Content from IASW Contributors

New face may scramble Brazil’s presidential campaign

By Roger F. Noriega By Roger F. Noriega
Brazil’s presidential campaign took a tragic turn Wednesday morning when Socialist Party candidate Eduardo Campos, 49, was killed when the private plane he was traveling on crashed in the Brazilian port city of Santos; four other passengers and the two pilots also were killed. Campos’ running mate, Marina Silva Vaz de Lima, will likely be designated to assume the top spot on the Socialist alliance ticket.
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Don’t Believe Everything You Read About the United States’ Cuba Democracy Program

By José R. CárdenasBy José R. Cárdenas
For the second time in four months, the Associated Press has published a gross distortion of USAID’s Cuba Democracy Program that has made it the subject of unjust derision from the legions of U.S.-Cuba policy critics. Read More-->

Xi heads to Venezuela after inking trade deals with Argentina

| July 21st, 2014 | No Comments »
Global Post

China’s President Xi Jinping departed Argentina Sunday for Venezuela, the next-to-last stop of a Latin American tour aimed at bolstering trade with the region.

The Chinese leader’s charm offensive seeks to secure new bilateral trade deals — particularly for coveted raw materials.

Xi hopes to further develop his country’s strategic relationship with Venezuela, just as Caracas’ ties with the United States — the region’s traditional political and economic powerhouse — are arguably at their lowest point ever.

The countries, which have not had ambassadors in each other’s capitals since 2010, had poor relations during the leadership of late president Hugo Chavez and ties have remained strained under his successor, Nicolas Maduro.

- Warming ties with Caracas -

By contrast, relations have been warming between China and Venezuela where bilateral trade has been steadily rising, exceeding $20 billion in 2012. Beijing now is also the second largest buyer of Venezuelan oil.

Xi’s visit to Caracas is sandwiched ... Read More

Russia Rejoins Cuba’s Espionage Apparatchik in the Americas

| July 21st, 2014 | No Comments »
Mexi Data

By Jerry Brewer

In order to effectively monitor aggression, hostile intelligence acts, interference, and other forms of insurgency within their homelands, democracies throughout the Americas must immediately address their governments’ counterintelligence missions against those rogue and dictatorial style regimes that pose obvious threats.

Russia’s recent decision to reopen its electronic spying center in Cuba is once again an obvious act that aggressively demonstrates support for the Cuban Castro regime, and a shared dispute versus the United States.

The Lourdes base closed 13 years ago, having been built in 1962. The closing was reportedly due to the economic crisis in Russia, along with repeated requests from the United States.

Lourdes served as a signals’ intelligence (SIGINT) facility, among other applications, located just 100 miles from the United States at Key West, Florida. During what has been described as the Cold War, the Lourdes facility was believed to be staffed “by over 1,500 KGB, GRU, Cuban DGI, and Eastern ... Read More

China’s Goals in South America

| July 18th, 2014 | No Comments »
The Diplomat

By Shannon Tiezzi

As Xi Jinping travels through South America this week, China’s goals for the region are on display. Even though Xi ’s tour of South America only sees him stopping in three countries (Brazil, Venezuela, and Argentina), he has arranged meetings with even more leaders, including the presidents of Ecuador, Peru, and Bolivia. Amidst all the diplomatic niceties, what does China actually want to achieve with Xi’s trip?

The most obvious priority is expanding economic ties between China and South America. Trade between China and Latin America (a region encompassing South America, Central America, and the Caribbean) has skyrocketed in the past 15 years, rising from a total value of $12 billion in 2000 to $261 billion in 2013. And there’s still room for growth, as China’s bilateral trade volumes with individual countries remain relatively low. China has grown to be Latin America’s second largest trading partner and may ultimately has its sights ... Read More

Putin’s Pirates Of The Caribbean Tour

| July 18th, 2014 | No Comments »
IBD

Geopolitics: Vladimir Putin blew through Latin America last week, handing out goodies to anti-U.S. regimes. But he insists he doesn’t want to reopen an old spy base in Cuba, which we find disingenuous.

