All Categories

Cuba and Obama

When the fifth Summit of the Americas takes place in Port of Spain on 17-19 April, US President Barack Obama's first formal encounter with the region's leaders as a group will be hallmarked by an important change in hemispheric relations: he will be the representative of one of only two countries that do not have diplomatic ties with Cuba — and the other one, El Salvador, is only a few months away from restoring diplomatic relations with the island. Behind this is another, related change: the repositioning of Cuba vis-í -vis Venezuela.

Costa Rican president Óscar Arias, one of the most outspoken critics of Cuba under Fidel, announced on 18 March that his country was restoring the diplomatic links severed back in 1961. This was the culmination of a rapprochement that began when Raúl Castro was formally invested as President of Cuba in February 2008. In December, Costa Rica voted in favour of Cuba's incorporation to the Rio Group, Latin America's premier political forum. In early March this year, the Cuban government invited Arias to attend the summit of the Non-Aligned Movement, due to be held in Havana in April.

Mauricio Funes, President-elect of El Salvador, had included among his campaign promises the restoration of diplomatic ties with Cuba, severed back in 1959. Immediately after his victory in the Salvadorean presidential elections held on 15 March, the representative in Havana of his party, the Frente Farabundo Martí­ para la Liberación Nacional (FMLN), issued what sounded like a formal announcement that the promise would be kept, adding that the FMLN was interested in joining the Alternativa Bolivariana para las Américas (Alba), the Venezuela-led bloc. Funes announced on 18 March that he would restore relations upon taking office in June, adding, “The official position is defined only by the President. Any opinion on foreign policy not issued by the President is not to be considered official".

The significance of this remark became evident two days later when Funes made his first pre-inaugural trip abroad — to Brazil. After a meeting with “my friend", President Lula da Silva, Funes said: “I identify myself more with the Brazilian model than with the Venezuelan one, though I want good relations with all. President [Hugo] Chávez called to congratulate me and I will visit him, and all the countries I can, particularly the Latin American ones [...] Many of our ideas for government are taken from concrete actions of Lula's fight against poverty. I had a Brazilian campaign adviser, my wife is Brazilian, my son lived these last days of the campaign in Brazil and the first president to congratulate me on my victory on Sunday was Lula. Thus, my link with Brazil is undeniable."

This earned Funes an oblique criticism from Nicaragua. Tomás Borge, deputy secretary general of the ruling Frente Sandinista de Liberación Nacional (FSLN), after congratulating the FMLN — not Funes — for its victory, said he hoped it would “represent the inheritance, the fullness and the identification with the principles that gave life to the FMLN". By way of contrast, he said, “Sometimes there is a tendency for the victory of progressive movements to lean towards exaggerated conciliation and to renounce certain principles that gave it life".

Arias is representative of the mood that will prevail at the Summit of the Americas. “The Cold War is over and I think that President Obama will sooner or later have to draw close to a dialogue with the Cuban régime. [Obama] has announced that he will close the prison in Guantánamo. I go further: I have said that sooner or later Guantánamo must be returned to the Cuban people and be part of their territory".

His stance was mirrored in Brazil by Lula's foreign affairs adviser, Marco Aurélio Garcia. He predicted that the issue of Cuba would be on the table in the Summit of the Americas, and that he hoped the US would take the plunge and respond unilaterally, without waiting for pressure to build up. “It would be good for the US to see these [recent] events as another signal that governments in the region with the most diverse political sensitivities consider dialogue important [...] The issue of Cuba will come up because there is a widespread feeling in Latin America that the [US] embargo no longer makes sense, that it is part of a Cold War agenda that belongs to the past [...] The normalisation of relations with Cuba would have an extraordinary effect on the image of the US. I think that, at first, the US initiatives must be unilateral, with no strings attached". Lula himself is on record as stating that there are “no moral, political or economic justifications" for the US to maintain its embargo.

Development: On 10 May president-elect Ricardo Martinelli announced his new cabinet, a week after his landslide victory.

Significance: The list of names contained few surprises and reflects Martinelli's commitment to the private sector.  His new cabinet features a mixture of his campaign team, independents and members of the political parties which comprised his Alianza por Cambio coalition - including the traditional opposition Partido Panameñista (PPA).

Martinelli's running mate, Juan Carlos Varela, a millionaire businessman whose family controls the liquor distilling business, Varela Hermanos, will serve as foreign minister as well as vice president.  Varela had been the PPA presidential nomination before striking a deal with Martinelli.

Another PPA member, Alberto Vallarino, formerly a prominent banker and member of Panama's leading financial group, Banistmo, will serve as economy minister. Both Vallarino and Varela will work on clinching US congressional approval of the delayed US-Panama Free Trade Agreement, one of Martinelli's declared priorities.

