Content from IASW Contributors

Washington should not forget Venezuela

BY ROGER NORIEGA & JOSÉ R. CÁRDENAS

Russia’s annexation of Crimea is an egregious violation of international norms that demands a concerted international reaction. However, as foreign policy pundits settle into their Eurocentric comfort zone, Washington must not neglect its important strategic interests elsewhere in an increasingly interconnected world

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La MS-13 brinda apoyo secreto al partido de gobierno en El Salvador

Roger NoriegaLa ultra violenta Mara Salvatrucha, conocida como MS-13 – cuyos 10,000 miembros siembran el caos en decenas de ciudades de Estados Unidos – ha estado apoyando secretamente al partido gobernante de El Salvador desde hace varios años de acuerdo a evidencia que ha surgido en las últimas semanas.

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Violence threatens Mexico’s reforms

| January 21st, 2014 | No Comments »
Financial Times

BY JUDE WEBBER

“What’s going on with limes?” Agustín Carstens, Mexico’s central bank governor, asked experts some months back, after a rise in prices for the fruit in Michoacán, the country’s top lime-producing region, skewed nationwide inflation.

Producers, it transpired, were simply passing on to consumers the cost of extortion extracted by the Knights Templar, a vicious drug cartel named after a warrior order from the time of the Crusades, whose stranglehold has turned Michoacán into what rights groups say is a “failed state”.

That moniker hit home last week, when Enrique Peña Nieto, Mexico’s president, was forced to dispatch the army to Michoacán for the third time in under a year to try to regain control of a wild west Pacific state on the brink of civil war.

Heavily armed vigilante militia groups, which sprang up last February amid rumours they were being financed by a rival cartel, seized a string of towns to try to ... Read More

Panama Canal Expansion Slows Sharply as Deal Remains Elusive

| January 21st, 2014 | No Comments »
Article originally appeared in the Wall Street Journal

BY DAN MOLINSKI

Panama’s government on Monday said work to expand the Panama Canal fell by up to 75% due to its still-unresolved dispute with a consortium of European companies it hired to do the job.

The move puts further doubt to a scheduled completion date of June 2015.

Panama hired the consortium, Grupo Unidos por el Canal, in 2009 to build a third set of massive locks in the canal for $3.1 billion. The historic project will allow bigger ships to pass through the canal and is more than two-thirds complete. When finished, it would allow the Central American nation to quadruple its yearly income of $1 billion from toll fees it charges to shipping firms that use the maritime shortcut.

But the consortium, which is 96%-controlled by Spain’s Sacyr SA and Italy’s Salini Impregilo SpA, suddenly threatened in late December to halt construction by the end of Monday if not paid an ... Read More

Venezuela May Meet New Reality, and New Price, at the Pump

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

BY WILLIAM NEUMAN

CARACAS, Venezuela — Venezuela has the world’s cheapest gasoline, about 6 cents a gallon, a price so low that drivers often fill their tanks for less than a dollar and tip the gas station attendant more than the cost of the fuel pumped into their cars.

With their country holding the world’s largest estimated oil reserves, many Venezuelans consider cheap gas almost an inalienable right of citizenship — a coveted remnant of the boom days when Venezuela saw itself riding its oil riches to a first world dream of wealth and status.

But the illusion of inexhaustible wealth that every citizen can effortlessly tap into at the nearest gas station may finally crash into hard reality. President Nicolás Maduro has called for what was once unthinkable: It is time, he has said, to raise the price at the pump.

“I am ... Read More

The case of Paraguay: A challenging ally

| January 21st, 2014 | No Comments »
Center for Security Policy

BY LUIS FLEISCHMAN

The land-locked country of Paraguay, neatly tucked between Argentina, Brazil and Bolivia is seldom given much notice. However, there are elements of the country that are worth taking a look at.  Last April Paraguay elected a new president, Horacio Cartes.