The scope of the Russian president’s visit took the U.S. by surprise. Instead of just attending the World Cup final and a summit of BRICS countries, Putin made an unexpected visit to Nicaragua, with talk of a military land base there. He then flew to Argentina, reportedly with promises for two nuclear plants, and on to Venezuela to offer a credit lifeline.

Last but not least, Putin stopped in Cuba to sign deals on everything from electricity output to exploration for oil with Rosneft (the company whose unsavory oligarch, Igor Sechin, was the target of Wednesday’s sanctions over Ukraine). There was also a dramatic announcement that Russia would forgive 90% of Cuba’s $35 billion debt.

But on Thursday, Putin denied that ... Read More

China, Russia leaders seek South American inroads

| July 18th, 2014 | No Comments »
The Miami Herald

By JOSHUA GOODMAN

It’s enough to make an aging U.S. Cold Warrior shudder.

During overlapping visits to Latin America, the leaders of China and Russia have been welcomed with open arms by governments that are among the most hostile to Washington, including Cuba, Nicaragua and Venezuela. Together with stops in Argentina and Brazil, which both have distanced themselves from the U.S. in recent years, the tours underscore the mix of ideology and economics that’s allowing the two superpowers to expand their influence in America’s backyard.

“These are all countries the U.S. has some real question marks about,” said Kevin Gallagher, a Boston University economist and expert on Chinese-Latin American ties. “It’s going to require some PR so as not to be interpreted in certain, phobic circles as an overt alignment with left-leaning governments at odds with the U.S.”

Both Chinese President Xi Jinping and Russian leader Vladimir Putin said their visits were focused on ... Read More

Argentina Default Worries Renewed as Fernandez Defiant

| July 18th, 2014 | No Comments »
Bloomberg

By Charlie Devereux

Bond trading shows investors are becoming less confident that Argentina will reach a settlement with holders of defaulted debt amid defiant comments by President Cristina Fernandez de Kirchner.

Two weeks after a U.S. judge blocked Argentina from paying interest on its restructured bonds because it didn’t abide by a ruling to pay holdout creditors that won a court order for full repayment, Fernandez dismissed concern the nation risked reneging on its obligations again if it doesn’t reach a deal. The comment deepened the first weekly drop in Argentine bonds in a month, pushing losses to 5.6 percent since July 11 on benchmark notes due 2033.

While the securities have still risen 7.4 percent in the past month on speculation the nation will strike a deal to avoid defaulting for the second time since 2001, Fernandez’s comment underscores the risk Argentina will refuse to negotiate, according to Patrick Esteruelas, an analyst at ... Read More

Is Mexico Doing Enough to Secure Its Southern Border?

| July 18th, 2014 | No Comments »
FUSION

BY TED HESSON

Sneaking north into Mexico wasn’t easy, according to Brandon, who was 14 years old when he left his hometown in Guatemala last April to rejoin his parents in the United States.

A smuggler hired to get Brandon across the border led him on a five-hour hike across rough terrain and through sweltering heat to avoid Mexican border checkpoints.

“I suffered a lot,” Brandon told Fusion during a recent interview in Virginia. “It was really hot. There were a lot of thorns and my shoes broke. I got blisters on my feet.”

The month-long trip didn’t get any easier after that. The coyote warned Brandon’s group that capture by the Mexican federal police meant deportation or bribery. “He said that if they found us, they would arrest everyone.”

Still, Mexican immigration enforcement was no comparison to what he faced when he entered the U.S. After crossing the Rio Grande border into South Texas, Brandon was ... Read More

Venezuela’s loss of thousands of oil workers has been other countries’ gain

| July 18th, 2014 | No Comments »
The Economist

In 2003 Venezuela’s then president, Hugo Chávez, fired more than 18,000 employees, almost half the workforce, of the state-run oil corporation, Petróleos de Venezuela (PDVSA). Their offence was to have taken part in a strike (pictured) called in protest at the politicisation of the company. Their punishment was to be barred from jobs not only in PDVSA itself but also in any company doing business with the oil firm. The axe fell heavily on managers and technicians: around 80% of the staff at Intevep, PDVSA’s research arm, are thought to have joined the strike. At the stroke of a pen, Venezuela lost its oil intelligentsia.

