Venezuela on The Huffington Post

Chavez Spurs Fears Of Venezuelan Banking Meltdown

2009-12-04T15:50:21Z

CARACAS -- Worries grew Thursday that Venezuela is on the verge of a banking crisis, causing a run on smaller lenders, sinking the country's currency and bond prices, and stoking fears that president Hugo Chávez could nationalize the banking system.

Daniel Wagner: 21st Century Socialism's Impact on Latin American Economic Performance

2009-12-01T11:35:32Z

Hugo Chavez came to power in 1998 promising a change in the way government was run, with the plight of the poor and a war against corruption as the centerpiece of his campaign platform. More than 10 years and $200 billion in oil revenue later, there is little perceptible change in the effectiveness of social spending in Venezuela, and corruption is arguably as bad, or worse, than it was prior to his election. Yet Chavez remains in power, with ambition to stay there indefinitely, and his brand of 21st century socialism has been exported throughout Latin America. This article examines whether positive economic change has occurred in the Latin American countries that have embraced Chavez's political model.

Real GDP growth has traditionally gyrated - sometimes wildly - in Latin America. Since Chavez was first elected, real GDP has mostly declined in Venezuela, apart from a short period in 2004. Since Morales was elected in 2005 in Bolivia, real GDP has remained steady. Since Correa took office in 2007, Ecuador's real GDP briefly rose, before getting caught up in the global recession. Nicaragua's real GDP has mostly consistently under-performed against the region and the world average, was below zero from 1984-1994, and has been in steady decline since 2004.

Non-socialist countries in Latin America have generally performed better. Although Argentina, Brazil, Chile and Colombia's real GDP growth all gyrated - sometimes wildly - between 1980 and 2008, in general, their rates of growth were higher than the 21st century socialist countries. Like Bolivia, Ecuador and Venezuela, Argentina, Brazil, Chile and Colombia are all resource rich. The primary difference is how they transitioned from military to democratic governments, and how each government managed or mismanaged its fiscal resources.

The level of direct investment in the economy in Bolivia, El Salvador, Honduras, and Venezuela from 1980 to 2008 is mixed. The worst performer, by far, is Venezuela, which declined from nearly $6 billion in 1998 to less than $1 billion by 2008. Part of this is due to the anti-foreign investment laws that were passed since Chavez came to power, nationalizations in key sectors, and a reliance on more indigenous forms of investment. In Bolivia, the initial decline in FDI leveled off since Morales modified his nationalization program in the power sector, but investment levels remain depressed compared with levels in the late 1990s. Although investment levels have slowly risen in Honduras since 2002, this trend is likely to be reversed based on the political change that occurred in the country earlier this year. Investment levels in Ecuador have been declining since 2004, and like Nicaragua and Bolivia, have always been under $1 billion per annum.

By contrast, average direct investment levels have risen considerably since the mid-1990s in Argentina, Brazil, Chile and Colombia. Brazil's investment levels has been at least 10 percent since 1996, and even at their low points since that time, the other countries' investment levels has not dropped below $1 billion.

Inflation rates gyrated wildly in Venezuela and Ecuador in the 1980s and 1990s, reaching as high as 100% in Venezuela in 1996 and Ecuador in 2000. It is on the rise again in Venezuela, and is projected by the IMF to approach 50% next year. After reaching incredible highs of more than 11,000 percent in Bolivia and more than 12,000 percent in Nicaragua in the 1980s, inflation has been at more manageable levels since the 1990s, and remains under control in Honduras.

Although Argentina and Brazil experienced periods of hyper-inflation, inflation has been under control in Argentina since 1992 and in Brazil since 1996, and in Chile and Colombia throughout the reporting period.

Unemployment remains a persistent problem in most of Latin America, with a contributing factor being high birth rates. As is the case with so many other statistics for the referenced countries, the unemployment rates have tended to lack consistency. Since Chavez came to power, the unemployment rate has been cut in half, from 15% to 7.5%, due, largely, to the swelling ranks of public employees. Ecuador's unemployment rate has been roughly halved, as well, from a high of 14% in 1999 to roughly 7% in 2008. IMF statistics for Bolivia and Nicaragua are incomplete, but the trend lines were rising in both countries in the middle of this decade.

Unemployment remains an issue in Argentina, Brazil, Chile, and Colombia. The unemployment rate in Argentina reached as high as 18% in the early part of this decade, and was reduced to 7.5% in 2008. The worst affected of the four non-socialist countries has been Colombia, whose unemployment rate reached 20% in 2000, but had been reduced to 11% by 2008. Brazil's rate was as high as 10% and Chile's 8% earlier this decade, but were both 7.5% in 2008. Of all of the statistics measured in this study, unemployed poses the most persistent challenge.

In terms of exports, it is no surprise that Venezuela's statistics are quite favorable, given Chavez's emphasis on revitalization of the oil sector. Export income has more than tripled since Chavez came to power. A similar story in Ecuador, where the maturation of the oil sector has resulted in a doubling of export income since 2001. Bolivia's statistics might have been even more favorable if it were not for the nationalizations since 2005. Both Bolivia's and Nicaragua's export statistics are unimpressive, being nearly flat from 1980 to 2003.

The non-socialist countries being used in this study were certainly not flat since 1986. In the case of Brazil, export income has risen ten-fold, to approximately $200 billion since that time. Argentina's, Chile's, and Colombia's export income all rose dramatically during the period. This coincided with a generally more liberalized trade regime, along with enlightened policy decisions on the part of the region's governments.

Venezuela's jump in exports has been matched by a concurrent rise in imports due to a corresponding rise in foreign exchange levels and domestic demand. The same is true in Bolivia, Ecuador and Nicaragua. That is sustainable as long as export income and consumption levels rise. What countries like Bolivia, Ecuador and Venezuela must address is how rising import levels can be sustained when oil export revenue falls, as has been the case in the past year. In Venezuela's case, expectation levels among the general populace have risen in accordance with oil revenue generation. Chavez has his hands full in managing those expectations since the price of oil was halved a year ago.

Although the cost of a barrel of oil rose nearly 15-fold between 1998 and 2008, Latin America's socialist petro states generally tended not to benefit from a meaningful rise in foreign exchange reserves until well into the current decade. The additional revenue generated for national budgets in the interim years appears to have evaporated, as the region's petro states squandered much of the wealth that was created. Venezuela's propensity for wild reserve fluctuations persisted for the entire 20-year period being observed - throughout Hugo Chavez's reign as President. For those Latin American countries that do not have petro-based economies, such as Nicaragua, the chronic foreign exchange deficit has continued unabated.

Brazil enjoyed a tremendous rise in its reserve asset position since 2005, largely the result of the spike in oil prices between 2005 and 2008. Its skillful management of its fiscal resources is in stark contrast to Venezuela. The significant new oil discoveries that have been made in the past two years imply that eventually, it will become the dominant hydrocarbon supplier in the region, and may become the new model for social development in the region.

In spite of the avalanche of oil wealth over the past 10 years, the region's petro states have generally failed to invest adequately in local infrastructure or keep pace with the rising levels of expectation among their populations. Chronic mismanagement of indigenous infrastructure, poor planning, and endemic corruption have also contributed to the problem, as has frozen tariff levels for water and power, providing a disincentive to conserve resources, and exacerbating the problem. This has exacerbated the level of frustration among voters and raised question about whether 21st Century Socialism is ultimately any different than any other political movement in terms of rhetoric and deliverables.

In Venezuela, less than a quarter of the $643 million budgeted for electricity infrastructure projects between 2001 and 2005 was actually spent, and less than 10 percent of the additional electricity generating capacity deemed necessary for the country's growing population 10 years ago has been realized. Chavez responded in October 2009 by implementing power and water rationing, and blaming El Nino for the problem. The bottom line is that in spite of all his rhetoric and promises, Chavez has failed to deliver what he promised to his people.

Even when times have been good, Latin America's socialist countries have still failed to deliver meaningful political and economic reforms or effective public spending programs. From an economic perspective, 21st Century Socialism has failed to deliver a meaningfully improved standard of living for most of the people who have embraced Chavez's credo. The global recession has only served to highlight many of the inherent contradictions in Chavez's 'revolution'.

Venezuelan Criminals Turn To Facebook

2009-11-16T10:42:07Z

CARACAS, Venezuela -- It has taken Venezuela by storm, but it seems that Facebook and other social networking sites also come with their perils.

Police here revealed that a pair of students at a private university in Caracas had been robbing their virtual friends' homes using information they had compiled using Facebook.

Victor Zambrano's Mother, Elizabeth Mendez Zambrano, Rescued in Venezuela

2009-11-11T12:29:45Z

CARACAS, Venezuela — The mother of former major league pitcher Victor Zambrano was rescued after a three-day kidnapping ordeal, Venezuelan authorities said on Wednesday.

The 56-year-old Elizabeth Mendez Zambrano was rescued late Tuesday during a "commando-style operation" in the central state of Aragua, Federal Police Chief Wilmer Flores Trosel said.