Other notable appointments include José Raúl Mulino, as interior minister. Mulino is president of the Unión Patriótica (UP), one of the smaller parties comprising Martinelli's coalition. Along with the economy, Panama's security situation is a priority for the new government. Mulino is one of the most experienced appointees having served as foreign minister under the Guillermo Endara administration (1990-1994).

The members of Martinelli's campaign team rewarded with cabinet positions include: Jimmy Papadimitriu (minister of the presidency); Alma Cortés (labour); Salomón Shamah (tourism); popular TV presenter Guillermo Ferrufino (social development); and Roberto Enrí­quez (trade and industry). Ministry for canal affairs goes to Rómulo Roux, a lawyer.

Development: On 16 June Chile's foreign minister, Mariano Fernández, poked fun at his Peruvian counterpart.

Significance: Although the joke was justified it is risky because of Peru's century-old grudge against Chile. Fernández joked that his opposite number in Peru, José Antonio Garcí­a Belaúnde,   was an "international political visionary" because Garcí­a Belaunde claimed that he knew that Chile would not challenge the authority of the International Court of Justice (ICJ) at The Hague. Fernández himself had made just such an announcement the day before Garcí­a Belaunde made his claim that he knew that Fernández would do so.

The two countries are using the court to resolve a long-running dispute about where the maritime border runs. Fernández announced that Chile will present all its supporting evidence for its case to the ICJ by 10 March 2010.

Development: On 23 July the interior minister, Fabio Valencia, denied that the government's coalition has fractured and said that he would not step down, after the coalition party, Partido de la U (the 'U'), demanded his resignation.

Significance: President Alvaro Uribe is facing an internal crisis in his multi-party coalition following the government's failure to secure backing for its preferred candidates in elections for the presidencies of congress on Monday (20 July). The 'U' and other factions close to Uribe are terrified that the result will endanger the final approval of the referendum to allow for Uribe's re-election for a third consecutive term in May 2010. This fragmentation is exactly what Uribe had feared may happen if he does not unite his coalition by running again.

The 'U' is seething because it was robbed of the presidency of the lower house - which it should have taken according to a pact agreed by coalition parties after the last elections in 2006 - after factions of Uribe's coalition united with the opposition to elect Edgar Gómez, of the smaller coalition party Convergencia Ciudadana.

The head of the 'U', former peace commissioner Luis Carlos Restrepo, demanded Valencia's resignation on 22 July, accusing him of mishandling the congressional vote, and therefore putting the re-election referendum at risk. The party was irate when Valencia (of the Partido Conservador, PC) attempted to underplay the result. “We do not agree with the minister of the interior when he says nothing happened here. It is clear that something happened, the government's coalition is fractured.   It is clear that parties like Cambio Radical openly violated congressional pacts to prevent the U from holding the presidency, which would have enabled the conciliation of the referendum to advance", said Restrepo.

Yesterday, 23 July, the 'U' also asked Uribe to eject the Cambio Radical party from the coalition. The party is nominally part of the government's coalition, but its leader and presidential hopeful, Germán Vargas Lleras, has been estranged from Uribe for months over the re-election question. Uribe can ill afford to lose the party's support, however: it is the third largest coalition party with 15 senate and 20 lower house seats.

Also yesterday, the PC reaffirmed its unequivocal backing for Valencia.   This is the first time since Uribe came to power that the PC and the 'U' - the two dominant coalition members - have come to blows publicly.

Argentina: Argentina's tax take reached US$6.5bn in August 2009, up 4.2% over the same month of 2008.

Development: On 11 October the constitutional court (CC) confirmed a revised list of 13 supreme justice court magistrates for the 2009-2014 period.

Significance: The outcome of the election, crucial to determining the future of Guatemala's notoriously corrupt justice system, represents a partial victory for civil society and the UN-backed International Commission against Impunity in Guatemala (Cicig). Following objections raised by Cicig against six of the 13 judges initially appointed on 30 September, congress backed down and replaced three of them on 8 October.

The judges with alleged dubious credentials who remain on the final list are: Thelma Aldana, Gustavo Bonilla and Mynor Franco. Franco in particular has been flagged up in the national media for his links to Sergio Roberto López Villatoro - a reported ally of President Alvaro Colom's wife, Sandra Torres de Colom, and her sister Gloria Torres, both of whom wield considerable influence in the government. Cicig's director, Carlos Castresana, singled out López for his alleged meddling in the election process and accused him of having links to organised crime.

