, the founder of Wikileaks hasn’t said very nice things about Ecuador.  In an interview with the U.S. television network CNN, he avoided commenting on the situation of freedom of expression or the control of media by the government of Rafael Correa, as it is a country that is “insignificant” and its decisions don’t have the same importance as those of other states.

But relatively little attention was paid to a statement that WikiLeaks published in reaction to the coverage that Assange’s Ecuador comment had generated.  The statement provides a bit of critical background information that was generally not mentioned, or buried deep inside the articles:

The Obama administration has been outspoken recently about human rights, but some statements are somewhat disconnected from actual policy.

Deputy National Security Advisor Denis McDonough visited Honduras this week, meeting with President Lobo, “members of his cabinet, and civil society representatives.” At the conclusion of his visit, he issued a statement, saying among other things that

I …extended my congratulations to the Honduran people on their strong participation in a peaceful, democratic, primary election process on November 18, recognizing the commendable work of the Supreme Electoral Tribunal.

“Peaceful” and “democratic” perhaps, aside from the various assassinations of opposition candidates and members belonging to the LIBRE party this year, and other political repression recently submitted to the International Criminal Court as evidence of “crimes against humanity and impunity in Honduras.” These murders represent another serious threat to Honduran democracy in the wake of the 2009 coup, and have led some analysts to conclude that “free and fair” elections next year are all but impossible. But the Obama administration seems to pretend the repression is not happening by describing the process as “peaceful.”

U.S. Ambassador to Honduras Lisa Kubiske, meanwhile, also has become a vocal champion of human rights - on Twitter - reminding followers of significant dates in U.S. history for labor and civil rights, for example, and decrying attacks on women, and other serious rights abuses in Honduras.

On Wednesday, Kubiske Tweeted:

 

Yesterday Argentina appealed a ruling by a New York court that could force Argentina to pay holdout bondholders known as vulture funds, reports the Associated Press.  Judge Thomas Griesa ruled last week that Argentina must put $1.3 billion into an escrow account by December 15. If Argentina refuses to do so, the court ruling would force Bank of New York Mellon, which distributes payments to those bondholders who did accept a restructuring following the 2001 default, to stop those payments. The ruling is based on the parri passu clause, which the court interpreted as requiring equal treatment to both the bondholders who accepted a restructuring and those that held out. If, as President Kirchner has indicated, Argentina refuses to pay the vulture funds and the appeal is unsuccessful, it could lead Argentina into a technical default. Siding with Argentina in the court case is the US Federal Reserve, commercial banks and holders of restructured bonds. Also, as the AP points out, even critics of Kirchner in Argentina have criticized the judge’s ruling in recent days, as it threatens the successful economic growth that resulted after the default in 2001. For more on the case, click here and here.

Meanwhile, writing in The Guardian, Cambridge economics professor Ha-Joon Chang highlights the need for a sovereign bankruptcy law, similar to what countries offer debt-laden companies. Once a company declares bankruptcy, “the debtor company and its creditors are forced to work together to reorganise the company's affairs, under clear rules.” Unfortunately, as Chang notes, “no mechanism like this exists for countries, which is what has made sovereign debt crises so difficult to manage.” Chang uses the examples of Greece and Argentina, arguing that the effects of their debt problems go far beyond their borders, noting that “In the Argentinian case, we are risking not just an end to Argentina's recovery but a fresh round of turmoil in the global financial market because of one questionable US court ruling.”

A new report from the Economic Commission on Latin America and the Caribbean reports on the reduction of poverty in the region over the last few decades, reports the AP. Overall, despite recording the lowest poverty level in three decades, some 167 million people still remain mired in poverty in the region. This is one million fewer than in 2010 and represents some 29 percent of the population. The report, “Social Panorama of Latin America 2012”, released today, also reports on trends in inequality. The report notes that “on average, the richest 10% of the Latin American population receives 32% of total income, while the poorest 40% receive just 15% of income.” Since 2002, the countries that have shown the largest decrease in inequality are Argentina, Bolivia, Nicaragua and Venezuela. In all of these countries the Gini coefficient fell at an annual rate of more than two percent. To read the entire report, which “examines paid employment in care activities, as well as household spending on care services, and proposes a series of policy recommendations,” click here. For more on the reduction of inequality in Latin America, see here and here.

