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NAFTA Advocates Continue to Make Misleading Claims Print
Written by Stephan Lefebvre   
Wednesday, 16 July 2014 16:36

In an effort to defend NAFTA and promote similar agreements, the Peterson Institute for International Economics (PIIE) – Washington’s most influential think tank on international economic policy – had a full day of events yesterday. The program highlighted one of their recent publications [pdf], which seeks “not to rehash old claims that may have been overstated but to clear the air so that the benefits and challenges of trade can be examined in an objective light.” In spite of this disclaimer, the authors grossly overstated the benefits of NAFTA for Mexico, and put forward a number of misleading claims, including a particularly egregious bait-and-switch used to justify a rant against the economic policies of the “Andean-3” aka Bolivia, Ecuador and Venezuela. It is a good example of how ideology can trump facts when it comes to commercial agreements made in Washington.

Earlier this year, CEPR published a paper giving an overview of the Mexican economy in the NAFTA era (“Did NAFTA Help Mexico? An Assessment After 20 Years”), so I will focus here on the claims made about Mexico by the PIIE economists. In terms of their bottom line for Mexico, the authors’ findings concur with our conclusions. They say that “Mexican growth in the NAFTA era has been disappointing.” But they also argue that without NAFTA Mexico’s economy would be $170 billion smaller. In other words, they attribute half of Mexico’s (per capita) growth rate to trade in goods and services stimulated by NAFTA (see table below.) Given Mexico’s population (about 118 million), this amounts to a payoff of $1,441 per person, or about $4 per day. In a country where over 27 percent of the population lives on less than $4 a day – in rural areas it is over 48 percent of the population – this would be very significant. In reality, results such as these are produced by economic models that are highly sensitive to parameters which the researchers themselves determine, so it is easy to end up with results that corroborate one’s worldview.

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Does the US Have a Double Standard When it Comes to Spying on Latin America? Print
Written by Dan Beeton   
Friday, 11 July 2014 10:29

Brazilians may have little love for Germany following Brazil’s historic World Cup loss to the German team Tuesday, but the two countries do have something in common: both have notably been targeted for espionage by the U.S. Yesterday, U.S.-German relations suffered a new blow after Germany announced it was kicking out the CIA station chief over revelations that an employee of the German defense ministry may have passed secrets to the U.S. government. Just last week a member of Germany’s intelligence service was arrested, accused of selling information to the CIA. These scandals follow disclosures made available by Edward Snowden last year of NSA spying on Germans, including German Chancellor Angela Merkel. Snowden has also revealed extensive political and economic spying by the NSA on Brazil.

The Washington Post reported yesterday:

“The representative of the U.S. intelligence services at the Embassy of the United States of America has been requested to leave Germany,” government spokesman Steffen Seibert said in a statement Thursday.

Seibert said the request for the CIA official’s departure was made “against the backdrop of the ongoing investigations of the Federal Prosecutor General as well as the questions pending for months about the activities of the US intelligence services in Germany, for which the Lower House of Parliament has also established a parliamentary inquiry committee.”

German officials have also been angered by the revelations of former National Security Agency contractor Edward Snowden of widespread U.S. surveillance in Germany. Among the targets was Chancellor Angela Merkel’s cellphone, an operation that has since been halted.

Germany is a key partner for U.S. intelligence, and Germany’s allegations and response are no doubt being taken very seriously by both the Obama administration and the media. While the administration clearly hopes it can downplay the scandal -- and while the CIA chooses to Tweet about its robotic fish rather than publicly address the incident (h/t Jonathan Schwarz) -- officials have underscored the gravity of Germany’s response in anonymous comments to press.  The AP reported:

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U.S. on Its Own, Once Again, at OAS Meeting on Argentinean Sovereign Debt Print
Written by Alexander Main   
Wednesday, 09 July 2014 16:22

Once upon a time, the U.S. government ran a very tight ship at the Organization of American States (OAS), a multilateral institution created by Washington at the start of the Cold War.  Though the OAS’  1948 Charter calls on its members to uphold democracy and respect the principle of non-intervention, for decades the U.S. supported military coups against democratic governments and intervened militarily around the hemisphere without serious opposition from within the regional body.  In 1962, the U.S. rallied a majority of member states behind a resolution to suspend Cuba’s membership in the organization and, in the years that followed, was successful in preventing the OAS from taking action against U.S.-backed Latin American dictatorships.