Cicig's contribution to strengthening the process of electing the judiciary was also evident in relation to the final list of 90 appeal court judges, picked by congress on 10 October. The final list excluded 20 candidates to which Cicig had raised objections. However, the flaws in the election process and continued nepotism were evident with the inclusion of figures such as Silvia Molina de Linares and Flor de Marí­a Gálvez Barrios. The former is the wife of a legislator for the rightwing Partido Patriota and the latter is the sister of the rector of Guatemala City's Universidad de San Carlos, who presided over the committee responsible for nominating the CSJ.

The new judges will be sworn in on 13 October.

Development: On 21 November Mexico's attorney general's office (PGR) confirmed that Ramón Martinelli Corro, a cousin of Panama's President Ricardo Martinelli, had been arrested, accused of money laundering and links to organised crime.

Significance: Martinelli Corro's arrest is particularly unfortunate for the Panamanian president given his declared offensive against corruption, which has largely targeted the opposition Partido Revolucionario Democrático (PRD).

The Mexican authorities confirmed that Martinelli Corro who has previously served as treasurer for President Martinelli's Cambio Democrático (CD) and, in a previous political cycle, as the party's representative in the Central American Parliament (Parlacen) was arrested along with seven others, accused of money laundering for Mexico's Beltrán Leyva drug gang, one of Mexico's six largest criminal gangs. The Beltrán Leyva gang split from the Sinaloa gang but is now one of its chief rivals.

Four of those arrested were stopped at Mexico City's international airport, in possession of some US$410,000, while the others (including Martinelli Corro) were arrested in various hotels in the capital. An official source in Panama said that Martinelli Coro was already under investigation for money laundering by the Panamanian authorities.

The Panama government spokesperson, Judy Meana, issued a rather weak statement in response to the arrest, reiterating the commitment of the Martinelli administration to the fight against organised crime.

Development: On 13 January Eduardo Frei, the presidential candidate from the ruling centre-left Concertación alliance, received a double boost. The first was an opinion poll that put him neck-and-neck with his opponent in the second round run-off, the rightwing candidate Sebastián Piñera. The second was a fulsome endorsement by a dissident socialist, Marco Enrí­quez-Ominami, who finished third in the first round of the presidential election a month ago.

Significance: The poll, by Mori, still has Piñera, the first round victor, narrowly ahead, by 50.9% to 49.1%, but this is within the poll's margin of error. Enrí­quez-Ominami's endorsement of the former president Frei (1994-2000) may yet tilt the election Frei's way. Despite the fact that he has led the polls throughout the race, history is against Piñera: no rightwinger has been elected president of Chile since 1958.

Enrí­quez-Ominami's move was predictable. Last week his stepfather, Carlos Ominami, who was a long serving senator and served in the first Concertación government in the early 1990s (but not in Frei's government) endorsed Frei. The outgoing government has also taken up a couple of Enrí­quez-Ominami's policy proposals in an effort to secure his endorsement of Frei.

What was unusual about Enrí­quez-Ominami's endorsement was the strong language he used. He accused Piñera of representing the people that killed his father, a leftwing guerrilla leader, Miguel Enrí­quez.

Enrí­quez-Ominami's language was charged. He said that Piñera's supporters were “accomplices of the people who killed my father, and worse still, even today they have not repented of anything and are proud of having killed him." He went on: “Between us and the Right, which is ultimately the base of Sebastián Piñera's candidacy, there is an irreconcilable difference. At this point, with the uncertainty as to whether the Right could stop Chile's march towards the future, it's my responsibility to do what I can to stop this happening." He went on to say that his supporters, of course, had the right to decide for whom they would vote.

Enrí­quez-Ominami, who had pointedly refused to endorse Frei after he was evicted from the presidential race after the first round on 13 December, has little to lose and much to gain by endorsing Frei. If Frei wins, Enrí­quez-Ominami can claim that it was his intervention that swung the election. As the dissident socialist has no party behind him or a slate in congress, this 'kingmaking' role is the only way he can maintain his political momentum. If Frei loses, Enrí­quez-Ominami cannot be blamed for splitting the leftwing vote, and his long-standing criticism of Frei as a dull candidate chosen by an out-of-touch political class will resound.

Piñera responded clumsily to both events. His campaign chief, Rodrigo Hinzpeter, argued that Enrí­quez-Ominami's belated endorsement was a betrayal of the 1.4m people that voted for him in the first round. Hinzpeter all but dismissed the Mori poll as a rogue: he pointed out that every other survey has shown that Piñera will win the presidency on 17 January.

Pointer: The Mori poll found that 7% of registered voters would either spoil their ballot papers or vote blank. A further 12.9% would not bother to vote, technically breaking the law.

