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A Full Moon after Bolivia’s Elections? Print
Written by Jeanette Bonifaz   
Friday, 10 October 2014 15:42

Campaigning for the Bolivia’s presidential election officially ended on Wednesday, ahead of voting on Sunday. The election, which includes 272,058 voters living abroad in 33 countries, will be observed by a mission from the Organization of American States. While the final outcome is likely to be a first-round victory for the incumbent, Evo Morales, the most interesting results will come from the four departments of the media luna region. In the past, the Morales administration has faced significant opposition there, including a sometimes violent secessionist movement.  This year, the president has a chance to win majority support in all four of the departments, which would mark a major turning point in Bolivian politics.

Earlier this week, Morales expressed confidence that he will surpass his 2009 record of support, and that as much as 70 percent of the electorate will vote for him this year. Morales won previous elections handily, with 54 percent of the vote in 2005, and 64 percent in 2009. When his party, the Movement Toward Socialism (MAS), celebrated the end of its campaign in what has been an opposition stronghold, Santa Cruz, on Tuesday, thousands of people came together to show their support, demonstrating changing dynamics in the relationship between the MAS and Santa Cruz. Then on Wednesday, Morales brought his campaign to an end in El Alto, where he claimed that he will win in all nine of Bolivia’s departments, saying:

Bolivia is united, the “half-moon” is over, now it is a full moon. We have all united at the top the social forces and the youth, who have joined for two reasons: because of the patriotic agenda and stability and because of the economic growth that guarantees hope for future generations.

The “half moon,” or “media luna,” is located in the eastern lowlands of Bolivia and is comprised of the departments of Santa Cruz, Beni, Pando, and Tarija. According to an IPSOS poll the MAS could win in Santa Cruz with 50 percent of the votes. In the 2009 presidential elections, Morales lost in Santa Cruz, Beni, and Pando. Things have been changing, however, and Morales has been strategic in building and maintaining alliances in the media luna departments. Not only do polls show that Morales might win in Santa Cruz, but he might also win in Beni (44 percent), Pando (54 percent), and Tarija (43 percent).

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Bolivia's Economy Under Evo in 10 Graphs Print
Written by Jake Johnston and Stephan Lefebvre   
Wednesday, 08 October 2014 15:37

On October 12, Bolivians will go to the polls to choose their next president for a five-year term. Recent polling suggests that the incumbent, Evo Morales, will obtain a decisive first-round victory over his closest opponent, Samuel Doria Medina. Below are ten graphs on economic and social developments since Evo’s election in 2005 that help explain the strong support for his re-election.

 

      1. Economic Growth: Bolivia has grown much faster over the last 8 years under President Evo Morales than in any period over the past three-and-a-half decades.

Source: International Monetary Fund.

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Marina and Dilma: Different Visions for the Brazilian Economy Print
Written by Stephan Lefebvre   
Thursday, 02 October 2014 16:10

Marina Silva unexpectedly became a front-runner in the 2014 Brazilian general election when her presidential running mate, Eduardo Campos, died in a plane crash this August, catapulting her to the head of the Brazilian Socialist Party (PSB) ticket. After this, Silva briefly took the lead in the polls, but in the last few weeks the incumbent, Dilma Rousseff of the Workers’ Party (PT), has recaptured the momentum and the lead in a potential second round match-up with Silva. In an opinion piece written for Al Jazeera, Zeynep Zileli Rabanea explains Silva’s appeal:

With her background being quite different from the regular ruling elite - a woman of African descent from Amazonia - she has been portrayed favourably by the international media both as a disruptive force and as a welcome departure from the usual suspects running Brazil (Rousseff's workers' party [sic] has been in power for more than a decade). Silva has even been depicted as a kind of "green" heroine, all of a sudden popping up on the political field to save Brazil from corruption.

The rest of the piece is dedicated to examining this reputation in light of Silva’s election platform. Silva advocates a rebalancing of foreign policy, bringing the country closer to the United States; she proposes signing trade deals with the U.S., Europe and some of the Asian country trading blocs; and she has embraced big agriculture in a series of policy changes, including dropping her opposition to genetically modified crops. In terms of macroeconomic policy she has focused on lowering the government budget deficit and raising interest rates to curb inflation. Could these policies be the appropriate response to a slowing economy?

