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Jamaica and the IMF: How Not to Learn From Past Mistakes Print
Written by Jake Johnston   
Thursday, 24 January 2013 14:45

Once again it seems that Jamaica and the IMF are on the verge of a new lending agreement. And once again, it sounds like more of the same failed policies as before. Last week, after a three-day retreat with Cabinet members, the AP noted that Prime Minister Portia Simpson Miller “said the Cabinet recently signed off on all fiscal consolidation matters to forge a new IMF deal.” Reason to celebrate? Not so fast. As Jamaican analyst Dennis Chung was quick to point out, “further expenditure cuts and tax increases will only pave the way for further economic contraction.” The Economic Commission for Latin America and the Caribbean (ECLAC) is predicting even more job cuts in 2013 precisely because of the impending IMF agreement. Unemployment is already nearly 13 percent.

As Chung notes, also relevant to the discussion is the recent research by the IMF showing that austerity policies have much larger negative effects than previously thought (at least by the IMF). But one need not look outside Jamaica or do a regression analysis to see the deleterious effects of austerity. Faced with extremely high debt payments, and having spent the last few years trying to court the IMF by cutting spending (following a previous IMF agreement which mandated such austerity), Jamaica has been a prime example of the pitfalls of this failed economic policy making. Debt levels haven’t come down, economic growth hasn’t returned, and the downward spiral has continued apace. Even a few dissident IMF directors have expressed concern.

Jamaica was the only country in the Latin American and Caribbean region to see three consecutive years of negative growth from 2008-2010 according to ECLAC, and it hasn’t exactly rebounded nicely since. GDP actually shrank in the first half of 2012 compared to 2011 and ECLAC predicts a paltry 0.1 percent growth rate for 2013, “assuming that an agreement is signed with IMF,” as the Jamaica Gleaner reported.

Unfortunately, while Jamaica needs serious debt relief in order to free up resources for the type of investment that will get the economy moving again, that seems to have already been taken off the table. Last week Finance Minister Peter Phillips stated, “[l]et me make it clear, since there are lot of rumours around, no haircut is contemplated.” The rumors concerned the possibility of a second debt exchange, but the main problem with the first one was that it never went far enough and there was no haircut. Just like with the continued austerity policies, the IMF in Jamaica is providing a great example of how not to learn from past mistakes. 

 
The Man Who Ousted the President is Now Running for President Print
Written by Arthur Phillips   
Thursday, 24 January 2013 11:52

The Associated Press recently reported that General Romeo Vásquez Velásquez, who led the military-backed coup against democratically elected president Manuel Zelaya in June 2009, would himself run for president in this year’s election. The move has been anticipated since late 2011, when Vásquez, along with a number of ex-military officers, formed the new Honduran Patriotic Alliance party.

Putting aside the irony of Vásquez’ candidacy, his announcement serves as a reminder of the political violence and institutional breakdown that has plagued the Central American country for the three-and-a-half years since he executed the coup. In November 2009, 5 months after Zelaya was dispatched, the illegitimate government proceeded with national elections, hoping these would in effect white-wash the coup. The Obama administration did all it could to ensure that this effort was successful, and current president Lobo was elected under a cloud of repression and impunity.

Today, violence against dissidents, journalists, women, union leaders, activists, the LGBT community and others continues unabated. And while the State Department has withheld some aid to the Honduran military and police, it continues to work closely with the government on counternarcotics efforts with little accountability. The U.S. government has still not conducted an investigation into an incident on May 11, 2012, in which the DEA was involved and in which State Department helicopters were used, that left four innocent people dead.

Though political repression still runs rampant, the opposition LIBRE party, led by the former president and his wife Xiomara Castro, continues to organize in advance of upcoming elections. Party leaders have announced that they will escalate their presence through a series of public demonstrations, the first of which is slated for today, January 24. Yet as long as the U.S. government keeps supporting the Honduran armed forces and working directly and without oversight in drug interdiction efforts, those in power in Tegucigalpa may have little incentive to address the dire human rights situation.