Cuba: On 23 February the US congressional agriculture committee's chairman, Collin C. Peterson (Minnesota) introduced legislation to expand US agriculture exports to Cuba. This bipartisan bill, known as the 'Travel Restriction Reform and Export Enhancement Act' (H.R. 4645), is co-sponsored by 30 deputies, including representatives Jerry Moran (Kansas), Rosa L. DeLauro (Connecticut), and Jo Ann Emerson (Missouri). The bill would eliminate both the need to go through banks in other countries to conduct agricultural trades and the accompanying fees those banks charge. It would also require agricultural exports to Cuba to meet the same payment requirements as exports to other countries, which means payment would be required when the title of the shipment changes hands, not in advance. Finally, it would allow U.S. citizens to travel to Cuba, reducing the bureaucratic red tape currently required for individuals to travel to Cuba to facilitate new agriculture sales. 

In the official press release Peterson declared: “Helping feed Cuba is good for the US economy and for the Cuban people. This bill increases the ability of our farmers to sell their products to Cuba just like they do with our other trading partners. US producers are the closest suppliers that can help meet the food and agriculture needs of the Cuban people. Opportunities to sell to paying customers in Cuba have been hindered by bureaucratic red tape and by arbitrary prohibitions on the ability of U.S. citizens to travel to Cuba. This bill cuts the red tape and allows that trade and travel to happen". US food sales to Cuba rose 61% year-on-year to a record US$710m in 2008, up from US$437.5m in 2007. However, sales fell again in 2009 to an estimated US$528m, amid a severe liquidity crisis in Cuba (and lower prices).

Cuba: On 24 February the US state department issued a statement, signed by Philip J. Crowley, Assistant Secretary, Bureau of Public Affairs, on the death of the Cuban political prisoner, Orlando Zapata Tamayo: "On Tuesday, February 23, 2010, prisoner of conscience Orlando Zapata Tamayo died following an eleven-week hunger strike. We are deeply saddened to learn of his death, and the U.S. Government extends its heartfelt sympathies to his family, friends, and supporters. Zapata was arrested in 2003 on charges of 'contempt for authority.' While in Havana last week, the U.S. delegation for Migration Talks raised Zapata's incarceration and poor health with Cuban officials and urged them to provide all necessary medical care. "Mr. Orlando Zapata Tamayo's death highlights the injustice of Cuba's holding more than 200 political prisoners who should now be released without delay."

Central America: On 22 February US senators Christopher Dodd (D) and Bob Corker (R) returned from a trip to Central America where they met government officials to discuss US relations and economic issues impacting the region. The pair met: Panama's vice president, Juan Carlos Varela; Costa Rica's President and president-elect, Oscar Arias and Laura Chinchilla respectively; El Salvador's President Mauricio Funes and Foreign Minister Hugo Martí­nez; members of El Salvador's opposition; Nicaragua's Vice President Jaime Morales Carazo; members of Nicaragua's opposition; Honduras's President Porfirio Lobo; and members of the Honduran opposition. Dodd is a senior member of the Senate Foreign Relations Committee and the chairman of the subcommittee on Western Hemisphere, Peace Corps, and Narcotics Affairs. Corker is also a member of the Senate Foreign Relations committee and serves as ranking member of the subcommittee for International Development, Foreign Assistance, Economic Affairs and International Environmental Protection, which has jurisdiction over bilateral humanitarian, development, economic, trade and security assistance programs implemented widely across Central America.

Nicaragua: On 21 February, US Deputy Assistant Secretary of Defence for Western Hemisphere Affairs, Frank Mora, as well as senators Christopher Dodd (D) and Bob Corker (R), attended the swearing in of General Julio César Avilés as the new commander of the armed forces. Mora said his presence reflected US interest in deepening bilateral relations and cooperation in the fight against organized crime. He said that Russia's plans to open a regional office in Managua did not bother the US, as long as there was transparency in relations between the states to prevent problems and misunderstandings. He also emphasized the importance of maintaining strict control over the 1,057 SAM missiles that Nicaragua keeps for national security. Nicaragua has not replaced its ambassador to the US since Arturo Cruz left in March 2009 (to take up a teaching post in Managua) and is currently represented by charge d'affaires, Alcides Montiel Barillas.

Development: On 8 April it became clear that Brazil and the US were working on two separate security agreements. 

Significance: Both the US and the Brazilian governments and the international media had conflated the two. As today's edition of our monthly sister publication, Security & Strategic Report (SSR), makes clear, the two countries have been discussing two, separate, agreements. SSR points out that the US reticence about details has led to wild speculation.

