Expat News and Information: Economic Development

Showing posts with label Economic Development. Show all posts

Tuesday, January 21, 2014

News from Around the Hemisphere, Jan 15, 2014 (reposted from original location)

article from January 15, 2014
By Jamie Douglas

First off, an apology to my readers: I have not been writing as often as I would like, as I am not well... but not ill enough to refrain from occasionally spouting my opinions and pointing out interesting facts.

Mexico’s continuing problems

Poor Mexico! After the recent elections, there was hope that the violence would subside somewhat, but it is only getting worse in the states that have been flashpoints in the unfortunate war on drugs, which has cost over 100,000 lives over the past few years – one of which is the state of Michoacán, where I used to reside until I went to buy the newspaper for my morning coffee at Pátzcuaro restaurant where expats, artists and criminals alike would mingle.

Since that morning eight years ago, when I was shocked to see photos of 22 mutilated corpses on the back pages of La Voz de Michoacán, things have gotten progressively worse. In a recent article in Proceso [spanish], it is revealed that the Knights Templar, successors to the Zeta crime syndicate, have now entered politics on behalf of the PRI, the hyper-corrupt Mexican political party that bled the country dry for generations. After a brief respite, the PRI is back in power, with a little help from their usual election fraud along with the Knights Templar, who have become an economic force to contend with, as they have made hundreds of millions of dollars running the port of Lázaro Cárdenas and illegally mining iron ore.

As a result of long-standing collusion between the local, state and federal government and the cartels, Michoacán has come close to being an ungovernable failed state, and the neighboring states up and down the Pacific coast may follow.

When will the powers that be realize that the unfortunate war on drugs had the same results as the prohibition in the United States did? It enabled criminal elements to take over the country with diluted and dangerous unregulated alcohol, corrupting most major police forces by flooding them with money.

Panama and Nicaragua race for a wider canal across the isthmus

In 2006, Panama’s then-president Martin Torrijos announced a plan to expand the Panama Canal so it could accommodate today’s VLCCs. He boldly stated that this project would turn Panama into a first-world country. Perhaps he did not anticipate all of the corruption that would inevitably follow this proposal. Perhaps he underestimated the larceny of the Martinelli administration. But one thing is glaringly obvious: The conglomerate that bid on the work grossly underestimated the cost and time for building this ambitious project – and therein lies the current problem. The Panama Canal Authority is refusing to pay for the cost overruns and has threatened to take over the project by force mejeure.

Regardless of what will happen in this chapter of Panama Canal history, Panama will not be a first-world nation until it rids itself of all the scams that are at home there, including the banking and real estate sectors, much of which is run by American and Canadian expats, con men and women and convicted criminals trying to sell anything they can think of.

Meanwhile, a Chinese investor has put together a consortium of wealthy business people from China to build a canal clear across the isthmus in Nicaragua. This project is slated to begin in December of this year; and if successfully completed, it will be quite a thorn in the side of the Panama Canal Authority. But with the enormous nature of the project, one should not hold their breath. China may be riding high at the moment, but nothing lasts forever. The Chinese economy is already feeling the pain of the costs of their armed forces and high-speed rail networks.

I wonder why Mexico has not pursued the logical choice of building a trans-isthmus canal from Tehuantepec to the Caribbean. Perhaps the cost and logistics are too prohibitive, along with the opposition of the indigenous people.

Venezuela and crime

Venezuela’s sweetheart, actress and former Miss Universe Monica Spear, and her husband, Thomas Berry, were brutally murdered a few days ago when their car broke down. Their little 5-year-old daughter was also shot but survived.

Venezuela is a spectacular nation, blessed with abundant natural resources and stunning beauty. From Angel Falls to the Caribbean islands, nature has blessed this nation with abundant and fertile lands, not to mention the crude oil reserves in Lake Maracaibo and the gold in the ground.

Unfortunately, the riches of the nation have been distributed unequally to the point of forcing many into a life of serious crime. The homicide rate is near the top of world statistics, and the prisons are overflowing. The staggering amount and wide distribution of serious crimes is affecting everyone from the very poor to the very rich. Ironically, Monica Spear and her family moved to Miami out of fear for their safety. Nearing the end of a holiday vacation, fate caught up with them.

If there is one good thing that can be said about it, it is the fact that thousands of people came to her funeral and thousands more protested the senseless violence the Bolivarian nation is confronting.

And now the weather

After an early spring followed by another cold front, the Southern Cone countries of Brazil, Uruguay and Argentina have been hit with several waves of severe weather, which included some of the most intense lightning and thunder this observer has ever witnessed.

Torrential rains in Brazil took their toll in human lives, and Uruguay also had several casualties, including a police officer who was killed in downtown Montevideo when hit by a swinging door he was trying to secure during one of the storms, which packed winds of up to 100 km/h.

Argentina also suffered one of the worst heat waves in their recorded history that was compounded by the failure of the electric grid in Buenos Aires, causing brownouts, blackouts and several heat-related casualties. The worst incident happened in the small beach town of Villa Gesell, where four youngsters were killed on the beach by lightning and another 22 injured. The tragedy happened so quickly that the victims never had a chance to escape.

I will not opine on the cause of all this severe weather, from the polar vortex to the unseasonably severe cold in Antarctica that caused an Australian tour boat to get stuck in the pack ice, forcing other important scientific programs to be interrupted when several additional ships had to be sent to their rescue. The Australian organizer of the trip defended his expedition as having valid scientific value by explaining that the lay observers on the ship were qualified to make observations of the current conditions in the region.

Antarctica, being the last frontier on this planet, has been exploited for high-end tourism for several years, and this latest problem is no different from any other for-profit organized tour.

Jamie Douglas

At large in Uruguay

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.

Mexico’s July 2012 Elections

article from July 2, 2012

By Jamie Douglas

Mexico just held elections this past Sunday, July 1. There are no surprises in the outcome. The PRI, which ruled the country for about seven decades, is back in power after sitting out two terms, during which the opposition parties managed to throw the country into a civil-war-like chaos that has so far cost the lives of over 55,000 people, turning a formerly happy, laissez faire population into a bunch of paranoiacs, removing the happy face of Mexico to be replaced by daily graphic images of the victims of Reagan’s war on drugs, something that was happily adopted by (soon to be former) President Felipe Cálderon.

Large areas of the country have no security to speak of, as the billions of dollars in illicit drug money have corrupted all the law enforcement agencies. Like other Latin American nations, the experiment with a more democratic administration was short lived. Cálderon’s pig headed approach to the problem, to please his North American overlords, allowed the former dictators from the PRI, which spent three generations robbing the country of its very soul, to return to the helm of the Aztec nation, unfortunately, justifiably so, as the two main opposition parties have failed miserably in their stewardship of the great nation.

Cálderon was so intent on winning the unwinnable war against the narco-terrorists that he failed to prepare his nation for the looming economic downturn. Mexico has become an economic giant, thanks to NAFTA, and the wealth and income distribution was improving. From a few maquiladoras along the US border, it has gained worldwide clout as a manufacturer of quality goods. From Ford to Volkswagen to Chrysler, Nissan and Honda, along with European and Chinese manufacturers, everyone realized that by having factories in Mexico, it would grant them easy access to the US and Canadian markets, as well as opening the door to exports to the rest of Latin America.

The last two years have seen a marked slowdown in the GNP, exports and employment. Instead of focusing on his nation’s growing internal business problems, Cálderon followed the road to self-destruction by continuing his alliance with the DEA, ICE, the FBI and the Obama administration’s guidance in general, practically giving up the sovereignty of his nation in order to continue to receive massive military and law-enforcement aid from his northern neighbors. It is, of course, those very same northern neighbors that make it possible, with their fanatical pro-gun stance, to supply the gangsters with the latest in weaponry.

