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.

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-->

US, Mexico, CentAm to look at child migration

| September 10th, 2014 | No Comments »
The Miami Herald

The attorney generals from the United States, Mexico, Guatemala, El Salvador and Honduras have agreed to form a high-level group to address the migration of unaccompanied children.

U.S. Justice Department spokesman Brian Fallon says in a statement that Attorney General Eric Holder met with his counterparts in Mexico City on Tuesday.

The attorney generals will form the group with prosecutors from each country, and will work on a strategy to handle the flow of child migrants. The group is to meet in the coming weeks.

Since Oct. 1, the United States has detained more than 66,000 unaccompanied child immigrants, mostly from Honduras, El Salvador and Guatemala. More than 66,000 additional immigrants traveling as families, mostly mothers and young children from Central America, have also been caught.

Click here for original ... Read More

Mexico’s Dubious Reforms

| September 10th, 2014 | No Comments »
The New York Times


MEXICO CITY — Many Mexican politicians are losing sleep lately pondering an enigma: How is it possible that the most important set of governmental reforms in decades has aroused so much enthusiasm abroad and yet so much rejection in Mexico? How is it that, while the groundbreaking reforms were approved by a two-thirds majority of Congress, ordinary Mexicans affirmed in a poll that they believe their country is moving in the wrong direction?

Some observers have compared the scope of Mexico’s reforms with American legislation to combat monopolies initiated by Theodore Roosevelt early in the 20th century. Roosevelt’s program put formal limits on the ownership of railroads, mines, oil resources, and steel and tobacco production. President Enrique Peña Nieto, in the 21 months he has been in office, has set limits on the ... Read More

Brazil’s Market Gains as Politics Shift

| September 10th, 2014 | No Comments »
Wall Street Journal WSJ-01


Investors are piling into Brazilian stocks, adhering to one simple rule: The lower President Dilma Rousseff falls in the polls, the higher share prices go.

Ms. Rousseff has few fans in the investment world, where she is blamed for not doing enough to reverse a prolonged economic slump. Until recently, she looked like a sure bet to win a second term in October elections, but her numbers have slipped against Socialist Party candidate Marina Silva.

That has caught the attention of some investors who had previously steered clear of South America’s biggest economy. “We’ve added to positions in companies that we don’t particularly like because they’re cheap and poorly managed,” said Michael Reynal, a portfolio manager with RS Investments, which oversees about $25 billion. “If there’s any change in government, that would change.”

Mr. Reynal and other investors are essentially betting that a Brazilian government run by Ms. Silva would loosen state control over ... Read More

Expansion of Panama Canal Expected to Open in 2016

| September 10th, 2014 | No Comments »
ABC News

Panama’s president says the major expansion of the Panama Canal will be completed in time to open for business in the beginning of 2016.

The project is expected to be finished in December 2015, and President Juan Carlos Varela says it will open early the following year, despite construction setbacks.

A dispute with the European consortium that is expanding the canal led to a two-week work stoppage earlier this year.

Varela said Tuesday in Spain that Panama is working closely with Madrid and with Spanish company Sacyr, which is leading the consortium.

The $5.25 billion project aims to reduce congestion and expand capacity. The new channel will be able to accommodate ships with twice the cargo capability of vessels that currently traverse the existing canal.

Click here for original ... Read More

Venezuela’s annual inflation rises to 63.4%

| September 10th, 2014 | No Comments »

Venezuela’s annual inflation rate has risen to 63.4%, the highest in Latin America, according to official figures published on Tuesday.

The figures are the first released by the central bank since May, which has led critics to accuse the government of withholding data for political reasons.

The poor state of the economy, among other issues, triggered mass anti-government protests earlier this year.

They have since died down, but many continue to grapple with shortages.

The central bank did not publish its scarcity index, a measure of goods that are missing from store shelves, but shortages of basic items such as flour, milk and toilet paper continue to be the bane of many shoppers.

‘Protest slump’

While the bank said that month-to-month inflation had eased in August for the third straight month to 3.9%, the annual inflation rate reached a six-year high.

The government of President Nicolas Maduro blamed the soaring inflation on the ... Read More

Colombia Faces Backlash For Turning Over Venezuelan Activists

| September 10th, 2014 | No Comments »

CARACAS, Venezuela—The expulsion by Colombia of two Venezuelan activists–both of whom were being detained here–has fueled a backlash against Colombia’s government for handing them over to President Nicolás Maduro’s administration.