Chavez Tells Troops To Prepare For War With Colombia

2009-11-09T16:31:06Z

CARACAS, Venezuela — President Hugo Chavez on Sunday ordered Venezuela's military to prepare for a possible armed conflict with Colombia, saying his country's soldiers should be ready if the United States attempts to provoke a war between the South American neighbors.

Chavez said Venezuela could end up going to war with Colombia as tensions between them rise, and he warned that if a conflict broke out "it could extend throughout the whole continent."

Elizabeth Zambrano, Victor Zambrano's Mother, Kidnapped In Venezuela

2009-11-09T02:57:10Z

The mother of former major leaguer Victor Zambrano has been kidnapped.

Zambrano's agent Peter Greenberg says Elizabeth Mendez Zambrano was abducted Sunday morning from her son's farm near Maracay in central Venezuela.

Diane Tucker: Terrorist Or Activist? A Young Colombian, Gabriel Gonzalez, Fights For His Country, His Reputation (VIDEO)

2009-11-05T14:07:45Z

Last week in Manhattan, veteran journalist Tom Brokaw presented the 2009 Human Rights Award to Gabriel Gonzalez, a young activist who opposes the inhumane treatment of Colombian prisoners. The thoughtful young man then flew home to Colombia, where he is charged with being a terrorist and faces seven years in prison.

Call it one heck of an identity crisis for Gonzalez, or better yet, call it "same old, same old" in Colombia, where the difference between "hero" and "rebel guerrilla" can be a matter of opinion, and all too often a matter of life and death. Last year, 11 human rights workers were murdered in Colombia. So far this year, at least nine have been killed, despite increased government protection.

I spoke with Gonzalez just hours before he returned to Colombia to face the music.

What is the nature of your relationship with Colombia's leftist guerrillas?

Gabriel Gonzalez: I don't have any relationship whatsoever with the FARC or any other illegal group in Colombia. In my human rights work, I help prisoners promote their right to due process and legal representation -- legitimate and important work. However, some of these prisoners have been detained because they were suspected of being FARC members.

Is that why you were prosecuted?

No, the government accused me of being the commander of a FARC rebel militia force in Pamplona, the town I grew up in. I spent 15 months in jail -- in detention -- before the judge declared I was innocent because the court found no evidence of the FARC in Pamplona. Obviously it was impossible for me to be the leader of a group that didn't exist.

Then why were you sentenced to seven years in prison?

The Inspector General appealed the judge's decision, which was strange because the Inspector's job is to uphold the rights of defendants. Another court convicted me in absentia to seven years in prison, without a new trial or any new evidence. Human Rights First is helping me appeal this decision to the Supreme Court of Justice in Colombia. We still don't know if they'll take the case.

Do you believe you were set up?

Not long before the legal proceedings against me, I learned that paramilitaries were planning to assassinate me. It came as a terrible shock. Despite their death threats I continued my work, which included exposing human rights violations committed by public officials. I received a lot of attention from the national media. One might assume that since death threats didn't silence me, the baseless criminal charges were an attempt to silence me.

Do you expect you'll be treated fairly by the Supreme Court?

The Supreme Court in Colombia is a strong institution with very good jurisprudence. I certainly hope the court maintains its independence and doesn't succumb to political interests, because this is an emblematic case. Coached witnesses, biased prosecutors -- the same old patterns appear over and over again in human rights cases. It's time for the government to take concrete steps to address this problem, not in a case-by-case manner, but in a way that reforms institutions.

Does President Uribe deserve a third term?

His policy of Democratic Security has resulted in extrajudicial executions, forced displacement on trumped-up charges, and other serious human rights violations. A third term for Alvaro Uribe would continue along the same line.

But human rights violations have been occurring for decades in Colombia.

That's true. The solution depends less on one man, and more on a coherent state policy. For this we need the assistance of the international community.

So you think President Obama should do more to condemn human rights violations?

Plan Colombia isn't working. The U.S. is spending millions of dollars fighting drug trafficking in Colombia, without commensurate results. President Obama should focus on human rights, because ultimately it's the best way to combat problems like drug trafficking. Poor rural farmers must be allowed to cultivate their own land, sell their own products, and earn a livable wage. Instead, the farmers' political leaders are prosecuted on trumped-up charges. No wonder rural farmers grow coca or join the FARC, simply to earn money for food.

I thought the FARC were withering away.

They've suffered enormous blows. But we aren't sure whether they've become extremely weak, or are trying to regroup. What's certain is that Uribe said he would get rid of the FARC in four years. It's been eight years and the FARC is still here, which means less attention has been paid to education, jobs, and health care. Most of the international community thinks the main problem in Colombia is the war between the government and extremist groups, but that's not the case. The war is a consequence of the underlying problem.

Do you mean drugs, or poverty?

Lack of opportunity, lack of jobs, a dysfunctional health care system, a weak educational system -- together these problems generate social unrest. The government needs to sit down with civil society and listen to our proposals for a peace process, our ideas to improve Colombia's economic structure. As long as the government refuses to have an open dialogue with its people, it will never find viable solutions.

Should a U.S. free trade agreement with Colombia have human rights' strings attached?

A free trade agreement would give enormous benefits to Colombia. This would be the best time, and the best way, to achieve systematic reform of human rights.

You're returning to Colombia in a few hours. Do you fear for your life?

Sadly, everyone who works to promote human rights in Colombia fears for their life.

Then why do it?

Someone has to. I can't close my eyes and pretend nothing is happening. It's an ethical imperative for me, and for Colombia as a nation.

Your parents must be very worried.

When I was detained in jail for 15 months, it was a terrible time for them. But they're proud that I'm putting into action the principles they taught me as a child.

Gabriel Gonzalez at the Supreme Court Building in Washington, D.C. (Oct. 2009)
Photo: Andrew Hudson

Venezuela: Gays Attacked, Harassed By Police

2009-11-04T13:24:12Z

By Humberto Márquez

CARACAS, Nov 4 (IPS) - One Friday at around midnight, on Villaflor Street, a favourite spot for gays and lesbians in the Venezuelan capital, Yonatan Matheus and Omar Marques noticed two Caracas police patrol vans carrying about 20 detainees, most of them very young.

When Marques and Matheus, who are gay leaders of the Venezuela Diversa (Diverse Venezuela) organisation, approached to find out what was happening and take pictures, they were picked up too.

"Like most of those arrested, our identity documents and mobile phones were taken away, we were beaten, our sexual orientation was insulted in degrading language, and we were refused permission to speak to the Justice Ministry officials and members of the National Guard who were present," Matheus told IPS.

The vans set out for the Caracas police headquarters with their load of detainees, but Marques, Matheus and two minors were left by the main highway crossing the city. They had to walk to the city centre, where they contacted officials at the Ombudsman's Office to file complaints.

This incident in October was one of the multiple arbitrary arrests carried out against the GLBTI (gay, lesbian, bisexual, transvestite, transgender and intersex) community, within the framework of Operation Safe Caracas, a campaign to crack down on crime involving personnel from several police forces and the National Guard, a military body with police functions.

The Venezuelan capital, with five million people living in the metropolitan area, is one of the most dangerous cities in the world; the annual murder rate is in excess of 135 per 100,000 population. In the third week of October alone there were 65 murders, and the central morgue has been stretched beyond capacity several times this year.

"Operation Safe Caracas has meant more insecurity, because it adds police harassment to attacks by common criminals and homophobic citizens," César Sequera of the Venezuelan GLBTI Network, a recently formed coalition of groups defending the rights of sexual minorities, told IPS.

In Caracas and the oil-rich western state of Zulia, where Venezuela Diversa is also active, "so far this year nine transsexual persons have been killed in violence related to their condition, so one of our most urgent claims is proper guarantees for the right to life," Matheus said.

Astrid, a transvestite sex worker who finds her clients among drivers on Libertador Avenue in Caracas, told journalists that "sometimes the police stop us, take our money and even force us to have sex with them under threat of being beaten or dropped off in a dangerous part of the city."

One of her co-workers said that on one occasion, a police patrol car drove up and without warning, its occupants shot pellets at her legs while laughing and hurling insults at her. Then they sped off into the night.

Even someone as well known as Giannina Cadenas, the transsexual host of the programme "Brújula Sexual" (Sexual Compass) on the state Ávila TV channel, has said that "those who discriminate against us the most are the police, who need reeducation in order to understand that they are supposed to provide a public service."

"When I'm travelling by car, I'm always stopped at the police control points and they ask me whether I'm a man, a woman or a transvestite. I'm made to feel like a cockroach. The police have taken money off me just because I'm transsexual," Cárdenas said.

The non-governmental organisation Citizen Action against AIDS (ACCSI) carried out a 2008 survey of 742 people in the GLBTI community in Caracas and the western cities of Maracaibo and Mérida, to investigate negative experiences with the police.