Until recently, the U.S. could systematically rely on the support of a solid group of rightwing allies at the OAS to defend its agenda.  But, as a result of the region’s far-reaching political shift to the left, the tide has clearly changed.  At the OAS General Assembly in 2009, the U.S. reluctantly joined the rest of the organization’s member countries in lifting the suspension on Cuba’s OAS membership.  After Honduras was expelled from the OAS following the June 2009 military coup in Honduras, the majority of members resisted U.S. efforts to restore the country’s membership until June of 2011 when deposed president Manuel Zelaya was finally allowed to return.  And in March of 2014, after working with the rightwing government of Panama to force an OAS discussion on opposition protests in Venezuela, the U.S. came up worse than empty handed.  Though the U.S. sought a resolution condemning the government of Venezuela and calling for OAS mediation, the member states – minus the U.S., Panama and Canada – backed a resolution that declared “solidarity and support” for Venezuela’s “democratic institutions” and for a process of dialogue already underway. 

Last week the U.S. once again stood alone, backed only by the rightwing government of Canada in its opposition to an OAS resolution supporting Argentina in its fight against vulture funds and the ruling of a judge in New York.   As Argentina news hounds and CEPR readers are well aware, the U.S. District Judge in New York, Thomas P. Griesa, ruled that Argentina would have to pay two hedge funds, aka vulture funds, the full value of Argentinean debt that the funds had bought for around twenty cents on the dollar. Griesa didn’t seem to care that 93 percent of the holders of the country’s defaulted debt had signed on to restructured debt agreements in 2005 and 2010.  In order to enforce his decision, Griesa’s ruling blocked Argentina from paying interest to the holders of the restructured bonds without first paying off the vulture funds.

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There Has Never Been a Better Time to be Forced into Exile for Being Gay in Honduras Print
Written by Eileen O'Grady and Stephan Lefebvre   
Friday, 20 June 2014 15:25

That seems to be the take-away in the Wall Street Journal’s (WSJ) front-page story on asylum claims from Honduras, which alternatively ran with the headlines “If You’re Seeking Asylum, It Helps to be Gay” and “The Battle for Gay Asylum: Why Sexual Minorities Have an Inside Track to a U.S. Green Card.” In his news story for WSJ on Honduras, Joel Millman tells a familiar story in which some members of a persecuted minority, namely LGBT Hondurans, can find some relief from their situation thanks to the U.S.’s liberal values and “a growing willingness by Americans to embrace alternative lifestyles,” though they must leave their countries of origin in order to benefit from enlightened asylum laws.

While much of the piece is offensive and inaccurate (Nathaniel Frank has great take-down in Slate that is worth reading), the main problem is that it ignores the most significant event in recent Honduran history: a successful military coup in 2009 that ousted President Manuel Zelaya and triggered a wave of human rights violations and widespread political repression. Attacks on LGBT Honduras increased greatly after the U.S.-supported coup – organizations in Honduras count at least 25 murders of LGBT individuals between 1990 and 2005, but more than 116 murders since 2008 – and so while it might be true that many Hondurans have benefited from successful asylum applications and are now living in the United States, this is clearly not the full story.

The U.S.-backed coup in 2009 sparked a wave of violence against activists, the political opposition, and members of the LGBT community, with as many as 5,000 reports of human rights violations last year in the northern region alone. LGBT activists point out connections between violence perpetrated against them for their identity and for their involvement in resistance to the dictatorship and its successor regime. Indeed, while targeted hate crimes are often not overtly related to targets’ political involvement, LGBT activists note that it’s important to recognize the embedded nature of coup-opposition activism in many LGBT advocates’ work. Members of the LGBT community, including activists, are obvious targets for right-wing violence.

