Content from IASW Contributors

Close vote in Brazil reveals a deeply divided nation

By Roger F. Noriega By Roger F. Noriega
Brazil’s President Dilma Rousseff won a second four-year term yesterday, defeating challenger Aécio Neves by a margin of 51.6% to 48.4%. Rousseff waged one of the most negative campaigns in memory, conjuring fears that Neves would cut government anti-poverty programs rather than explaining how she plans to pull the world’s seventh largest economy out of recession.
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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-->

Low oil prices fuel death spiral of Venezuelan regime

| October 24th, 2014 | No Comments »

By Roger Noriega

Oil prices plummeting to four-year lows has compounded Venezuela’s budget and governability crisis, leading that government to call for an emergency meeting of OPEC member nations. Until now, Venezuela’s petrodollars have prevented a complete collapse. Now that oil prices are declining drastically, the government does not have the revenue to placate its political base and buy off power-hungry rivals. (Ironically, the reliable source of oil revenue from the United States is propping up Maduro’s hostile regime.)

The price of oil benchmark West Texas Intermediate dropped today to its lowest point in over 4 years, reaching just $80.38 a barrel. Experts point to two causes for the steep decline, an excess supply and a decision by Saudi Arabia to cut its prices in hopes of undermining competition from US shale. Oil revenue is vital to Venezuela’s economy, making up 95% of its export earnings and nearly half of its fiscal ... Read More

Ibovespa Rises on Optimism Over Neves’s Odds of Winning Election

| October 24th, 2014 | No Comments »
Bloomberg

By Denyse Godoy

The Ibovespa snapped a four-day rout after a voter poll fueled optimism that candidate Aecio Neves has a chance to beat President Dilma Rousseff in the election runoff this weekend.

State-run oil producer Petroleo Brasileiro SA (PETR3) contributed the most to the gauge’s advance on bets that a new government will curtail intervention in state-owned companies. Clothing retailer Lojas Renner SA (LREN3) rallied after profit beat estimates.

The Ibovespa added 1.2 percent to 51,312.88 at 11:15 a.m. in Sao Paulo as 50 of its 70 stocks gained. Brazil’s benchmark stock index had rallied as much as 38 percent from this year’s low on bets Rousseff would be voted out of office after overseeing the slowest growth for any presidency since 1992. The gauge has pared that gain to 14 percent as backing for the incumbent’s re-election bid rose.

“Investors have a clear preference for one candidate, and the last poll that ... Read More

Scandal and Bullying in Brazil’s Elections

| October 24th, 2014 | No Comments »
Bloomberg

By Mac Margolis

So you’re the leader of a large emerging country and up for reelection. It’s been a bruising year, the economy stinks, the scandal-ridden state oil company’s just been downgraded by Moody’s Investors Services, and this annoying challenger comes from behind to steal your lead on the eve of the runoff vote. Worse, every time you claw your way back up in the polls, the stock market tanks. What’s an incumbent to do?

Go negative, of course. Olivia Pope wasn’t available, but lucky for Brazilian President Dilma Rousseff, no one can wag the dog like native campaign guru Joao Santana and communications maestro Franklin Martins. The result is one of the bitterest races on record — where slights trump platforms — that has Rousseff on top again for Sunday’s vote and Brazilians more divided than they’ve been in 25 years.

Santana and Franklin earned their retainers in the first round by ... Read More

Brazil and its backyard

| October 24th, 2014 | No Comments »
The Economist

LIKE voters in most democracies, Brazilians pay little heed to foreign policy when choosing leaders. Yet the presidential election on October 26th matters not just to Brazil but to the region. Over the past two decades Latin America’s giant has overcome its introversion and wielded growing influence in its backyard. And on foreign policy, as on economics, there is a clear gap between President Dilma Rousseff of the centre-left Workers’ Party (PT), who wants a second term, and her rival, Aécio Neves, of the centre-right Party of Brazilian Social Democracy (PSDB).