Half the interviewees said they had experienced situations in which their rights had been violated, although most did not report them, out of fear or a sense of shame. The most common behaviours they complained of were verbal aggression (36 percent), extortion (20 percent), physical aggression (12 percent) and deprivation of freedom (11 percent).

"GLBTI persons suffer strong rejection in Venezuela, because of dogma, social prejudice and mistaken medical or psychiatric diagnoses," said Edgar Carrasco, who directed the survey. "And the worst of," he added, "is that the discrimination and impunity is related to the spread of the HIV/AIDS epidemic."

The depth of this rejection was spelled out to IPS by Fernando, a 22-year-old cookery student who came to Caracas "practically in headlong flight, because if we are excluded in Caracas, where gays gather in large groups to go out or spend time together, imagine what it's like in a small town full of prejudice like Altagracia de Orituco," in the central plains of the country, where agriculture and ranching are the main activities.

Article 21 of the 1999 Venezuelan constitution states that all persons are equal before the law and, consequently, discrimination based on race, sex, creed or social condition is prohibited.

On this basis, the Supreme Court ruled in March 2008 that no individual may be discriminated against by reason of his or her sexual orientation in any way that implies treating him or her in an unequal fashion.

Yet based on article 77 which protects marriage between a man and a woman, in the same ruling the Supreme Court refused to equate the rights of stable homosexual unions with those of heterosexual married couples.

Sequera of the GLBTI Network emphasised that "many of our rights are still being infringed: in the first place, respect for our identity and self-image, and secondly the right to health, since we are often denied access to public and private health care centres, and we aren't even considered as possible blood donors, for example."

Matheus also complained of "employment discrimination in terms of access to jobs and treatment in the workplace, as well as discrimination in schools and educational institutions, where we are harassed by teachers and other students, leading many of us to drop out."

"But police harassment remains a serious concern, because in effect it abrogates our right to freedom of movement, to use the public thoroughfares of this country, or to freely and peacefully go to night clubs or shopping centres to exercise our right to leisure and entertainment, just like everybody else," Matheus concluded.

Read more from Inter Press Service.

Sean Penn Visits Hugo Chavez, Talks Politics And Obama's Nobel Prize

2009-10-30T08:48:09Z

CARACAS, Venezuela — President Hugo Chavez said he met privately with actor Sean Penn on Wednesday, and that the Oscar-winning celebrity may film a movie in Venezuela.

Penn may shoot a film based on a novel by Cuban writer Alejo Carpentier, which is set largely in the jungle along Venezuela's southern Orinoco river, Chavez said. He appeared to be referring to Carpentier's 1953 novel, "The Lost Steps," about an American anthropologist and composer's journey into the jungle region.

Robert Amsterdam: Joe Scarborough Needs to Wake Up and Smell the Coffee

2009-10-26T12:22:16Z

Cable television news has an earned reputation for its tendentiousness, but still, every now and again I can get caught off guard. It happened to me again this morning, Oct. 26, at my hotel while watching the usually moderate Morning Joe on MSNBC, listening to Scarborough launch into a rant about how the United States is woefully "going it alone" in the Afghanistan effort, and how the rest of the world should belly up to the bar to share the burden. Sandwiched between a discussion on taxing meat eaters and the eternal feedback loop on healthcare, these ill-considered quips highlight a bigger problem beyond my fragile Canadian sensitivities.

Let's just do some numbers. The greatest burden in terms of per capital military casualties has been Canada, having lost 131 soldiers in violent deaths in the campaign to date - disproportionate to its small population of 33.5 million (U.S. casualties total 897, to a population of 304 million, for a war effort they have led). The only other coalition partner to lose more of its soldiers in Afghanistan is the United Kingdom, with 222 casualties.

This ungrateful chauvinism of U.S. thinking reaches far beyond the example provided by Scarborough, who at least has the excuse of being in the business of manufacturing polemics. It is a bipartisan rejection of the value of allies we have unfortunately gotten used to, and one that is increasingly outdated in the post-9/11 international atmosphere, and eagerly exploited by rising regional powers of sometimes questionable motives. This gets right to the heart of the reasons why U.S. soft power is so rapidly crumbling: it's becoming harder and harder to see the benefit of being a friend of America.

Consider the enormous contribution of the coalition in this effort. Amid the sensation of aimless strategy on the ground and regular disappointment (yes, I am afraid that Dick Cheney did locate the jugular in accusing Obama of "dithering"), the Canadian mission boasts a rare success story in the Kandahar region. The Conference of Defence Associations (CDA) has recently stated that the mission has "turned a corner" in its peacekeeping efforts in this area, making marked improvements from a year ago. Ken Sommers, a retired rear admiral who visited Afghanistan as part of the CDA tour, commented to the press that "Where Canadians used to clear an area and leave, allowing the Taliban to come, they are now able to stay," and that one of the most memorable snapshots he witnessed was "Canadian troops walking hand-in-hand with Afghans in the village of Belanday, one of six model villages established to the southwest of Kandahar since this spring by Canadian soldiers and diplomats."

The United Kingdom has also, on its behalf, contributed considerably successful results in Afghanistan, due in part to the fact that both the UK and Canadian military have a strong track record in state-building, security, and non-offensive initiatives. After interviewing the British Foreign Secretary David Miliband, Roger Cohen of The New York Times found the British to possess a much clearer and determined vision of counter-insurgency in the Af-Pak theater - which is almost an embarrassment in contrast to the enigma of Washington's policy.

So when we hear Joe Scarborough (whom most of the time I like) and inwardly focused commentators lament their solitude in the global anti-terrorism effort, perhaps it should not come as a surprise whatsoever that support among allies for this war is rapidly declining. Just today new poll numbers from the Innovative Research Group have come out to show that now less than 50% of Canadians support the war effort, down from 59% in June 2006. In the UK, the reaction is much stronger, and I can't tell you how often the evening news delves into bitter and angry obituaries of the young men and women being sacrificed. Just this weekend between 5,000-10,000 protesters marched in London to demand the immediate withdrawal of troops.

What would the nationalist pundits have to say then if the protesters got their way? I try to take my friend's oft-repeated advice to ignore the provocations of television news bacchanalia, preferring to nourish the endangered species of print media or even the blog infestation (guilty as charged). But this lack of appreciation of America's closest allies and the assumption that the whole world should by default see the interest in working with the United States reeks of ugly hubris.

Both Washington and its pundits on both sides of the aisle have got to come around to the fact that the number of disincentives for being friendly with the U.S. are rapidly increasing, and it's not longer just the radical fringes. In Latin America, where we can't even seem to hold confirmation hearings for our diplomatic appointees, it simply pays much, much more to accept unconditional aid from Venezuela's Hugo Chavez, or even strike up relationships based on credit and guns from Russia and China. In Eastern Europe, Poland and the Czech Republic stick their necks out in their reluctant agreement to host a missile shield, only to have it withdrawn and watch the Obama administration throw them right into a conceded "sphere of influence" of Russian revanchism.

From Southeast Asia, to the Stans of Central Asia, to Muslim areas of Africa, the United States is emphasizing relationships with abusive dictators over the fledgling democracy movements, unwittingly raising the prospects of newly hostile Islamic states. We don't even need to ask leaders such as Jose Maria Aznar or Mikheil Saakashvili the personal political costs of support the United States.

Worst of all, I am one of the people who actually believes that peaceful cooperation in the international community and the active and respectful engagement of the United States in key alliances is a cornerstone of global security - that's why it is such a pity to see these relationships dependent on a battered spouse syndrome ... one of these times, they might not come back. A slip of the tongue on just one cable news show means nothing, but if the U.S. doesn't get back on the same page as the rest of its friends, these lamentations of isolation could become self-fulfilling.

Nikolas Kozloff: End of the Dollar Dictatorship? Hugo Chavez and Latin Leaders Hope to Bury the Greenback

2009-10-23T14:19:40Z

Last week, representatives of the Bolivarian Alternative of the Americas (known by its Spanish acronym ALBA) met in the Bolivian city of Cochabamba to discuss the future evolution of the trade bloc, designed to promote complementarity and reciprocity amongst left-leaning regimes in the region such as Cuba, Venezuela, Bolivia, Nicaragua and Ecuador. Since its inception in 2004, ALBA has carried out important exchanges of goods and services; for example Venezuela has exported subsidized oil to Cuba and receives Cuban medical assistance in return. However, some wonder whether ALBA is practical or can help to foster real economic development for the region's poor.

ALBA leaders however say it's time to place such doubts aside. Last week in Cochabamba they declared their historic adoption of a common currency called the Unified System of Compensation of Reciprocal Payments or SUCRE in Spanish. Named after Antonio Jose de Sucre, a military general and hero of the wars of independence against Spain, the Sucre is to be gradually substituted for the U.S. dollar in terms of commercial exchange between ALBA member nations.

