Content from IASW Contributors

Mexico’s security crisis: Will Iguala be a wake-up call?

By Roger F. Noriega and José R. Cárdenas By Roger F. Noriega and José R. Cárdenas
Mexico’s democracy, stability, and economy require a collaborative response from all levels of government to quell the wave of recent political unrest and address the underlying causes of insecurity and public dissatisfaction. The current crisis—sparked by national outrage over the September 26 disappearance of 43 students near the town of Iguala in the state of Guerrero—should be a wake-up call for the country.
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Las Naciones ‘Sumergidas’ de Latinoamérica

By Roger F. NoriegaBy Roger F. Noriega
Líderes políticos y diplomáticos de América Latina y el Caribe saben más sobre Cuba y Venezuela que incluso los observadores más astutos en Washington. Por lo tanto, deberían saber lo que le conviene más a su región ¿no? Read More-->

Brazilian Real Declines Less Than Week Before Election Runoff

| October 23rd, 2014 | No Comments »
Bloomberg

By Paula Sambo

Brazil’s real declined as polls indicated that President Dilma Rousseff and Senator Aecio Neves were statistically tied less than a week before the runoff election.

The real dropped 0.2 percent to 2.4871 per U.S. dollar at the close of trade in Sao Paulo after climbing 0.7 percent earlier today. Swap rates, a gauge of expectations for changes in local borrowing costs, fell four basis points, or 0.04 percentage point, to 12.12 percent on the contract due in January 2017.

One-month implied volatility on options for the real, reflecting projected shifts in the currency as the Oct. 26 runoff approaches, was the highest among developing countries. The real climbed earlier today on speculation that Neves will prevail in the runoff as the nation struggles to recover from a recession and curb above-target inflation.

“Until the presidential race is over, there will be great volatility and any poll numbers or just rumors will ... Read More

5 Reasons Why Aecio Neves Should Be Elected The Next President Of Brazil

| October 23rd, 2014 | No Comments »
Forbes

By Anderson Atunes

Twelve years ago Brazilians chose Luiz Inacio Lula da Silva, the first member of the working class to be elected president of Brazil, as the person whom they believed could promote the changes that the country needed in order to become a fairer and better place to live. Lula, who is known by his first name, didn’t disappoint. During his government (2003-2010), Brazil’s economy expanded considerably, although not as much as the world economic growth during the same period, and  it was mostly thanks to China’s appetite for Brazil’s commodities.

Millions of Brazilians were lifted out of poverty, and a new middle class emerged, eager to spend money. During Lula’s eight year term, the number of Brazilians with banking accounts went from 70 million to 115 million, increasing from 40% to 59% the percent of the Brazilian population who maintained a relationship with the country’s financial system. The total ... Read More

Venezuela’s latest surprise default…China!

| October 23rd, 2014 | No Comments »
Financial Times

By John Paul Rathbone

Last month Ricardo Hausmann, a normally mild Harvard academic, set off the equivalent of a financial bomb. The economist suggested that Venezuela had already defaulted on many of its suppliers, its oil service contractors, and its citizens. So who or what might come next?

When Hausmann suggested Wall Street, the market reaction was huge. Indeed Venezuelan bonds, undercut by the falling oil price, have been dropping ever since. Yet it turns out that Venezuela’s latest default has been, in fact, to China. Given that Beijing is one of Caracas’ closest allies, this is surprising. It is also bullish for Wall Street.

Venezuela has long been a major recipient of Chinese loans, accounting for half of Beijing’s lending to the region. Since 2006, it has taken on $50bn of oil-backed debt. Last year, Rafael Ramirez, the former head of state-oil company PdvSA, revealed that these payments-in kind absorbed over half ... Read More

Despite Riches, Venezuela Starts Food Rationing

| October 23rd, 2014 | No Comments »
Wall Street Journal WSJ-01

By Sara Schaefer Muñoz

MARACAIBO, Venezuela—Amid worsening shortages, Venezuela recently reached a milestone of dubious distinction: It has joined the ranks of North Korea and Cuba in rationing food for its citizens.