It is no wonder that the PRI will once again rule the mighty nation south of the border, but one can only hope that common sense will prevail and this race to the bottom against the narcos will cease. The slaughter in the neighbor nation must stop! I am not sure that legalization is the answer, but one thing is certain: The current approach is not working!

The problem was created by the huge demand for cocaine and heroin, and more recently, methamphetamine. The only way to reduce the violence in Mexico is to reduce the demand of the consumer nations. That goal will not be accomplished by the current approach, to criminalize the users and small-time dealers. The US has more people in prison than any other nation in the world, and many are there because of relatively smalltime offenses such as possession and distribution of small amounts of these drugs. The prison industry is being privatized (Ronald Reagan’s dream) and huge profits are being made by the US Prison Corporation, Wackenhut and several others that have direct connections to Congress.

Presently, those in charge of moving the large quantities of drugs to the US, Canada and Europe, as well as Australasia, are sitting on billions of dollars worth of cash, which corrupts virtually all law enforcement efforts. Fifty-five thousand people in Mexico alone have died, along with untold others from Argentina to Guatemala. The result is that today, there are more cheaper and more potent drugs entering the consumer nations, and they are being consumed in ever-larger quantities. What is the answer to that? If you have it, please send it to President Obama and Eric Holder. They could use some new ideas.

Jamie Douglas

Expat in the Land of Tannat

[Image of Mexican President-elect Enrique Peña Nieto via Wikipedia]

Mexico v Argentina Trade Relations

article from June 29, 2012

By Jamie Douglas

First off, I would like to give my sincere thanks to the many of you that sent me good wishes after my accident a few weeks ago. I was really overwhelmed by how many of you dear readers sent me their emotional support. Thank you very much; Mahalo nui loa; Merçi beaucoup; Grazie mille; Vielen herzlichen dank; Domo arigato; y Muchas gracias a todo mis lectores!

Now to the lead story: Back in 2002, Mexico and the Mercosur nations signed bilateral trade accords governing the importation and exportation of automobiles and auto parts. As has become the norm with Argentina and to a large degree Brazil, treaties are made to be broken when they are not to their advantage anymore, and such is the case here.

Cristina Fernández de Kirchner recently announced that the treaty between the two nations would be suspended. Figures released by Mexico’s economic ministry show that in 2011, exports of automobiles and auto parts reached almost a billion US dollars, while Mexico imported almost US$300 million in automobiles and parts from Argentina.

That is a more-than 3:1 ratio in favor of Mexico. On the surface, it seems very unbalanced. But when you consider what an economic giant Mexico has become, with the help of the North American Free Trade agreement, it is a small wonder that the imbalance is not greater. Manufacturers from the United States and the rest of the world have set up shop in Mexico to take advantage of the lower labor costs and easy access to the North American market.

Mexico’s captains of industry, of course, realized that excess production could be marketed to the rest of Latin America, increasing employment as well as driving up the GNP. They sent trade representatives everywhere, from Guatemala to Argentina, as well as to the European Union, Japan and China, and they came back with very lucrative trade agreements that boosted Mexico’s economy and provided many new, good-paying jobs for the Aztec nation.

At the same time, Argentina and Brazil built up their automotive industries, exporting what they could, building up their own foreign reserves, creating jobs and making the politicians look good.

But that was then, and this is now. A nationalistic imbecile is running Argentina, continuing in the tradition of going from economic disaster to economic disaster, something I refer to as “Argentina’s circular history.” It runs in cycles of about 10 years from complete meltdown to utter chaos, and we are nearing the latter.

Cristina’s meddling with Mexico has awakened the fighting spirit of the Aztecs. They are not taking her lunacy lying down; in fact, they are getting ready (along with many other nations) to take this lunacy to the World Trade Organization.

Now, to add to the chorus of nations reaming Argentina for their protectionist measures, the USA has demanded that Argentina immediately put an end to their illegal import- and export-licensing regulations, which have turned major multinational corporations such as BMW into exporters of rice in order to expatriate their income.

Already, the USA and others have filed complaints with the WTO in Geneva. US attaché Rachel Bae took a much harder stance against Argentina, which already is the subject of several lawsuits filed by the European Union over the completely outrageous steps the administration of Empress Cristina Fernández has taken to freeze imports wherever she can.

Cry for Argentina! Once a nation of such great wealth and promise, it has been subject to incompetent and corrupt leaders. Why is it that a nation that has such an abundance of wealth and natural resources has been exploited by its own leadership for over 201 years? Argentineans, as a whole, are a wonderful and lively people; but they have fallen for the bullshit being dished out by their leadership for all that time. And the beat goes on!

Jamie Douglas

Safely across the Río de la Plata, in the land of the lovely Tannat wine

Costa Rica Property Double Whammy

article from April 24, 2012

By Jamie Douglas

In May 1974, I moved down to the southern Pacific coast of Costa Rica, in Dominical, at the mouth of the Barú River. It was summer still, the river was low and I was able to rent the only house within miles. Soon, the “Hey Gringo, you wanna buy my finca?” doorknockers came. I had become friendly with a few of the locals, and they all warned me not to buy in Dominical because the government had already advised them not to build anything within 50 meters of the high-tide line, and the next 150 meters would be considered public property, as well.

I could have bought all the land from the mouth of the Barú all the way south to Crazy Norman’s house for US$35,000 – a steal! Then the law was published. In most cases, beachfront properties are untitled because the ownership and possession of the shoreline is governed by the Ley Sobre la Zona Maritima Terrestre (Maritime Zone Law), which restricts the possession and ownership of beachfront properties. By law, the first 200 meters of beachfront starting at the high-tide markers is owned by the government. Of the 200 meters, the first 50 are deemed public zones and nobody may possess or control that area. On the remaining 150 meters, the government, through the local municipality, will lease the land by way of concessions to private individuals. Since virtually all of Dominical is located in the 200-meter range, I would have been entangled with various departments in Costa Rica for the next two lifetimes. Good thing I didn’t get involved, as multiple murders have been committed over the property both north and south of the Barú.

I had the money, but not the inclination. I did not go to Costa Rica to buy a finca. I was a nomad with no fixed destination, and it was the jungle and photography that had me by the tail. After about a year or so, I moved on to Panama (That was another adventure!) and then the Big Inheritance came, and another and another and another, and I was able to keep exploring the planet. Meanwhile, the civil war raged in Nicaragua and El Salvador, making Costa Rica, Honduras and Guatemala into US surrogate states.

Eventually, thousands of gringos moved to the area south of Limón on the Caribbean side of Costa Rica and flooded the Pacific side with their surf resorts and yoga retreats, and naturally, Latin America’s least popular president is ready to cash in on all the gullible foreigners who listened to the “don’t worry about it” sales pitches.

So now, suddenly, comes the second slam of this double whammy. A few weeks ago, the Costa Rican government decreed that all of the land that had been granted to the aborigines, and was never to be sold to whites, not even Costa Rican whites, was to be returned to its original owners. Reaching back for decades, this decree is creating quite a bit of panic among all the people who bought land on the BriBri and the Talamanca, along with some of those Ticos who sold their jungle paradise for a few dollars or euros. There is an attorney general who, if she doesn’t get assassinated, will give all that land back to the indigenous people. It does not matter that they are the very ones who sold the land. All of the titles to indigenous lands are communally owned. I knew about those laws when I did a documentary in 1975 in the Boruca area. The cacique (chief) informed me in no uncertain terms that not a millimeter of their land could ever be sold to a non-Indian. Too bad they did not include all the natural resources.

So all those foreigners along the coastlines – Pacific and Atlantic – are likely in for quite an expensive fight. Costa Rica has become a more developed nation that does not need to sell its fincas anymore. They have an INTEL Microchip factory, one of which has powered this computer flawlessly for the past two and a half years.