According to the new Cochabamba agreement, ALBA countries will make deposits in their respective currencies to an ALBA bank headquartered in Caracas. The Sucre will act as a payment compensation mechanism and allow ALBA nations to reconcile accounts when they carry out commercial transactions in local currency. It's a kind of barter exchange system: if Venezuela for example buys textiles from Bolivia and owes the Andean nation a certain quantity of money, then this will be compensated in kind with other imported goods such as asphalt. The difference in cost will be reconciled by central banks located within respective ALBA countries which handle the Sucre. Payment requests meanwhile will be processed electronically between ALBA members via an ALBA bank.

Creation of the Sucre then will not lead to a new physical currency being issued. The Sucre will not have any intrinsic value but will have parity in relation to the U.S. dollar, the euro or Japanese yen. By early 2010, ALBA countries hope to start using the "virtual" currency, with future plans to convert it into a hard currency. Eventually, at some future yet undefined date, ALBA members hope to establish a unified regional currency which Bolivia has suggested could be named "Pacha" for the Quechua Indian word for Earth.

Recently, Nikolas Kozloff, author of Revolution! South America and the Rise of the New Left (Palgrave, 2008) sat down with Ethan Kaplan, a visiting Professor at Columbia University's Committee for Global Thought and Department of Economics. Kaplan, a former economic advisor to the Venezuelan National Assembly, discussed the economic and political implications of the Sucre.

NK: ALBA leaders say creating the Sucre is necessary so as to defray the regional effects of the world economic crisis. By substituting their trade in dollars with the new alternative currency, ALBA members hope to protect themselves from future financial downturns. How well do you think this will work?

EK: There's a lot of evidence that currency unification leads to greater trade and hence there would probably be more intra-regional trade under the Sucre. The Sucre could make ALBA nations less subject to international financial crises outside of their group, but we need to remember that these countries have a lot of crises themselves. If ALBA nations make it harder for capital to leave their currency area, then they will have less to do with the broader international economy. A lot of recessions are induced by international financial crises, so if ALBA doesn't have much to do with that international system and ALBA countries have a stable monetary system themselves, they could avoid some degree of financial crisis. However, I doubt that the Sucre will protect ALBA. Consider: ALBA is a small area economically. ALBA members will still trade heavily with the outside world. Obviously ALBA nations and the Sucre are not like the EU and the euro. Moreover, transmission of economic crises is more based upon trade in assets than trade in goods. My guess is that having a larger currency area shouldn't dramatically change the demand for dollar-denominated, yen-denominated, or Euro-denominated assets. Capital controls would much more effectively accomplish that.

To be honest I'm more optimistic about the Sucre as a means of fostering economic growth and achieving better prices as opposed to protecting ALBA nations from financial crises. Consider: right now, ALBA nations have low tariffs on U.S. goods like cars which can come into their countries relatively cheaply. So, ALBA countries are not going to start their own domestic car industry. In the 1960s Brazil experimented with this somewhat and had a well functioning car industry for a while. However, they later eliminated trading protections and the industry went belly up. Since ALBA represents a decent sized group of countries which would be fostering trade amongst themselves, there would be some scope for industrial diversification and ALBA nations might produce some things that they would normally get from the United States. By adopting a new currency, ALBA nations get slightly greater leverage to slap tariffs on U.S. goods so as to protect infant industries which the left wing group of countries seeks to encourage.

NK: There's a very pronounced political dimension to the Sucre: Hugo Chavez has remarked that the Sucre "will help us to overthrow the dictatorship of the dollar." Yet, ALBA nations are rather insignificant economically at the global level. What are your thoughts?

EK: I think that's correct --- I don't think the adoption of the Sucre or Pacha for that matter will have much of an economic impact on the United States. It probably will have a greater economic impact on ALBA nations by fostering import substitution and industry as opposed to pursuing a course of commodity exports. Here's another benefit of a common currency: right now a lot of countries spend a lot of money buying dollar assets because they're afraid of a speculative attack on their currency. One solution to this is to institute capital controls which the International Monetary Fund doesn't particularly like. A successful currency union could make ALBA nations less subject to speculation and as a result these countries would be less concerned about their exchange rate relative to the U.S. dollar. As a result, ALBA nations would benefit as they wouldn't have to invest so much in low-yield dollar assets. Still if speculators can force the bank of England to lose almost 100 billion pounds in one day back in 1992, my guess is that the Pacha will not be immune to speculative attack.

NK: ALBA was originally set up to counter the FTAA or Free Trade Area of the Americas, the corporately -friendly free trade scheme sponsored by Bill Clinton and George Bush. Venezuela's Hugo Chavez on the other hand says that the adoption of the Sucre constitutes a system of "fair trade" which will distance Latin American countries from "hegemonic capitalism," "the neo-liberal dictatorship" and the "dictatorship of transnational companies." The Sucre, Chavez adds, "will be much more than a currency." According to him, the Sucre system will have four component parts: the Regional Monetary Council, the Sucre currency itself, the Central Clearing House, and a regional reserve and emergency fund. How significant a break does this represent with the go-go free trading past?

EK: If the Sucre agreement winds up fostering closer economic integration along the lines of the EU and not NAFTA, then the new ALBA currency could wind up resulting in more fair trade as opposed to exploitative trade. Here's another way the Sucre could represent a plus: normally multinationals go to Venezuela or Ecuador and set up their own companies which get all kinds of tax breaks and make profits off exports. Those profits are then repatriated to the United States. If there's a common currency however, those profits would probably stay in the local region. So, a new currency might promote fair trade as well as fair investment.

NK: On the face of it the idea of the Sucre is reminiscent of the euro, another regional currency which recently came into effect. Yet, the Sucre would seem to be more unique in that it has been promoted as a common ideological project amongst left-leaning nations. Is there any historic precedent for such an idea?

EK: I'm not aware of any currency that's been promoted on the basis of shared ideology, certainly not any left wing ideology...

NK: What about the ruble?

EK: That's a good point. The Soviets exported the ruble to all of their satellite areas. But for the Soviets, the ruble on its own wasn't such a decisive factor as there was already a centrally planned government which decided what the satellite countries would produce as well as what price they would trade at. In other words, given that the Soviet Union could already decide the relative prices of all goods, an exchange rate was relatively redundant. So, in terms of ALBA countries I think the benefits of a shared currency are higher because you have different governments as opposed to Moscow calling the shots.

NK: Ecuadoran President Rafael Correa, himself an economist, hopes that the Sucre and the implementation of the new "virtual monetary system" could accelerate commerce between nations. Eventually, he hopes, such a system could be extended to all countries in Latin America and use of dollars would be reduced greatly. How likely is this to occur?

EK: I think if the Sucre, or the Pacha as the case may be, were extended to all of Latin America this would reduce the use of the dollar and this would have an impact on the United States, particularly if Mexico joined the Sucre. Let's face it though: Mexico is going to be reluctant to do that. To be honest, we don't even know if the countries that have currently signed up for the Sucre will continue to stay on it. What would happen if a right wing government came to power in one of the ALBA nations? If one ALBA country on the Sucre has an economic downturn and wants to pursue a monetary policy that will help to reduce unemployment, this could lead to inflation in another ALBA nation, which in turn could spark political conflict. For the time being the ALBA nations have relatively similar political ideologies and they could set up some kind of political institution to govern the currency board. But, if one of the ALBA nations became right wing I don't know what would happen.

In addition to disagreements over monetary policy, there might also be conflicts over fiscal policy. One way for the government to get out of debt is by printing money to pay off the debt. This causes inflation. This is a very typical pattern in Latin America. So, if one ALBA country decides it wants to inflate its debt away and another country in the currency union doesn't like that idea, then this could give rise to political conflict. A country finding itself in dire economic straits may need to create inflation because otherwise it would go bankrupt. Other countries within ALBA meanwhile won't want one of their members to go bankrupt which could result in a potential currency attack on the entire region. Here's the key point though: ALBA countries that are not experiencing economic pain may want to dictate how much debt their fellow member can hold as a percentage of GDP. If you want to join the EU, you must have a certain debt to GDP ratio. How will the ALBA nations bargain this out? These are vexing questions. Plus, if you really want to have an economic impact on the United States and the dollar you'd have to involve Brazil, Argentina and Mexico and it's difficult to see that happening.

NK: Speaking of which, Chavez has invited Argentina to join in the Sucre, and over the past few years Venezuela and Argentina have cultivated an unprecedented geopolitical alliance which is based on shared ideological affinities. Do you think that if Argentina joined that there could be a ripple effect and other countries might be encouraged to join? Some might say that if Brazil, the true economic juggernaut in the region, fails to join that such a currency might lack credibility.

EK: Cristina Fernandez de Kirchner, the current President of Argentina, is not super popular. She and her husband [former president Nestor Kirchner] had this idea of alternating power so they wouldn't hit the wall on term limit restrictions. In light of recent parliamentary elections which resulted in electoral defeat for the Peronist party, it's not clear whether the Kirchners can stay in power. If they don't stay in power you can forget the idea of Argentina ever joining the Sucre. My guess is that even if they do, it's an unlikely scenario for Argentina.