More than 3,000 young people who participated earlier this year in protests against Mr. Maduro’s government here were jailed, leading to criticism from human rights groups about abuses even after most were released. At least 43 people—the majority of them antigovernment demonstrators—were killed in the protests, in which university students rose up to protest Venezuela’s economic troubles and rampant crime.

Lorent Enrique Gomez Saleh, 26, who leads the Operation Liberation anti-Maduro group, and Gabriel Valles, 27, a member of the organization, were deported from Colombia last week for visa infractions and violating regulations prohibiting foreigners from “participating in activities that threaten public order or national security,” said a Colombian Foreign Ministry statement. Colombian officials went on to say that ... Read More

Venezuelan Rout Deepens as Default Specter Raised: Andes Credit

| September 10th, 2014 | No Comments »

By Sebastian Boyd and Ye Xie

Venezuelan debt traders are beginning to consider the possibility the country may run out of money.

The cost of insuring the country’s foreign-currency bonds against non-payment soared yesterday by the most since the aftermath of Lehman Brothers Holdings Inc.’s collapse in 2008 to 14.25 percentage points, the most expensive in the world. Investors are also demanding the biggest premium in six months to insure the South American nation’s notes over those from war-torn Ukraine.

While most analysts and investors expect Venezuela and its state-owned oil company to make $5.3 billion in bond payments coming due next month, concern is mounting the country may find itself without enough cash to service debt as soon as next year as foreign reserves drop to an 11-year low and oil prices sink. The nation’s notes tumbled yesterday after Ricardo Hausmann, a Venezuelan-born economist at Harvard ... Read More

Hugo Chavez’s Absence Felt on Wall Street Bond Desks

| September 10th, 2014 | No Comments »

Venezuelan bond investors are learning the hard way that Nicolas Maduro is no Hugo Chavez.

Since replacing his late mentor in April 2013, Maduro has overseen the worst bond returns in emerging markets, with the country’s dollar debt posting a loss of 8.7 percent. That’s a complete reversal of the Chavez presidency, when the nation’s debt gained 16 percent annually over 14 years, generating a total return of 692 percent that dwarfed the 387 percent earned on developing-nation debt, data compiled by JPMorgan Chase & Co. show.

At first glance, it’s hard to see what exactly changed: Maduro, like Chavez, is a self-proclaimed socialist who has followed his predecessor’s model of spending the nation’s oil wealth on a wide array of social programs and ramping up state intervention in the economy. A closer look, though, reveals a president who lacks the kind of political clout and popular ... Read More

Acusan a Santos de colaborar con la represión chavista al deportar a Lorent Saleh

| September 9th, 2014 | No Comments »
El Nuevo Herald


Representantes de la comunidad venezolana en Miami expresaron el lunes indignación por la decisión del gobierno colombiano de deportar a Venezuela a Lorent Saleh y a otro dirigente estudiantil, acusando al presidente de ese país, Juan Manuel Santos, de alinearse con un régimen ampliamente denunciado por sus violaciones a los derechos humanos.

Los dirigentes juveniles Lorent Gómez Saleh y Gabriel Valles Sguerzi, quienes están bajo custodia del Servicio Bolivariano de Inteligencia de Venezuela (SEBIN), fueron expulsados esta semana de Colombia, donde habían buscado refugio de la feroz represión que el régimen de Nicolás Maduro ha emprendido contra la disidencia.

Al explicar su decisión, el gobierno colombiano argumentó que Gómez Saleh había violado las leyes al emprender actividades proselitistas desde territorio colombiano.

Pero para algunos activistas venezolanos que residen en Estados Unidos, la decisión de Bogotá no es más que una muestra más de ... Read More

Mexican drug cartels are expanding their reach in Peru

| September 9th, 2014 | No Comments »
Global Post

LIMA, Peru — When police here unearthed nearly 8 tons of cocaine — a national record — hidden inside lumps of coal late last month, it was little surprise that two Mexican citizens were also arrested.

The brutal Mexican cartels that control the drug routes from remote Andean villages where raw coca plants grow to the world’s largest consumer market, the United States, are known to have been present in Peru since the 1990s.

Nevertheless, the haul found in a small seafront warehouse in Huanchaco, a fishing village known for its surfing on Peru’s northern coast, stood out for another reason: It was bound not for the US but, in two separate shipments, for Spain and Belgium.

“What is surprising is that this implies a change in the criminal map,” said Peru’s former anti-drug czar Ricardo Soberon. “For Mexicans to be running drugs from Peru to Europe, ... Read More

Venezuela to charge two opposition activists deported from Colombia last week

| September 9th, 2014 | No Comments »
The Miami Herald

By Jim Wyss

Venezuela on Monday said two activists who were deported from Colombia last week would be facing charges for failing to register with authorities every 21 days.