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Police Violence and Forced Evictions in São Paulo: An Interview with Benedito “Dito” Barbosa Print
Written by Brian Mier (Guest post)   
Thursday, 25 September 2014 09:50

Brazil has a housing shortage of around 5.8 million units, while there are around 6 million vacant units in empty houses and buildings located mainly in the downtown areas of its large cities. Urban social movements have historically tried to resolve this problem by coordinating squatters’ occupations of empty buildings, and they have successfully pressured the government to legalize these activities, resulting in some of the world’s most progressive property rights. Articles 182 and 183 of Brazil’s 1988 Constitution guarantee that the social function of property overrides the profit motive.  After a decade of protests and advocacy, in 2001, these amendments were further defined through the complimentary Statute of the City legislation. According to Brazilian law, buildings that do not fulfill their “social function,” that are left vacant and owing property taxes can, after a certain period of time, be taken over by people who don’t own any property of their own and converted to low income housing at the government’s expense. Unfortunately this law, like many other progressive laws of its kind in Brazil, is ignored by many local governments.

According to Evaniza Rodriques, from the União Nacional de Moradia Popular (National People’s Housing Union, or UNMP) there are around 35,000 people squatting in 60 abandoned buildings in São Paulo’s downtown region, trying to pressure the government for ownership.  Currently, 30 of these buildings are undergoing legal processes to be returned to their former owners. As the violent eviction of hundreds of people from a building on São João Avenue in downtown São Paulo last week shows, military police violence against squatters groups is increasing.

Benedito “Dito” Barbosa is a lawyer and founding member of the Central de Movimentos Populares (People’s Movements Central, or CMP).  Earlier this year, while trying to communicate with his clients during a technically-unconstitutional mass forced eviction in downtown São Paulo, Dito, a man of humble origins in his 50s, was beaten, choked and dragged down the sidewalk by Sâo Paulo military police.  It was not an isolated incident. There have been seven cases of lawyers beaten by police while trying to perform their duties during mass evictions in São Paulo this year.

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Connectivity and Mobility through Bolivia's Cable Cars Print
Written by Jeanette Bonifaz   
Friday, 19 September 2014 14:16

The government of Bolivia has built a cable car that connects the cities of La Paz and El Alto, giving commuters a much better alternative to the long and congested path they would otherwise have to take in buses and road transportation. Together, these neighboring cities are home to about 2 million people. The cable car, which cost $234 million, was built by the Austrian company Doppelmayr and will have considerable benefits for workers and the environment, and will reduce poverty, if we can judge from precedents with cable car projects in Colombia, Venezuela, and Brazil.

The World Bank notes that:

Urban poverty may be reduced through the contribution which transport makes to the efficiency of the urban economy and so to the overall growth of incomes.  Urban transport policies can also be focused more specifically on meeting the needs of the poor.  Inability to access jobs and services is an important element of the social exclusion which defines urban poverty.  Accessibility is important not only for its role in facilitating regular and stable income-earning employment, but also as a part of the social capital which maintains the social relations forming the safety net of poor people in many societies.

This is very important in a country where the national poverty rate is still 43.4 percent and extreme poverty is 21.6 percent (2012). Traffic congestion for commuters traveling between these two cities has been a real obstacle. As the World Bank asserts, “Inadequate and congested urban transport is damaging to the city economy and harms both rich and poor.”  The relationship between lacking transport and poverty has also been demonstrated and explored in academic research.

In addition, as the Bolivian Agency for Information (ABI) points out, Bolivia’s new cable car will conserve energy and time as well as reduce car accidents.  Some critics in Bolivia, like Rolando Carvajal, point out that the cable car will make only a small difference because it will serve (together with other new transportation initiatives) less than 20 percent of commuters.  Carvajal also claims that the government has been using the cable car as a palliative in an election year, even moving the inauguration of the red line closer to the elections.  But President Evo Morales has no serious challenge to his re-election, and did not need to build a $234 million cable car to assure that he would win. Polls have shown that Morales enjoys considerable support; according to a recent poll carried out by the company Equipos-Mori, Morales is leading with 54 percent and his opponent, Samuel Doria Medina, follows with only 14 percent.

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On Government Funding of Think Tanks Print
Written by Dan Beeton   
Wednesday, 10 September 2014 15:44

The New York Times ran an investigative article over the weekend examining foreign government funding of U.S. think tanks. The article found that

More than a dozen prominent Washington research groups have received tens of millions of dollars from foreign governments in recent years while pushing United States government officials to adopt policies that often reflect the donors’ priorities, an investigation by The New York Times has found.

The money is increasingly transforming the once-staid think-tank world into a muscular arm of foreign governments’ lobbying in Washington. And it has set off troubling questions about intellectual freedom: Some scholars say they have been pressured to reach conclusions friendly to the government financing the research.