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Colombia Peace Talks Survive Elections, May Have Lasting Implications for Regional Integration and US-Led “War on Drugs” Print
Written by Peter Hayakawa   
Thursday, 19 June 2014 13:41

Ending a very close race, incumbent Juan Manuel Santos won a decisive five-point victory Sunday in Colombia’s second round of presidential elections, beating challenger Óscar Iván Zuluaga, who had won the first round in an upset. The campaign centered on one issue: the future of the Santos-led peace process under way in Havana between the Colombian government and the rebel group FARC that may have the potential to end a half century of civil war.

Zuluaga, who had been hand-chosen by Santos’ predecessor, Alvaro Uribe, and ran in opposition to the peace talks (though he had softened his position after the first round), quickly conceded defeat this Sunday. Uribe, however, wasted no time in claiming that the elections had been marred by “massive fraud,” a charge quickly rejected by international electoral observers. 

Santos’ victory has certainly dealt a major blow to ‘Uribismo,’ as the rightwing movement around Uribe is known. Colombians largely seem to support the peace process as well as efforts to improve relations with neighboring countries Venezuela and Ecuador, and it looks as though few were convinced by Uribe’s wild charges during the campaign that the peace process would open the path to “Castrochavismo,” allowing the “FARC to run this country from Havana.” Uribe has long loomed over Colombian politics, but Zuluaga’s defeat signals that his influence may be waning, even on the political right. Meanwhile, Santos’ support of the peace talks won him the backing of some of Colombia’s most prominent business people, in addition to endorsements from indigenous groups and left-wing coalitions.  

Uribe might have thought twice about investing so much political capital in opposing the negotiations. While it is true that the peace talks had the support of Venezuela and Cuba, they also had the support of virtually every other country in the region, as well as the United Nations, in addition to broad domestic support. More to the point, the peace talks have the support of the United States. Just a month ago, on May 18th, U.S. Secretary of State John Kerry reaffirmed U.S. support for the peace process, which, given that they were the main election issue, arguably amounted to an endorsement of Santos.

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The World Cup Bus to Nowhere Print
Written by Brian Mier (Guest post)   
Monday, 09 June 2014 11:28

The Rio de Janeiro city government inaugurated the most expensive public works project officially connected to the World Cup last week.  Although construction of some of the stations is expected to continue throughout the next few months, a new Bus Rapid Transit (BRT) corridor called the Transcarioca now connects Galeão International Airport to the wealthy beachside neighborhood of Barra da Tijuca, 39 kilometers away, without going anywhere near the city’s downtown, Maracanã soccer stadium or the tourist hotel neighborhoods on the city’s south side. The final cost of the project is estimated at R$2.2 billion (approximately US$970 million). Photos and videos of shoddy workmanship have cropped up on the Internet, and according to O Dia, a local newspaper, the inaugural voyage had only one paying passenger.

Despite spending around R$4 billion preparing for the World Cup, Rio de Janeiro, with a metropolitan area of over 12 million people, remains one of the world’s largest cities with no direct public transportation link between its international airport and downtown. Officially billed as a means by which World Cup tourists will move around the city during the games, the only apparent use of the Transcarioca will be to connect tourists to nearby metro or train lines which could have just as easily been connected to the airport if it weren’t for what author and geographer Chris Gaffney calls the “mafiaesque” influence that the city’s 49 private bus companies have on the city’s transportation policy.