Jamie Douglas

San Rafael, Mendoza

[Image of Manuel Antonio, Costa Rica via Wikipedia]

The World as Seen from Cuba

article from April 19, 2012

By Jamie Douglas

Cuba is going to be a very wealthy nation, once the economic blockade is lifted. In 2010 alone, over a half a billion US dollars have been confiscated (stolen?) by Washington and its Caribbean lackeys.

This amount is certified by the US Office of Foreign Assets Control, which still refers to the island nation as a “state sponsor of terrorism.” But when it comes to state sponsored terrorism, it is the United States that has repeatedly supported terrorist organizations that have served its goals. Surely, we all remember the ill-fated Bay of Pigs Invasion, carried out by incompetent minions of the CIA, who are still hanging around the cafés of Miami’s Calle Ocho, reliving their massive failure. It’s very similar to the Argentineans celebrating their ass-kicking at the hands of the British in the Falkland Islands. They are all such heroes!

The biggest heroes of them all are two mass murderers who have been given sanctuary in the United States: Luis Posada Carriles and the now deceased Orlando Bosch. And of course, the CIA has equally dirty hands in the matter that brought down Cubana Airlines Flight 455, a DC-8 that exploded midair by means of a bomb that was disguised as a shipment of Colgate toothpaste but was in reality plastic explosives. The CIA was aware of the impending terrorist action, but never informed the Cuban government via the Swiss Embassy. Some of the perpetrators were tried in Venezuela but were allowed to escape in 1985. The entire operation was so badly bungled that it had the hand prints of the CIA and the veterans of the Bay of Pigs all over it. They did succeed in blowing up the airplane, which carried the entire Cuban fencing team that had just won all the medals in the Central American and Caribbean Games.

Last week (April 13, 2012) also had Raúl Castro hosting the presidents and ministers of state of several Latin American nations, including President Felipe Calderón of Mexico. During their meeting, the future prospects of the Community of Latin American and Caribbean States, an alternative to the US-dominated Organization of American States, were discussed. The United States’ objection to Cuba’s presence at any OAS function, despite its membership in the organization, was a key issue at the recent Summit of the Americas. So, slowly but surely the nations of the hemisphere, minus Canada and the United States, are building their own organization, with China reaping the most benefits.

I had much greater hopes for President Barack Obama reaching out to our neighbors in the hemisphere. But this being an election year and Florida being an important swing state (who could forget the 2000 fiasco), he must pander to the vociferous Cuban exile community there.

As for the population of Cuba, they are doing OK. They would love to do better. But on February 3, 1962, President John Fitzgerald Kennedy, with Proclamation 3447, turned Cuba into the USA’s redheaded stepchild. A year and a half later he was dead – shot by unknown assassins. Fifty years later the Castro brothers are still in power, and the USA still has not learned anything about their yanqui arrogance. China has become the dominant trading power in the hemisphere, and they own trillions of dollars worth of the USA. Will the lights ever come on, or will the United States keep blundering through the dark swamp for another 50 years?

Jamie Douglas

San Rafael, Mendoza

Having a Havana Club Gold

Brazil’s Other Power Woman

article from January 26, 2012

By Jamie Douglas

As most of us know, Brazil, the Southern Hemisphere’s uncontested economic powerhouse, has been very efficiently run by highly a competent technocrat, President Dilma Rousseff, who succeeded the wildly popular Lula da Silva.

Brazil has become a huge player in the energy industry with its homegrown Petrobras, the world’s fifth-largest oil company. It’s fast growing natural gas and power division has been very capably led by a woman named Maria das Gracas Foster, and as such, she has been accountable only to CEO Jose Sergio Gabrielli, who announced his resignation to become a politician, abandoning his position at the helm of one of Brazil’s most dynamic companies.

To many in the Latin American energy sector, it came as no surprise that his successor was quickly named, and it turns out to be 58 year old Maria Foster, a 34-year veteran of the Rio-based energy giant’s fastest-growing division. Her task is monumental, as she will be in charge of a US$225 billion expansion plan that aims to poke holes as deep as six kilometers beneath the sea floor to look for black gold and gas. The targets that were set for 2011 were missed because of the double whammy of the 2010 Gulf of Mexico rig disaster and difficulties in obtaining required equipment. I am sure that the recent Chevron oil spill off the coast of Brazil will have some cascading effects, as well. But Ms. Foster is clearly the woman of the moment, as the announcement of her appointment caused the company’s stock to surge to its highest level in more than eight months. The stock gained almost 5% between Friday and Tuesday’s close.

The story of her rise to the top is one of those enviable rags-to-riches tales. Born into a working-class family on the outskirts of Rio de Janeiro, she collected recyclables as a child to pay for her school supplies, eventually getting a degree in chemical engineering. She subsequently went to work for Petrobras, where she has been employed continuously, with the exception of a three-year break when she worked for Dilma Rousseff, the energy secretary for the state of Rio Grande do Sul at the time.

Foster has worked in every single division of Petrobras, having started her career as an intern in 1978. Her nomination, which is certain to be approved, will be voted upon on Feb 9. Congratulations to her, to Petrobras and to Brazil!

Jamie Douglas

San Rafael, Mendoza

Feliz Nuevo Año: News from Brazil, Argentina for Jan 7, 2012

article from January 7, 2012

By Jamie Douglas

Brazil’s fizzle

As the New Year begins, Brazil is bursting at the seams. The world’s financial wizards deposited a record US$65.2 billion in the fizzling economy during the past year, an increase of 168% over 2010. Why fizzling? Just like when you open a bottle of sparkling wine, it has a lot of little bubbles, which fizzle out after a while. The champagne bottle named Brazil has now been open for several years, benefitting mostly from China’s oversupply of US dollars and that country’s need to plan ahead for the future by assuring abundant raw material and food supplies for its ever-growing population. But China’s overheated economy is starting to feel the pinch of the global slowdown and returning cycle of recession, and after stockpiling hundreds of millions of tons of raw minerals and signing very long-term contracts with developing nations, it is possible that a saturation point is approaching.

Meanwhile, Brazil will need to increase its availability of electricity by 56%, according to a study released January 4, 2012, by the state-run EPE, the energy research corporation. It forecasts a consumption increase from the current 472,000 gigawatt-hours (gwh) to 736,000 gwh. That is a helluva jump, equal to three times the capacity generated by Itaipú, the world’s second-largest hydroelectric facility after China’s Three Gorges Dam. Itaipú generated 92,245 gwh of electrical current last year, putting it in the number-one slot worldwide for electrical generation.

Brazil is counting very strongly on three major manmade ecological disasters to avoid the coming brownout: the Belo Monte, San Antonio and Jirau hydroelectric projects, the first one being very strongly opposed by humanitarians and ecologist worldwide, as well as the native aboriginal tribes having lived off that land for eternities. There are court battles going on, lives have been lost and more will be lost; but in the end, the “greater good” will be the evil winning the day.

Argentina military reassignments

Most of you probably know that La Cristina, current figurehead of the Kirchneristas in Argentina, underwent a full thyroidectomy on Wednesday, Jan 4. According to her doctors, it was a full success, or as the official release stated, with “no inconvenience or complications.” Early detection is the best way to beat cancer, and in the case of cancer of the thyroid, the survival rate is over 90%. I am very happy for her as well as me, as her continued incompetent flailing is giving me fodder for writing on a daily basis.

What many of you have probably not heard about is that one of her last acts in exercising her executive powers before going under the knife was the abrupt cashiering of 36 military generals and admirals. An official announcement in The Gazette on Monday declared that Chief of Staff Operations Commander Jorge Telado will be retiring effective immediately and that he has been replaced by Kirchner loyalist Brigadier General Humberto Claudio Trisano.

The next day, The Gazette announced the forced retirement of twelve army generals, ten air force generals and thirteen navy admirals. Obviously Madame Fernández de Kirchner is somewhat aware of her nation’s circular history, and she most likely preempted what may have been the whispers of Argentina’s next military coup d’état.