Mexican president-elect Enrique Peña Nieto is in Washington today to meet with President Obama, reports CNN. In an op-ed printed by the Washington Post last week, Peña Nieto lays out his agenda for the meeting with Obama, noting that “It is a mistake to limit our bilateral relationship to drugs and security concerns. Our mutual interests are too vast and complex to be restricted in this short-sighted way.” As CNN notes, Peña Nieto will focus on economic issues as well as security in his visit. Meanwhile, writing in Huffington Post, John Ackerman a professor at UNAM-Mexico City writes that Obama is losing credibility by cozying up to Peña Nieto. Ackerman notes that the recent election in Mexico was “a far cry from normal democratic politics” and warns that Peña Nieto represents a return to the old guard, which “represents the worst of Mexico's authoritarian past.” Ackerman concludes that by cozying up to Mexico’s new president “Obama sends a clear message that his Latin America policy will be equally as shortsighted in his second term as it was during his first.”

“Will the elections in Honduras be free and fair?”

This was the question asked yesterday by Aljazeera’s Inside Story Americas, in a discussion with professor Dana Frank of the University of California Santa Cruz, and Pam Spees, an attorney with the Center for Constitutional Rights (CCR), which filed evidence last week with the International Criminal Court (ICC) regarding ongoing impunity for crimes against humanity committed by coup leaders Roberto Micheletti, General Romeo Vasquez Velasquez, palm oil magnate Miguel Facusse, and others. (See our previous post here.)

Honduras’ presidential elections are a year away, but if they are anything like the country’s previous elections in 2009, the answer would be no. Those elections were overseen by an un-elected coup regime, which attacked protesters, raided civil society offices and censored media outlets. An Amnesty International spokesperson declared, “Justice seems to have been absent also on Election Day in Honduras," and most Latin American countries refused to recognize the new government of Porfirio Lobo afterward.

Party primary elections were held on Sunday, with the preliminary results showingMauricio Villeda ahead as presidential candidate for the Liberal Party while the National Party was favoring Juan Orlando Hernández,” and former first lady Xiomara Castro de Zelaya emerged – running unopposed - as the candidate of the new Liberty and Refoundation (LIBRE) party (which emerged from the National Resistance Front to the coup (FNRP)). Notably, of the three, Zelaya had received the most votes (357,926) as of this writing, with Hernández’s 306,012 second. But, only about two-thirds of the mesas had been examined before technical problems caused a vote count disruption, and Hernández’s National Party challenger Ricardo Álvarez called for a “vote by vote recount.” The Supreme Electoral Tribunal vowed yesterday to issue final results “within 10 days.”

As the CCR and the International Federation for Human Rights (FIDH) noted in its evidence to the ICC, several LIBRE party candidates and members have been killed this year. Spees told Aljazeera:

We saw the same types of threats and violence around the elections in November of 2009 after the coup, and it’s continued and expanded, and what we’re seeing is either killings of candidates or would-be candidates. We’re seeing threats and attacks. It’s not an atmosphere in which you can legitimately, realistically expect to have free and fair elections.

As dialogue opens on the second day of the much anticipated peace negotiations between the Colombian government and longstanding rebel group the Revolutionary Armed Forces of Colombia (FARC), citizen inclusion and participation in the process have been sought as part of an expressed commitment from both sides to incorporate input from Colombian civil society, a main tenet of the General Agreement for the Termination of Conflict and the Construction of a Stable and Lasting Peace. The country’s bicameral congressional Peace Commissions, with the support of the Office of the High Commissioner for Peace and technical support from the United Nations, have called for the “extensive participation in the conversations between the Colombian national government and the FARC”, inviting Colombian civil society to present proposals to be included at the negotiating table.

To facilitate this process, various platforms have been provided for citizen engagement in proposing solutions to the conflict based on the five-point agenda of the peace process, including regional meetings and a forthcoming online forum for submitting proposals. The regional roundtable meetings were designed to “guarantee the extensive participation of different regional social sectors, including organizations of farmers, indigenous peoples, afro-Colombians, women, union workers, students, human rights defenders, youth, environmentalists, LGBTQ communities, peace initiatives, churches, guilds, businesses, academics, social researchers and victims of the conflict.”