The US and Brazil have been discussing simultaneously, but separately, a new defence cooperation agreement and a new joint intelligence facility on drugs/security in Rio de Janeiro. The bilateral military agreement is the product of a visit by General Douglas Fraser, chief of the US Southern Command (Southcom) to Brazil in late March. The drugs intelligence centre is the development of an initiative by the Brazilian navy and federal police to establish an intelligence centre devoted to monitoring drug trafficking, smuggling, gunrunning and people trafficking in Rio. This is a Brazilian undertaking with the participation of other countries, loosely modeled on the US Joint Inter Agency Task Force South (JIATF-S) based in Key West Florida, and a European Union centre based on the banks of the river Tagus in Portugal.

The confusion arose because the JIATF-S, set up 17 years ago, is under the command of Southcom but has military and police attachés from 14 countries, among them Brazil's navy and federal police who were impressed with the facility. Brazil is still in the process of appointing attachés to the European centre in Portugal.

Development: On 18 May the central bank president Nelson Merentes said that Venezuelan authorities will shortly seek to establish a trading band for the parallel free floating exchange rate, as part of continuing efforts to rein in inflation and clamp down on speculation.

Significance: The government must also address the root of the current problem, which is the severe dollar shortage on the local market. Confidence in the Bolí­var Fuerte has all but collapsed.

The country will use prices on government dollar bonds traded by investors in the local market to set the range, Merentes explained, but he declined to specify what the range might be. The local securities market has been temporarily suspended in the meantime.

The parallel exchange rate, known as the dolar permuta, has fallen to BF8.1/US$ in recent weeks, almost 50% below the official 'oil' exchange rate used for most imports, set at BF4.30/US$ in a January 2010 devaluation. The government has now intervened in 31 local brokerages on suspicion of dubious currency trades, according to Tomás Sánchez, president of the National Securities Commission (CNV).

The government has accused local traders of speculative attacks on the parallel rate, and yesterday Merentes suggested that some drug traffickers were using the local parallel market for money laundering purposes. US judicial authorities yesterday said they had “voluminous" evidence against 16 Venezuelan nationals (of which 14 are being held) on such charges.

Also yesterday, the president of the National Assembly's Social Development Commission, Rafael Rí­os, said he was looking at new ways to make sure that local supermarkets accept employee food coupons (known as 'cesta tickets') as a means of payment, after the new consumer rights agency, Indepabis, reported that the Makro chain was refusing to accept the coupons.

Development: On 24 June, outgoing President Alvaro Uribe announced he would ask France's President Nicolas Sarkozy for greater French assistance to recapture Rodrigo Granda Escobar, the so-called foreign minister of the Fuerzas Armadas Revolucionarias de Colombia (Farc).

Significance: Without saying so explicitly, Uribe's “request" could be interpreted as a recrimination against the French government's apparent lack of interest in Colombia's armed conflict after Ingrid Betancourt, the Colombian-French politician held hostage by the Farc between 2002 and 2008, was freed during 'Operación Jaque'. Uribe's appeal is undoubtedly a preliminary step in intensifying the search for the Farc's top leaders during the upcoming administration of President -elect Juan Manuel Santos after 7 August.

France's public humanitarian involvement in the Colombian conflict appeared to vanish once Betancourt was freed, but the Colombian government had freed Granda in mid-2007 as a gesture of goodwill to the international community in general and to President Sarkozy in particular, who asked Uribe to release the Farc leader. Granda's liberation was intended to trigger a reciprocal move from the Farc; however, the Farc never formally agreed to the government's proposal and Granda, who left Colombia for Cuba, has now vanished.

Colonel Alvaro Pico, director of Interpol Colombia, confirmed that Granda has three pending Interpol Red Notices against him for numerous crimes, including his alleged participation in the kidnapping of Cecilia Cubas, daughter of Paraguay's former president Raúl Cubas (1998-1999), who was kidnapped in 2004 and her body found in 2005.

Furthermore, General Freddy Padilla de León, commander of the Colombian armed forces, announced that capturing Granda was one of the top priorities for the intelligence services and appealed to people in other countries to contact Colombian authorities as it is believed Granda is “overseas". William Brownfield, the US ambassador to Colombia, stated that Granda is not in the US, adding that his country's intelligence services believe Granda to be in a country in which the US has little influence.

Development: On 1 August an Argentine senator claimed that attempts had been made to bribe him in 2008, prompting an outburst of allegations of extortion from the opposition against the administration of President Cristina Fernández de Kirchner.

Significance: Prominent members of the opposition have spoken out against the government. Felipe Solá, now a senator from Peronismo Federal (PF), but previously governor of Buenos Aires and an ally of Fernández's husband, Néstor Kirchner, has been the most critical, saying of the senate “we are full of legislators who are prepared to U-turn" on legislation.