Wisely, she confirmed in their positions the armed forces chief of staff, the army commander and the air force chief, all three avowed loyal Kirchneristas.

Just when I thought it was getting interesting around here!

Jamie Douglas

San Rafael, Mendoza

Merco-Mess in Montevideo and President Obama’s Jinxed Hopes For a Regional FTA

article from December 21, 2011

By Jamie Douglas

Merco-Mess in Montevideo

The Mercosur meeting in Montevideo, Uruguay, showed promise of having all the ingredients of the classical Latin American telenovela (a soap opera with high drama) even before the delegates sat down. The high drama outpaced even the most lurid expectations. I am stunned myself at how this event unfolded.

A little history lesson here for those who have not been able to keep up with the fast-paced developments in the region:

Mercosur, short for Mercado del Sur, or Market of the South, was formed in 1991 by the Treaty of Asunción to promote the free trade and the movement of goods, people and currency. Its member nations are (in order of economic power) Brazil, Argentina, Uruguay and Paraguay. There are five nations with associate member status: Bolivia, Chile, Colombia, Ecuador and Peru, while the Bolivarian dictatorship of Hugo Chávez signed a membership agreement in 2006. It was to become a South American version of the European Union with a common currency, the fictitious gaucho.

Now, more than 20 years later, the merry-go-round keeps going around. The most recent Mercosur Summit took place in the Uruguayan capital of Montevideo, where the host, President José Mujica, who is Presidenta Cristina Fernández de Kirchner’s new lapdog, has been pushing for the incorporation of Venezuela as a new member state, in spite of the legislature of Paraguay’s refusal to ratify its entry. Paraguay’s president, the virile Priest Father (really – three illegitimate kids) Fernando Lugo, was trying to strike a side deal with Argentina’s Kirchner, Brazil’s Dilma Rousseff and Uruguay’s Mujica, which would have bypassed the unanimous requirement from the agreement.

Hugo Chávez already announced the he will (and did) travel to Montevideo to announce Venezuela’s full membership, but something did not go according to plan. The president of Paraguay’s Congress, Senator Jorge Oviedo Matto, made three points very clear:

1. The Paraguayan constitution requires the approval of every international agreement and must be voted on and approved by Congress before becoming law.

2. If the membership of Venezuela will be approved against the objection of the opposition congress, President Lugo will be impeached.

3. The Paraguayan position is not against the nation of Venezuela, but against its dictatorial despot, Hugo Chávez, under whose leadership the Venezuelan government has ceased to respect the freedom of the press or the political freedom of opponents.

In Montevideo, meanwhile, Uruguay’s foreign minister announced that there is a formula on the table, the objective of which is to find a mechanism to assure a prompt entry for Venezuela into the crumbling union, while at the same time Paraguay’s threat to leave the Mercosur was described by Senator Oviedo Matto as being an event by which his country will not be losing much, “…and what have the advantages been so far? There will be no parting tears!”

Chávez’s arrival in Montevideo to announce his country’s entry has been toned down a little bit by his public admission that Venezuela’s incorporation doesn’t have to be decided today (Tuesday, Dec 20).

To add to the high drama, it was revealed during lunch that one high-ranking member of the Argentine delegation, an ultra-Kirchnerite wunderkind, was found hanging from his shower in his luxury hotel suite at the Radisson Hotel. Iván Heyn, Argentina’s under-secretary of commerce, was one of the most promising Young Turks, best friends with former minister of the economy and current Vice President of Argentina Amado Boudou. He was one of the most prominent leaders of the young Kirchnerist organization La Campora, and his future as a political and economic leader was as assured as you can get in Argentina.

His death brought shock and disbelief to the summit, which was temporarily suspended. The headline of the Mercosur press release reads, “On hearing the news, Argentine President Cristina Fernandez suffered a decompensation and had to be taken for medical attention.”

This, of course, will open his tragic death to all kinds of conspiracy theories; but regardless of the circumstances, the loss of such a promising young man is a tragedy.

By 23:30 on Tuesday night, the delegates announced the formation of a working group to help smooth the entry of Venezuela and Ecuador into Mercosur. The member nations also signed a free trade agreement with Palestine and expressed their solidarity with Argentina’s effort to gain control over the disputed (by Argentina) Falkland Islands, referred to around here as las Islas Malvinas.

US Hopes for a regional free-trade agreement

Now that the US finds itself playing second fiddle to China in Latin America, the Obama administration just suddenly rediscovered its old and exploited southern neighbors, with US Trade Representative Ron Kirk wanting to kick-start a trade agreement with South America and calling for a greater opening of the Brazilian economy to the United States. Since 2009, Brazil’s largest trading partner has been China, whose influence is spreading rapidly across the entire Southern Hemisphere.

The Clown Prince of Venezuela, of course, could not resists the opportunity to go on state TV in Caracas on Monday, Dec 19, telling Obama to “leave us alone” and calling him a clown and an embarrassment as well as suggesting that he should focus on governing the US, which, says Chávez, he turned into a disaster.

Very interesting he should say that. He must have been practicing his speech in front of a mirror.

Jamie Douglas

San Rafael, Mendoza

[Image of Mercosur Headquarters in Montevideo, Uruguay, via Wikipedia]

Central America News Roundup Dec 15, 2011: Costa Rica Rains and Trade Relations, Panama Expat Murderers

article from December 15, 2011

By Jamie Douglas

Costa Rica: Rains and trade relations

Good news for our Tico friends: While you may get the impression that it’s raining all over the world, it is not raining here in Argentina; and regardless of your present dilemma, the rains will stop soon. But it is true that this last rainy season has eaten well into your current verano. If things go as they have in the rest of the world, you can expect a very dry, dry season. Keep your rubber boots and umbrellas handy for the time being, especially if you live over on the Caribbean side.

Even in regard Costa Rica, the United States is losing its hold on trade. With the US having treated the region like a giant backyard banana plantation for years without giving any respect to the area’s inhabitants, China has entered the Latin American market with gusto. After establishing itself successfully in the developing nations of Peru, Ecuador, Chile, Brazil and Argentina, China is now courting smaller countries like Costa Rica with massive loans on favorable terms to improve their infrastructure. The Asian Giant has just concluded negotiations to assist the small Central American nation with an upgrade of the Recope refinery in the Caribbean Port of Moín, offering US$900 million to finance the upgrade from a capacity of 20,000-25,000 barrels per day to 60,000 barrels. And as an additional insult to the gringos who built the original facility, the construction work is to be carried out by an Australian company. Total expenditures are estimated to be somewhere in the neighborhood of $1.25 billion.

If it were not so tragic for American workers, it would be ironic. The Chinese are going all over the world, spending all the US dollars they acquired in trade with the US, looking like the benefactors of the developing world, when in fact they are just the latest reincarnation of economic assassins as they get these nations into incredible debt, for which China will receive valuable licenses to extract minerals as well as creating huge plots of monoculture soy plantations, all for export to feed their hungry masses.

Maybe these countries should look instead at the USA to grant some of their generous aid, perhaps transferring some of their transfer-acquired technology north to the land of the unemployed and starving masses. You know, the richest nation in the world, where one in seven residents is receiving what used to be food stamps. I would like to take this opportunity to thank all the politicians who are responsible for this mess, and I mean all of them.

Panama: Expat murderers

Some of you living in Panama may have heard about that nice steroid-pumped neighbor in Bocas del Toro, a certain William Holbert, aka “Wild Bill,” and his gangster moll, Laura Reese. The couple admitted to murdering five expats in that small community without anyone there getting particularly curious about what happened to their neighbors. They were apprehended while migrating north to Nicaragua, where they planned on settling in San Juan del Sur.

Now, it turns out that there is another victim to their reign of terror, a US business owner by the name of Jeffrey Klein who, according to the prosecutor general in Chiriquí Province in Panama, was also murdered by the infamous criminals.