These regional meetings have been held throughout the country, offering a space for civil society leaders to present their organizations’ proposals on the first three agenda items to be discussed at the talks: agrarian development policy, illicit crop substitution, and political participation (future roundtable meetings to be held in 2013 are set to include issues related to victims, a fourth subject area of the peace agenda). Similarly, an electronic forum is said to be in the works as a mechanism to receive additional citizen input, the technical finalization of which delayed negotiations four days from their initially planned start date of November 15. With these participatory mechanisms in place, the stage now seems to be set for the desired inclusion of Colombian civil society in the peace talks as part of the larger process seeking an end to half a century of civil conflict.

In previous blog posts we’ve commented on the rampant political violence in Honduras since the country’s 2009 military coup, as well as the alleged involvement of Honduran security forces in extrajudicial killings and other human rights violations. Sadly, recent reports from Honduras suggest that the situation continues to deteriorate. Today we’ll provide an update on some of the troubling recent events in Honduras - the recent killing of an unarmed boy allegedly carried out by U.S.- vetted military troops; the targeted killings of opposition politicians – as well as efforts by non-governmental groups to hold Honduran authorities accountable for the ongoing attacks and the country’s pervasive climate of impunity.

U.S.-vetted soldiers allegedly murder unarmed boy

Breaking news this week reveals that soldiers vetted by the U.S. chased after, shot and killed a 15-year-old boy, Ebed Yanes, who supposedly ran through a check point on a motorcycle in Tegucigalpa on the night of May 26. The Associated Press’ Alberto Arce and Martha Mendoza reported that, according to a soldier involved in the incident who came forward:

The boy, he said, did not stop at the checkpoint, but raced through it. They followed him in the Ford pickup, chasing him through the dark alleys for at least five minutes. The boy turned into an alley too narrow for the truck, so the driver stopped. The lieutenant sitting in the front passenger seat ordered the unit to open fire as he jumped out of the truck and started shooting. Two other soldiers got out and fired from 30 meters away, with soldier Eleazar Abimael Rodriguez dropping to his knee in the firing position, said the soldier, who is now a protected witness. The motorcyclist was shot.

AP notes that the soldier alleged to have fired first, Josue Sierra, was trained last year at the Western Hemisphere Institute for Security Cooperation (WHINSEC), formerly known as the School of the Americas (SOA), at Fort Benning, Georgia, and has been charged with attempting to cover up a crime and violating official duties. Lt. Col. Reynel Funes, who allegedly oversaw a cover-up of the murder (in part by having the soldiers switch out their weapons) also attended the SOA in 1984, and went to the Naval Postgraduate School in Monterey, California, in 2006, AP reports.

The revelations behind Yanes’ murder – only brought to light through the brave investigative work of his father - further demonstrates the rampant impunity and corruption within the Honduran military and police, even by officers “vetted” by the U.S. Despite recent misleading comments by U.S. Ambassador to Honduras Lisa Kubiske in the Honduran press, the U.S. Congress is already withholding funds to the Honduran police over the national police chief’s past ties to death squads, and counternarcotics operations and radar support to the Honduran police and military has been suspended following Honduras’ shooting down of airplanes, and the May 11 shootings of several local villagers in a counter-drugs operation in the Moskitia region. A State Department official cited in AP’s report yesterday says that “the withholding may reach $50 million, including $8.3 million in counter-narcotics aid, and $38 million under the Central America Regional Security Initiative.”

The Mexican senate approved controversial new labor reforms yesterday, the AP reports. The bill, which has faced mounting public protests, would allow greater flexibility on the part of owners to hire and fire workers, among other changes.  While supporters claim it will generate thousands of jobs, critics contend that it will erode what little benefits workers do have. Alejandra Barrales, a senator from the Democratic Revolution Party, told Reuters, “What we're doing here is annulling worker's rights.”

Aspects of the bill that unions had advocated for; the right to a secret ballot and increasing transparency of union finances, were stripped in the lower house and not included in the Senate version. Those reforms were seen as key to diminishing the power of the PRI-backed, non-democratic unions and supporting the development of smaller more independent groups.  The PRD did manage to get Senate approval for two articles (388 and 390) that allow workers to choose which union they want based on majority vote and require unions to submit proposed contracts to union members.  Ultimately, these were left out of the labor reform bill and sent back to the lower house for discussion and approval.