NK: Some might say that from the very outset the Sucre won't have much clout. Bolivia exports most of its goods to other Andean nations such as Peru and Colombia which do not participate in ALBA. Nicaragua meanwhile exports most of its products not to fellow ALBA nations but to other Central American nations, the United States and Europe where the dollar and euro are paramount in commercial transactions. What are your thoughts?

EK: That's true. But similarly a lot of countries in the EU don't just trade amongst themselves but also with the UK, Switzerland and the United States. So, I don't see that as being a huge barrier. In the case of Nicaragua it could be a little weird since the Central American nation doesn't do that much business with other ALBA nations. So, there may not be a lot of benefits but conversely getting on the Sucre might imply little financial and political risk.

However, once the currency goes from being "virtual" to real and ALBA nations ditch their own currencies for the Pacha these costs may go up as I explained earlier. The bottom line is that as long as ALBA countries are not trading amongst themselves that's Ok: if it's a virtual currency like the Sucre they still maintain their exchange rates with the other countries. Once they swap their currencies entirely however they're forced to have the same exchange rate as other ALBA countries. Normally, if Nicaragua had a lot of inflation it would want to devalue relative to its other trading partners in Central America. But in the new milieu, Nicaragua wouldn't be able to do that. This could really wind up hurting its exports.

NK: What types of protections would you advise for the ALBA nations moving forward?

EK: My concern would be defending the incipient currency from speculative attacks. There's a very easy way to prevent this: you need to implement currency controls. In other words, don't let people take money out of the currency except for trade-related actions and do not allow any speculation. There's no way for ALBA to move ahead with a currency union without acting on currency controls. The International Monetary Fund won't be too happy about that but I don't think these left wing countries care about the IMF anyway.

NK: The situation in Ecuador is positively ironic. Up until recently the Andean nation's currency was called the Sucre, which it then ditched for the U.S. dollar. Now Ecuador is going back to another Sucre. How do you think life will change for Ecuador and Ecuadorans as the country moves to the Sucre as opposed to the dollar which had been embraced by the country's economic elite?

EK: First of all, let's look at some of the costs of using the U.S. dollar. When the U.S. inflates currency and prints dollars to pay off debt, that's a tax because prices go up and the value of money goes down. Who pays that inflation tax? In part it's the Ecuadoran people who hold dollars. Who benefits? The U.S. government as it gets to pay off its debt. So, these financial crises devalue Ecuadoran money.

But now the new Sucre monetary board, or eventually the Pacha board, could redistribute money between countries as opposed to having it filter back to the United States. Also, once Ecuador goes on the Pacha it'll be easier for the Andean nation to adjust its exchange rate than it would under the dollar. As long as Ecuador sticks to the dollar, it'll be beholden to whatever U.S. monetary policy happens to be. Once Ecuador's in the ALBA currency union it has a voice and can have a much greater impact to shape its own finances.

There are other political benefits to not being on the U.S. dollar. Take for example the case of Panama. When George H.W. Bush wanted to get rid of military strongman Manuel Noriega, he banned the export of U.S. dollars to Panama which caused a recession. That leverage is still there potentially with Ecuador. George W. Bush never entertained the possibility of putting the squeeze on Ecuador as he was distracted in other parts of the world. But, under other circumstances the United States might have exerted pressure.

Despite all these problems, there are some benefits to having ties to the U.S. dollar. If you're on the dollar this leads to stability in price levels which could be lost once Ecuador joins a new currency.

NK: One key question will be whether private sector exporters in ALBA nations will have confidence in the new Sucre for it is they who dominate international trade. What are your thoughts?

EK: If the private sector is forced to trade in the Sucre or not trade, then they'll use it...

NK: In all of these countries like Ecuador and Venezuela, it's precisely the right opposed to leftist governments which is controlling the exports...

EK: You could wind up with a strange situation in which the exporters are skittish about the new currency and either reduce exports or send their goods to non-ALBA countries like Colombia. In that case, the new currency union would not foster more intra-ALBA trade but the total opposite. If there's greater state control over exports, as in the Venezuelan oil industry, this all becomes a moot question.

NK: Professor Kaplan, thank you very much.

EK: Thank you.

Ethan Kaplan is a visiting Professor at the Committee for Global Thought and the Economics Department at Columbia University. Nikolas Kozloff is the author of Revolution! South America and the Rise of the New Left (Palgrave, 2008). Visit his blog at senorchichero.blogspot.com

Chavez Popularity Slips In Venezuela: Polls

2009-10-22T09:02:24Z

CARACAS, Venezuela — Hugo Chavez's support has declined in the polls as many Venezuelans say they are fed up with 27 percent inflation, a stagnant economy, faulty public services – and a government they see as incapable of doing much about it.

The president's popularity has slid in monthly tracking polls from a high of 61 percent after winning a vote in February to 52.8 percent last month, pollster Luis Vicente Leon of the Caracas-based firm Datanalisis said Wednesday, adding that the downward trend in the percentage who view his presidency positively has continued since.

Hugo Chavez Jokes About Nuclear Bomb For Iran On Live TV

2009-10-07T12:00:41Z

Telling somewhat less than tasteful jokes about weapons of mass destruction has been an occasional pastime of a number of senior US Republican politicians...

It's not yet clear whether the prospect of joining this exclusive club was the motivation for the Venezuelan president, Hugo Chávez, to have a quip about nuclear weapons yesterday.

Venezuela Bans "Family Guy" -- But "Baywatch" Is OK (VIDEO)

2009-10-06T14:06:12Z

By Charlie Devereux

CARACAS, Venezuela -- He's a pot-smoking toddler who fantasizes about killing his mother and he's the latest American figure to rile the Venezuelan government.

Stewie Griffin, the animated character from the hit cartoon "Family Guy," has caused offense here in Venezuela by singing a ditty lauding marijuana's restorative properties.

The Venezuelan government highlighted the clip as an example of how the U.S. government promotes pot smoking and the legalization of drugs. Venezuela resented a recent U.S. Congress report that said a fourfold increase in cocaine smuggling through Venezuela has been aided by police corruption and a refusal to work with the U.S. Drug Enforcement Administration.

A Bag Of Weed - Funny bloopers are a click away

"There's no subliminal messages here," said Interior and Justice Minister Tarek El Assaimi, who warned that the government would fine any TV station that continues to broadcast the show. "It's an animated cartoon where you can observe perfectly how they promote consumption and moreover sponsor the consumption of marijuana."

El Aissami blamed U.S. drug consumption for fueling Venezuela's narco-trafficking market and suggested that "adult" cartoons such as "Family Guy" were mouthpieces for the U.S. government's tolerant attitude toward drugs.

"Family Guy" is not the first cartoon to receive short shrift from authorities in Venezuela. Last year, "The Simpsons" was banned from terrestrial television after it was ruled "unsuitable" for children. It was replaced with "Baywatch," the 1990s series featuring scantily-clad lifeguards in California.

And offensive American cartoons are not the only shows to have felt the sting of government censure. President Hugo Chavez's government has been shutting down radio and TV stations across the country, accusing them of violating licensing laws. In 2007, the government revoked the terrestrial license of Radio Caracas Television (RCTV), arguing the station had played a large part in orchestrating a coup

"Increasingly what we are seeing is the state assuming a role in which it says what you can and can't watch," said Andres Canizalez, an investigator at the Center for Communication at the Andres Bello Catholic University.

Many protested what they claimed was a clamp on freedom of expression, but others were more annoyed about losing the station that broadcast the majority of the beloved telenovelas, or soap operas.

And those staples of Venezuelan viewing habits haven't escaped fierce criticsm from Chavez.

"Careful with those capitalist telenovelas -- they poison," he said last year. "It's all a design, an ideological design -- to destroy the potential of a girl or a boy, of a youth -- to induct them into that plastic life and many times to violence, to prostitution, to the loss of values, to smoke cigarettes, to drink rum and I don't know what else ... to drugs."

So far they've survived but not without having to practice self-censorship, said Carolina Acosta-Alzuru, a professor at the Grady College of Journalism and Mass Communication at the University of Georgia and author of "Venezuela es una telenovela" ("Venezuela is a telenovela").

She points to telenovelas such as "Cosita Rica," which aired in 2003-2004 when Venezuela was at its most polarized following a coup attempt and a two-month national oil strike that tried to bring Chavez's government down.

"Cosita Rita," like other telenovelas at that time, did not shy away from political content. "It had characters who were allegoric of the political scene, including a character that was a metaphor of President Chavez," said Acosta-Alzuru.

But since 2007 when RCTV had its license revoked, most stations have toned down the subjects they tackle, even on entertainment shows, fearing similar reprisals.