In a statement, Venezuela’s Public Prosecutor said Lorent Saleh and Gabriel Valles, who were deported from Colombia on Thursday and Friday, had violated the terms of a settlement they reached in 2010 when they were detained for participating in “violent protests” in the city of Valencia, the capital of Carabobo state.

Venezuela’s public prosecutor said both men had outstanding arrest warrants for failing to check in with authorities.

Saleh is a well-known student activist and the president of the Operación Libertad civil-rights group. He had been living and studying in Colombia since February but was deported on Thursday after Colombian authorities said he had been involved in political work that violated the terms of his visa. Valles, who was ... Read More

Argentina says discusses mechanism of currency swap with China

| September 9th, 2014 | No Comments »
Article originally appeared in Reuters

(Reuters) – Argentina’s central bank chief, Juan Carlos Fabrega, met his Chinese counterpart on Sunday to discuss how a currency swap worth billions of dollars will be put into action, the Argentine monetary authority said.

The swap will allow Argentina to bolster its foreign reserves or pay for Chinese imports with the yuan currency at a time weak export revenues and an ailing currency have put the Latin American nation’s foreign reserves under intense pressure.

The South American country’s La Nacion newspaper reported that the Buenos Aires government would receive a first tranche of yuan worth $1 billion before the end of the year, without saying how it obtained the information.

It would be part of a loan worth a total $11 billion signed by Argentina’s President Cristina Fernandez and her Chinese counterpart in July, shortly before the Latin American nation defaulted on its debt for a second time in 12 years.

Argentina’s latest ... Read More

Brazil’s Economic Growth Forecast Reduced Again

| September 9th, 2014 | No Comments »
Wall Street Journal WSJ-01 By ROGERIO JELMAYER

SÃO PAULO—Economists reduced once again their economic-expansion forecasts for Brazil for this year, after Latin America’s largest economy fell into a technical recession in the first half of the year, according to a weekly central-bank survey published Monday.

The survey’s 100 respondents reduced their estimates for economic growth this year to 0.48% from 0.52%, marking the 15th-consecutive reduction of the growth outlook for 2014. For next year, economists kept their estimates for an expansion of 1.10%.

Brazil’s gross domestic product shrank 0.6% in the second quarter from the previous three months, and first-quarter data was revised to a 0.2% contraction, according to the Brazilian Institute of Geography and Statistics, or IBGE, at the end of August. A conventional definition used by economists is that a recession is two consecutive quarterly declines in economic output.

Meanwhile, economists slightly raised their estimates for inflation as measured by Brazil’s consumer-price index, or IPCA, for the ... Read More

Insight – Dreams on hold, Brazil’s ‘new middle class’ turns on Rousseff

| September 9th, 2014 | No Comments »
The Star


SAO PAULO (Reuters) – The streets of Jardim São Luis, a poor and violent neighbourhood near the edge of São Paulo, have not been this quiet in years. And that is exactly why Valeria Rocha is so worried.

Arms folded, she scans the racks of baby clothes in her small store before flicking a glance towards the empty sidewalk.

“Just a year ago this area used to be packed with shoppers but nowadays it’s all empty, my store included,” she said.

After a decade of economic growth and welfare policies that lifted more than 30 million Brazilians out of poverty, Jardim São Luis and other tough neighbourhoods across Brazil had high hopes for the future.

 But a faltering economy and mounting frustration over poor public services are dimming the outlook for Brazil’s “new middle class.”

As that happens, leftist President Dilma Rousseff is watching ... Read More

Venezuela defaults on its citizens, but not its bonds

| September 9th, 2014 | No Comments »
Financial Times

When Argentina’s Senate recently passed a “price fixing law” to curb inflation following its sovereign debt default, the government attacked critics who accused it of turning the country into a Venezuela. Instead, it seems, Venezuela may be turning into an Argentina.Last week, one of Venezuela’s most distinguished economists suggested Caracas should default on its foreign bonds. Given that Venezuela’s more than $100bn of hard currency debt accounts for a chunk of emerging market indices, this would be a major market event.

What makes the idea more attention-grabbing, though, is that the economist who suggested it was not a tub-thumping leftist from Caracas. It was Ricardo Hausmann, head of Harvard’s Center for International Development and a former chief economist of the Inter-American Development Bank.