Brazil’s greater assertiveness began under Fernando Henrique Cardoso of the PSDB in the 1990s and continued under the PT’s Luiz Inácio Lula da Silva, the president in 2003-10. Both gave importance to the Mercosur trade block (founded by Brazil, Argentina, Paraguay and Uruguay), to South America and to ties with Africa and Asia. Both had reservations about a 34-country Free-Trade ... Read More

Opinion: Mexico’s uprising for the rule of law

| October 24th, 2014 | No Comments »
DW

By Uta Thofern

Bit by bit, investigations are confirming what has been clear to everyone in Mexico for weeks. Of course the mayor of Iguala and his wife were behind the disappearance of the 43 student teachers. Of course these two local politicians had been hand in glove with local criminal gangs, who in turn were in league with the town’s police. The whole system could never have worked otherwise. How is a local mayor supposed to exercise power if he has no money to distribute, and no “narcos,” as the drug gangsters are known, to implement his interpretation of the law by force?

For most Mexicans, the results of the attorney general’s investigation were no surprise, because Iguala is not an isolated case. Encouraged by the extreme social inequality that still exists in Mexico, corruption is common at all levels of the administration. It is hardly surprising that police officers, too, ... Read More

In Mexico, an Embattled Governor Resigns

| October 24th, 2014 | No Comments »
The New York Times

By Randal C. Archibold

MEXICO CITY — The governor of the southern Mexico state where 43 college students have gone missing in a case that the authorities say has exposed the deep ties among local politicians, the police and organized crime stepped down on Thursday under pressure from his own party.

The governor, Ángel Aguirre of Guerrero State, agreed to leave his post after leaders of his party, the Party of the Democratic Revolution, publicly said they would otherwise try to push him out in order to quell growing civil unrest in the state.

On Wednesday, protesters burned the city hall of Iguala, where the students went missing on Sept. 26 after a violent clash with the police. Last week, the State Capitol building in Chilpancingo was heavily damaged by fire in demonstrations demanding that the ... Read More

Bolivia facing up to lower gas export prices

| October 24th, 2014 | No Comments »
Financial Times

By Andres Schipani

Bolivia, a key supplier of gas to the southern half of Latin America, is facing potentially harder times as falling international oil prices are piling downward pressure onto the price at which it sells its gas.

However, Carlos Villegas, the president of the state-run energy company, YPFB, is confident that if oil prices continue to hover around their current levels of $82 a barrel, Bolivia can avoid having to cut the prices of its exported natural gas.

“For Bolivia if the oil price lies in the range of between $80 and $100, the prices for [gas] exports will remain at their current level,” says Villegas.

Thanks to take-or-pay contracts, Bolivia currently ships about 30m cubic meters a day (mcm/d) of natural gas to Brazil at some $8.9 per million British thermal units (mmbtu), and 16mcm/d to Argentina at $10.2 per mmbtu.

The prices of such gas exports are set in relation to ... Read More

Venezuelan victory is bad news for Washington

| October 24th, 2014 | No Comments »
The Star

By Oakland Ross

This month’s election of socialist Venezuela to a two-year term on the UN Security Council is one more sign of dwindling U.S. influence in Latin America, a part of the world once regarded as Washington’s “backyard,” according to some experts on the region.

“Latin America has become a dead star (for Washington),” said Larry Birns, director of the Council on Hemispheric Affairs, a somewhat left-tilting think tank based in Washington. “It is simply not in the administration’s workbook.”

In the past — most recently in 2006 — the U.S. government has resorted to determined diplomatic arm-twisting to prevent Venezuela from joining the UN’s powerful inner sanctum.

This time, Washington mounted only a muted opposition, but even that campaign was roundly ignored by UN member states on Oct. 16 when 181 of 193 countries voted to vault Venezuela into a two-year term as one of the Security Council’s 10 non-permanent members.

One ballot ... Read More

Venezuela seizes warehouses packed with medical goods, food

| October 24th, 2014 | No Comments »
Yahoo News-01

By Andrew Cawthorne

CARACAS (Reuters) – President Nicolas Maduro’s government said on Thursday it had taken over warehouses around Venezuela crammed with medical goods and food that “bourgeois criminals” were hoarding for speculation and contraband.

The socialist government says businessmen and wealthy opponents are trying to sabotage the economy to bring Maduro down, while also seeking to make profits from hoarding, price-gouging and smuggling across the border to Colombia.

Critics say 15 years of failed policies of state intervention are to blame for the OPEC nation’s widespread shortages, high inflation and apparently recessionary economy. They accuse nouveau riche officials and military officers of illegal business practices.

