May 5, 2008 [LINK / comment]

Autonomy for eastern Bolivia?

By a vote of over 60 percent, the people of the state of Santa Cruz in Eastern Bolivia have approved a referendum that asserts more rights. It is a step toward a looser federation, but it may not have much practical effect, as the populist President Evo Morales has declared the vote "illegal." Santa Cruz is the wealthiest part of Bolivia and is a vital part of the nation's economy, because that is where most of the petroleum reserves are located, and the controversy over exporting hydrocarbons was one of the main issues that brought Morales to power. Morales is pushing for a vote to approve a major revision of the Bolivian constitution this month, aiming to centralize power in executive hands, supposedly for the sake of enhancing the rights of Indians in Bolivia. See Washington Post.

Since taking office two years ago, the young and energetic Morales has sharply polarized the nation of Bolivia by assuming despotic powers and using force against his opponents. He had urged his "grassroots" (mostly Indian) supporters to boycott the referendum, but even so an estimated 60 percent of eligible voters turned out. It is always ironic when demagogic leaders who pander to the masses get defeated in a free and open election.

Sexual rights for women?

They are also in the process of rewriting the constitution in Ecuador, and Maria Soledad Vela has proposed to include a provision giving women equal rights in sexual matters. That would be a major step forward in this culturally conservative society. "Opposition assembly member, Leonardo Viteri, accused her of trying to decree orgasm by law." See BBC.

April 28, 2008 [LINK / comment]

Farmers protest in Argentina

As world market prices for foodstuffs have soared in recent months, tensions have risen in Argentina, which is a major agricultural exporter. The government of Cristina Fernandez de Kirchner is in a quandary over the food price issue, as farmers contend with budget-squeezed consumers. True to her (Peronista) party's populist roots, she has chosen to raise taxes on exports of soybeans and other products, for the third time in the last six months. In response, farmers declared a three-week strike and put up roadblocks in various parts of the country. The ostensible purpose of the tax hikes was to keep local food prices low, but there is an added political benefit:

That revenue, she said, would allow the government to redistribute the agricultural sector's disproportionate wealth to the people most vulnerable to price hikes. SOURCE: Washington Post.

In other words, it would transfer wealth from the sector that produces the most desired commodity (soybeans and grain) to the sectors that are least productive. That, in a nutshell, is why most Latin American countries remain stuck in poverty or relative backwardness. A temporary truce will end on May 2, and further confrontations are likely in this country with a long record of chaos and instability.

For most Argentine people, eating meat at three meals a day is considered a basic entitlement, much like consuming gasoline is considered a birthright by many Americans. So while we are stuck in the mud on energy policy, Argentina is stuck in the mud on food policy.

April 24, 2008 [LINK / comment]

Food price summit in Caracas

In response to the soaring price of foodstuffs that has created hardship for poor people in many countries, four Latin American leaders held a summit meeting in Caracas, Venezuela this week. President Evo Morales of Bolivia, Daniel Ortega of Nicaragua, and Hugo Chavez of Venezuela, along with the vice president of Cuba, Chavez claimed the food price spike demonstrated the "historic failure of the capitalist model." In his typical populist style, ignorant of market realities or business practices, he blamed "intermediaries and speculators" for the food shortages. The United Nations World Food Program calls this a "silent tsunami" for countries that are highly dependent on food imports. See BBC. To my mind, that kind of rhetorical hyberbole only confuses the issue and makes it harder to solve the problem.

Thailand has faced heavy criticism in recent weeks for refusing to put controls on the price of rice. I learned to my surprise that Thailand is one of the world's biggest exporters of rice.

It will be interesting to see how Brazil reacts to this situation, since it has put heavy emphasis on the production of ethanol fuels made from sugar cane. Environmentalists who tout biofuels as the answer to the global shortage of hydrocarbon fuels are now learning what the consequences of that strategy are for human beings: hunger.