Mr Hausmann, who is Venezuelan and occasionally advises the opposition, argues that the socialist government of President Nicolás Maduro has already defaulted on its citizens. ... Read More

Explota bomba en metro de Chile, siete heridos

| September 8th, 2014 | No Comments »
El Nuevo Herald

SANTIAGO, Chile – En el peor atentado ocurrido en años en Chile, una bomba detonó el lunes en un local comercial de una de las principales estaciones del metro de Santiago y causó al menos siete heridos, dos de ellos graves.

El comandante de bomberos Ivo Zuvic García dijo a la prensa que la explosión fue provocada por las esquirlas contenidas en un extintor ubicado en el interior de un basurero frente a un local de comida en una de las varias galerías de la estación Escuela Militar del tren subterráneo de Santiago de Chile. La explosión se produjo a las 1700 GMT.

El vocero de gobierno, ministro Álvaro Elizalde, dijo que “tiene todas las características de un acto terrorista que ha sido realizado para causar daño a personas inocentes”.

El subsecretario del Interior Mahmud Aleuy dijo ... Read More

ANALYSIS-Brazil squanders oil bonanza even as Rousseff declares victory

| September 8th, 2014 | No Comments »
Article originally appeared in Reuters


(Reuters) – Brazilian President Dilma Rousseff has put her government’s oil policies front and center in her re-election campaign.

TV ads show dramatic views of giant, floating oil platforms and new refineries under construction. The message: her leftist government is turning an offshore oil bonanza into schools, hospitals and jobs, propelling Brazil into the ranks of developed nations.

But there’s a problem. Brazil’s oil industry may be large and growing, but little of what Rousseff promised when elected in 2010 – or before then as energy minister or chairwoman of state-run energy giant Petrobras – has come to pass.

Instead, industry experts and Rousseff’s election rivals say her policies have led to stagnant oil output, increased dependence on imports and waning investor confidence despite Brazil’s huge potential.

“When Dilma talks of oil she talks of success, of patriotic destiny, but she’s failed to deliver,” ... Read More

Argentine drug probe zeroes in on Presidential Palace

| September 8th, 2014 | No Comments »
The Miami Herald

By Joel Keep

A Federal judge in Buenos Aires said that raids could be ordered on the seat of government here, in a drug trafficking investigation that could stain a presidency already battling allegations of corruption.

The case threatens to expose links between presidential staff and organized crime figures suspected of importing precursor chemicals for the manufacture of crystal methamphetamine in Mexico and the United States.

Justice Maria Servini de Cubria issued a writ stating that phone calls had been made between the government’s Military Household and members of presidential staff where authorization was given for importing ephedrine, a crucial component in the manufacture of crystal meth, also known as “ice.”

The judge asserted that drug trafficking rings operating in the country were acting with impunity and with the blessing of politicians and security forces.

“If not, they would have been caught by the police (by now),” ... Read More

Even Stronger: Truce Between El Salvador Gangs Has Unintended Consequence

| September 8th, 2014 | No Comments »
From Fox News Latino

ILOPANGO, EL SALVADOR (AP) –  Marvin Gonzalez waves to shopkeepers as he enjoys a morning walk through the sunny, working-class resort of Ilopango. His cellphone rings nonstop with residents seeking his support for anything from dealing with a drunk who won’t pay his bar bill to reporting an attempted rape.

Gonzalez is not a police chief, nor a politician. The 31-year-old plug of a man is the local leader of the Mara Salvatrucha, a gang formed by Central American immigrants in California and now designated by the U.S. as a transnational criminal organization.

But in Ilopango and communities across El Salvador, the Mara Salvatrucha and their arch rivals, the 18th Street Gang, are de facto rulers. A truce declared two years ago briefly tapered their bloody gang war, but the cease-fire had an unintended consequence: It gave the gangs breathing room to grow even stronger. Now, ... Read More

Oil Scandal Erupts Again as Brazilians Near Election

| September 8th, 2014 | No Comments »
The New York Times


SANTIAGO, Chile — As Brazilians prepare to vote in a national election next month, a scandal involving the state-controlled oil giant Petrobras flared up again this weekend over testimony that implicated dozens of top figures in President Dilma Rousseff’s governing coalition in a vast kickback scheme.

Details of the scheme were revealed in confidential testimony by Paulo Roberto Costa, a jailed former executive who oversaw refining operations at Petrobras until 2012. The testimony was obtained by Veja, a Brazilian magazine. The accusations target Ms. Rousseff’s energy minister, Edison Lobão, and the leaders of both houses of Congress, Henrique Eduardo Alves and Renan Calheiros.

The revelations complicate a tough re-election bid by Ms. Rousseff, who has seen her lead in the polls vanish amid the surging candidacy of Marina Silva, an environmental leader whose campaign has blasted Ms. Rousseff over ... Read More

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