The government put out its own telenovela on the state channel Venezolana de Television (VTV) in 2004. "Amores del Barrio Adentro," which told the story of love and life inside a poor neighborhood, was an attempt to present an alternative reality to what the private channels showed, but was panned by critics as government propaganda. It stopped airing soon after its launch, although the government claimed this was because VTV moved toward a news-centered agenda.

Yet despite Chavez's strong aversion to telenovelas, one of them actually helped him in his rise to power, said Acosta-Alzuru.

"Por Estas Calles" mirrored the reality under the government that preceded Chavez's. The show, set in the barrios, became famous for addressing the corruption that was rife in Venezuelan politics at the time and often used plotlines grabbed from newspaper headlines.

"To me it's always ironic when he mentions telenovelas," she said, "because actually he should be thankful."

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Robert Amsterdam: Hunger Strikes Expose Hugo Chávez's Myths

2009-09-30T13:28:37Z

One of Venezuela's most infamous prisons is located in the state of Miranda, southeast of Caracas. There, the Yare III facility, which occasionally garners headlines following one of its frequent deadly riots, is part of a prison system which is well known as one of the worst in Latin America, with 498 violent deaths in 2008.

Given the reputation of Yare III, it is understandable why there was widespread public outrage when the Venezuelan authorities decided to send the 22-year-old university student Julio César Rivas, who has never committed a crime in his life, right into the general population of hardened criminals. His only crime was participating in an August 27th protest against President Chávez's draconian Education Law, where he was arrested and later charged with, among other inventions, attempting to incite civil war.

The use of the justice system to punish César Rivas in such a public and disproportionate way is seen by many in the opposition as part and parcel of a new state policy to criminalize dissent. The message being sent to the youth of Venezuela, the majority of whom reject the president but operate outside the formal network of political parties, is that they can do anything to anybody -- and that no human rights oor mercy will stand in their way.

The response from fellow student leaders has been dramatic. Outside the Caracas headquarters of the Organization of American States (OAS), an impromptu tent city of protesters was established (filled with mattresses and banners like a refugee camp), where last Friday they initiated a mass hunger strike to demand his release, as well as a visit from a special commission of the Inter-American Commission on Human Rights (IACHR) of the OAS to investigate the situation of political prisoners in Venezuela.

On Sunday night they were joined in solidarity by some of Venezuela's high profile political prisoners, many of whom are confined to the "Helicoide" in the center of Caracas, a building once designed to be a shopping mall, but which now houses the headquarters of Venezuela's much feared secret police, the DISIP. Eligio Cedeño, one of the hunger strikers and a political prisoner whom I represent, has been locked up there on false charges without a complete trial or conviction for more than two and a half years.

Very few could have predicted that the hunger strike would put so much pressure on the Chávez administration - even fewer foresaw the important victory they would obtain. On Tuesday, Julio César Rivas was finally able to leave the Yare prison unharmed on conditional release (now he will have to appear in person before a judge every 30 days, and is unable to leave the country, a repressive condition applied to hundreds of students). However the strike itself has continued, and with even greater numbers, until the IACHR responds to their requests for a delegation.

It is a rare thing to see so much government backpedaling. Gabriela Ramírez, the ironically state-appointed "People's Defender," has issued statements denying that there exists an "alleged State policy to deprive people of their liberty who exercise their right to protest." The attorney general Luisa Ortega Díaz is similarly denying any irregularities over the mass arrests of protesters, despite the fact that earlier this year she pushed through stiffer laws to imprison anyone who "disturbs the peace" in showing their dissent with the government. It is very rare to see this government stray from its script and actually respond to its citizens.

So why have the students been so successful in getting under Chávez's skin? How have they been so effective in breaking through the noise of the sometimes repetitive and cacophonous complaints of the relatively unorganized opposition? The answer, at least in part, is because they have honed in specifically on the government's weakest and most vulnerable points - the myths of progressive policies and social inclusion. And they have done so in a way that the clumsy and faux-pas prone opposition has often been missing.

In a new article published by the political scientist Javier Corrales in Washington Quarterly, it is argued that Chávez has created an intimidating illusion of strong social programs, which in many minds seem to trump all other concerns or abuses of citizens' rights. Few other countries in the region can stand up for human rights in Venezuela, Corrales writes, because "they fear that picking a fight with the patron-saint of the poor will enervate radical left-wingers at home, potentially destabilizing their governments. Chávez has crafted a coalition of the silent, even among those he annoys, and that is not a trivial victory."

But the existence of more than 50 hunger striking students on the steps of the OAS headquarters blows the smoke off the myth that Chávez is still some sort of social democrat who cares about his people. The wider world was willing to ignore all the other aberrant signs that this regime is very different than what it claims to be, such as $2.2 billion in additional Russian arms, open cooperation with Iran on procuring uranium for their nuclear program, and building a deep friendship with the genocidal president of Sudan.

Throughout history it is shown that you can't be a revolutionary for very long without the support of the youth behind you, and what is happening in Venezuela this week is making this change painfully visible. It is something I noticed during my visit to the country earlier this year, when Chávez was boasting about giving the children of Venezuela "a good dose of the gas" to break up their demonstrations, and it has continued even further with the Education Law and the decision to throw an innocent 22-year-old deep to the wolves in a high-security prison. This is what separates a revolutionary from a caudillo.

The brave students on hunger strike have shown what can happen when Chávez goes too far, and the fact that they are having success is the best news they have had in years. Mr. Jose Miguel Insulza, Secretary General of the OAS, the ball is now in your court.

Eric Ehrmann: Latin Arms Race Heats Up: Obama Leans on Brazil To Buy Boeing Warplanes

2009-09-28T13:18:24Z

Sao Paulo

While sharing his vision of a more peaceful world with the UN and demanding big Pentagon cuts, US president Barack Obama has also been lobbying Brazil to buy warplanes from shrinking defense giant Boeing. This latest chapter in the underreported arms race between Brazil and Venezuela is a reminder that the global arms bazaar is a key driver of post-crisis economic growth.

Brazil's air force wants to replace aging Mirage and US-made F-5 fighters with either the French Rafale, the SAAB Gripen, or the F-18 Super Hornet now manufactured by Boeing. Next door, Venezuela is buying a new fleet of Su-35 attack aircraft, three Kilo class submarines from Russia and Chinese aircraft and radar systems. Already Brazil's top trade partner, China has just inked a big energy deal with Venezuela that adds $15 billion to the Hugo Chavez weapons war chest. And with the United States keeping Venezuela as their #2 supplier of imported oil (Canada is #1) Hugo has an even bigger bankroll for buying arms.

The last time a Dem White House put the arm on Brazil to buy American over French it was Bill Clinton, the deal was the big SIVAM radar project that's pushing the war on drugs into the Amazon, and the bribery investigation that followed embarrassed Brazil's government. Hoping it would all go away, Planalto Palace spokesperson Marcelo Baumbach dismissed reports in Paris daily Les Echos that Obama called Lula from Marthas Vineyard to discuss the Boeing deal as "rumors."

Aviation trade publications and blogs in Brazil have tagged the French Rafale as the front runner. Washington assured Brazil that they will provide previously unavailable sensitive technologies to give the Boeing Hornets a tactical the edge over Venezuela's Russian-made Flankers. This point was driven home last month when White House national security council director James Jones and Boeing executive vice president Jim Albaugh visited Brazil to discuss the F-18 deal. If supersized the way Boeing wants it to be, the deal could involve 120 aircraft and carry a price tag upwards of $30 billion.

Obama's efforts to run off the French are consistent with Bush administration policy crafted to contain what Washington views as threats to its Monroe Doctrine bragging rights in South America. To this end the Pentagon has re-activated the old 4th Fleet- mothballed since the 1950s- to police the waters off Latin America and protect US interests in the region.

France and Brazil, meanwhile, have hooked up in a strategic alliance to promote growth and regional security in the southern hemisphere. Since Guyana is an integral part of the French Republic, Brazil and France share a common border.

Brazil is buying submarines, frigates, helicopters and military aircraft made in France. Sale of the Dassault Rafale fighters would be a natural outgrowth of that relationship. In a show of solidarity, French president Nicholas Sarkozy was on the reviewing stand with Lula for Brazil's September 7th Independence Day celebration.

Beyond the hugs and photo ops, relations between the US and Brazil have become symptomatic of greater strains created by an antiquated inter- Inter-American system that is unraveling after more than a century of primus inter pares diplomacy by Washington.

Moving from US-backed dictatorships to democracy and free markets has widened the gap between haves and have-nots creating hybrid forms of class conflict, violence and micro-communities that attempt to imitate the upscale values post-crisis America continues to promote, but can no longer afford. Whether its aircraft, ethanol or drugs, world trade has escalated into economic warfare.