April 22, 2008 [LINK / comment]

Opposition wins in Paraguay

For the first time in over sixty years, an opposition party has won the presidential elections in Paraguay. Fernando Lugo, who used to be a Catholic bishop, won 41 percent of the votes. He leads the "Patriotic Alliance for Change," a coalition of center-left parties. Blanca Ovelar of the once-dominant Colorado Party won 30 percent; the party has suffered from bitter infighting in recent years. Ovelar would have been the third presidenta (female) currently serving in South America, after Chile's Michelle Bachelet and Argentina's Cristina Fernandez de Kirchner. The third-place candidate, Lino Oviedo, received 21 precent. The founder of the "National Union of Ethical Citizens" party, he is a retired colonel who was jailed for plotting a coup attempt in 1996, and later plotted another coup attempt in May 2000 while in exile. Unlike most Latin American countries, there is no provision in Paraguay for a run-off election in case no candidate gets a required percentage of the vote. Lugo pledged to renegotiate the agreements on hydroelectric power Paraguay signed with Brazil and Argentina. He denied the accusation made by incumbent president Nicanor Duarte that he will pursue the radical populist agenda of Venezuela's Hugo Chavez or Bolivia's Evo Morales. See BBC and CNN.com.

Being land-locked (like Bolivia), Paraguay seldom garners notice in the outside world. It ranks among the lower income countries in Latin America, but there is not as much desperate poverty as there is in places like Brazil or Bolivia. The ruling Colorado Party, conservative in orientation, maintained control of the country even after the downfall of dictator Alfredo Stroessner in 1989, and even after scandals that turned violent in the 1990s. Paraguay's transition toward democratic rule has been frustratingly slow, mainly because of widespread corruption. It is the center of contraband traffic to and from Argentina and Brazil, including drugs and weapons.

Paraguay has a fascinating culture in which the Spanish settlers intermingled with the indigenous people rather than conquering and exploiting them. That is why nearly all Paraguayans today speak both Spanish and the Guarani languages. It's rather appropriate that a former Catholic priest like Lugo would campaign on helping Paraguay's poor people, since the country was originally run by Jesuit missionaries, as depicted in the movie, The Mission, starring Robert De Niro and Jeremy Irons. (See IMDB.com.) Inasmuch as Paraguay is a symbol of pluralistic tolerance, with relatively few instances of political violence in its history, it would be nice if Lugo opts for the more pragmatic and inclusive style of Brazil's Lula da Silva and avoids the temptation of radical populism.

April 10, 2008 [LINK / comment]

Free Lori Berenson? No way!

From the department of political correctness: Left-wing activists have launched a campaign to free convicted terrorist supporter Lori Berenson from prison in Peru: see www.freelori.org.** Ms. Berenson is an American citizen who was tried, convicted, and sentenced in 1996, and later retried and reconvicted after complaints were lodged about the judicial proceedings in the first trial. Some people, such as her parents, claim that she was an innocent dupe of the Tupac Amaru Revolutionary Movement (MRTA, the lesser-known of the two main terrorist organizations in Peru), but she lived with those people for several months, and she had to have known. In the courtroom, Ms. Berenson loudly proclaimed her allegiance to the MRTA cause, and she got what she deserved. Anyone who argues in defense of Ms. Berenson is, wittingly or not, abetting the cause of international terrorism.

** I learned of that Web site from Rick Howell, who is clearly sympathetic to Ms. Berenson. All I can say is that the vast majority of Peruvians with whom I have talked, elites as well as common people, are not at all sympathetic to the misguided American woman.