The Brazilian government estimates that it has allocated R$25.8 billion on the World Cup, divided roughly in thirds between stadium construction and reformation; airport and infrastructure improvement; and public transportation projects. Although there is a large public outcry from across the political spectrum over the amount of money spent, especially on stadiums, some of the comparisons made with things like health and education have been blown out of proportion.  Even Folha de São Paulo newspaper, a traditional enemy of the ruling PT party, admitted recently that: 1) the total amount spent on the World Cup over the course of seven years is equivalent to around one month’s spending on public education; 2) most of this money was lent by the BNDES (the Brazilian National Economic and Social Development Bank); and 3) a large proportion of the money lent went to the private sector, as in the case of stadium construction and reformation in cities like São Paulo and Curitiba, and will be paid back with interest.

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John Kerry on the Latin American Economies: Getting it Half-Right Print
Written by Mark Weisbrot   
Wednesday, 04 June 2014 16:34

On Sunday U.S. Secretary of State John Kerry published an op-ed in the Miami Herald, in which he gave the official Washington view on democracy and economic progress in Latin America.

“Not so long ago, naysayers doubted that the growth of democracy in Mexico and elsewhere across the Americas would translate into better lives for the people who live there,” he writes.

And then the bait and switch: “The last decade has been a story of democracy and economic achievement in Latin America and the Caribbean. The region’s economies grew at a rate of 4 percent a year, trade with the United States nearly tripled, and more than 73 million people were lifted out of poverty.”

Now the part about the regional growth rate is true. But Mexico didn’t share in the recovery:

Figure 1. Mexico and Latin America: Average Annual Real Per-Capita GDP Growth, 1960-2013
Mexico v LA blogpostimage

The above figure used GDP growth per person, which is a better measure than the overall growth rate that Kerry uses (since population growth doesn’t increase living standards). Note that Latin America and the Caribbean did in fact experience a growth rebound in the past decade. Average annual growth was just 0.4 percent annually from 1980-2000 – a long-term growth failure that is uncommon in the history of capitalism.

The region grew at a vastly better 2.0 percent annual rate from 2000-2013, despite the Great Recession. But not Mexico, which averaged only 0.6 percent annually, slightly worse than during the lost decades. The poverty rate in Mexico in 2012 (52.3 percent) was as bad is it was in 1994 (52.4 percent). So much for “democracy and economic achievement” in Mexico. The U.S. government of course is reluctant to acknowledge this because Mexico has been run by friendly right-wing governments for decades, and NAFTA has been the model for subsequent commercial agreements.

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108 Members of Congress Urge Action on Political Repression and Human Rights Abuses in Honduras Print
Written by Stephan Lefebvre   
Monday, 02 June 2014 12:39

Last week, Secretary of State John Kerry received a letter regarding “egregious violations of human rights” in Honduras signed by 108 members of Congress. The letter represents the latest in an ongoing effort by social movements and citizens’ organizations in Honduras, diaspora community groups, U.S. solidarity activists and many others to reverse the trend of political repression and human rights abuses since the 2009 coup ousting President Manuel Zelaya.

Rep. Jan Schakowsky (D- IL), who circulated the letter, and early signers Rep. “Hank” Johnson (D- GA) and Rep. Sam Farr (D – CA) have all been engaged on this issue for years. The signers are concerned with human rights violations that have been documented under the National Party governments of President Porfirio Lobo and the current president, Juan Orlando Hernández. In terms of U.S. foreign policy, the most important change they are calling for is an end to U.S. government support and training for groups and individuals responsible for these human rights abuses.

The situation in Honduras is alarming. That country has the highest homicide rate in the world, with an average of 19 murders each day in 2013. Since targeted and politically-motivated killings have become an almost regular occurrence, people struggling for justice put their lives at risk. Based on the government’s record keeping, at least 33 journalists were killed during the previous president Porfirio Lobo’s term (2010-2014). As the congressional letter says, other targeted groups include “members of the LGBT community and indigenous and campesino activists.” Many lands rights activists have been killed, and the letter to Secretary Kerry explains how the Honduran government has allowed the homicides to take place with impunity:

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Argentina Reaches Paris Club Debt Deal without IMF Intervention; Creditors Come Under Fire Print
Written by Jake Johnston   
Friday, 30 May 2014 14:08

Locked out of international capital markets since its 2001 default, Argentina cleared a major hurdle on Thursday when it reached an agreement with the Paris Club, a grouping of 19 major economies, to resume debt payments and clear outstanding arrears. The Paris Club issued a statement, noting that:

The scheme offers a framework for a sustainable and definitive solution to the question of arrears due by the Argentine Republic to Paris Club creditors, covering a total stock of arrears of USD 9.7 billion, as of 30 April 2014. It provides a flexible structure for clearance of arrears within five years including a minimum of USD 1150 million to be paid by May 2015, the following payment being due in May 2016.