 
Does Guatemala Include “Extrajudicial Executions” in its Calculation of National Murder Rates? Print
Written by Sara Kozameh   
Friday, 18 January 2013 17:30

On January 14th, a day marking the one-year anniversary of his administration, Guatemalan president Otto Pérez Molina presented his first annual report on the state of the country. In his speech, Pérez Molina, a former general, graduate of the School of the Americas and accused of being  a war criminal implicated in the systematic use of torture and acts of genocide, hailed a “historic 10 percent reduction in violent crime” and “an almost five point drop in the homicide rate per every 100,000 inhabitants” from the previous year. Guatemala currently has one of the highest murder rates in the world (41 murders per every 100,000 inhabitants); it had a total of 5,122 murders in 2012. Ironically, while President Pérez Molina was reporting back to the nation on crime statistics and murder rates that morning, the mayor of the town of Jutiapa had just been shot down, dying almost immediately of sixteen bullet wounds. 

In the 1980s, the “scorched-earth” campaign of the Guatemalan military tortured, slaughtered and massacred entire villages, resulting in the deaths of over 200,000 people. Under the dictatorship of General Efraín Ríos Montt from 1982-83 state violence in Guatemala has been said to have been the most brutal. A year ago, after years of attempts by human rights defenders to put him on trial, Ríos Montt was charged with genocide in Guatemalan courts. He has since filed two petitions to acquire amnesty from the law, the second of which is still awaiting a ruling. Last month Pérez Molina, who himself served under General Ríos Montt during the 1980s, issued and then suspended a decree stating that it would stop adhering to the Inter-American Court of Human Rights on cases of crimes against humanity and genocide that occurred before 1987,  which human rights defenders say could be an attempt to prevent legal challenges from taking place.

In 2011, when presidential elections were held, Guatemalan and international human rights organizations warned of the danger in electing a former general implicated in “scorched earth” campaigns and extrajudicial executions, pointing out that militarization and repression would likely escalate if Pérez Molina were to win. 

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The Guardian vs. the Conventional Wisdom on Venezuela Print
Written by Alex Main   
Wednesday, 16 January 2013 15:35

Earlier this month my colleague Dan Beeton noted that the major media, after incorrectly predicting a close race in Venezuela’s presidential elections, had quickly reverted to the familiar “gloom and doom” predictions for Venezuela’s economic future.  Additionally, many recent opinion and news pieces have echoed the Venezuelan opposition’s view that the decision to postpone Chávez’s inauguration was legally questionable.  On January 8th, a Chicago Tribune editorial neatly summarized the prevailing wisdom: “Venezuela after Chavez will likely be plagued by political turmoil and economic struggle.”

Just as it appeared that the current conventional wisdom on Venezuela had spread and hardened irreversibly throughout the major media, on Monday the UK daily The Guardian published an editorial entitled “Venezuela, defying predictions – again.”  The piece deftly takes on a few commonly held views found in much of the media coverage of Venezuela.

The postponement of Chávez’s inauguration “is not a coup,” the Guardian states. In fact, “the constitution allows for a president-elect to be sworn in by the supreme court, and the postponement has now been endorsed by the court itself.”  It’s worth noting that head of the Organization of American States José Miguel Insulza, the government of Brazil and a number of other regional governments have also publicly agreed with this assessment, which we explored in detail last week.  Few U.S. media reported on the international acceptance of the decision to postpone Chávez’s swearing-in, instead preferring to focus on the views of members of the Venezuelan opposition, some of which lack consistency.  For instance, opposition leader Henrique Capriles called on the Supreme Court to rule on the constitutionality of the postponement, only to later reject the Court’s determination that the move was constitutional.

The Guardian editorial also points out that the frequent predictions that rivals within the pro-government coalition “would begin falling out have not materialized” and that:

dire warnings about a mismanaged economy, with soaring inflation, crumbling infrastructure and currency control problems, also need examining with care.  After all, the Venezuelan economy has grown for nine successive quarters, has a relatively low debt burden, and the fall in inflation indicates a government with the ability to control inflation while maintaining growth. Oh, and Venezuela is sitting on the world's largest oil reserve.