As background on this case, this excerpt from Chapter 8 of my dissertation (footnotes excluded) describes Ms. Berenson's involvement with the MRTA, and a subsequent dramatic episode:

Unlike Sendero Luminoso, the Tupac Amaru Revolutionary Movement (MRTA) held out well into Fujimori's second term, partly because it was more astute in international politics. In November 1995, police were tipped off about a plot to bomb the Peruvian Congress, and a gun battle erupted at a house in the La Molina suburb east of Lima where a large arms cache was found. The woman renting the house, a young American named Lori Berenson, was arrested, found guilty of treason in a military court, and sentenced to life in prison, giving rise to another international human rights issue nagging Peru. In a desperate bid to stave off defeat, the MRTA carried out a stunning seizure of the Japanese ambassador's residence in Lima in December 1996. Its leader Nestor Cerpa demanded the release of jailed MRTA members (including Berenson) as a condition for freeing the hostages, which included Foreign Minister Tudela. After four months of mediation efforts, government commandos launched a nearly perfect rescue operation in April 1997. It was another political triumph for Fujimori, but some criticized the way he took advantage of the bloody episode.

While visiting Lima in February 1997, I stopped at the scene of the hostage crisis to take a picture , in which you can see soldiers guarding the perimeter and television journalists on a rooftop. Actually, I had to request permission to pass through an outer perimeter of guards to get that close, and it was still a half block away.

April 8, 2008 [LINK / comment]

Chavez nationalizes cement

President-for-life Hugo Chavez has decreed that Venezuela's cement industry, most of which is foreign-owned, will be nationalized immediately. He justified this move on the grounds that there is a shortage of building materials for people of modest means, but this shows that his radical populist policies are beginning to cause major distortions in the Venezuelan economy. This abrupt move has sparked a dispute over respect for property rights with the Mexican government, since the Mexican company Cemex controls almost half of the Venezuelan market. See BBC.

In 1938, ironically, the government of Mexico nationalized the petroleum industry, most of which had been owned by U.S. companies. It's perhaps a sign of Mexico's great economic progress over the past 20 years that it now takes the side of responsible private businesses, rather than pandering to the (often-gullible) impoverished masses.

April 3, 2008 [LINK / comment]

Argentine farm strike is lifted

Farmers in Argentina temporarily halted the strike they began three weeks ago as a protest against recent tax hikes on exports of agricultural commodities. Those measures were part of the government's anti-inflation program. The showdown is not over, however, as the farm leaders say that have only suspended the strike for a "truce." Taxes on exports of soybeans, for example, have been raised to as much as 45 percent. In a speech to 20,000 people gathered to show support for her, she warned that the last time Argentina faced widespread food shortages was in 1976 -- the year that the last female president of Argenina, Isabela Peron, was overthrown by a military coup. See CNN.

Using such alarmist rhetoric, it seems that President Cristina Fernandez de Kirchner, who was inaugurated just last October, must be in serious trouble. Somehow her husband, Nestor Kirchner, who preceded her as president, managed to evade the consequences of his rather irresponsible economic policies, defying foreign banks and the IMF, while encouraging the Argentine people to live it up in the wake of Argentina's default on its foreign debt. Now, the chickens are coming home to roost.

Taxes on exports are often a convenient revenue-raising measure for governments that lack the administrative capacity to collect taxes on income or retail purchases. Argentina does not fit that description, however. Export taxes have a perverse effect on the economy, moreover: They curtail total export value, because foreign consumers are forced to pay a higher price for the goods, and the result is an unfavorable shift in the balance of payments. Ordinarily that means greater pressure on a country to devalue its currency (assuming it has a fixed exchange rate), which leads to increased inflation. The logic of what the Fernandez government is trying to do escapes me.

Uribe rebukes Obama

Colombian President Alvaro Uribe criticized Barack Obama for opposing the pending U.S.-Colombia free trade agreement. See AP / Google News; via InstaPundit. Obama apparently thinks that the United States can dictate terms to countries that fall short of our high standards, not realizing what the awful consequences would be if we turn our backs on solid allies such as Colombia. If the United States gives up on Colombia just as the Uribe government has the FARC rebels on the ropes after all these years of bitter struggle, we will have made one of the biggest strategic blunders in recent diplomatic history.