I have written about the dangers new expats face from established crooks who prey on newcomers, but this is a reverse situation where it was the established nice expats who were murdered by a professional criminal. Watch out for each other.

Jamie Douglas

San Rafael, Mendoza

Latin America News Roundup Nov 30, 2011: Argentina, Colombia, Cuba

article from November 30, 2011

By Jamie Douglas

Argentinean Holidays

Being a worker in Argentina in 2012 certainly has its benefits. Out of the 366 days next year, 122 will be official holidays and weekends, precisely one third of the whole year, assuming that the end of the world will not surprise us all. There will be a total of 10 fin de semanas largas, or 3-day weekends, with the possibility of an eleventh one to celebrate the bicentennial of the Argentinean flag on Monday, Feb 17. That last one is pending approval of a bill in the lower house, after the Senate approved it already.

Add to that the vacation days that are written into the law, and the average worker productivity will be down, forcing manufacturers to hire more workers, something that is great for the economy, driving down unemployment and raising income tax receipts. Oh, sorry, I almost forgot! It doesn’t work that way. Few people actually pay taxes, and employers will probably just force their workers to be more productive. Have another mate, mate, and then get back to work.

Venezuela-Colombian cooperation on drug kingpin capture

The short and violent criminal career of Colombian bad boy Maximiliano Bonilla-Orozco has come to its inevitable conclusion. No, he is not dead, but he has just been apprehended in Venezuela’s third-largest city, Valencia. Bonilla-Orozco has been on the US’ list of most wanted drug kingpins for a while. It is alleged that he was the mastermind behind sending several hundred tons of cocaine from Colombia to the US and sending millions of dollars back through Mexico.

Perhaps not so coincidentally, the capture was made on Sunday while Colombian President Juan Manuel Santos was on a state visit to that very country. Santos thanked his Venezuelan counterpart, President Hugo Chávez, for his country’s invaluable assistance in the capture of the very high-value drug trafficker who has wrought so much damage in many parts of the Americas.

The captured narco received his drugs from the Ejercito de Liberacion Nacional (ELN) and has had extensive dealings with the Zetas, the ultraviolent Mexican gang of former military commandos. The US had a $5 million reward out for his capture, but Venezuelan officials announced that they will not claim the reward, stating that he will be extradited to the US as soon as the yanquis are ready for him. Bonilla–Orozco was indicted in New York in 2008. This comes as somewhat of a surprise to US officials, as Venezuela discontinued its anti-drug cooperation with the US in 2009.

Cuba’s privatization moves

Raúl Castro keeps surprising not just seasoned Cuba watchers, but also his long-oppressed compatriots. It is looking like the Pearl of the Caribbean will slowly get back to private ownership of businesses, automobiles and property. With the latest announcements coming from Castro, the road ahead for private enterprise looks promising. After over 50 years of the island’s Soviet-style central planning and execution, the president of the island nation has come to the logical conclusion that even at the very low salaries paid to state workers, having millions of underperforming but unfireable workers on the state payroll is a drain on the already-strained economy. President Raúl is encouraging the formation of small businesses, hoping they will hire as many as one million workers away from government payrolls.

While his ultimate goal is to strengthen Cuba’s communism with these changes, it appears more like the grassroots of a new socio-capitalistic society that, once it takes hold, will become the base for future economic development. Enterprising minds in the country are already planning and hoping for more relaxed rules that will allow the human spirit to soar once again on that incomparably beautiful island.

One of the major drawbacks has been the lack of capital available to potential entrepreneurs, but that is all about to change. As an early Christmas present, new banking and credit regulations will take effect on December 20, 2011, presenting for the first time the opportunity for farmers, small businesses and individuals with good ideas to obtain financing and to be able to open commercial bank accounts, a prerequisite for doing business with the government.

Cuba’s potential is vast. The islands citizens are very industrious people, having learned to make do with very little for more than 50 years. Being so close to Florida and having such a large underutilized labor pool, the possibilities of industrialization are very high. All it takes is for some of the US right-wing politicians to realize that the potential for their patrons, the large corporations that got them elected, is immense, and that the children of Cuban robber barons who fled to Florida should get used to the fact that they, too, live in a changing world. You can never go back, baby! Cuba of the 1950s is gone forever.

Jamie Douglas

San Rafael, Mendoza

Is the New Peru Better for Expats?

article from October 20, 2011

By Jamie Douglas

So maybe 2010 Nobel Prize winner for literature, Peruvian writer Mario Vargas Llosa was being overly dramatic when, earlier this year, he reluctantly endorsed Ollanta Humala in the runoff for the presidency of the Andean Nation. Humala was running against Keiko Fujimori, the daughter of the disgraced former President Alberto Fujimori, now deservedly rotting away in prison. The highly respected Vargas Llosa summed the runoff up as the Peruvian people having the choice between AIDS and terminal cancer.

The Lima Stock Exchange must have felt that one of those unenviable descriptions fit Ollanta Humala, as it experienced its largest drop ever upon his win. Unfounded fears of Chávez-style socialism had been spread by the opposition, to the point where they apparently started believing their own propaganda.

During the campaign, I received several communications from US and British expats living in Peru, all of them telling me that it was over in the event that Marxist/socialist Humala would win, and they would leave the country. I would love to hear from them, to see what their view is now!

Humala surprised his opponents when he appointed many moderate technocrats with many years of experience to his cabinet, and the stock exchange quickly recovered. The mining companies, which provide a nice chunk of income for the state, agreed to a reasonable upward adjustment in royalties, and a portion of that is to go toward helping the very poor who live in the remote areas of Amazonia and in the Andean highlands – we hope!

So suddenly, Peru is back on the radar for expats. Lima always had a sizeable expat community, and lately there have been a number of new arrivals, many of them professionals working for multinationals. For expats who require some safety and comfort in their lives, Lima is not inexpensive. One-bedroom apartments in the center will run you from US$400 to $800 per month. Food prices can vary wildly, depending on where you buy. Fresh fruits and vegetables at the market are the most economical and healthiest, while supermarkets tend to be much pricier.

If you are looking at Arequipa or Cusco, your cost of living will be lower. The rents in Arequipa are substantially lower, with a three-bedroom apartment in the city center averaging just over $400 per month.

Health care is actually something that brings some retirees to the area, as the cost is very reasonable, and there are a number of doctors and clinics that specialize in eldercare. I see that as a growing specialty field, as more and more Baby Boomers find themselves priced out of the US market or are tired of the mediocre care afforded through Medicare, which is only good in the USA. Dentists are also very reasonable and good. Just make sure that, in either field, you have a reputable professional taking care of you.

For those of you with school-aged children, there are a number of choices available. If you want that your kids to become fluent in Spanish so they can help you with shopping, the bureaucrats and the mechanic, send them to a good Spanish-speaking private school. There are a number of them. It would probably be a good idea to find a good school before you rent or buy a home, as the daily to-and-from can be a grind in Lima’s traffic nightmare.

As far as your utilities are concerned, it depends mostly how big your refrigerator is – and how efficient it is. Expect to have to pay between $150-200 for everything, including water, gas, electricity (220 V, 60 Hz), broadband Internet (6 GB flat rate) and telephone. For making international calls, use Skype, which is free between Skype users, or do as I do and get a low-cost subscription with a US number that your friends and loved ones can reach you on at no cost to you.

If you need domestic help, it is also available for $200 and up per month. Inform yourself of the labor laws. Knowledge of them is protection, for if you have reason to dismiss you helper after paying them under the table, they might just turn you in.

Would I recommend Peru? Hell yes! It is a very fascinating country that is full of surprises – and not just Machu Picchu. Just south of Lima, there are intensive archeological excavations under way. A quick flight over the Andes will take you to Iquitos in the Amazonian rainforest, where you will have a chance to explore and see incomparable fauna and flora, as well as visit with the indigenous inhabitants.