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NPR Examines One Side of Honduran “Model Cities” Debate Print
Written by Dan Beeton   
Tuesday, 15 January 2013 17:36

Honduran newspaper El Heraldo reports that a plan for the creation of “model cities” was reintroduced in the Honduran congress yesterday, months after the Supreme Court declared earlier such plans to be unconstitutional. Congress President Juan Orlando Hernández said that he did not expect the plan to run into the same legal problems as last year because he had taken into account the Supreme Court’s arguments for its decision.

According to El Heraldo, the bill proposes the creation of the 12 special regimes of various kinds which “shall enjoy operational and administrative autonomy.” Among these are “ciudades autónomas.”

Earlier this month, NPR’s This American Life profiled the “model cities” or “charter cities” concept for Honduras in a report that only presented one side of the debate. The report follows reporters Chana Joffe-Walt and Jacob Goldstein’s previous account of the Honduran “model cities” concept for NPR’s Planet Money, and an early examination of the plans in The New York Times Magazine by Planet Money co-creator Adam Davidson.

There is much important context that the This American Life “model cities” profile left out. First, the proposed “model cities” could impact the land rights of Garifuna (Afro-indigenous) communities in the area.  There was little mention of opposition to the “charter cities” idea inside Honduras, outside of lawyers and the Supreme Court decision. And crucially, Honduras has been in a state of relative chaos since the coup, with a breakdown of institutions and the rule of law leading to, among other things, Honduras having the highest murder rate in the world (now at 91 per 100,000 people, according to the UN) (a fact that the This American Life report does note).

As The Americas Blog readers know well, there is a strong political dimension to this violence. As human rights organizations from Human Rights Watch to Amnesty International to the International Federation for Human Rights have described, there has been political repression since the coup, targeting opponents of the coup and of the current Lobo government with assassination, forced disappearance, torture, rape, kidnapping, and other abuses. Journalists, lawyers, opposition party candidates, the LGBT community, and women have also been targets, with attacks against each of these groups spiking since the coup. The Garifuna communities are another targeted group, with, e.g., land barons in the Zacate Grande region attacking community groups and radio stations. Honduras is now widely recognized as one of the most dangerous countries to be a journalist, with some 23 journalists murdered since President Lobo took office in January 2010 according to the Committee to Protect Journalists.

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What the Venezuelan Constitution Does, and Does Not, Say Print
Written by Dan Beeton   
Wednesday, 09 January 2013 18:28

The Venezuelan government announced Tuesday that President Hugo Chávez will miss his swearing in on Thursday, January 10, when his new term is set to begin. The Supreme Court ruled today that his swearing in tomorrow would not be necessary for “continuity” of his administration, and that he could be sworn in before the Court at a later date.

Returning from a meeting with Venezuelan Vice-President Nicolás Maduro, Brazilian Foreign Minister Marco Aurelio Garcia said Tuesday that Brazil regards as constitutional the extension of time needed to swear in Chávez as president for his new term, saying the current debate can be solved through "constitutional means,” as Venezuela’s El Universal newspaper reported. Several heads of state or other high level officials from Latin American governments will be present at events at the presidential palace in Caracas tomorrow.

Despite some confusion and deliberate distortions in the media and among Venezuela observers, the Venezuelan constitution (English PDF version here; Spanish version here) is clear on procedure regarding what is allowed if the president-elect is unable to be sworn in in Caracas.

For example, Rep. Ileana Ros-Lehtinen (R – FL), who has infamously called for Fidel Castro’s assassination in the past, issued a hyperbolic statement accusing Chávez of attempting to subvert the constitution:

The delay of his swearing-in is yet another example of the trampling of the constitution by this despot. The Venezuelan constitution states that the leader of Venezuela needs to take the oath of office on January 10 in front of the National Assembly or the Venezuelan Supreme Tribunal of Justice.