Cartes is a member of the Colorado party, a party that held Paraguay’s presidency for 60 years. Thirty five of those years were ones   of dictatorship. Cartes, however, joined the Colorado Party only four years ago.

Cartes’s election took place ten months after former President Fernando Lugo (2008-2012) was impeached and deposed by the Paraguayan congress.  That move by the Paraguayan legislature was seen by many countries in the region as a coup and as a result of that Paraguay was suspended from the South American Free Trade zone (Mercosur) as well as from the Union of South American Nations (UNASUR) and faced regional isolation.

The election took place against the ... Read More

Kerry punts on Keystone XL pipeline

| January 21st, 2014 | No Comments »
AEI

Secretary of State John Kerry met today with Canadian Foreign Minister John Baird to discuss economic cooperation in North America, but he punted on one of the biggest items on the agenda, approval of the 1,200 mile $5.3 billion Keystone XL pipeline.  Kerry said in a Foggy Bottom press conference that Canadians should not expect an answer soon as State Department analysts wade through “environmental impact statements.”  Quick to praise the importance of our bilateral trade relationship with Canada, Kerry’s inaction on Keystone XL says more than his rhetoric.

For more than five years, the State Department has been slow-rolling its review of TransCanada’s permit application to build the cross border pipeline, despite bipartisan and widespread popular support.  Even former Obama national security advisor Tom Donilon recently endorsed its approval.

Environmentalists oppose the pipeline vigorously, despite a growing body of evidence that stalling its construction may lead to more greenhouse gas emissions and environmental hazards.  Without the ... Read More

A tale of two hacks: Ecuador’s continued assault on the press

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

BY JIM WYSS

BOGOTA, Colombia – Two days after Christmas, masked and armed police raided the home of Fernando Villavicencio in the predawn hours, hauling away a lifetime of data and documents.

Hours later, President Rafael Correa said Villavicencio — an opposition adviser who also writes about corruption and the oil industry — was suspected of hacking into the president’s email.

Ten days later, Ecuador’s state-run El Telegrafo newspaper wrote about a proposed online media outlet that is seeking funds in the United States, including with the National Endowment for Democracy — whose Cold War origins and “democracy building” efforts have made it a boogeyman in the Americas.

There was one problem with the El Telegrafo story: According to Martha Roldos, a former legislator and government critic who was pitching the idea, the only way the paper could have had access to the information was by hacking her email.

The twin “hacking” stories shed light on the small Andean ... Read More

Panama Canal says it’s talked with other contractors amid dispute

| January 17th, 2014 | No Comments »
EFE

The Panama Canal Authority, or ACP, confirmed Thursday that it has held talks with other potential contractors as it prepares for the possible Monday suspension of work on an expansion project, although it said it still hopes to resolve a financial dispute with the consortium building a third set of locks for the waterway.

Canal administrator Jorge Quijano told reporters after a meeting with Panama’s APEDE business executives’ association that he would not reveal the names of the companies he had spoken with “until we’re ready to act.”

“We’re prepared for that eventuality, (but) we’re still holding out hope that the (GUPC) reconsiders,” Quijano said, referring to the consortium led by Spain’s Sacyr that was awarded the contract for the locks project in 2009.

Quijano met later Thursday with Sacyr Chairman Manuel Manrique and representatives of two of the other three members of the consortium: Belgium’s Jan de Nul and Panama’s CUSA.

An agreement ... Read More

La economía de Argentina: De regreso al 2001?

| January 17th, 2014 | No Comments »
By Roger Noriega

[Traducción por IASW]

Las dificultades económicas de la Argentina están siendo una vez noticia debido a la caída significativa del precio de sus bonos y a causa de cifras económicas que no dejan de preocupar a argentinos y a inversores extranjeros. Como lo reportó el Wall Street Journal el 12 de enero, ” … [En Argentina ] el precio de los bonos ha caído significativamente desde la semana pasada debido a la depreciación del peso y a la disminución de reservas de divisas. Esto genera incertidumbre sobre la capacidad de Argentina para pagar sus deudas”.