On a recent, muggy morning, Maria Varge stood in line outside a Centro 99 grocery store, ready to scour the shelves for scarce items like cooking oil and milk. But before entering, Ms. Varge had to scan her fingerprint to ensure she wouldn’t buy more than her share.

Despite its technological twist on the old allotment booklet, Venezuela’s new program of rationing is infuriating consumers who say it creates tiresome waits, doesn’t relieve shortages and overlooks the far-reaching economic overhauls the country needs to resolve the problem.

“These machines make longer lines,” said Ms. Varge, 50, as she was jostled by people in line, “but you get inside, and they still don’t have what you want.”

The government rolled out the system last ... Read More

El Salvador Gangs and Security Forces Up the Ante in Post-Truce Battle

| October 23rd, 2014 | No Comments »
From In Sight

By Steven Dudley

Since the dissolution of the gang truce, assassinations of police and military personnel and clashes between gangs and security forces have changed the security equation in El Salvador, closing any small window left to revive the short-lived and highly criticized ceasefire.

As of October 17, the violence had left 31 policemen and various military personnel dead in 2014, including six police in October alone. The victims range from low- to high-ranking members of the security forces and are spread across a wide geographic area. This gives the impression that they were not pre-selected or targeted, but rather were killed when the opportunity presented itself, or following security force disputes with local gang factions.

Clashes between security forces and gangs are also on the rise, officials in the police and army told InSight Crime. The police have reported 130 clashes with gang members this year; the army has had 14 ... Read More

Neves Win in Brazil Would End Alliances Built by Lula

| October 22nd, 2014 | No Comments »
Bloomberg

By Charlie Devereux and Anatoly Kurmanaev

The election of Aecio Neves as Brazil’s president would end a 12-year alliance uniting leaders from Venezuela to Bolivia on regional development and state intervention in the economy.

Neves, who came from behind to make the second round vote on Oct. 26 against President Dilma Rousseff, has pledged to restore investor confidence in the economy, end “ideological” political alliances and negotiate new trade deals with or without the Mercosur trade bloc Brazil founded with Argentina in 1991. Polls show the two statistically tied.

Former President Luiz Inacio Lula da Silva, once a union leader who lost national elections three times before taking office in 2003, brokered deals and soothed tensions with leaders including Venezuela’s Hugo Chavez, Argentina’s Nestor Kirchner and Bolivia’s Evo Morales. Together, they promoted regional bodies such as Mercosur and the Union of South American Nations, while Mexico, Chile, Peru and Colombia created the Pacific ... Read More

An “invisible” Iran in the Western hemisphere: America’s strategic blind spot

| October 22nd, 2014 | No Comments »
The Hill

By Rep. Jeff Duncan(R-S.C.)

Recently, we have seen a hydra of terrorist organizations wreak havoc around the world. ISIS continues to destabilize the Middle East and has ambitions to expand globally. Al Qaeda recently expanded its operations to India and had plans to attack a U.S. aircraft carrier on 9/11. Boko Haram kidnapped 50 more women in Nigeria and continues pursuing an Islamic caliphate in Africa. Only a year ago, Al Shabaab attacked Westgate Mall in Kenya, and Hezbollah attempted several assassinations around the world. Such an uptick in terrorism was reflected in an April report published by the State Department, which found terrorist attacks had increased 40 percent worldwide since 2013.

As the Obama administration stumbles its way toward a strategy to confront ISIS, some have suggested that the US could try to enlist help from Iran to combat this threat. Specifically, Secretary of State John Kerry said on September 19 ... Read More

Mexico’s Gulf Cartel Drug Kingpin Captured in Texas

| October 22nd, 2014 | No Comments »
Bloomberg

By Laurel Brubaker Calkins

Oct. 22 (Bloomberg) –The head of Mexico’s Gulf Cartel drug trafficking ring was arrested by federal agents during a shopping trip in south Texas in the latest in a series of arrests this year on both sides of the U.S.-Mexico border.