But Article 231 states, in part, “If for any supervening reason, the person elected President of the Republic cannot be sworn in before the National Assembly, he shall take the oath of office before the Supreme Tribunal of Justice.” No deadline is mentioned, contrary to what Ros-Lehtinen claims. Ros-Lehtinen also stated:

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“A Natural Experiment”: William K. Black Compares the Latin American Left to the “Washington Consensus” Print
Written by Dan Beeton   
Monday, 07 January 2013 16:37

William K. Black, former deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement and now Associate Professor of Economics and Law at the University of Missouri – Kansas City takes on Alvaro Vargas Llosa and other “neoliberal” pundits in a long post today at Huffington Post. Noting how Vargas Llosa, P.J. O’Rourke and others have condemned the left-leaning heads of Latin American states as “idiots” and “stupid,” Black examines the track record of the neoliberal economic model versus the alternatives being pursued by countries such as Ecuador:

We have run what economists refer to as a "natural experiment." At the same time that Latin Americans were overwhelmingly rejecting key neo-liberal aspects of the Washington Consensus the Eurozone and the United States moved rapidly in the opposite direction by adopting ever more extreme neo-liberal dogmas. These dogmas created what criminologists refer to as a criminogenic environment -- an environment where the incentives are so perverse that they can produce epidemics of "control fraud." These fraud epidemics directly drove the financial crises in the United States, the United Kingdom, Ireland, and Iceland and indirectly triggered crises by causing global systemic shocks. AVL does not wish to discuss the predation by the world's most elite bankers.

The loss of the young (through emigration), employment, output, income, and wealth and the growth of poverty and inequality that resulted from the most extreme neo-liberal policies are staggering. In the U.S., over 10 million Americans lost their jobs or could not obtain jobs that would have been produced by a healthy economy. Spanish unemployment is nearly 5 million. The crisis is so great that it is now common for Irish and Italian citizens to emigrate as soon as they earn their university degrees. The Financial Crisis Inquiry Commission reported that the loss of U.S. wealth in the household sector alone was estimated at over $12 trillion -- a trillion is a thousand billion.

And concluding:

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Pundits Who Had Predicted a “Tight” Presidential Election in Venezuela Now Predict Doom and Gloom Print
Written by Dan Beeton   
Friday, 04 January 2013 16:45

As we have previously noted, many pundits and much of the international media predicted a close presidential election in Venezuela in October, if not an actual victory by opposition candidate Henrique Capriles Radonski. But in the end, the vote was not close, as we had predicted it would not be in a paper we released on October 4. Chávez won by 11 percentage points – just a little over the 10.7 point victory that poll averages had suggested. As we have also noted, the conventional wisdom on Venezuela in the U.S. media and the economics profession (including the IMF) has repeatedly predicted sharply more negative outcomes for the Venezuelan economy than have materialized.

Now, as speculation runs rampant over the state of Hugo Chávez’s health, many of the same voices that predicted a close election in October are again predicting doom and gloom for Venezuela.

For example, in an op-ed just before the October election, the Inter-American Dialogue’s Michael Shifter wrote that “the election appears to be very tight.” In the New York Times’ Room for Debate today, Shifter details a list of problems that he says Chávez’s successor will need to tackle, “gradually” and tactfully in order to avoid some kind of catastrophe:

By now, it is easy to recite the litany of problems facing Venezuela.

At the top of the list are a huge fiscal deficit (around 20 percent) and high inflation (just under 18 percent), decaying infrastructure, mismanaged petroleum sector, shortages of basic goods, periodic blackouts and widespread crime and insecurity. All of these derive in some measure from severe institutional weaknesses, a product of Hugo Chávez’s one-man, 14-year rule. Whether his successor comes from his camp or from the opposition, reform and improved governance will be essential.

In a quickly-dated October 5 op-ed titled “How Hugo Chávez Became Irrelevant,” blogger Francisco Toro wrote, “Mr. Chávez is facing a tight re-election race against Henrique Capriles Radonski, a 40-year-old progressive state governor who extols the virtues of the Brazilian model,” and a little over a week before that wrote “Two weeks out, though, two of Venezuela's three best-regarded pollsters show him in a statistical dead-heat with the president. By crafting a message to appeal to a truly nationwide audience, he's given himself a real fighting chance to pull off a stunning upset on Oct. 7th.”

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It’s Official: Iran’s Presence in the Region a Threat to U.S., according to Congress and Obama Print
Written by Alex Main   
Wednesday, 02 January 2013 15:46

En Español

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. 

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Battle Over Secretary of Defense Nomination May Affect Latin America Policy, Too Print
Written by Mark Weisbrot   
Saturday, 22 December 2012 13:08

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. 

 
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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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