The article was a good example of investigative journalism. However, it did miss one point that is perhaps most important for majority of U.S. citizens and residents, who are generally opposed to much of our government’s foreign policy, especially e.g., wars of choice. This is that the foreign governments funding the think tanks in question are all allies of the United States, and often share U.S. foreign policy goals. In that sense they may reinforce the U.S. government’s influence over media and ideas.  This paid influence in “the marketplace of ideas” help perpetuate the process by which the media that reaches most Americans does not recognize an independent civil society on foreign policy issues. Practically all of the experts that Americans see on major TV on foreign policy issues are either government officials, former government officials, or are getting money from the government – or from its foreign allies.  

Writing about the investigation, the Non-Profit Quarterly noted that sometimes think tanks are not overly transparent regarding their foreign funding:

There are several very disturbing elements to this story that should be a concern for all nonprofits.

First, because these think tanks are 501(c) organizations, the public disclosure of their funding relationships with foreign governments may be difficult to spot in formal documents such as Form 990s. For example, on the CSIS website, there is a list of foreign governments that have provided funding to the organization, but without funding amounts, dates, or the specific projects or initiatives they may have supported. There is nothing in the latest CSIS Form 990 posted on the GuideStar website identifying or describing any foreign government funding of the organization. One would think that funding from other sovereign nations might be something that should be a matter of public disclosure.

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Window Dressing for the Vulture Funds Print
Written by Peter Hayakawa   
Thursday, 14 August 2014 09:48

The American Task Force Argentina (ATFA) is Elliott Management’s main public relations and lobbying arm supporting its long-running legal fight against Argentina in U.S. courts to collect on debt purchased in the aftermath of the country’s 2001 default. Although it markets itself as a coalition, ATFA has in the past had to remove several groups from its list of supporters after the Wall Street Journal found that they had never heard of the organization, much less supported it. Over the years, ATFA has gone to creative lengths both to lobby the hedge funds’ case and to generally defame Argentina, by alleging nefarious ties with Iran, for example.

One of ATFA’s main goals has been to divert attention away from the fact that the fight over Argentina’s debt fundamentally hinges on the heavy-handed tactics of large hedge fund owners, like Elliott’s Paul Singer, to collect a lot of money on distressed sovereign debt. These tactics are not pretty, and these hedge funds rightly earned the name “vulture funds” long before the Argentina case, as CEPR Co-Director Dean Baker has pointed out. So one of ATFA’s strategies has been to highlight how Argentina’s actions have supposedly hurt the “little guys” and how the vulture funds’ case somehow represents a fight for these underdogs.

ATFA has not been great at coalition building, however. To date, perhaps their most successful lobbying push was their attempt to portray Argentina as cheating retired educators. Before 2010’s bond restructuring, one of the holdout creditors was TIAA-CREF, which had a relatively small stake in the defaulted bonds. Jumping on this fact, ATFA alleged that Argentina seriously harmed the pensions of retired academics, hosting an event [PDF] on the default’s effect on teachers, coordinating [PDF] letters [PDF] to members of Congress, and launching an ad campaign  [PDF]. ATFA’s ad lists the members of the “American Task Force Argentina Educator Coalition” who support the vulture fund’s case: the Alabama, Georgia, and Colorado conferences of the American Association of University Professors (AAUP), the Nebraska Community College Association, and lastly, the Nebraska Retired Teacher Association. That’s it. There was no participation from the national AAUP or TIAA-CREF in this campaign; in the case of the Georgia conference of the AAUP, it’s unclear if the collaboration with ATFA involved the participation of anyone but the group’s then-executive secretary. When Congressman Eric Massa later pushed ATFA-backed legislation to punish Argentina over the debt issue, ATFA’s efforts may have helped the bill to garner some extra co-sponsors. But Massa’s ATFA legislation died, just like all of its later versions.

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Do the Holdout Hedge Funds Hold Argentine Credit Default Swaps? Print
Written by Peter Hayakawa   
Wednesday, 13 August 2014 13:34

The International Swaps and Derivatives Association (ISDA), the body that governs credit derivatives, recently declared a “failure to pay” credit event that triggers payment of credit default swaps (CDS) on Argentina’s debt. Bloomberg and others have raised the question of whether Paul Singer’s Elliott Associates or other hedge funds involved in the case against Argentina hold any of these CDS—and may be forcing a default and profiting from their CDS positions.

Elliott’s lawyers have denied that the firm owns CDS on Argentina’s debt, and a December, 2012 Reuters report cites an anonymous source saying the firm did have some, but no longer does. When asked by Judge Rosemary Pooler in a February 27th hearing in the Second Circuit Court of Appeals if Elliott’s NML owned any of the CDS, Elliott’s lawyer, Ted Olson, gave an evasive answer:

“I don’t know that that’s true,” Olson said. “I’m informed it isn’t true. But if it was true, it would be utterly irrelevant.”

Bloomberg pointed out that it was unclear if the denial applied to just NML Capital the Elliott subsidiary represented in the case, or to all of Paul Singer’s firms.