The capture of Juan Francisco Saenz-Tamez, 23, on Oct. 9 follows that in February of Joaquin “El Chapo” Guzman, who was the world’s most-wanted drug boss and the alleged head of the Sinaloa drug cartel.

Hector Beltran Leyva, who allegedly took over a third cartel that bears his family name after his brother, Arturo, was gunned down by Mexican forces in 2009, was captured in a seafood restaurant without a shot fired in the central tourist town of San Miguel de Allende, Mexico’s Attorney General’s office said Oct. 1.

Mexican President Enrique Pena Nieto said in September that his administration’s security efforts have led to the capture or removal ... Read More

Dilma edges ahead

| October 22nd, 2014 | No Comments »
The Economist

By J.P.

BRAZIL is on tenterhooks. With five days to go before the presidential run-off on October 26th the race remains too close to call. But for the first time since the first round of voting two weeks ago the left-wing incumbent, Dilma Rousseff, has gained ground. On October 20th a poll by Datafolha put Ms Rousseff four points ahead of Aécio Neves, her centre-right challenger; last week Mr Neves was leading by a whisker.

Perhaps it was only a matter of time. Ms Rousseff’s campaign, as cynical as it is formidable, has relentlessly (and unfairly) bashed the market-friendly Mr Neves for wanting to slash social programmes and govern solely for the rich elite. It has also attacked his record as governor of Minas Gerais, a big state which has just elected a governor from Ms Rousseff’s Workers’ Party (PT) and where she beat Mr Neves in the first round (in part ... Read More

Why Bolivia could be the new hub for regional drug trafficking

| October 22nd, 2014 | No Comments »
Article originally appeared in The Christian Science Monitor

By Jeremy McDermott

Transnational organized crime likes opportunities and little resistance. Bolivia currently provides both and finds itself at the heart of a new criminal dynamic that threatens national and citizen security in this landlocked Andean nation.

This new criminal dynamic centers on the changing patterns of drug consumption in the region. Mexico’s dominance in the regional drug trade owes much to its position alongside the world’s largest drug consumer, as well as its ability to produce drugs like heroin, marijuana, and methamphetamine.

Bolivia now sits alongside the second biggest consumer of illegal drugs in the world: Brazil. Bolivia also borders the world’s principal producer of cocaine, Peru, and South America’s primary producer of marijuana, Paraguay. Meanwhile, Argentina is experiencing ballooning domestic drug consumption, particularly of “basuco” or “paco,” a form of crack cocaine which can be produced in Bolivia. Even the domestic drug markets in Chile and Peru are growing.

Bolivia is now literally at the heart of South America’s illegal narcotics trade. ... Read More

Venezuela Prepares 2015 Budget in Wake of Tumbling Oil Prices

| October 22nd, 2014 | No Comments »
Wall Street Journal WSJ-01

By Ezequiel Minya

CARACAS—Venezuela’s finance minister assured lawmakers Tuesday that the country was poised to handle sliding oil prices and wouldn’t default on its debt, while proposing a 35% increase in the 2015 budget.

“It’s important to emphasize that we are prepared to deal with whatever scenario that presents itself with the price of petroleum,” Rodolfo Marco Torres said.

Venezuela, which depends on oil for 96% of its export revenue, has seen the price for its crude slide to $77.65 a barrel, the lowest since late 2010 and a drop of $15 since late September.

A scarcity of dollars has spurred shortages of basic goods in the import-dependent country and made investors increasingly nervous. Oil rich but cash strapped, Venezuela carries a total of $67.4 billion in debt issued by the government and state oil company, Petróleos de Venezuela, also known as PdVSA.

The country’s budget deficit registers at 16.9% of gross domestic product, government ... Read More

Venezuela Does Not Deserve a Seat on the Security Council

| October 22nd, 2014 | No Comments »
The New York Times

By Ernesto Londoño

The timing certainly was awkward.

On Monday, Zeid Ra’ad al-Hussein, the United Nations High Commissioner for Human Rights, called for the release of political prisoners in Venezuela, arguing that their detention has been unjustifiably “prolonged and arbitrary.”