Jamie Douglas

San Rafael, Mendoza

Where fortunately, the pisco sour is NOT the national drink!

[Image of Arequipa Yanahuara, Peru, via Wikipedia]

Monday, January 20, 2014

Volcanoes, Sheep and Airlines: The Argentinean Ash Problem

article from October 4, 2011

By Jamie Douglas

Those of us living in the Southern Hemisphere are well aware of the effects of the Chilean volcanic eruption of Puyehue-Cordón Caulle. Flights in a large swath of South America had to be cancelled for weeks, and after the initial ash cloud had made its way around the world, flights in Australia and New Zealand had to be cancelled as well, causing massive disruption to peoples' travel plans and large losses for the air carriers.

The initial eruption from the Cordón-Caulle fissure occurred June 4, 2011, and by June 18, exactly two weeks later, the ash cloud had completed is circling of the globe. No human lives were lost. The dimensions of this natural disaster, however, keep growing. The economic impact of the Argentinean winter-sports tourist industry has been devastating, with almost the entire season lost due to the ash fall, closure of the airspace and the associated bad publicity.

The effect on livestock has been tragic, with thousands of cattle and horses having died because of lack of food and water as well as from ingestion of the fallen ashes. And in Argentine Patagonia, it is estimated that half a million sheep have perished. The ashes have not just contributed to the deaths of many of these sheep by way of ingestion of ash-covered forage, but have also diminished the amount of their available pasture. An additional complication has been the added weight of the volcanic emissions, which, when combined with rain, has created so much additional bulk that the poor creatures have been having difficulties moving about, and when they lie down, many simply cannot get back up.

Of course, the steady deposit of more ashes has complicated lives for the human population, as well. Aside from being harmful when inhaled, there is a constant struggle to keep roofs from collapsing under the weight of accumulated deposits, with traveling and routine trips to the store having become very hazardous. In some areas of the province of Chubut, the accumulations on roads are up to 1 meter, costing the Public Works Department a fortune to clear and maintain.

This is also a minor contributor to the hemorrhaging of cash that the government-owned Aerolineas Argentinas is suffering from. While the national airline enjoys a near-monopoly on domestic flights, it did not help things that, for a large portion of the winter season, the Patagonian ski areas were unreachable by air. For weeks, all flights from Buenos Aires south were cancelled, and on many days, no flights out of Buenos Aires operated at all. While sitting idly on the ground, the leasing fees, along with everything else involved, such as insurance, continued to accumulate.

The Argentinean flag carrier, sadly, has the distinction of being the third-most money-losing carrier in the world, with a loss of US$486 million in the past year. While that is serious money for the nation, consider Air India, which lost $1.2 billion over the same period. Government ownership always means that there need not be too much worry about efficiency, and of course, there is a lot that is allowed to fall between the cracks. But it all adds up in the end.

Jamie Douglas

San Rafael, Mendoza

I was introduced to that Fine Malbec Wine on an intercontinental flight on Aerolineas!

China’s Importance As a Trading Partner For Latin America

article from October 3, 2011

By Jamie Douglas

October 1, 2011, Chinese National Day, was respectfully observed by Latin American nations that have become dependent on China’s resource-hungry economy gobbling up thousands of tons of their exported foodstuff, minerals and energy resources.

From Mexico to Argentina, high officials of the region’s governments visited the Chinese diplomatic envoys in their countries to pay respect to the nation that has made them less dependent on the whims and winds of their northern neighbor, the USA.

Colombia offered up a “Discover China” event, intending to showcase the benefits brought by the ever-increasing trade between these two nations. With the Colombia-USA Free-Trade Agreement still in limbo because the US Congress, with its incredible inability to come to a consensus about anything, has not yet held a vote on this bilateral agreement, Colombia is smart to cultivate other options. Many see Colombia’s vote in the Security Council against Palestinian statehood as the result of strong-arming by US threats to continue to delay the ratification of this treaty, which will bring at least a billion-dollar windfall of US exports. But the benefits to Colombia’s economy are yet to be assessed.

Cuba, having been the first nation to officially recognize China 51 years ago, celebrated their bilateral bonds with exuberant newspaper and television propaganda from the Cuban government.

Uruguayan President José Mujica stated that China’s explosive growth over the last few years has been a blessing for the region, with China having made substantial investments in the small Eastern Republic of Uruguay, and there are more projects on the horizon.

The Dominican Republic, meanwhile, has expressed its gratitude for China’s generous donation of various forms of aid for reconstruction efforts, after several recent hurricanes have put great strains on this Caribbean nation’s ability to take care of its poorest citizens. Chinese workers are on the ground helping with very important efforts such as rebuilding water and electrical grids as well as aiding with reestablishing the all-important tourism sector.

Argentina’s Luis Susman, a spokesperson for the Foreign Affairs Ministry, has stated that both nations have been engaged in important efforts to increase trade between them. Recently, China’s state-owned agribusiness company, Beidahuang, signed an agreement to purchase almost 800,000 acres of land in Rio Negro, a deal that was initially kept secret from the people of the province, as there were sure to have been some serious favors passed to the officials making possible this dirty deal, which includes water and port rights. Juan Accantino, Rio Negro’s deputy secretary for agriculture, has repeatedly touted the benefits of this arrangement: “It makes great economic sense. We can foresee global shortages of land, water and energy, and our province can offer all three.” And once again the good people of Argentina got screwed by their corrupt leadership leaving off the end of the sentence, “...to the Chinese.”

Chile and Peru are also very grateful for the Chinese having become major investors in their countries’ mining industries. The recent 23% drop in value of copper will have severe impacts on the economies of both nations, with Chile’s currency already having suffered the worst loss in value since the Lehman Brothers collapse. The Chilean peso fell 11% during September and will probably fall more, since copper makes up more than half the country’s exports.

The huge buildup of trade between Latin America and China is evidenced in the fact that, between 2007 and 2010, the figure went from US$100 billion to $183 billion, with 2011 expected to exceed $200 billion.

Jamie Douglas

San Rafael, Mendoza

Where that Fine Malbec Wine is staring to grow!

Brazil’s Future

article from September 28, 2011

By Jamie Douglas

Brazil in the last few years has shaped itself into an economic powerhouse, becoming South America’s own “Wirtschaftwunder.” But there are troubling signs on the horizon: The nation’s currency, the real, has appreciated to such an extent that Brazilian tourists in Uruguay and Argentina are spending like drunken sailors or Americans in 1950’s and 60’s Europe. With their powerful currency, their buying power is nearly double in those countries than it is at home.

In the real world, the rise in the value of the real has created some very unpleasant side effects, such as the loss of exports, inflation and lately, a minimizing of isolation from the shrinking world economy. Since the beginning of 2011, the Brazilian share market, Bovespa, has lost 22%. In other words, the value of traded entities has fallen by over a fifth, which is a staggering loss of wealth.

Brazil’s former president, Luis Ignacio Lula da Silva, AKA Lula, a very popular socialist who reduced abject poverty by about 25 million people, was widely thought to be planning a run for office again when Dilma Rousseff’s first term is up. But he has recently announced that he will stand down and let her run for a second term. He is a sly fox, that Lula. Realizing that, three years down the road, things will be very different that now, he can just play the role of elder statesman without having to take the blame for the possible collapse of the nation’s economy.

Brazil is confronted with several major obstacles in the future, not the least of which are the triple money-guzzling sporting events coming their way. In 2013, Brazil is to host the Confederation Games, then there will be the 2014 FIFA Soccer World Championship and finally, in 2016, the Olympic Games as well as the Para-Olympics. All told, the drain on the nation’s finances will amount to over one trillion US dollars. The improvements to the infrastructure will be permanent, while the influx of foreign currency will be fleeting. On the upside, thousands of jobs will be created in construction and the service industry; on the downside, most of these jobs will vaporize once the festivities are over. Then comes the long hangover of repaying the debt that was accumulated to hold these prestigious events.