These reforms would have been especially important in the Mexican context because often collective bargaining agreements are signed by ‘unions’ that are company-backed.  Without independence, these frequently fail to represent the interests of workers, many of whom are unaware that their labor group is essentially an extension of the company they work for

Senator Manuel Bartlett told reporters Tuesday night that, “This law is an attack against social justice, and the only ones who will benefit are going to be the business owners.” For example, the law legalizes trial periods and initial training contracts, which allow employers options for offering more tenuous employment and paying lower wages with fewer benefits.  With respect to outsourcing, a practice already used but now formally sanctioned, the law allows employers even more ways to combine low wages with little or no health, housing, severance and profit-sharing benefits, according to the AP.

Inequality is falling in Latin America as some 50 million people have risen to the middle class over the past 15 years according to a newly released World Bank report. The Guardian reports on the study, which notes that Latin America remains one of the most unequal parts of the world, “but a combination of favourable economic conditions and interventionist policies by left-leaning governments in Brazil and other countries has brought it more closely in line with international norms.” According to the World Bank report, 30 percent of the population is now part of the middle class, similar to the number who are considered poor. Meanwhile, 38 percent are classified as “vulnerable”, living just above the poverty line, but below middle class.  Previous CEPR research has shown that, as the Guardian notes, left-leaning governments have performed especially well in reducing inequality. As CEPR’s researcher Juan Montecino has written, “there is a relationship between moving away from the Washington Consensus and reducing inequality.”

The wage gap between men and women in Latin America is decreasing according to a study by the Inter-American Development Bank, reports Univision. Despite obtaining more education than men, women in Latin America receive 17 percent less than their male counterparts, similar to the 18 percent gap in the United States. This is down from 22 percent in 1992. Chile and Brazil have the largest gaps, while Mexico and Central America have the lowest. Reporting on the World Bank study cited above, Inter-Press Service also notes how the increasing role of women in the economy has had a huge impact on the decrease in inequality and the rise of the middle class. Citing World Bank research, Stephanie Leutert, a research associate at the Council on Foreign Relations, writes “Latin American women have been responsible for 30 percent of the region’s extreme poverty reduction in the past decade, as a result of their increased workforce participation and higher earnings.” Adding, “the global economic downturn hit men’s incomes the hardest. In response, Latin American women picked up the slack, causing more than half of 2009’s poverty reduction.”

For the 21st year in a row, the United Nations General Assembly voted overwhelmingly to condemn the U.S. embargo of Cuba, reports the Associated Press. The United States was joined by Israel and Palau in voting against the measure, which was approved by a vote of 188-3. As the AFP notes, this was a record number of countries voting for the measure.  Ian Williams, a senior analyst with Foreign Policy in Focus, comments, “The UN vote on the Cuba embargo reminds us yet again that U.S. foreign policy is concocted in a bubble detached from the real world, where most nations recognize that the boycott is designed to pander to the most reactionary Cuban emigres in Florida. Even dissidents in Cuba think that it is counterproductive, giving the Cuban government an excuse for its inefficiencies, while, like most such sanctions, harming more the population than those in power. Obama, embarking on a second term, and winning Florida despite the Cuban vote, owes them nothing. He should use his influence to call off the embargo and allow free travel to and from Cuba.”

Ecuador’s Rafael Correa announced his decision over the weekend to run for another term in office, reports Reuters. The decision, widely expected for some time, paves the way for Correa’s reelection in February. He currently has the highest approval rating in the hemisphere at around 80 percent. A recent survey showed Correa receiving 55 percent of the vote, over 30 points ahead of his closest rival. As the AP recently pointed out, a major reason for Correa’s popularity is that “Ecuador now devotes a greater share of its economy, 10 percent of gross domestic product, to public investment in infrastructure, education and other purposes than any other nation in Latin America and the Caribbean.” Echoing these points, Elma Lincango, an Ecuadorean nurse, told Reuters, “I want all the public works to continue, and he needs another term in office to do that ... My grandparents say that in their lifetime, he's the only president that has worked exclusively for the poor.”