Incredibly, that scolding, the most high profile in the case of jailed opposition leader Leopoldo López, came not even a week after Venezuela secured a two-year term on the United Nations Security Council, the organization’s most powerful body. How to explain the dichotomy? In a nutshell, Latin American governments were spineless.

Given Venezuela’s dismal record on human rights, its tumbling economy and its brutal crackdown on the opposition earlier this year, no one can credibly argue that Caracas deserves a seat on the council. Many organizations, including the editorial boards of The Times and The Washington Post, called on regional capitals to pick a different nation for the seat. But ... Read More

Venezuela, Ninth-Biggest Oil Producer, Confirms It’s Importing Crude

| October 22nd, 2014 | No Comments »
International Business Times

By Brianna Lee

Venezuela’s state-owned oil company confirmed this week that it was set to receive its first shipment of light crude oil from Algeria. This marks the first-ever import of oil for Venezuela, which has the largest oil reserves in the world and is the ninth-biggest oil producer.

Venezuela’s exports of oil extracted by state-owned Petroleos de Venezuela S.A. (PDVSA) make up the government’s largest source of revenue. But oil production has declined over the years, exacerbating the country’s problems with a limited foreign currency supply, and critics say mismanagement of PDVSA is largely to blame. Meanwhile, global oil prices have slipped by more than 25 percent since June.

Venezuela produces mostly a type of oil known as extra heavy crude, which necessitates the addition of light crude to make it more exportable. Venezuela had been buying naphtha as a diluent in recent years, as domestic stocks of light and medium crude oil have dwindled. But ... Read More

Venezuela’s Maduro approval rating drops to 30 percent, poll says

| October 22nd, 2014 | No Comments »
Article originally appeared in Reuters

Reporting by Girish Gupta, Writing by Brian Ellsworth, Editing by W Simon

(Reuters) – Venezuelan President Nicolas Maduro’s approval rating dropped to 30.2 percent in September from 35.4 percent in July, according to a survey by pollster Datanalisis, amid an ongoing economic crisis that has weighed on his popularity.

The OPEC nation faces the highest annual inflation in the Western Hemisphere at 63.4 percent, chronic shortages of consumer goods and an economy that business leaders say has entered recession.

The poll conducted between Sept. 25 and Oct. 7 showed that 80.1 percent of those interviewed have an unfavorable perception of the country’s state-led economic model, created by late socialist leader Hugo Chavez.

Maduro narrowly won the presidency last year following Chavez’s death from cancer and his popularity has slid consistently since then.

The overall situation of the country was viewed negatively by 81.6 percent of the population, according to the poll.

Support for Henrique Capriles, ... Read More

Cuba should not be rewarded for denying freedom to its people

| October 21st, 2014 | No Comments »
From the Washington Post

By the Editorial Board

THE OTHER day, Fidel Castro wrote an opinion column for Cuba’s state-run newspaper, Granma, as he has done periodically from retirement. He lavished praise on an editorial in the New York Times that called for an end to the U.S. trade embargo on Cuba. But Mr. Castro had one complaint: The Times mentioned the harassment of dissidents and the still-unexplained death of a leading exponent of democracy, Oswaldo Payá, and a younger activist, Harold Cepero, in a car wreck two years ago.

The assertion that Cuba’s authoritarian government had yet to explain the deaths was “slanderous and [a] cheap accusation,” Mr. Castro sputtered.

So why has Cuba done nothing to dispel the fog of suspicion that still lingers over the deaths? If the charge is slanderous, then it is long past time for Mr. Castro to order a thorough investigation of what happened on an isolated Cuban road ... Read More

As Colombia pursues peace, victims of the conflict struggle with forgiveness

| October 21st, 2014 | No Comments »
The Miami Herald

By Jim Wyss

POPAYAN, Colombia - Gloria was 10 years old when armed rebels burst into her home at night, forced her father to his knees and shot him twice in the back of the head as the family watched. The guerrillas never said why. When she was 14, the men returned. Four of them raped her.

Now 20, Gloria (whose real name is not being used to protect her safety) is putting her life back together in the colonial town of Popayán, about an eight-hour bus ride from her troubled Andean village.