It was a blow from which PDVSA has never recovered. The firm’s oil production has since stagnated (see chart), despite a big run-up in prices. The financial crisis bears some of the blame for that, as does the economic mismanagement of Chávez and, since last year, ... Read More

Argentina and the holdouts

| July 17th, 2014 | No Comments »
The Economist

ARGENTINA’S impressive run in the World Cup meant that, for the past few weeks, the country has existed in a state of football-fuelled bliss. Restaurants were strewn with blue and white streamers; bars extended happy hours; and stores offered discounts. Now troublesome reality has returned. Argentina’s vice-president is under investigation for corruption; its economy is in recession; and its inflation rate is the second-highest in the world. Most pressingly of all, it is less than two weeks away from default.

Last month the Supreme Court of the United States declined to hear Argentina’s defence against NML Capital, a fund that scooped up steeply discounted debt left over from Argentina’s 2001 default, and has been holding out for full payment of principal and outstanding interest. Argentina had been hoping to appeal against a decision by Thomas Griesa, a judge in a New York district court, barring Argentina from paying the 93% of ... Read More

Report: Russia will reopen spy base in Cuba

| July 17th, 2014 | No Comments »
The Miami Herald

BY JUAN O. TAMAYO

A report that Russia will reopen a Havana base that eavesdropped on U.S. communications from Key West to Washington has triggered fresh warnings of Moscow’s expansionism and predictions of a continued freeze in U.S.-Cuba relations.

Until its closure in 2002, the Lourdes base was Moscow’s largest intelligence facility abroad, with up to 1,500 KGB and GRU military intelligence officers manning an array of antennas and computers in the super-secret 28-square-mile base.

“If the report is true, there’s no question Washington will put Cuba engagement on the back burner,” said Andy Gomez, a retired Cuba specialist at the University of Miami and now senior policy advisor for the Washington law firm Poblete Tamargo.

Alvaro Alba, a Miami expert on Russia, said reopening Lourdes would underscore President Vladimir Putin’s ambitions and cast a pall on U.S.-Cuba relations as dark as that caused by Havana’s imprisonment of U.S. government subcontractor Alan Gross since ... Read More

US should be ready if Petro Caribe tightens credit terms, study says

| July 17th, 2014 | No Comments »
Oil and Gas Journal

By Nick Snow

The possibility that Venezuela’s financial support for energy imports in the region could erode quickly makes it imperative for the Obama administration to adopt a wide range of policies to avoid an energy crisis in the Caribbean and Central America, a recent Atlantic Council report said.

“It’s almost 10 years since Venezuela announced the Petro Caribe program, which sells products at market benchmarks, but provides credit financing,” David L. Goldwyn, president of Goldwyn Global Strategies LLC and a senior nonresident energy fellow at the Atlantic Council’s Adrienne Arsht Latin America Center, said during a discussion of the report he co-wrote with Cory R. Gill.

Petro Caribe has been an enormous political success and a significant financial drain for Venezuela, he noted. It also has undermined budgets in the Caribbean and Central American countries that use it by keeping electricity prices high through continued use of fuel oil and diesel fuel to generate power, ... Read More

Mexico makes promises, but little changes at Guatemala border

| July 17th, 2014 | No Comments »
Dallas News

CIUDAD HIDALGO, Mexico — Mexico is promising to stem the flow of Central American migrants to the U.S. by tightening control at its notoriously porous Guatemalan border.

But messages from the country’s top two leaders in little more than a week have provided few details on how. And the scene on the ground is business as usual.

Dozens of Central Americans who paid $1.50 a head could be seen this week crossing the broad Suchiate River on improvised rafts of inner tubes and wooden boards, in full view of Mexican police on the shore and immigration agents posted on a bridge overhead.

“I don’t see anything has changed,” Guatemalan Luisa Fuentes, 56, said as she rode a raft to Mexico.