When Hurricane Sandy ripped through the Caribbean it caused massive damage to the island-nation of Jamaica, but it’s not the reason Jamaica’s economic prospects are so poor right now. A large share of the responsibility for that lies with the International Monetary Fund (IMF), which has been squeezing the country since 2010. The damages caused by Sandy provide just the latest example of the negative effects of the severe austerity policies pushed by the IMF and backed by the Jamaican government. Early estimates are that Sandy has caused over $60 million in damages (some 2 percent of non-interest government expenditure), yet there may be limited action the government can take without cutting important spending elsewhere. That’s because the Jamaican government is trying to reestablish a lending agreement with the IMF, and the lender is demanding an extremely tight fiscal policy. Last week, Finance Minister Dr. Peter Phillips said that despite the massive damage from Sandy, the government will have to keep to “the strict fiscal program.”

It shouldn’t come as much of a surprise. Tropical Storm Nicole hit Jamaica in the fall of 2010, during the time of the previous IMF agreement, causing damages equal to 1.7 percent of GDP. Yet, because the storm “did not have hurricane-force winds, the government was not eligible for relief under the World Bank-administered Caribbean Catastrophe Risk Insurance Facility (CCRIF).” Rather, the IMF agreed to adjust the fiscal target by 0.2 percent of GDP, just a fraction of what was needed to repair and prepare for the next disaster. In the end, Jamaica increased expenditures to cover the damages but it was entirely offset by cuts elsewhere. (The IMF stopped disbursing money to Jamaica in 2011 for their failure to adhere to the program, yet the Jamaican government still hit the required primary budget surplus target nearly right on. More likely the agreement went off-track because the government decided to honor previous commitments to raise wages and pay back-wages to public sector workers, a big no-no for the IMF.)

As Juan Montecino and I have documented, first in May 2011 and then again in May 2012, the Jamaican government responded to the worldwide recession with austerity policies pushed by the IMF. The result, as anticipated, was slower economic growth and a failure to reduce the debt (the ostensible reason for pushing austerity). Meanwhile, what expenditures Jamaica did make went towards paying interest on their crippling debt, which has absorbed over 30 percent of expenditures the past three years. Jamaica has the largest debt burden in the world, greater even than debt-riddled Greece. The result has been an estimated ten-year period of negative per-capita GDP growth.

Recent IMF research has shown that cutting spending during a recession has greater negative effects on GDP than they had previously estimated. Perhaps this is a reason why the economic downturn for Jamaica was so much worse than the IMF anticipated. Unfortunately, neither the Jamaican government nor the IMF seems to be learning from their past mistakes. While Jamaica needs real debt relief and public investment to spur growth, as they once again approach the IMF, the signs are pointing to more of the same – not even a devastating hurricane can get the IMF to relax their conditions. 

Tuesday’s elections could bring some changes to U.S.-Latin America policy, but how significant they are remains to be seen. At the administration level, Obama’s second term is likely to continue the 12 years of the “war on drugs,” support for coups d’etat, funding of opposition groups in left-leaning countries, promotion of “free trade” deals and other policies that characterized the Bush administration’s approach to Latin America and which were carried on by Obama. As we have previously noted, the Obama administration has largely left Latin America policy to the State Department – itself a clear sign that it was a low priority compared to the Middle East, Asia, Europe and other regions.

It was other votes that could spell some changes in U.S.-Latin American relations. Some vocal Latin American policy proponents on the right were defeated, but committee leadership changes could result in a more right-leaning policy. Meanwhile, landmark referendums to legalize recreational marijuana use in two states – Colorado and Washington – could have an impact beyond the U.S. borders, depending on how the Federal government reacts to them.

First, Congressman Cornelius Harvey McGillicuddy IV, aka Connie Mack, lost his Senate bid to incumbent Bill Nelson (D – FL). Since Mack gave up his House seat in order to run for Senate, this means that Mack will no longer chair the Western Hemisphere Subcommittee of the House Foreign Affairs Committee, and therefore will have to abandon his dream of having Venezuela declared a state sponsor of terrorism. He will be gone from Congress, but not forgotten – his entertaining conspiracy theories will still be available online for anyone that likes a good story, as will video of his classic dust-up with former Minnesota Governor Jesse Ventura on Larry King Live. Mack’s chairmanship of the subcommittee will likely go to Rep. Michael McCaul (R – TX), currently the vice-chair.

Speaking of conspiracy theorists, Mack’s like-minded Florida neighbor, Allen West (a Republican from the 22nd District who has said there’s 81 communists in the House of Representatives) may also be on his way out, pending final election results.