Un analista de Prudential Fixed Economy le comentó al mismo diario que, “Las cosas están tomando un giro negativo en Argentina. El gobierno no ha sido capaz de controlar el peso.” Los dueños de bonos están alarmados por la debilidad del peso y que esto pueda conducir  a una mayor disminución de las reservas de divisas del ... Read More

Argentina says 2013 inflation nearly 11 percent, but analysts say it’s more like 28 percent

| January 17th, 2014 | No Comments »
Article originally appeared in the Associated Press

BUENOS AIRES, ARGENTINA –  Argentina’s government says consumer prices rose 10.9 percent during 2013, but private economic analysts say inflation really was more than twice that.

The inflation figure was reported Wednesday by the INDEC national statistics institute, which has been accused by economists of tweaking the numbers.

This is the last inflation measurement by the INDEC before a new method to calculate consumer prices under the supervision of the International Monetary Fund is released.

Private analysts say inflation topped 28 percent last year, making it the highest in more than two decades.

With consumer prices soaring, Argentines are used to annual labor protests in which workers threaten chaos if they don’t get raises.

Union leaders are expected to demand pay hikes of at 30 percent in line with the double-digit inflation rate.

Click here for original ... Read More

Michoacan: Mexico’s failed state?

| January 17th, 2014 | No Comments »
BBC

BY WILL GRANT

Michoacan, the Mexican state where troops were first deployed in 2007 to tackle the drug gangs, is in danger of spiralling out of control.

Vigilante groups armed with high-powered weapons of questionable origin have pushed out a powerful drug cartel, the Knights Templar, from some of their key footholds in a region called Tierra Caliente.

As the retreating drug cartel members fled towards the town of Apatzingan, they burned lorries and set up roadblocks along the main highway.

Meanwhile the army, sent in to restore order and disarm the self-defence forces in the town of Antunez, opened fire, killing at least two villagers.

There have also been repeated arson attacks in Apatzingan, presumably by drug gang members, right under the noses of the scores of military personnel and federal police patrolling the city.

‘Poor administration’

“This is a failed state,” says Comandante Cinco, a self-defence leader in the village of Paracuaro.

He says ... Read More

Mexican forces struggle to rein in armed vigilantes battling drug cartel

| January 17th, 2014 | No Comments »
From CNN

BY CATHERINE SOICHET

The vigilantes came to violence-torn towns with a simple pitch: Join us and fight back before the cartel kills you.

For some in the western state of Michoacan, long a flashpoint in Mexico’s drug war, it was an offer they couldn’t refuse.

They toted guns and called themselves self-defense groups as they patrolled the streets, claiming they were forced to fight the Knights Templar cartel themselves because the state had failed to protect them.

They took over several communities and sent a clear message to cartel members and authorities: Keep out.

But this week, the Mexican government stepped in, sending federal forces to the region and ordering the vigilante groups to lay down their weapons.

The smoldering situation has become a major problem for President Enrique Peña Nieto’s government, which has vowed to reduce drug violence.

In some areas, it hasn’t gone smoothly, with both sides refusing to back down in tense standoffs.

Mexican soldiers clashed ... Read More

Argentina’s economy: Back to 2001?

| January 17th, 2014 | No Comments »
AEI

Argentina’s economic difficulties are once again making headlines given the significant drop in its bond prices and economic numbers that continue to worry investors. As reported by the Wall Street Journal on January 12th, “…[Argentina’s] government bonds have fallen sharply over the past week, as a deep drop in the value of the peso and dwindling foreign-exchange reserves are raising questions about the country’s ability to pay future debts.”