La Bestia, a decrepit freight train that takes migrants north from the border state of Chiapas, still carried many riders on its roof.

President Enrique Peña Nieto’s government says it is catching and deporting far ... Read More

Why Colombia makes a nice alternative to Brazil

| July 17th, 2014 | No Comments »
Market Watch

By Peter Kohli

In my previous column on Chile, I explained why I was looking at opportunities in South America that were neither Brazil-focused nor ETFs based on the Andean Exchange. Today I’m going to look Colombia and why looking past the obvious could make for some good investing in this country.

I’m approaching the picks based on specific sectors which I think will do well on their own, namely consumer goods, finance and infrastructure.

Colombia has gone through its political and economic turnaround, and it now offers a very good macroeconomic story. For me, it’s a particularly auspicious sign that the Colombian President, Juan Manuel Santos, won re-election, thereby giving foreign investors more comfort and the country more stability, to say nothing of the fact that he, unlike his opponent, is committed to ending 50 years of rebel conflict in the country.

Colombia’s economy grew 5.9% last year, according to ... Read More

Russia’s Ambitious Energy Diplomacy in Latin America

| July 17th, 2014 | No Comments »
Oil Price

By Nick Cunningham

Russian President Vladimir Putin, seeking to build alliances to counter Western influence, signed several energy deals in Latin America this past week.

The first stop on Putin’s six-day tour was Havana on July 11, where he met with Cuban President Raul Castro. The two sides reached an agreement that could see Russia exploring for oil in Caribbean waters, which would build up Cuba’s offshore oil industry. Putin also decided to wipe away 90 percent of the $32 billion worth of debt Cuba owes Russia, most of it dating back to the Soviet era.

The agreement was no doubt motivated by Putin’s desire to push back against what he views as U.S. meddling in Ukraine. Exploring for oil only a few dozen miles from the U.S. coast is a finger in Uncle Sam’s eye. “We will provide support to our Cuban friends to overcome the illegal blockade of Cuba,” Putin said on July ... Read More

Top US Airlines Are Fleeing Venezuela Because Of Its Bizarre Currency Regime

| July 17th, 2014 | No Comments »
Business Insider

ADAM LEVINE-WEINBERG

In the past month, each of the three top U.S. airlines — American Airlines, United Continental, and Delta Air Lines — have dramatically cut their flight schedules to Venezuela.

Indeed, airlines across the world have been complaining for months about the impact of currency manipulation and government regulations in Venezuela. Several other foreign carriers have stopped flying to Venezuela altogether this year. The U.S. legacy carriers have finally realized that they, too, need to cut their losses.

Venezuela’s bizarre currency regime Whereas most countries today operate with floating exchange rates that vary based on economic conditions across different countries, Venezuela has a fixed official exchange rate. For a long time, this official exchange rate has overvalued Venezuela’s local currency (the bolivar), causing a shortage of foreign currency.

For a while, airlines benefited from this situation. A loophole allowed Venezuelan citizens to exchange bolivars for up to $3,000 dollars at the official exchange rate if they were traveling ... Read More

18 meses del sexenio de Peña: 16,174 ejecuciones

| July 17th, 2014 | No Comments »
Excelsior

Podemos decir que quizás alrededor de 60% de los homicidios en México tienen que ver con el crimen organizado.

Por Leo Zuckermann

En mayo de este año aumentaron en 18% las ejecuciones relacionadas con el crimen organizado, comparadas con las del mes inmediato anterior: de 658 en abril, pasamos a 777. Esto, de acuerdo con la base de datos de Lantia, consultora especializada en temas de seguridad. Contabilizando el total de este tipo de homicidios en los primeros 18 meses del sexenio del presidente Peña Nieto, tenemos un total de 16 mil 174, un promedio de 30 por día.

