Latin American Fallout from the G-20 Summit, Elections in Nicaragua and Guatemala

article from November 8, 2011

By Jamie Douglas

War on tax havens

In a classic example of “he said/she said” Panamanian President Ricardo Martinelli rejected French President Nicolas Sarkosy’s suggestion that Panama was a tax haven. The Panamanian president has courteously offered President Sarkozy a few days to “immediately correct himself.”

Pipes up the Foreign Minister of Panama, Roberto Henriquez, “[we] categorically reject that our country is a tax haven [it’s just one of the most corrupt countries in the hemisphere!]. The G-20 nations are merely looking for scapegoats to cover their financial mismanagement on the periphery of this crisis.” Perhaps that is why a country such as Panama has close to 100 banks chartered in the nation, most of which only do business with foreign clients.

In fairness, it must be stated that Sarkozy may, indeed, be looking for any sort of diversion from the utter failure of the meeting held last week by threatening that the nations identified to be tax havens would be shunned by the international community. He announced plans at the close of the G-20 Summit to publish a list of uncooperative tax havens at each of the future summits. At least he made it seem like they accomplished something while wasting millions of euros in tax dollars on the event. For the future meetings, I am sure that the list of those offending nations will be a bestseller to all corrupt government and corporate officials.

The leader of France also urged member states to isolate Uruguay, as it is allegedly also a major offender, according to information given to him. This information was based on the Argentine delegation’s statements at the Organization for Economic Cooperation and Development meeting, where they accused their neighbor country of being a facilitator of tax evasion. But this accusation really carried little weight when it was made, as Argentina’s Presidenta Cristina Fernández de Kirchner, as did her late husband and presidential predecessor, has foreign bank accounts worth millions of dollars. They, like most Argentineans, have no confidence in their homegrown banking system.

Uruguay’s reluctance to cooperate with Argentina and Brazil is rooted in the fact that both of its behemoth neighbors have abysmal record-keeping systems in their tax establishments compared to the Eastern Republic’s sophisticated and accurate record keeping. The more the Argentinians and Brazilians pick on their little neighbor, the more Uruguay questions the wisdom of membership in Mercosur.

Presidential elections in Guatemala and Nicaragua

Turning to election news, Guatemalans went to the polls this past weekend (November 6, 2011) to elect a new president. To no one’s surprise, Generalissimo Otto Perez, a retired right-wing military man, won by a margin of 54.85% vs. 45.14% for his opponent, centrist Manuel Baldizon. This northernmost of Central American Republics has become the new battleground for narcos fighting turf wars over control of the lucrative trade in Colombia’s main export commodity, cocaine. Perez, a former military commander, had better credibility as a person with experience, promising a mano dura in fighting the cartels that have invaded the nation by providing heavily armed military patrols at night, when the regular police are too frightened, undermanned and outgunned to face them.

Baldizon had made his campaign about helping the elderly and poor, a noble gesture, to be sure. But the best way to help them, for starters, would be to make their towns secure again, particularly after dark. Guatemala is a culturally diverse nation where, for the last 500 years, the majority indigenous population has wallowed in the poverty and misery that makes the youth susceptible to gang recruitment. It is very important for the new president to address the needs of these disenfranchised citizens and to include them in future decisions involving their communities. The nation’s national security demands that the nation work more on the integration of the indigenous majority.

On the same date in Nicaragua, voters went to the polls and gave former Marxist strongman Daniel Ortega a resounding majority of the ballots. Counting and tabulating are slow, but as of Monday evening, November 7, 2011, with just under 40% of the votes tabulated, he seems to have a comfortable 64% of the vote. He, of course, had his Sandinista-dominated supreme court void that part of the constitution that limited the holder of the office to only one term.

Ortega’s wife, Rosario Murillo touted the win to be “a victory for Christianity, socialism and solidarity!” Mr. Ortega’s ruling party also gained a majority of the country’s deputy seats, which will allow him and his supporters to change the constitution in any way that they see fit, with perhaps another round of nationalizing foreigner’s landholdings. It looks like we may have him and his handpicked cronies in power for years to come.

Jamie Douglas

San Rafael, Mendoza

Where that Fine Malbec Wine just voted me the Best Sampler!

I encourage you to write me at cruzansailor [at] gmail [dot] com with any questions or suggestions you may have. Disclaimer: I am not in any travel-related business. My advice is based on my own experiences and is free of charge (Donations welcome). It is always my pleasure to act as a beneficial counselor to those who are seekers of the next adventure.