While US secretary of state Hilary Clinton criticizes China and Brazil's other key economic allies for engaging in unfair trade practices the World Trade Organization recently issued a decision awarding Brazil $800 million in a cotton subsidies case in which the US exhibited classic big government behavior. And a Dem controlled congress refuses to remove the 54 cents per gallon tax on sugar based ethanol imported from Brazil that Obama supported as a senator. Washington also blocked Brazil's deal to sell Toucano turboprop surveillance aircraft to Venezuela because the planes in question would contain sophisticated technology similar to what the US provides Colombia in a big aid package designed to track down suspected guerrillas and drug traffickers.

Brazil likes Obama, who remains a popular but unproven global leader as he enters the long backstretch of his presidential term. But Obama is deferring to an all Bush all the time Latin policy that promotes the downsizing of government and laissez-faire economics and runs contrary to Brazil's notions of state power and workers rights as voiced by Lula in his UN speech last Wednesday.

With Obama and Jones running interference Boeing may be getting closer to the red zone. Due date for final tenders was set for last Tuesday. But Reuters reports that Brazil's defense ministry, apparently in fairness to all the competitors, has extended the deadline for tenders on the deal to October 2nd - the same day the International Olympic Selection Committee announces whether Rio de Janeiro or Obama's home town of Chicago will host the 2016 Olympic Games.

Venezuela To Fine Networks That Air "Family Guy"

2009-09-25T09:53:23Z

CARACAS, Venezuela — Venezuelan authorities plan to impose fines on cable television companies that refuse to stop airing the animated television series "Family Guy."

Justice Minister Tareck El Aissami says the program should be pulled from the airwaves because it promotes the use of marijuana.

Venezuela Spends Millions On Grooming Beauty Queens

2009-09-24T10:57:34Z

CARACAS, Venezuela �" He calls them "loin steaks," you might know them as beauty queens.

With that attitude, it's no surprise that Venezuela is fast becoming known for an export other than oil and socialism: female beauty.

Rabbi Abraham Cooper: Obama at the UN: Will He Sound the Trumpet for Human Rights?

2009-09-22T18:10:34Z

To update Tom Paine, these are times that try men's souls. It's been an American summer of discontents--from an uncertain economic recovery, to an acrimonious health care reform debate hotter than global warming, to ACORN's inglorious examples of how not to "community organize." And now, President Obama makes his first foray to the United Nations--right between the Shofar blasts of Rosh Hashana and the Introspection of Yom Kippur.

What an opportunity for President Obama, after a tumultuous eight months in office, to announce at the UN an auspicious new beginning for his Administration by sounding America's trumpet as the champion of human rights--from Tehran to Caracas, and Pyongyang to Sudan. How better to unify Americans and to inspire our friends around the world impatiently waiting for America again to lead toward human rights. Ground Zero of the world's conscience waiting on America are Iran's people: brave enough to shout "death to the dictator" Ahdmadinejad in the mist of the hatred and lies of Nuremberg-style rallies orchestrated by their country's genocidal mullahcracy.

Here are ten global arenas that are crying out for renewed U.S. human rights engagement:

• Obama's invocation of democracy, not as an American imposition, but as a "human right" was among the biggest applause lines of his Cairo speech. Will the President use his bully pulpit to embrace the brave democratic voices across the Arab and Muslim world struggling against a sea of corruption and suppression?
• The displacement and deaths of non-Arab Sudanese by the Khartoum regime--the twenty-first century's single biggest human rights tragedy--cannot continue to be swept under the rug in the name of realpolitiks or oil profits.
• Israel-Palestine will edge closer to peace only when the President not only demands a settlement freeze but dismisses the verdicts of anti- Israel UN kangaroo courts and urges the arab world to join him in recognizing the Jewish People's historic 3,500 year relationship with the Holy Land.
• China--our most important economic partner--remains a serial abuser of the rights of Tibetans, Muslim Ughurs, and Falun Gong. Presidents Jimmy Carter and Ronald Reagan found a way to combine commitment to human rights with pursuit of Soviet-American détente, the Obama Administration must do the same with regard to human rights and Sino-American détente.
• Japan's new experiment with electing the opposition may not succeed in building an reinvigorated democracy and ally if the U.S. continues to ignore the gulags and coddle the proliferation challenge from Northeast Asia's biggest bully--North Korea's Kim Jong Il.
• Southeast Asia--from Myanmar, where Aung San Suu Kyi braves the silence of house arrest, to Indonesia, where Islamic democracy is a reality--voices await for encouragement from the American President.
• Western and Northern Europe, which likes to give the rest of the world self-righteous lectures about human rights, itself needs to be reminded of its own failures to contain a rising tide of anti-Semitism or to integrate its growing Muslim minority.
• Eastern Europe, as evidenced by the backlash against the abrupt cancellation of the U.S.'s promised missile shield on the seventieth anniversary of the Germany's WWII invasion of Poland, may waver in its democratic commitments if it continues to feel its being treated as a political and economic poor relation.
• Latin America democracies like Colombia and Argentina may falter if the U.S. doesn't begin to take more seriously the subversive threat posed by Venezuela's Iran-allied "Castro on steroids"--Hugo Chavez.
• The United Nations itself, where President Obama will preside over a Security Council meeting, is doomed to remain a paper tiger as long as its human rights potential is stifled by the stranglehold maintained by anti-human rights bureaucracies such as the UN's misnamed Human Rights Council in Geneva.

By throwing down the gauntlet to the global rogues' gallery--including Muammar Gaddafi, Hugo Chavez, and Mohammed Ahmadinejad--who will be in attendance at this year's UN confab in New York, Barack Obama can remind people abroad as well as at home why his election initially electrified their hopes for "change we can believe in." From Woodrow Wilson's Fourteen Points, to Franklin D. Roosevelt's Four Freedoms, to JFK's New Frontier, to Ronald Reagan's "Mr. Gorbachev, Dear Down this Wall," the world has heard a clarion call before. Now it the time for America's eloquent new trumpeter to sound the message that this nation--no matter the difficulties--won't retreat from its global human rights commitments.

Historian Harold Brackman, a consultant to the Simon Wiesenthal Center co-authored this essay.

Christopher Herbert and Victoria Kataoka Rebuffet: Weekly Foreign Affairs Roundup

2009-09-18T17:38:58Z

The week's top stories in foreign affairs:

Redirecting Missile Defense

SI Analysis: The Obama administration announces that it is scraping plans for a Eastern European based Missile Defense Shield in favor of a more mobile and agile naval-based missile defense strategy. Critics of the administration contend that the US has weakened its nuclear deterrent strategy and relinquished a key card in negotiations with the Russians (planned Missile Defense installations in Poland and the Czech Republic irked Russia to no end, as they said such a shield could only be aimed at them; but more importantly they felt that Missile Defense coupled with NATO expansion policies pushed too far into their sphere of influence). From this perspective, relinquishing the program without a solid quid pro quo from the Russians is a waste of an opportunity. Proponents say it is a savvy move: to better position the US ahead of the UN Security Council meeting next week and impending negotiations with Iran scheduled to start at the beginning of October; to bolster the US policy of anti-proliferation and to boost strategic arms reductions talks (START II) with the Russians; and to relieve the US of a costly, so-far ineffective and contentious program in favor of a more agile and reliable system. Some speculate that the move is indicative of a grand bargain reached with the Russians over pursuing greater sanctions against Iran (e.g. halting oil imports into Iran) if it does not quickly change course on its nuclear program. Whatever the reason, it was an expected decision and practical as it eliminates all sorts of distractions from key security policy (e.g. opposing European positions on the shield, debates about its cost and efficacy, arguments that say it spurred a new generation of arms races, a oft-cited reason for Russian opposition to myriad forums of international cooperation).

Countdown for Iran
SI Analysis: A flurry of stories has hit the airwaves ahead of Iran's showdown with the UN Security Council next week and Iran appears to be dictating every move: the UN nuclear agency IAEA says that Iran has enough fissile material to make a nuclear weapon; Iran, in an about-face, suddenly has allowed the nuclear watchdog to inspect its facilities (via CCTV); Iran agrees to hold talks about re-engagement with the West (but not specifically about its nuclear program) beginning the first week of October (one week after the Security Council meeting). Meanwhile internally all seems to be going the way of President Ahmadinejad and the Supreme leader Ayatollah Ali Khamenei: the President's picks for key ministerial positions such as oil, intelligence and the interior have been approved; in a provocative move, the next defense minister Ahmad Vahidi is wanted by Interpol for his lead role in the 1994 bombing of a Jewish center in Argentina; latent repression is reported in universities, where the feared baseej militias are skulking about to warn off any potential student uprisings and the Supreme leader has hinted on cracking down on dissenting professors and liberal arts curriculum. All eyes, especially Israel's, are watching closely to see whether Iran will actually engage in talks over its nuclear program. If not then it will be up to the US to convince the Russians and the Chinese to go along with tougher sanctions and contain the hawkish actions of the Israelis.

Analysis in Brief:

President Putin Again?
SI Analysis: Reports emerge that Putin may run for President again in 2012. The Russian constitution bars politicians from serving more than two consecutive terms. But nothing, constitutionally (or politically, or logistically, or realistically) keeps the present Russian Prime-Minister from reclaiming the throne, er political office, after President Medvedev's term expires.