An analyst for Prudential Fixed Economy told the Journal, “Things are taking a turn for the worse in Argentina. The government is unable to control the peso.” Bond investors are alarmed that the weakening peso will lead to further decline in the country’s foreign-exchange reserves, used to pay debt, as the country will have to pay more for imports, exacerbating inflation and depleting reserves. (Argentina already has one of the highest inflation rates in the world, around 25 percent.) With foreign reserves plunging to ... Read More

Raúl Castro’s unhurried reforms of Cuba economy falter

| January 17th, 2014 | No Comments »
Financial Times

BY JOHN PAUL RATHBONE

In a dusty Havana parking lot, a group of Cubans examine the prices of the modern cars they can now buy from the state for the first time: $263,000 for a 2013 Peugeot saloon that retails in Europe for $30,000, or $20,000 for a 2002 Fiat Uno with over 100,000km on the clock.

“Who are they kidding? At those prices, they have to give a lifetime supply of petrol too,” says taxi driver Antonyne Carrera as he peers through the lot’s wire fencing. “It’s a bad joke,” adds fellow bystander Mauricio, who works in the tourist trade.

The car sale is the latest in a series of reforms introduced by President Raúl Castro that are supposed to improve the country’s economic lot and bolster the government’s popularity but which, in this case, has made the authorities a laughing stock among Cubans who earn an average state wage of $18 a month.

It ... Read More

Panama: North Korea ship owners will pay $670,000 fine to recover seized vessel

| January 17th, 2014 | No Comments »
Article originally appeared in the Associated Press

PANAMA CITY –  The owners of a North Korean ship seized by Panama for carrying Cuban fighter jets and missiles are paying a $670,000 fine to recover the vessel.

Panama’s foreign minister, Fernando Nunez, said Thursday that North Korea has agreed to pay the sum.

The nation’s canal authority had initially set a $1 million fine because the crew didn’t declare that it was transporting weapons. The country later reduced the fine.

The ship was headed from Cuba to North Korea when it was seized in June by Panamanian authorities, who suspected it was carrying drugs. Two Cuban fighter jets in perfect condition were discovered inside the vessel.

Panama’s prosecutors said crew members are still in custody but they will soon decide whether they will be freed or held for trial.

Click here for original ... Read More

Venezuela Post-Chávez: Hustlers’ Paradise

| January 17th, 2014 | No Comments »
Bloomberg

BY ROBEN FARZAD

Venezuela, a country of 30 million, has been in a state of economic bedlam since strongman socialist Hugo Chávez succumbed to cancer a year ago. His successor, former vice president and bus driver Nicolas Maduro, has a penchant for sub sandwiches and the teachings of an Indian spiritual guru with an afro. The stock market is up 483 percent in the past year, largely because people holding depreciating Venezuelan bolivars seek any store of value and traders bet on the end of Chavismo and/or a return to some semblance of capitalistic rule of law.

The black market, meanwhile, seems straight out of Mad Max. Last year the bolivar tanked 73 percent vs. the U.S. dollar on the unofficial but prevailing Caracas street exchange rate, a crisis that has spawned hording, looting, and dire shortages of food and consumer staples such as toilet paper and soap—this in an economy with the world’s No. 1 oil reserves. ... Read More

Venezuela’s Maduro bolsters currency amid devaluation talk

| January 16th, 2014 | No Comments »
Financial Times

BY ANDRES SCHIPANI

Venezuela’s socialist president Nicolás Maduro on Wednesday shrugged off speculation that the bolivar was to be devalued by confirming the current exchange rate of the local currency in spite of a galloping black market and runaway inflation.

“We’re going to keep the dollar at 6.3 [bolívars] for the whole year and far beyond that,” Mr Maduro said during his first State of the Union address. He also announced a reshuffle of some of his top economic aides.

With foreign reserves shrinking, many economists had speculated that Venezuela was on the verge of devaluing its overvalued currency in order to contain the country’s widening fiscal deficit, which is largely financed by printing extra money.