Maduro gave a live address to the nation from one of two warehouses seized in central Aragua state, where he said 14 million syringes and 2 million surgical gloves were among a massive hoard of medical equipment bound for Colombia.

“There’s enough medical equipment here ... Read More

Faltan las reformas estructurales… en seguridad

| October 24th, 2014 | No Comments »
Excelsior

POR JORGE FERNÁNDEZ MENÉNDEZ

Algo sucedió en la administración federal que la crisis de Iguala, que este fin de semana cumplirá ya un mes, dejó al gobierno paralizado durante días y rompió el ritmo, la imagen, el Mexican Moment del que tanto se habló después de la Reforma Energética y de la exitosa visita presidencial a Nueva York.

Es difícil entender por qué sorprendió la crisis de Iguala. No porque no se supiera de las relaciones de muchos presidentes municipales y policías estatales de la región con los grupos criminales. Tampoco nadie tendría que sorprenderse de que el gobernador Ángel Aguirre le haya fallado a las autoridades federales cuando le pidieron el mismo sábado 27 de septiembre que tuviera el control de la situación y no perdiera de vista al presidente municipal: las lealtades no son su fuerte, y en el PRI lo debería de saber mejor que nadie. Mucho menos tendría ... Read More

Rousseff Takes Lead in Brazil Runoff Polls for First Time

| October 23rd, 2014 | No Comments »
Bloomberg

By Anna Edgerton and Mario Sergio Lima

Brazil’s President Dilma Rousseff leads opposition candidate Aecio Neves in polls for the first time since the first-round vote, according to Ibope and Datafolha. The runoff is scheduled for Oct. 26.

Rousseff of the Workers’ Party, has 49 percent of voter support, compared to 41 percent for Neves of the Brazilian Social Democracy Party, according to an Ibope poll published on newspaper Estadao’s website. In the Datafolha poll, Rousseff has 48 percent, a lead of six percentage points. Both polls, which previously showed the candidates statistically tied, have a margin of error of plus or minus two percentage points.

“For the first time we see a candidate solidifying a lead,” Andre Pereira Cesar, a Brasilia-based political consultant, said by phone. “Given that this campaign is very different from all others we have seen before, there’s still the chance of a reversal. News, facts, specific moments could ... Read More

El gobierno de Peña parece pasmado

| October 23rd, 2014 | No Comments »
Excelsior

POR LEO ZUCKERMANN

Si hay algo que se le puede reconocer al gobierno de Peña Nieto es la disciplina para ceñirse a una estrategia bien pensada. Gracias a eso lograron aprobar importantes reformas estructurales durante el primer tercio del sexenio. No se salieron del guión y eso fue factor clave de éxito. Pero hoy las circunstancias han cambiado y lo que ahora han demostrado es que no son buenos para improvisar. Se distinguieron para seguir a la perfección un libreto, pero han sido lentos para reaccionar si ocurre algo que no estaba planeado.

¿Dónde está el liderazgo del Presidente en estos días aciagos cuando miles de jóvenes salen a las calles demandando la aparición de los 43 normalistas desaparecidos? ¿Dónde están sus dos hombres fuertes del gabinete, los supersecretarios que nos tenían acostumbrados a defender con elocuencia las posturas gubernamentales? ¿Dónde está Miguel Ángel Osorio para estabilizar la grave situación ... Read More

No change by Castro, no change in trade embargo

| October 23rd, 2014 | No Comments »
The Miami Herald

BY JAIME SUCHLICKI

There’s an eagerness among many in this country to begin a process of normalizing relations with Cuba. The belief persists that economic considerations could influence Raúl Castro’s policy decisions and that Cuba’s difficult economic situation will force Cuba’s leader to move toward a market economy and closer ties to the United States.

Yes, despite economic difficulties, Castro does not seem ready to provide meaningful and irreversible concessions for a U.S.-Cuba normalization. He may release and exile some political prisoners. He may offer limited economic changes to tranquilize the Cuban population, but not major structural reforms that would open the Cuban economy. Cuba is not moving to a market economy. In Cuba, political considerations dictate economic decisions.

Raúl’s legitimacy is based on his closeness to Fidel Castro’s policies of economic centralization, control and opposition to U.S. policies. Raúl cannot reject Fidel’s legacy and move closer ... 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

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