Far from family members and friends, Gloria says she harbors no hatred toward the men who shattered her life.

“In the middle of it all,” she says, “something good came out of it.”

Colombia is, perhaps, closer than ever to signing a peace deal that would put an end to a half-century-old conflict that has left at least 220,000 dead and forced some ... Read More

Mexico Offers Reward for Info on Missing Students

| October 21st, 2014 | No Comments »
ABC News

By Maria Verza

The Mexican government announced rewards Monday of 1.5 million pesos ($111,000) for information on 43 students from a rural teachers’ college who have been missing since Sept. 26.

The government ran full-page ads in Mexican newspapers with pictures of the 43 young men. The government also offered 1.5 million pesos for information on those who had abducted or killed the students.

The government says it still does not know what happened to the students of the radical teachers’ college, after they were rounded up by local police and allegedly handed over to gunmen from a drug cartel.

About 50 people have been arrested or detained in the case, including police officers and suspected members of the Guerreros Unidos cartel.

Analyses of remains found in mass graves have so far not matched the students.

As part of the effort to search for the students — which now includes, air, ground water-borne patrols — and ... Read More

Brazil’s Real Leads Global Declines as Rousseff Gaining Support

| October 21st, 2014 | No Comments »
Bloomberg

By Paula Samba

Brazil’s real led global currency declines after voter poll results showed increased support for President Dilma Rousseff, damping prospects of a new government reviving Latin America’s largest economy.

The real lost 1.1 percent to 2.4917 per U.S. dollar at 11:14 a.m. in Sao Paulo, the worst performance among 31 major currencies tracked by Bloomberg. The Ibovespa fell 3.7 percent to 52,312.40, the biggest drop among 93 stock indexes.

One-month implied volatility on options for the real, reflecting projected shifts in the currency as the Oct. 26 runoff approaches, surged to a three-year high. The real fell today as Rousseff gained backing over candidate Aecio Neves in a Datafolha poll showing the race was still too close to call.

“Markets get in a bad mood when Rousseff gains support,” Flavio Serrano, a senior economist at Banco Espirito Santo de Investimento in Sao Paulo, said in a telephone interview. “Polls are dictating the ... Read More

Russia Today, Argentina Tomorrow

| October 21st, 2014 | No Comments »
The New York Times

By FABIÁN BOSOER and FEDERICO FINCHELSTEIN

Earlier this month, the president of Russia, Vladimir V. Putin, and the president of Argentina, Cristina Fernández de Kirchner, took part in a video conference to celebrate a new television partnership. Under the terms of the deal, the Russian-owned channel RT (formerly known as Russia Today) will soon begin broadcasting Spanish-language news in Argentina. Mrs. Kirchner hailed the development as a means for Argentines “to understand the real Russia,” as well as to help Russians learn about “the real Argentina, unlike the way the international media and the so-called national media portray us.”

Buenos Aires currently enjoys warm relations with Moscow for a variety of reasons. Argentina is looking to Russia for help in upgrading its energy sector, including a possible partnership with the Russian giant Gazprom to develop oil and shale gas ... Read More

Argentina Sale Seen by Goldman as Buoying Informal Peso

| October 20th, 2014 | No Comments »
Bloomberg

By Katia Porzecanski

Argentina’s first dollar-linked bond sale in at least a decade may help shore up the peso in the nation’s informal currency markets, according to Goldman Sachs Group Inc.

The Economy Ministry said in a statement Oct. 17 that the government will take offers for as much as $1 billion of two-year securities Oct. 23-28. The bonds will be denominated in dollars and pay holders in pesos at the official exchange rate, with annual interest of 1.75 percent. Argentina hasn’t sold debt in international markets since defaulting on a record $95 billion in 2001.

The securities, which will be sold locally, offer protection against a peso devaluation and are being offered as the government tightens controls on informal currency markets. Mauro Roca, a Goldman Sachs economist, said today in a research note to clients that the sale will help strengthen the peso in the so-called ... Read More

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