An Argentine judge ordered Chevron’s assets embargoed in an effort to enforce an Ecuadorean court ruling, reports the Associated Press. Plaintiffs, who have waged a decades long legal battle against Chevron, have taken their fight outside the country to wherever Chevron has assets. Enrique Bruchou, the Argentina lawyer on the case, told reporters, “This is a ruling that sets an example. What we're telling the world is that in Latin America we want to demand that whoever comes to exploit does it following the same health an environmental standards as they do in their countries of origin.” Other than Argentina, the plaintiffs have filed suit in Canada, Brazil and Colombia.

State legislation legalizing recreational marijuana use in Washington and Colorado may impact Latin American countries drug war policies, reports McClatchy. The legislation, which the Mexican Institute for Competitiveness found would significantly reduce drug cartel profits, is a “game-changer”, according to Kasia Malinowska-Sempruch, the director of the global drug-policy program of the Open Society Foundation. Alejandro Hope, who co-authored the study, noted that, “Politically and symbolically, this is really powerful. My guess is that this will accelerate some countries’ efforts to have a legal marijuana regime.” The head of incoming president Enrique Pena-Nieto’s transition team told the AP: "Obviously we can't handle a product that is illegal in Mexico, trying to stop its transfer to the United States, when in the United States, at least in part of the United States, it now has a different status…These important modifications change somewhat the rules of the game in the relationship with the United States…I think that we have to carry out a review of our joint policies in regards to drug trafficking and security in general."

Three laborers were killed in Honduras this past week over a land conflict in the Bajo Aguan region, reports EFE. A 2011 report by the International Federation for Human Rights noted that the “The government has converted the area of these agrarian conflicts in Bajo Aguán into a war zone.” EFE points out that some 70 peasants have been killed in the past few years in fights with security personnel and guards from wealthy landowners. Last year an agreement was reached to give some 4,000 hectares of land to the landless families in the region, yet the agreement has yet to be implemented. MUCA, an organization representing the rural workers, released a statement:  “MUCA repudiates ... these cowardly acts of intimidation against the peasants and calls on the regime of (President Porfirio) Lobo to stop this violence against the laborers of Bajo Aguan.” Professor Dana Frank has written extensively about the conflict previously.

President Obama won reelection largely because of an economic populist appeal, especially to crucial white working-class voters in battleground states, as I described here. The message got through: an MSNBC exit poll showed that 53 percent of voters thought that Romney favored the rich (as opposed to the middle class or poor) and only 10 percent thought that of Obama. 

U.S. politics are getting a bit more like South America’s in other ways, as the right-wing media creates and maintains a bubble world for Republicans.  A big difference though is that the “bubble media” in South America, in most countries, is much bigger and more influential in countries like Argentina, Bolivia, Ecuador, and even Brazil.  Paul Krugman and others have commented on the expansion of right-wing bubble influence here, e.g.  how the right-wing media questioned the aggregation of polling data (e.g. by Nate Silver), which turned out to be extremely accurate; and also attacked the U.S. Bureau of Labor Statistics for its September unemployment report.

But the economic populism of Obama’s successful campaign was really the big story that most of the pundits seem to have missed (other than right-wingers accusing him of class warfare).  Most pundits didn’t notice how unprecedented this is for the U.S. :  no prior presidential nominee in at least the past half-century had anywhere near as much an economic populist campaign as Obama’s.  It was also vastly different from his own general election campaign in 2008.  Part of this is because the country has changed in recent years:  the long-term failure of our own neoliberalism finally provoked a turning point in the 2006 and 2008 elections.  This is another similarity to South America, which moved left after its longest period of economic failure in more than a century (1980 – 2003).  Our economic failure was different, in that it was not so much a collapse of economic growth as in South America, but a massive upward redistribution of income.  But it was a colossal setback for the majority of Americans, who joined their counterparts from the South in a revolt at the ballot box.  And then the Occupy movement put the issue of income and wealth inequality on the political agenda as it has not been since the Great Depression.

Another difference:  South Americans (in Argentina, Brazil, Bolivia, Ecuador, Venezuela, and Uruguay) got more changes for their votes than we have so far.  That will take a bit longer.

A guest post by former CEPR intern Tara Ruttenberg.