Many believe the root of the country’s economic woes lies in the price and currency controls that have generated a shortage of foreign currency, and which have in turn caused a scarcity of basic goods, fuelling inflation that spiralled to 56 per cent ... Read More

Inflation in Brazil: The bugbear of Brazil

| January 16th, 2014 | No Comments »
The Economist

THE year did not begin well for Dilma Rousseff. The real ended 2013 one-third weaker against the dollar than when she took office as Brazil’s president three years ago. Car sales were down for the first time in a decade. More dollars flowed out of the country than at any time since 2002.

Most perniciously, on January 12th the bean-counters announced that inflation hit 0.92% in December, the highest monthly rise in ten years. That pushed the annual figure to 5.91%, above market expectations. The jump prompted the Central Bank to raise the main interest rate on January 15th, not—as analysts had long forecast—by a quarter of a percentage point, but by half a point, to 10.5%.

 

Inflation is a Brazilian bugbear. The economic costs are clear: high inflation hits both the poor, struggling to make ends meet, and the indebted middle classes as interest rates rise. But it is also a ... Read More

Exxon to Chevron Face Two-Year Wait in Mexico Oil Opening

| January 16th, 2014 | No Comments »
Bloomberg

BY ADAM WILLIAMS

Oil companies from Exxon Mobil Corp. (XOM) to Chevron Corp. (CVX) will have to wait another two years before investing an estimated $20 billion in Mexico’s recently opened oil and gas industry.

Foreign crude producers will be allowed to bid on fields for exploration and begin developing infrastructure and operations as soon as late next year, Deputy Energy Minister Enrique Ochoa said in an interview at the ministry in Mexico City. Prior to granting the operating licenses, the legal framework has to be determined and state oil producer Petroleos Mexicanos must select the fields it plans to continue to develop, he said.

“We estimate that by the end of 2015 or beginning of 2016, we could be in the stage of implementation,” Ochoa said. “We must be professional and careful with the necessary institutional development prior to the following rounds.”

President Enrique Pena Nieto ended the 75-year production monopoly held by Pemex, as the state oil company is ... Read More

Colombia’s FARC rebels end holiday ceasefire

| January 16th, 2014 | No Comments »
Article originally appeared in Reuters

BY NELSON ACOSTA

A unilateral ceasefire declared by Colombia’s Marxist FARC rebels over the holidays ended on Wednesday, the organization said at peace talks in Havana, and it accused the Colombian government of mercilessly pursuing the war during its truce.

The FARC, or Revolutionary Armed Forces of Colombia, declared a one-month ceasefire on December 15 and said in a statement issued on Wednesday, “we lived up to our word… despite permanent aggressions and provocations by the government’s armed forces and police units.”

Colombian President Juan Manuel Santos rejected the ceasefire from the beginning, saying the government would maintain the military pressure to keep FARC at the negotiating table, a position it has held since talks began more than a year ago.

The FARC statement said the fighting it was involved in over the last month was in self defence.

Government forces continued to attack and kill rebels in their remote strongholds in the jungles and ... Read More

Venezuela shuffles economic team, keeps forex rate

| January 16th, 2014 | No Comments »
Article originally appeared in Reuters

BY EYANIR CHINEA & BRIAN ELLSWORTH

CARACAS – Venezuela’s President Nicolas Maduro named an army general as the new finance minister in a reshuffle of his economic team on Wednesday and said there would be no currency devaluation this year despite a soaring black market for dollars.

The cabinet changes do not suggest any major shift in the country’s state-dominated economy, as the new economic team retains many of the same policy-makers that helped the late Hugo Chavez advance the OPEC nation’s drive toward socialism.

Venezuela in 2013 saw slowing economic growth and soaring inflation that Maduro blames on an opposition-backed “economic war” but that critics call the result of decaying price and currency controls now widely linked to corruption.

Maduro tasked new finance minister Rodolfo Marco with “building a new financial model that can allow for all these investments we need, that will allow the expansion of a financial system at the service ... Read More