While investigating the issue an anti-government newspaper, La Nación, highlighted four bills recently under discussion in the congress in which the positions of opposition deputies are thought to have been influenced by the ruling Frente Para La Victoria (FPV) before the final vote. The allegations of corruption were originally made by Emilio Rached, senator for Santiago del Estero. Rached anonymously told a reporter from a newspaper Perfil that he had received a text message offering him US$2m if he changed his vote to support the controversial Resolution 125 in July 2008 which would have imposed export duties on soya.

The government is also supposed to have encouraged senators not to attend votes which the opposition seemed likely to win so that the sessions lacked a quorum. In some cases, when the deputies attended sessions after an absence, they would vote in the opposite direction to that originally expected. Accusations of cooption have focused on Senator Roxana Latorre of the Santa Fe Federal party, although La Nación has identified nine other senators that it believes to be involved from both ruling and opposition parties, including the former president Carlos Menem (1989-1999).

The topics of legislation supposedly affected by cooption were by no means insignificant. They include: appointments to the central bank; changes to cheque laws; and, most recently, the law on same sex marriage.

President Fernández allegedly gained the support of senators Marina Riofrí­o, of Frente Para La Victoria, and Ada Iturrez de Capellini, of Frente Cí­vico, by inviting them to accompany her on an official visit to China. Both senators were originally against the government-backed same sex marriage bill.

With regards to the appointment of Mercedes Marcó del Pont to the central bank, the appointment was only confirmed by 35 votes in favour, with 34 against and one abstention. Latorre voted in favour and Menem abstained. Aspersions will continue to be cast this week as the '82%' bill is considered. Championed by the opposition, the bill would increase the floor for pensions to 82% of the minimum wage.

PARAGUAY: Fastest growth since 1981

In late August the central bank  and the government jointly increased their forecast for real annual GDP growth this year from 6% to 9%.That growth rate would be the highest for the country since 1981, when the  economy managed 9.2% growth. In 2009,  it contracted 3.8%.

The revised forecast,  issued by the finance minister, Dionisio Borda,    largely reflects the huge soya harvest this year. Borda reckoned that the primary sector (agriculture, ranching and forestry) would expand  some 49.9% this year. More surprisingly, he expects growth of 10% in manufacturing (which in Paraguay includes construction, electricity and water). Services are likely to rise by 34%. The government is also expecting a 6% increase in tax revenues.

The central bank noted that the economy is growing healthily, with  demand and supply both looking solid. It  is also happy with the external side of the economy. It noted that demand for the country's exports, principally soya, is strong, leading to a healthy position in the balance of payments.The bank's main policy priority is to continue to curb inflows of cheap dollars. It is banning financial companies from having net foreign borrowings of more than 50% of their net worth. The bank is also pursuing a policy of trying to sterilise inflows of foreign currency by issuing domestic debt. It wants to avoid excess domestic liquidity, which would trigger more generalised inflation.

In July the consumer price index rose 0.1% on a monthly basis, well below the 0.6% registered in June. The July figure brought accumulated inflation for the first seven months of 2010 to 2.4%. The annual rate was 4.7%. In the first half of 2009, the annual rate was a much lower 1.1% (and  consumer prices fell 0.3% on a monthly basis). The central bank  noted that inflation in July would have been lower but for a rise in prices for a range of fresh foods. The price of cooking gas also rose because of shortages, prompting an increase in imports of electric cookers. The bank is not too bothered about the vagaries of inflation, which probably have more to do with recent  weather patterns.

According to  official calculations,  GNP per capita  will reach US$2,593 in 2010, from US$2,248 in 2009, equivalent to a 15% rise. Standard & Poor's (S&P) has also  increased its rating for the economy from B to B+, citing the country's political stability.

Beef: On 17 August the National Animal Health and Food Quality Service (Senacsa) announced   that Paraguay had exported 172,000t of beef between January and July this year; an increase of 18% over the same period of th2009. The beef exports generated  US$395.5m, in revenues, with another US$140m added by the sale of other meats such as chicken and offal. Chile and Russia were the main customers for Paraguay's beef. Paraguaya's  agriculture and livestock ministry estimated that beef exports could reach US$800m by the end of 2010.

Development: On 20 October, Uruguay's chamber of deputies approved a controversial bill to reform the 1985 'Ley de Caducidad' (amnesty law) on the grounds that it is unconstitutional.

Significance: The 'Ley de Caducidad' established an amnesty for crimes committed by military and police officials up to the end of the military dictatorship (1973-1985). The ruling Frente Amplio (FA) coalition is trying to repeal the law by claiming that Uruguay, which has been sued at the Inter-American Court of Human Rights (IACHR) for the disappearance of Marí­a Claudia Garcia Iruretagoyena in 1976, may face further cases in future should the law remain on the books. The bill, which seeks to repeal three articles of the law, now moves to the senate for discussion, where the FA also has a majority. It's unclear, however, if the FA will be able to enforce party discipline in the senate.