Economy Minister Axel Kicillof, who led the negotiations for the Government of Argentina, told a local radio station that, “Argentina is continuing its path of regularizing and paying off the debt that 40 years of neoliberalism left us,” Reuters reported.

Long thought to be a lynchpin of any possible deal, Argentina secured the settlement without the involvement of the IMF. President Fernández told the press, “It is the first time that a country negotiates without the intervention of the International Monetary Fund (FMI), and without ceding our independence.”

Argentina’s 2001 default followed years of following IMF prescriptions, which only exacerbated the crisis. Argentina broke off relations with the IMF in early 2006, paying back all of its outstanding debt to the Fund in one move. In a statement following the current deal, Eric LeCompte, Executive Director of Jubilee USA, praised the lack of IMF involvement:

“Argentina negotiated an agreement that keeps the IMF out of Argentina... IMF austerity programs have wreaked havoc in both poor and wealthy countries.”

Business News Americas reported that the creditors agreed to exclude the IMF “in return for a larger down payment by Argentina.”

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Ahead of House Vote, Members of Congress Warn Sanctions Could Undermine Dialogue in Venezuela Print
Written by Dan Beeton   
Wednesday, 28 May 2014 17:09

Ahead of a House vote to pass sanctions against Venezuelan officials today, 14 members of Congress sent a letter [PDF] to Secretary Kerry yesterday urging against sanctions, warning that they could undermine the dialogue process between the Venezuelan government and the opposition. Instead, the members - who include John Conyers (D-MI) and Hank Johnson (D-GA) - suggested that the U.S. should exchange ambassadors with Venezuela. The sanctions bill passed the House this afternoon with the support of a number of Venezuelan ex-pats in the U.S. who are mostly “from the middle class and upper middle class,” and is championed by anti-Cuba hawks in the House such as Ileana Ros-Lehtinen (R-FL), and Marco Rubio (R-FL) and Robert Menendez (D-NJ) in the Senate.

The letter also notes - unlike statements by sanctions proponents such as Ros-Lehtinen - that opposition protesters are responsible for some of the killings and other human rights abuses over the past few months, and that the Venezuelan government has taken steps to hold perpetrators accountable, with at least 19 arrests of "state agents." The letter states:

at least 42 people have died, including opposition activists, government supporters, bystanders and security agents.   Government security forces have been implicated in killings and accused of human rights abuses, and at least 19 state agents have been jailed in relation to these alleged abuses.  A number of fatalities and injuries have reportedly been caused by protesters themselves.  Security forces and civilians have been shot and killed while trying to remove barricades erected by protesters and motorcyclists have been beheaded by wire stretched across the road by protesters.

It also notes that the U.S. would be isolated regionally in sanctioning Venezuelan officials, as

While the United States government does not have to agree with its neighbors in the Western Hemisphere, it should take their opinions into account, as it takes European or African governments’ opinions into account in those regions.  The Union of South American Nations (UNASUR), the Caribbean Community (CARICOM), and the Organization of American States (by a 29-3 vote) have all issued statements that are in various ways supportive of the Venezuelan government and that call for the respect of the country’s democratic institutions.  A number of presidents and governments, including Michelle Bachelet of Chile, have publicly warned against attempts to forcibly remove the democratically elected government of Venezuela. As State Department spokesperson Jen Psaki noted on Wednesday, there are “no indications that other Latin American countries at this time would support sanctions on Venezuela.”

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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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