Ecuador made international headlines this week, first for plaintiffs taking their fight to Argentina and Colombia to hold Chevron accountable for decades of toxic pollution, and secondly as a result of the government’s recent decision to tax bank profits as a way to increase state revenue for social spending on poverty alleviation. As Ecuador celebrated the fourth anniversary of its relatively new citizen’s constitution last month, news agencies and policy analysts have made note of the successes of the many changes taking place under President Correa, particularly related to social policies targeting poverty reduction through increased public social expenditure and cash transfers to the poor. These and other reforms embody Correa’s proclaimed commitment to 21st century socialism and an inverted juxtaposition of traditional power relations, placing people and the environment above the market economy and the formerly unbridled reign of the private sector. Ecuador’s social and economic policy platform and successful poverty reduction experience are a strong reflection of wider regional trends in countries governed by left-of-center leaders now nearly a decade into Latin America’s post-neoliberal era.

While analysts continue to draw due attention to Ecuador’s success in reducing poverty and improving socioeconomic indicators by balancing strong economic growth with policies geared toward greater income redistribution (see CEPR publication on Ecuador’s economy since 2007), many have neglected the wider paradigmatic framework within which Ecuador’s new constitution thrives; that is, the indigenous-born and politically articulated concept of ‘buen vivir’ (living well). Buen vivir as a social paradigm incorporated into Ecuador’s constitution seeks to “better the quality of life of the population, develop their capacities and potential; rely on an economic system that promotes equality through social and territorial redistribution of the benefits of development; ….establish a harmonious coexistence with nature… promote Latin American integration; and protect and promote cultural diversity” (Article 276 of the Constitution of the Republic of Ecuador). Refreshingly, we see Ecuadoran policies living up to these ambitious constitutional aims based on buen vivir, with Correa continuing to focus on income redistribution, as demonstrated by the most recent tax on banks.

Before hitting the U.S.’ east coast last week, Sandy wreaked havoc on Haiti leading many to fear a food security crisis, reports the Miami Herald. Coming just nine weeks after Tropical Storm Isaac devastated agricultural crops throughout the country, Sandy inflicted an estimated $70 million in agricultural damages, mostly in the South department. An analysis done by the Haitian government following Isaac found that changing weather patterns were negatively effecting food security in almost every region of the country. Writing in NACLA, Kevin Edmonds discusses how climate change will affect Caribbean countries. Edmonds speaks with University of the West Indies professor Norman Girvan, “30 years ago, one expected to deal with major disasters of this kind, say, once every ten years. Nowadays, most islands expect at least one, and possibly two or three, every year. In other words this now has to be seen as a permanent, recurring phenomenon or integral feature of Caribbean development.” Edmonds notes that despite climate change presenting a significant threat to the Caribbean, the countries lack the power to address to the problem on a global scale.

Speaking at the G-20 summit in Mexico City, Argentina’s Economy Minister called on advanced countries to place restrictions on vulture funds, reports Bloomberg. The call comes after a U.S. court ruled that Argentina must pay vulture funds with the same priority that they pay holders of their restructured bonds, which some 93 percent of creditors accepted following Argentina’s default in 2001.  The court ruling, which has been called a huge win for vulture funds, could impact other sovereign debt restructurings. Economy Minister Lorenzino told his fellow ministers, “We hope that G-20 nations understand that the latest developments could affect any future restructuring process of sovereign debt…All nations should be on alert.” Meanwhile, Argentine and South African officials met to discuss NML Capital’s attempts to detain an Argentina ship docked in South Africa. The move by NML Capital, run by billionaire Republican donor Paul Singer, comes after they successfully detained an Argentina naval vessel in Ghana last month.

The Peruvian government is moving forward with plans to pay back billions of dollars in 40 year-old land bonds, reports Reuters. General Juan Velasco issued the bonds as compensation during a land redistribution program started in the 1970s. In 2001, the Constitutional Court ruled that the government should repay the bonds, yet a string of government’s since then have punted on the issue. Now, the payment is becoming more pressing as the U.S.-Peru Free Trade agreement comes into force. Over the years, many of the bonds have been bought by investors on a secondary market. With the “free trade” agreement, the funds which hold the bonds could sue in U.S. courts to seek payment, a similar strategy as vulture funds have employed in Argentina. Constitutional Court president Ernesto Alvarez told Reuters, “There is a worry among some authorities in the executive branch ... that Peru could find itself hurt if complaints were lodged in courts under clauses in the free-trade pact with the United States.” If Peru pays back the bonds, they could be on the hook for up to $8 billion, or 4 percent of GDP.


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