En las cifras de Lantia hay una mala noticia: se revirtió la tendencia de tres meses a la baja en las ejecuciones que había comenzado en febrero de este año. De hecho, en mayo regresamos a casi 800 ejecuciones en el mes, cifra muy similar a la que se dio en febrero. La segunda quincena ... Read More

Vladimir Putin y Raúl Castro destapan base de la Guerra fría, en La Habana

| July 17th, 2014 | No Comments »
El Nuevo Herald

POR JUAN O. TAMAYO

Un reporte de que Rusia reabrirá una base en La Habana que espiaba las comunicaciones de Estados Unidos desde Cayo Hueso hasta Washington ha provocado nuevas advertencias contra el expansionismo de Moscú y predicciones de una continuada frialdad en las relaciones EEUU-Cuba.

Hasta su clausura en el 2002, la base de Lourdes fue el mayor centro de inteligencia de Moscú en el extranjero, con más de 1,500 agentes de la KGB y de la inteligencia militar GRU manipulando una serie de antenas y computadoras en la base supersecreta de 28 millas cuadradas.

“Si el reporte es cierto, no hay duda de que Washington pondrá en pausa el mejoramiento de las relaciones con Cuba”, dijo Andy Gómez, especialista retirado sobre Cuba de la Universidad de Miami y ahora asesor político del bufete legal Poblete Tamargo de Washington.

Alvaro Alba, experto en Rusia, dijo que la reapertura de Lourdes subrayaría las ambiciones ... Read More

Cómo Se Dice, “Lost in Translation”?

| July 16th, 2014 | No Comments »
Foreign Policy

On immigration, drugs, and virtually every other pressing policy issue, why can’t the United States and Mexico stop talking past each other?

BY CARLOS PUIG

By now, the number is well known: From October 2013 to June 15 of this year, 52,000 unaccompanied children and teenagers were caught at the American border with Mexico, twice the number for the same period in the previous year. Responding to the influx of young migrants and the public outcry they’ve provoked, President Barack Obama has asked Congress to provide nearly $4 billion to establish new detention facilities, increase aerial surveillance capacity, and hire more immigration judges to speed up the processing of the detained. The proposal has been met with skepticism, not only from Obama’s political opponents, but also from immigration activists who argue that it is yet another example of the U.S. effort to stem the flow of migrants withoutaddressing systemic problems in Central America — gang violence, weak rule ... Read More

If Argentina Settles Debt Dispute, More Claims Could Come

| July 16th, 2014 | No Comments »
Article originally appeared in the Wall Street Journal

By SHANE ROMIG

BUENOS AIRES — If President Cristina Kirchner opts to settle with two New York hedge funds that have won court-ordered awards of more than $1.5 billion, economists say it will most certainly lead to additional claims that will cost Argentina’s government about $13 billion.

Mrs. Kirchner and her top economic aides have fought against paying out the full value on bonds the hedge funds bought cheap, mostly after Argentina’s massive 2001 default. Calling the creditors “vultures” and their demands “extortion,” the Argentine government says that paying the hedge funds would open the floodgates to myriad suits costing $120 billion and drive the country into bankruptcy.

But economists and former policy makers in Ms. Kirchner’s government said that while Mrs. Kirchner is right about Argentina facing a hefty bill, the cost is likely to be far less than what Argentine officials have claimed. And they say the government could soften the blow by negotiating a payment ... Read More

Peru’s Economy Continues to Slow

| July 16th, 2014 | No Comments »
Article originally appeared in the Wall Street Journal By RYAN DUBE LIMA, Peru—Peru’s gross domestic product expanded by 1.84% in May from the same month last year, the government said on Tuesday, as the country’s economic activity continues to slow.

National statistics agency INEI said May experienced the slowest monthly expansion since 2009.

Analysts had expected weak growth for the month, but the figure came in slightly below some forecasts. GDP grew 2.0% in April, 4.9% in March and 5.7% in February.

INEI said the country’s accumulated economic growth between January and May was 3.57%.

In May, activity in the mining and hydrocarbons sector contracted 4.49%, while in the manufacturing sector it fell 2.53%. The construction sector, however, grew 4.75% and the finance and insurance sector expanded 12.59%.

Peru’s economy has been hurt by a decline in exports due to lower commodity prices for products such as copper and by lower-than-expected mining output. The country’s gold production in May fell 24.6% compared with a year ... Read More

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