After 12 hours of heated debate, the lower house approved the bill with 50 votes in favour and 30 against; with all 50 FA deputies toeing the party line. Some FA representatives, such as Carlos Gamou and Nicolás Pereyra from the Corriente de Acción y Pensamiento-Libertad (CAP-L), expressed opposition to the project but cast their vote in favour amid party pressure.
 
The opposition, comprising the Partido Colorado and Partido Nacional, are fiercely opposed to abolishing the 'Ley de Caducidad' arguing that, although controversial, it has helped Uruguay achieve a stable democracy. They rest their argument on the fact that previous attempts to abolish the law via referendums have been defeated twice, in 1989 and again in 2009.

The FA is divided on the issue. Some coalition members are opposed to the project, backing the opposition's claim that it doesn't enjoy popular support. President José Mujica himself also takes this view. However, proponents of the project, some themselves victims of torture, have pushed for it to become party policy, calling for unity and discipline behind it.

Development: On 6 December, Paraguay's association of river and maritime ship owners, along with seven unions representing local shipworkers, denounced that a 'ghost' labour union, led by Argentines, was blockading Paraguay's foreign trade.

Significance: During the XX Ibero-American Summit in Argentina last Friday (3 December), President Fernando Lugo asked his Argentine counterpart, Cristina Fernández, to find a solution to the dispute. Both leaders agreed on the need to resolve the problem “urgently", which has resulted in severe delays to Paraguay's trade. However, the conflict threatens to spill over. Uruguayan and Brazilian unions have announced that they may join the Argentine initiative and lead a Mercosur-wide blockade on goods transiting on vessels with a Paraguayan flag.

The conflict began in mid-November when the Argentine union of united maritime workers (Somu) decided not to deal with container ships en route from or to Paraguay, in alleged solidarity with the so-called union of united maritime workers of Paraguay (Somupa). The Somupa didn't exist until 10 November, just a week before the Argentine measure was announced. Officially, and with backing from the International Transport Workers' Federation (ITF), Somupa was created to give a voice to Paraguayan workers who had been unable to unionise until the creation of the new union.

This allegation was rejected in a meeting yesterday, where local Paraguayan unions insisted that they have represented Paraguay's ship workers for decades. Paraguayan unionists claim that Somupa has no members and is no more than a front for Argentina's Somu to interfere in Paraguayan domestic labour issues. The Paraguayan unions claimed that the ultimate goal of all this is for Argentina to “plant its flag" in the Paraguay-Paraná waterway, displacing Paraguayan workers.

Conversely, Somu claims that Paraguayan workers are “almost starved to death" and are more prone to accidents due to poor training. Yesterday (6 December), the maritime, port facility and naval industry federation of the Argentine Republic (Fempinra) joined Somu's action, in solidarity with Somupa. This appears to be a direct reaction to the ITF's 1 December call for other Mercosur unions to “take legal solidarity industrial actions" in support of Somupa “to break the anti-union actions [in Paraguay] and weaken the media's defamatory campaign."

Development: On 26 January, government officials failed to reach an agreement with the five teachers' unions  over wage increases.

Significance: The teachers' demands, which have widespread support, are proving a test for the ruling left-wing Frente Farabundo Martí­ para la Liberación Nacional (FMLN), not least given its traditional affinity with the union movement; Vice-President and Education Minister Salvador Sánchez Cerén, one of the government's negotiators, is widely recognized as one of the leaders of the teachers union movement, having cut his political teeth in the main union, Andes-21 de Junio.

Key points:

The five unions, ANDES 21 de Junio, Bases Magisteriales, Sindicato de Maestros de Educo (SIMEDUCO), Sindicato de Trabajadoras y Trabajadores administrativos y docentes del Ministerio de Educación de El Salvador (SITADMES) and Consejo de Directores de Institutos Nacionales (CODINES) are protesting their exemption from a salary increase for public workers decreed by the legislature in December. Decree 553, which stipulates a 10% increase for those earning US$300-US$600 a month and a 6% rise for those earning US$600-US$1000, not only exempts teachers but also other workers on a lower bracket of the payroll scale, such as health employees and public security officials.

Unionists argue that this violates Article 34 of the law regulating the teachers' sector and states that public school teachers should receive salary increases in line with those of other state employees.

The government claims that it cannot afford the US$26m it would cost to cover these wage increases. Following yesterday's meeting, President Mauricio Funes said he would consider the possibility of a wage increase in the second half of the year. Talks are set to resume on 1 February.

The wage issue has exposed divisions within the teachers' movement. On 23 January the unions called for a general strike for 24 January, but Andes-21 pulled out - a sign of the continued influence exerted by Sánchez Cerén. According to Bases Magisteriales, 60% of teachers participated in the strike; other sources claimed less than 1% took part.