Black Hawk Not-So-Down-At-All
SI Analysis: In the most ambitious and brazen action in Somalia since its harrowing and failed incursions of the 1990s, US special forces made a daylight incursion into Somalia to track and kill Saleh Ali Nabhan, a supposed link between the extremist al-Shabbab militia in Somalia and al-Qaeda at large as well as a suspect in the al-Qaeda attack on a hotel in the Kenyan port of Mombasa in 2002.

Chavez taking the lead in the South American Arms Race
SI Analysis: Venezuelan President Hugo Chavez's recent statements and dealings have lent greater weight to those who argue, including US Secretary of State Hillary Clinton, that a new arms race is afoot in Latin America. Citing recent agreement to permit US anti-narcotic operations to launch from Colombian military bases as impetus, Chavez has just concluded a significant arms deal with Russia and, in defiance of international law, claims to be pursuing a nuclear cooperation agreement with Iran.

Ugandan Strife
SI Analysis: Riots and violence opposing the central government with members of the majority ethnic Bagandan group rocked Kampala. The reasons for the uprisings were not initially understood since the parties traditionally tend to get along; some speculate political maneuvering to seduce minority factions ahead of 2011 elections; others say a personal falling out between the Bagandan King Ronald Mutebi and Ugandan President Yoweri Museveni, an Akole; still others lay the bizarre claim that Libyan President Qaddafi is funding the Bagandan uprising.

Victor: President Karzai
SI Analysis: Incumbent Hamid Karzai emerges as the winner of the Afghan Presidential elections, but not without significant controversy and claims of massive fraud. The Independent Election Commission and the Election Complaints Commission are pursuing different strategies to investigating the reports of fraud and validating the election or calling a run-off election. But time is running out and many worry that supporters of Abdullah Abdullah will not accept the official results in any case. There are reports that the EU, whose election-observing mission claims up to one third of all votes could be fraudulent, may be trying to broker a power-sharing deal between Abdullah and Karzai, but those are unconfirmed. Meanwhile, in the US debate continues on how best to continue fighting the war in Afghanistan and how to measure success there. Some, including Chairman of the Joint Chiefs of Staff Adm. Mike Mullen, argue for massive troop increases, others, like chairman of the Senate Armed Services Committee Senator Carl Levin, call for state-building and empowerment of Afghanistan's own security forces... both will have to take place in order to change the present course of the war.

This briefing can be seen in the Huffington Post and on the Simple Intelligence site.

Robert Amsterdam: Clan Politics Unite Caracas, Moscow, and Tehran

2009-09-18T14:10:59Z

The recent visits to Moscow and Tehran by Hugo Chavez raise a number of concerns about the deepening relations between Russia, Iran and Venezuela.

The motivation behind the Russia-Iran-Venezuela alliance is often misunderstood. On the one hand, there is the narrative that these governments are pursuing national interests, seeking to deepen their security against ever-present external threats and accrue regional power. Others argue that the alliance is driven by an attempt to build an "alternative architecture" of global relations, one that is conveniently unconcerned with democracy and human rights and bound solely by the common value of anti-Americanism.

Both these assumptions are dangerously misleading. In reality, the foreign policies of these three states are driven by the personal interests of clans that control the highest offices of their governments.

In addition to sharing a national leader-for-life mentality, the leaders of these three countries regularly employ the powers of the state in support of clan-controlled businesses, especially in the energy and arms sectors. When Deputy Prime Minister Igor Sechin travels to Venezuela (he visits Caracas with extraordinary frequency), there is little to no separation between his diplomatic duties and personal financial interests in inking deals between Rosneft and PDVSA. When the Iranians travel to Caracas, they are given a red carpet welcome to jointly operated factories and the assistance of elaborate money-laundering networks.

Chavez's family and close-knit clan of loyal military officers have become multibillionaires under his rule. Known as the boligarchs, they benefit directly from the alliance of Russia and Iran since it lends much-needed credibility and legitimacy to their plunder of the country. In exchange, Chavez last week visited Moscow and announced that Venezuela would recognize the independence of the Georgian breakaway regions, South Ossetia and Abkhazia. On the way, he stopped in Turkmenistan to invite the president to join the Russian-inspired gas cartel -- despite the fact that Venezuela is a net importer of natural gas from Colombia.

It is important to recognize that reciprocally reinforcing mechanisms of corruption hide behind the facade of state institutions in all three countries. These systems are inherently duplicitous, using laws and instruments of state authority to enhance rather than control corruption. It is corruption cloaked in nationalism, religion and self-defense. All three countries -- with Venezuela far in the lead -- have unstable civil-military relations that are fraught with the tensions of unlimited power and limited ability to control some key interest groups. Ironically, Iran is the most pluralist of the three.

What are the symptoms of clan rule?

• The horizontal of incompetence. Rather than a vertical of power, there is a horizontal of incompetence, characterized by a systemic inability to delegate power because of the lack of trust and poorly defined institutional responsibility.

• Short-termism. The ongoing internal fights over property in all three countries leave elites focused more on internal than external battles. Policy flip-flops are the rule rather than the exception. The only constant is the need for crisis. From the Georgian war to the FARC to the virulent anti-Semitism of Chavez and Iranian President Mahmoud Ahmadinejad, the fire of the invective is inversely proportional to the need to mobilize security forces and keep internal opposition off-balance. The speed of opposition crackdowns is the one constant.

• Definitional anti-Americanism. The image of the Great Satan is another constant that needs to be continually kept alive. For leaders who speak of multivector diplomacy, there is a compulsive need to be obsessed with U.S. power and to foster anti-American attitudes as a tool to unite their societies. Yet in the face of the Obama administration, readiness for this is becoming harder to sustain.

Russia's legislation to ring-fence the "strategic sectors" of the economy provides a compelling example of clan-based interests at work. It is more accurate to call this the siloviki retirement plan because it protects businesses controlled by key individuals around the prime minister. But even better, it allows them to enrich their friends through tied sales between military, energy, and civilian nuclear technology. And now, if you are Chavez, throwing in recognition of Abkhazia and South Ossetia will give you a cheap credit to buy 100 Russian tanks.

The crackdowns on civil liberties recently in evidence in Tehran, Caracas and Moscow reflect the insecurity of three juntas that lack internal legitimacy and are fighting to maintain the private property they have amassed. Whether it is the Venezuelan boligarchs, the Revolutionary Guard or the siloviki, the torture and cruelty of the jails and show trials are directly related to their interest in safeguarding assets rather than ideology. All three leaderships are engaged in a quest for impunity and the possession of nuclear weapons sought by Iran and Venezuela is part of that process. The success of North Korea is not lost on these leaders. It is small wonder that Russia has so little interest in resolving the nuclear impasse over Iran.

The real danger, however, is that we too often confuse cause and symptom and fail to recognize how false fronts operate in these countries. Nearly all analyses, whether internal or external, see their systems through a prism that hides the power of clans and cabals. In order to formulate effective policies to respond to the new alliance of Russia, Venezuela and Iran, our first step should be to better understand what is motivating such odd bedfellows.

This opinion article was originally published in The Moscow Times.

Venezuela-China Sign $16B Oil Deal

2009-09-17T08:55:19Z

Venezuela has announced a $16bn deal allowing China to drill for oil in the eastern Orinoco basin.

Hugo Chavez, Venezuela's president, did not name the Chinese companies involved in the deal, but said they would form a joint venture with
state-owned Petroleos de Venezuela (PDVSA) to produce 450,000 barrels a day of extra heavy crude.

"Yesterday, a deal was signed in Beijing for the Orinoco basin. It sets out a Chinese investment of $16bn over the next three years," he said during a school visit on Wednesday.

"In addition, there will be a flood of technology into the country, with China going to build drilling platforms, oil rigs, railroads, houses."

Venezuela announced last Saturday that it had also signed a similar deal with a Russian consortium during Chavez's recent visit to Moscow.

Russia To Finance $2.2B For Venezuelan Arms

2009-09-14T09:50:24Z

Sept. 13 (Bloomberg) -- Venezuelan President Hugo Chavez said that Russia will finance arms purchases valued at $2.2 billion. This would increase the country's defensive capacity with more tanks, missiles and anti-aerial defense systems.

Venezuela Earthquake Rattles Caracas, Measures 6.4

2009-09-12T21:37:55Z

CARACAS, Venezuela — An earthquake shook Venezuela's capital and nearby states Saturday, injuring 14 people and causing damage to a few buildings.

The U.S. Geological Survey reported a preliminary magnitude of 6.4 for the quake, saying the epicenter was off Venezuela's Caribbean coast 65 miles (110 kilometers) west of Caracas. The head of Venezuela's seismological agency, Francisco Garces, put the quake at magnitude 6.2, followed by an aftershock registering 4.0.