ISDA Decision

On June 20th, the law firm Schulte Roth & Zaber (SRZ) sent a memo on behalf of an anonymous holder of Argentine CDS to the ISDA Credit Derivatives Determination Committee (DC) asking them to decide whether Argentina had defaulted on its debt, and also arguing that Argentina’s public statements were tantamount to a repudiation of its restructured bond payments, urging them to rule that Argentina had triggered a “repudiation/moratorium” credit event.

SRZ wrote that their client’s CDS were set to expire on the 20th of June, and that if the ISDA DC ruled that “repudiation/moratorium” had occurred, this would extend the life of the CDS.

The ISDA DC did rule that Argentina had defaulted through a “failure to pay” credit event, which is different than a “repudiation/moratorium” credit event in that it apparently doesn’t extend the life of expired CDS, though it does trigger payment of non-expired CDS. ISDA DC later confirmed that Argentina’s public statements did not constitute a “repudiation” credit event. The ‘no’ vote was unanimous among the DC’s 15 members, including Elliott Management, which is a non-dealer voting member.

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Cold Warrior Criticizes Cold War and Drug War, Hires Cold Warrior to Promote Drug War Print
Written by Jake Johnston and Peter Hayakawa   
Tuesday, 12 August 2014 14:03

After penning an op-ed which blames the U.S. backed cold war and drug war for leading to the recent surge in migration from Central America, the Guatemalan President has hired a cold warrior to lobby the U.S. for increasing drug war cooperation. Confused yet? Okay, let’s start over.

Last week, Guatemalan President Otto Perez Molina wrote an op-ed in the Guardian arguing that the U.S. shared responsibility for a legacy that has spurred the current migration crisis involving the surge of unaccompanied Central American children arriving at U.S. borders:

…the so-called cold war had one of its hot spots in Guatemala…Communist and anti-communist ideologies created in Guatemala one of the bloodiest conflicts in Latin America, with weapons and money mostly from countries outside the region. More damaging was that for decades governments diverted resources from social and economic programs to security and defense.

Nonetheless, after the curse of the cold war, we faced another war: the war on drugs. Again based on ideological motivations, this new war diverted scarce funding from policies to foster education, health and employment to programs to block the flow of drugs from producer countries in South America to the consumer countries in the north. The failure of the war on drugs is widely recognized today, both for its limited capacity to stop drug flow, and its terrible consequences, expanding violence, corrupting institutions and weakening the rule of law.

While Perez Molina makes some fine points in his op-ed, he also completely leaves out his own role in the exact policies he’s criticizing. During the Cold War, Molina was a Guatemalan military officer involved in a “scorched earth” campaign that resulted in hundreds of thousands of deaths and he has even been personally linked to serious human rights violations from this time period. Pot, meet kettle.

The situation took a turn for the ironic this week when O’Dwyers reported that Guatemala had hired notorious and far-right cold-warrior Otto Reich to lobby on the government’s behalf in Washington. Reich, who’s also been pretty much at the center of every lousy U.S. policy in the region since the Cold War, will be paid over $100,000 to, among other things:

Design a strategy to move forward on the change of narrative from Guatemala to Washington, D.C., allowing representatives in the North American political parties that are willing to abandon the reference to Guatemala of the 1970’s and 1980’s, as well as the last century, and are eager to talk about the present and future of Guatemala of the 21st century.

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Wall Street Journal Uses Bogus Numbers to Smear Argentine President Print
Written by Jake Johnston and Mark Weisbrot   
Wednesday, 06 August 2014 10:51

Last week the Wall Street Journal had a front page article on the net worth of Argentina’s first family since 2003, the year Néstor Kirchner was elected president. Based on financial disclosures with Argentina’s Anti-Corruption Office, the Wall Street Journal reported that, “the couple's net worth rose from $2.5 million to $17.7 million” between 2003 and 2010. Implying that such returns must involve some sort of corruption, the Journal writes, a “lot of people in Argentina want to know where that money came from.”

But there is a serious problem with the way the data are presented here. The Journal is reporting the Kirchners’ net worth in dollars, without adjusting for local inflation. This makes the increase look much bigger than it is, since Argentina had cumulative inflation of nearly 200 percent during these years, according to private estimates.

WSJ Kirchner wealth

If the Wall Street Journal had taken inflation into account then the Kirchner’s net worth would have looked quite different. From $2.5 million in 2003, the Kirchners’ real net worth increased to around $6.1 million in 2010.

Simply adjusting for inflation takes away more than three-quarters of the Kirchners’ gain. Should the Journal have known this and adjusted for inflation? The question answers itself. We won’t speculate about anyone’s motives.

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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.

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