Brazil had been a beneficiary of record-high commodities prices in the last few years, from minerals to grains. But in the current downturn, which may last several years, the prices of most of their commodities have slipped, as the consuming nations have cut back on their requirements due to reduced productivity. While some analysts are not worried about Brazil’s economic future, I am not so optimistic. But then again, I am not an analyst; I am just an opinionated observer who is good at math.

Brazil is currently carrying a debt burden of US$1.75 trillion, which may not seem like much compared to the USA’s approaching $15 trillion debt, but Brazil is under the rule of the IMF and is not allowed to recklessly print billions in worthless paper currency like the USA is currently doing.

An additional problem plaguing the Brazilian treasury is that fully half of all collected taxes go toward paying pensions. Economist are advising Dilma to reduce these pensions and reduce interest rates, which currently are at a reduced, but still staggering 12%. The easiest way to create social unrest in Brazil would be to mess with the holiest of sacred cows: the pension system. Should the presidenta decide not to run for that second term, then she may try for that. However, it is very unlikely that she will succeed, as the coalition holding the government together is comprised of 27 parties and a bunch of politicians who do want to get reelected again.

Jamie Douglas

San Rafael, Mendoza

Where that Malbec Wine is Always Fine!

Central America News Roundup Sept 22, 2011: Costa Rica, Panama

article from September 22, 2011

By Jamie Douglas

Costa Rica

The misnamed “Switzerland of Central America” (there is no such thing) is contemplating building an international jetport on the Osa Peninsula in the southwest part of the country. This is an ecologically sensitive area and one of the last regions to fall victim to tourism development. After having seen what the CIA-sponsored airport (I am not making this up) did to the overdevelopment of the Nicoya Peninsula and the mainland of the northwestern part of Costa Rica, one must question the sanity of those greedy government officials who operate out of the pockets of foreign land developers. Corruption is and has been one of this country’s overwhelming problems.

Meanwhile over on the Caribbean side of the nation, a shocking development for developers and agribusinesses: Judges in Goicecoechea ruled last week that the government will seize several hundred thousand hectares of land and return it to the Bribri people, who are part of the indigenous Keköldi nation of people of the Talamanca. What really makes this bite sting is that a lot of this land is near the very popular Puerto Viejo tourist area. The ruling is to compel the Agricultural Development Institute to expropriate the land and relocate any and all non-indigenous residents. This epic decision is based largely on the Indigenous Law of 1977, along with the presidential decree that established the Keköldi Reserve that same year. This established law states very clearly, “Land and property may only be traded between the indigenous residents of the reserve.” Judge Cynthia Abarca, president of the court, stated in an interview with La Nacion of San José that “the obligation to recover said land is sanctioned by international agreements, protecting the indigenous people’s rights. The lands have very special meaning for them, being places they consider sacred.” The government plans to appeal the decision.

A fiery Tica beauty, Johanna Solano from Heredia, made the country proud once again for its famously lovely ladies by placing in the top 10 at the Miss Universe pageant in São Paulo, Brazil. She is the current Miss Costa Rica, and will remain so until March 2012. Felicidades Johanna!

Costa Rica is also celebrating its independence from Spain 190 years ago. All the Central American nations except Belize tore themselves loose from the crumbling and broke Spanish Empire, and of course, that freedom did not come easily. The region has since been plagued with various dictators, despots and megalomaniacs, as well as an endless procession of civil wars. Costa Rica’s last civil war was fought for 44 days from March 12 until April 24, 1948. It is estimated that over 2,000 people lost their lives in that uprising caused by the country’s legislature voting to void the election results from February of that year. A rebel army, under the command of José (Pepe) Figueres, rose up and defeated the government of President Teodoro Picado in the bloodiest chapter of this tiny nation’s 20th-century history. After winning the revolt, Figueres ruled the country for a year and a half, wisely abolishing the army to keep history from repeating itself.

Meanwhile, on the narco front, Costa Rica managed to maintain its spot on the US State Department’s cherished blacklist of countries contributing to the illicit drug trade. Belize and El Salvador were just added this year.

Panama

Panama will have to exercise a little more patience until they get their hands on former strongman Manuel Noriega, the object of the United States’ affection in the 1970s and 80s. Noriega, a rogue CIA asset, was captured in the Vatican Embassy in Panama City in 1989 by George Bush’s invading army. Once again, like in Granada, the US went into a non-aggressor country and, according to UN estimates, slaughtered 2,500 civilians as well a number of members of the military, raking up an oft-mentioned figure of 4,000 dead, while the US forces numbered 23 dead and 325 wounded. Some surgical strike that was!

Manuel Noriega was to be returned to Panama from France, where he is currently incarcerated for money laundering. But French judges have held up the extradition because they needed more time to study the issue. Noriega has now been imprisoned for over 20 years, and I feel it is unlikely he will ever be released, as it could prove to be very embarrassing for the CIA-head-turned-US-president, George H. Bush, who is ultimately responsible for the crimes committed by Noriega. It sure would make for some very interesting reading if Noriega were ever able to publish his memoirs.

Ebrahim Asvat, a lawyer and activist for the voiceless masses of poor people in the country, is trying to get himself killed by attempting to have the law of Anati (National Land Authority) overturned. Laws and regulations have been no match for corruption in Panama ever since private land developers found out what a lovely country Panama is and how easy it is to get prime land for development by lining the pockets of everyone from the president down. Knowing how Panamanian “justice” works, I have no hope at all that he will prevail.

While on the subject of presidential corruption, it should be mentioned that President Ricardo Martinelli has declared that the Italian citizen wanted by the prosecutor of Naples for the extortion of a million dollars from Italian Prime Minister Silvio Berlusconi is welcome to stay in Panama. Berlusconi did not mind paying the money to protect himself from exposure in his underage prostitution “Bunga Bunga” scandal. Martinelli considers Valter Lavitola to be a very useful asset for Panama since, by giving him shelter, Berlusconi has become a major Panamanian benefactor, donating six patrol boats to the nation that are valued at close to US$300 million. Martinelli and Berlusconi also signed a no-bid sweetheart deal valued at $335 million for helicopters, radars and other assorted items.

Good news for film buffs: Panama will finally have its own world-class film festival in 2012, when it will host the International Film Festival April 11-17. The festival will be in the capable and experienced hands of the cofounder of the highly successful Toronto Film Festival, as well as those of Panama’s own Pituka Ortega Heilbron, a well know producer/director whose work includes a documentary about the life of famous pugilist Roberto Duran. Quiet on the set! And … ACTION!

Jamie Douglas

San Rafael, Mendoza

Where that Fine Malbec wine is ever-present! Salud!

Does Mercosur Have a Future?

article from September 19, 2011

By Jamie Douglas

Since 1991 Argentina, Brazil, Paraguay and Uruguay have been charter members of what was to become a Southern Cone common market, with a goal of eliminating punitive tariffs and allowing the free flow of commerce and people across international borders. Now, Venezuela has been approved to be a member as well, and all but Paraguay have ratified the motion to allow that Bolivarian nation to join. Excepting the Guyanas and Suriname, the remaining nations of South America – Bolivia, Chile, Colombia, Ecuador and Peru – have associate-member status.

In theory, this was to be an emulation of the European Union’s effort to eliminate borders and tariffs between member nations. But as is usual in the Southern Hemisphere, petty disputes still exist among these nations. The Uruguayan pulp mill dispute, which led to the closure of the southernmost border crossing between Argentina and Uruguay for years, is but one example.

Paraguay and Uruguay, of course, are the two dwarfs squeezed between the giants of Brazil and Argentina, both of them being exploited by their bigger neighbors at every turn and with virtually no recourse. With the worsening economy, inflation, and the Brazilian real having become overvalued to the point of its becoming a major hindrance to exports, Brazil’s leaders suddenly decided that protectionist measures were in order to reduce the importation of vehicles from Argentina and, to a much lesser extent, Uruguay.