Cuba: On 12 March the US government said it deplored the ruling by a Cuban court which sentenced a US national, Alan Gross, to 15 years in jail for subversion and acts against the Cuban state. Gross's lawyer, Peter J. Kahn, said that he may appeal the ruling before the Supreme People's Tribunal, the highest court in Cuba. There is also some expectation that having made its point about US interference in sovereign affairs, the Cuban government might decide to release Gross on humanitarian grounds, given that the political costs of continuing to hold him in Cuba would be fairly high. The Barack Obama government has repeatedly warned that further official efforts to improve bilateral relations hinge on the release of Gross.

Colombia and Panama: On 14 March 44 Republican senators threatened to block any White House nominee for a new commerce secretary unless the two free trade agreements with Colombia and Panama are not signed promptly. In a letter delivered by the 44's leader, Mitch McConnell, to the Democrat's senate majority leader, Harry Reid, McConnell said the Republican 44 would “use all the tools at our disposal to force action, including withholding support for any nominee for commerce secretary and any trade-related nominees". This follows the nomination of Gary Locke, the commerce secretary, as Ambassador to China. Locke's successor would have to be okayed by the senate. The move puts President Obama's administration under pressure to ratify the FTAs, originally agreed by former president George W. Bush (2000-2008).

Guatemala: On 14 March a lawsuit was filed against US federal health officials seeking compensation for health problems suffered by around 700 Guatemalan former prisoners, psychiatric patients and orphans. They and their families have filed a class action lawsuit in the US against the US government for infecting them, without their consent, with syphilis or gonorrhoea in medical tests in the 1940s. The scandal was brought to light in 2010 by a medical historian. The tests and medical records had been kept secret by both the US and the-then Guatemalan government, which had given the green light for the tests between 1946-1948. The US government, which had apologized last year for the "reprehensible" experiments, that had been were part of a programme to study penicillin, funded by the National Institutes of Health, did not respond to demands for an out-of-court settlement, so the plaintiffs filed the suit. According to the plaintiff's lawyers, court documents show that US researchers convinced officials at orphanages and prisons to cooperate by giving them supplies and medicines. In the case of prisoners, infected prostitutes were used to expose them to disease.
 
Panama: On 11 March the Panamanian security ministry announced that Panama and the US would work in closer partnership to fight against terrorism, people trafficking and drug-trafficking in Central America. The first step in this programme will be a joint military training exercise on 15-19 March. Panama previously announced the purchase of four US-built spy planes to help fight narco-trafficking along its borders.

Development: On 7 May, President Mauricio Funes extended a decree authorising the military (Faes) to help with domestic security for another 12 months.

Significance: Unlike in Mexico, the presence of the Faes on Salvadorean streets has had some impact. While still second only to Honduras in the region, El Salvador's homicide rate dropped to 66 homicides per 100,000 inhabitants in 2010 from 71 in 2009, according to figures from the US State Department. Funes's big problem now is how to finance the military's continued deployment.

Key points:

Funes first deployed the Faes in November 2009, a decision which proved highly controversial given provisions within the constitution and the 1992 Peace Accords, which followed the 12-year civil war, stating that public security is the responsibility of the civilian police force and the president is only authorised to call out the military in “exceptional circumstances".

Over half of El Salvador's 15,500 strong army (8,200 troops) is  involved in citizen security, of which 2,750 are deployed in 11 of El Salvador's 19 prisons. 

A further sign of the strategy's success has been the remarkable turnaround in the public perception of the armed forces which, previously associated with human rights violations and abuses committed during the civil war, is currently the country's best evaluated institution.

Funes said on 7 May that a further US$33m is necessary for the Faes to continue their work on the streets (out of a total US$400m for his general security plan). The government currently lacks these funds but Funes said he would be putting together various proposals to generate the revenue. One idea is a tax on big business akin to the temporary “war-tax" introduced by Colombia in 2006.

AsiaInt Weekly Alert, 22 April 2005

Click here for full text:
http://www.asiaint.com/arl/arl5976.asp - 598 words

China is eager to take advantage of the enthusiasm among opposition politicians in Taiwan to visit the mainland, seeing it as the best way to circumvent the government of President Chen Shui-bian and to promote the idea of eventual reunification. Following the successful trip in March by the opposition Nationalist Party (Kuomintang or KMT) vice-chairman, Chiang Pin-kung, KMT leader Lien Chan is also planning a visit, while Beijing has also invited James Soong, the chairman of the KMT's coalition partner, the People First Party (PFP), to come over. Chen's ruling Democratic Progressive Party (DPP) is understandably incensed_