On September 15, 2011, Brazilian Finance Minister Guido Mantega unilaterally lifted the industrial product tax by 30% to force domestic automakers to build key components such as engines and transmissions, as well as doing the stamping and painting. In order to stay competitive, Brazil is urging carmakers to locate their production in Brazil. This is particularly hard on Argentina, which has a booming business exporting the various vehicles it assembles, mostly with foreign engines, transmissions, etc.

The new rules went into effect Sept 16 and will stay in force until at least the end of 2012.

Meanwhile, Argentina’s national statistics agency, INDEC, has announced that the nation’s economy expanded by 9.1% in the second quarter compared to a year earlier. But when comparing that to the actual inflation of about 25%, one could easily surmise that, in reality, the economy contracted substantially. What is really driving the economy is the robust sale of durable consumer goods. Argentineans, long weary of saving their money or trusting banks, have taken to buying “stuff” in lieu of keeping money under their mattresses. While the currency is devaluing, the value of their goods is constant, and the easy interest-free payments that are offered by most establishments make that an ever-more attractive way to preserve the value of their money.

Undoubtedly, Argentina is the biggest bully in the Mercosur alliance, starting with Christina Fernández’ snubbing of the summit in June for mysterious medical reasons. Argentina has taken on an air of arrogance that resembles that of its northern brother, the United States of America. The brunt of Argentina’s quasi-imperialistic behavior is being born by the two small members of Mercosur.

On September 14, Uruguayan President José Mujica very carefully had to explain to his country’s manufacturers and farmers that Mercosur is not really working, even though relations between the countries were good, as Uruguayan exporters were facing increasingly difficult conditions to access markets across the Río de la Plata. While the Eastern Nation of Uruguay has been in compliance with the charter and intent of the Mercosur agreements, it has effectively been excluded from entering the Argentinean markets unhindered. As a result of being compliant, today’s Uruguay saw the transfer of control of several important industries, such as rice, soy, cattle and meat processing to Argentinean and Brazilian multinationals.

So does the Mercosur really have a viable future? I give it no more than a 50:50 chance over the long term. While it may continue to exist in the foreseeable future as an institution, its effectiveness depends on the full implementation of the spirit of the treaty, which is to better the lives of all the citizens in the zone by lowering the cost of goods and services provided across international orders.

Jamie Douglas

San Rafael, Mendoza

Where fortunately that Fine Malbec Wine grows right here!

[Image of Mercosur Headquarters in Montevideo, Uruguay via Wikipedia]

South America News Roundup Sept 5, 2011: Chile, Uruguay, Brazil, Peru, Colombia

article from September 5, 2011

By Jamie Douglas

A lot has happened since my last news roundup.

Chile

Tragedy has struck in Chile, where a Chilean Air Force CASA-212 aircraft was lost with 21 people aboard while attempting to land in deteriorating conditions on Juan Fernandez Island, 400 miles off the Chilean coast. On board were several employees of Chile’s TVN, including Felipe Camiroaga, a beloved on-air personality. They were on the way to the island to do a follow-up report on the earthquake and tsunami damage and recovery from the February 2010 disaster that hit Chile. We would like to offer our sincere condolences to the people of Chile.

The last few weeks have brought a great deal of unrest to Chile in connection with President Piñera’s attempt to make education a “consumer good,” further entrenching the status quo by removing the state from any responsibility to educate the masses of poor Chileans and making quality education something only obtainable by the wealthy. Massive street demonstrations by all classes have shown their disapproval of his position, with the labor unions joining in the protests and calling for a two-day national strike. In the midst of all the chaos, a young boy was shot to death by the carabineros while he was pushing his brother in a wheel chair.

Meanwhile, the general director of the Chilean carabineros was forced to resign, after it was disclosed that he personally covered up his son’s culpability in a hit-and-run accident in Providencia. In his resignation letter, he claims to be stepping aside for health reasons while, of course, denying the allegations raised against him by the investigative group CIPER.

Uruguay

In good news from Uruguay, it was reported that consumer inflation has fallen slightly to 0.56%, or an annual rate of 7.57%, down from 8.25%. But one must keep in mind that these are “official figures” compiled by government technocrats. I am sure my correspondent, Guy in Uruguay, would take issue with these figures. While they no doubt represent a slight improvement over the previous month, they are still well below the targeted rate of 4-6%.

Unfortunately, Uruguay’s economy has been affected by the double-dip recession hitting the “developed” countries in the Northern Hemisphere. In July, the nation’s fiscal deficit ballooned to US$40 million, while in July 2010 there was a sizeable $55 million surplus.

The Uruguayan national oil company, ANCAP, announced that it will start exploring for oil in the inland regions of Tacuarembó and Salto, where the discovery of oil-eating bacteria, in higher concentration than in Argentina’s Neuquén Province, has led to speculation that there may be crude oil in them thar hills. Uruguay could certainly use natural resources of this type, as most of its energy sources originate from outside the country, fanning the flames of inflation and national deficit.

Brazil

Brazil’s Presidenta Dilma Rousseff has just been anointed for a second term by her mentor, former President Lula da Silva, when he announced that he will step down from seeking a third term as president of that economic powerhouse, paving the way for her succession. President Rousseff has been challenged by the same entrenched corruption that plagued her predecessor, which ultimately brought her to the political forefront when she became Lula’s chief of staff before resigning that position to run for president, herself. But Brazil being Brazil, there is no telling what will happen there politically or fiscally in the next three years. The country is not isolated anymore from outside economic calamities, and the huge spending programs in progress now for the Olympic Games and the FIFA World Cup may yet end up draining the treasury. The infrastructure improvements that are necessary to make for a success of the games will have to be analyzed in terms of how much good they will bring to the country’s poor and undereducated. I personally would have liked to see this trillion dollars put into education, housing and sanitation projects in the rural areas that have so long been neglected. In the long run, that would provide security to the nation by allowing more of its citizens to climb the steep socio-economic ladder and eliminating the gap between the lowest class and the middle class.

Peru

In Peru, where the election of Ollanta Humala brought about a collapse of the Lima Stock Exchange because of fears that he would destroy the mining industry and drive investors away, things are going very well indeed. Ollanta Humala has become the darling of Wall Street and big investors. The mining companies that were so worried were happy to go along with his proposals to pay slightly higher royalties for minerals extracted in exchange for long-term commitments. This, in turn, will lead to more equal distribution of the wealth in a country that, like Brazil, suffers from abject poverty and lack of infrastructure in rural areas. We wish him and the good people of Peru much success in this new endeavor.

Colombia

And poor Colombia: Whenever that cocaine-cursed nation seems to be coming out of one crisis, it enters the next. The gold mining industry, an enterprise with the potential to eclipse the drug trade, is being plagued by all the usual suspects with terrorism, extortion, kidnappings and violence. I am rooting for Colombia to be able to leave the legacy of the cocaine cowboys behind. Colombia’s citizens are hard working, aspiring to be more than what they have been limited to by circumstances beyond their control; but through no fault of their own, they have repeatedly been victimized by the crime lords, the paramilitaries and fear of the dark. The current administration came into office on the heels of some great gains, but it seems that for every step forward, they slide back two. Large portions of the country are considered unsafe and unstable, so much so that not even the military is established there. Nobody seems to have a solution to these peculiar problems plaguing Colombia, but the time has come for a renewal.

Jamie Douglas

San Rafael, Mendoza

Where the Malbec grape vines are starting to sprout!

About Expat News and Information

This site was started by the former editors of Expat Daily News Latin America, of which many articles dating from 2010-2012 have been posted on this site, all with updated links. The intent of this blog is to add new content about issues of interest from around the globe while providing past insights and timeless expat topics with the older articles about the most popular expat region. The "Useful Expat Resources" page continues to offer information for anyone looking at the possibility of living overseas.

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