[Shef2venez] hola y articulos

Tue Apr 19 23:21:27 BST 2005

Hello ...

sorry I've been out of Sheffield, or otherwise out of action ... but now I'm back, beginning with a collection of articles, the first from The Militant, the rest from the Financial Times.

greetings!

JS

Contents

HYPERLINK "outbind://2/#_Toc101716007"Rice, Rumsfeld: Venezuela in U.S. gunsights 1

HYPERLINK "outbind://2/#_Toc101716008"Alliances with China and Venezuela bolster Cuba. 2

HYPERLINK "outbind://2/#_Toc101716009"US in new crackdown on exports to Cuba. 2

HYPERLINK "outbind://2/#_Toc101716010"Farc poised for new battle in long war. 3

HYPERLINK "outbind://2/#_Toc101716011"'El Loco' back in Ecuador, with a promise of revolution. 4

HYPERLINK "outbind://2/#_Toc101716012"Chile leader aims to woo Chávez over top OAS post 5

HYPERLINK "outbind://2/#_Toc101716013"By Andy Webb-Vidal in Caracas  Published: April 19 2005. 5

HYPERLINK "outbind://2/#_Toc101716014"Argentina still in hostile territory. 5

HYPERLINK "outbind://2/#_Toc101716015"Chile leader aims to woo Chávez over top OAS post 6

HYPERLINK "outbind://2/#_Toc101716016"Castro seeks justice over fugitive bomber. 7

Rice, Rumsfeld: Venezuela in U.S. gunsights 

BY BRIAN WILLIAMS  
In a lengthy interview on U.S. foreign policy published in the March 25 Washington Post, U.S. secretary of state Condoleezza Rice spoke about Washington’s hostile course toward the government of Venezuela. During a news conference in Brazil two days earlier, U.S. secretary of defense Donald Rumsfeld said the imminent purchase of 100,000 AK-47 rifles by the Venezuelan military is a threat to “the hemisphere.” 

Rice also touched on the U.S. rulers’ inability to make much headway in promoting counterrevolutionary forces inside Cuba, which is unlike what Washington has been able to organize in former Soviet republics such as Kyrgyzstan or Ukraine. 

“When it comes to Venezuela we have our differences,” said Rice, who has described Venezuelan president Hugo Chávez as a “negative force” in Latin America. 

In response to a question about whether Venezuela is interfering with the affairs of its neighbors, Rice asserted, “I think there are very strong signs that there have been problems with Colombia and there have been problems with others and, of course, Venezuela has a very close relationship with [Cuban president Fidel] Castro.” 

Turning to U.S. policy toward Cuba, Rice said, “The problem with Cuba is that there isn’t much room for the engagement really of whatever may be bubbling in Cuba. There just isn’t much room. And what room there is, like the couple of projects that have come up over the last couple of years, Castro has managed to cut off.” 

“So our view has been,” she continued, “that somehow engaging Cuba is going to have an impact on that domestic structure is just, there’s no evidence that that is going to be the case…. It’s true that they have better relations with Venezuela, but other than the personal relationship between Fidel Castro and Hugo Chávez, I’m not really sure what Cuba has to give to the Venezuelan people. We’ll see.” 

Two days earlier at a news conference held in Brasilia, the Brazilian capital, Secretary of Defense Donald Rumsfeld expressed his growing concerns about the Venezuelan government’s plans to buy 100,000 assault rifles from Russia. “I can’t imagine what’s going to happen to 100,000 AK-47s,” he said. “I can’t imagine why Venezuela needs 100,000 AK-47s. I just hope that, personally hope, that it doesn’t happen… I can’t imagine that if it did happen, that it would be good for the hemisphere.” 

In response to mounting criticism from Washington, the government of Venezuela has warned about possible U.S. aggression toward the country and has responded by taking steps to upgrade the country’s military and expand local popular defense units. In addition to the assault rifles, Caracas has agreed to buy at least 10 military helicopters from Russia and is considering updating its air force with Russian MIG-29’s. Chávez has also expressed interest in buying as many as 24 Super Tucano patrol planes from the Brazilian jet maker Empresa Brasileira de Aeronáutica, or Embraer, according to a March 24 New York Times article. 

In a similar approach, the conservative magazine National Review featured a photo of Castro and Chávez on the front cover of its April 11 edition with the headline, “The Axis of Evil… Western Hemisphere version.” The related article is authored by Otto Reich, former assistant secretary of state for the Western Hemisphere and member of the National Security Council between 2001 and 2004. 

Many Venezuelan capitalists and their U.S. allies have been angered by the passage of a series of laws beginning in late 2001. These include agrarian reform legislation, a bill strengthening state control of the country’s oil resources, and a law that includes protections for artisan fishermen and restrictions on big fishing firms. The struggles by workers and peasants to implement these measures and push for others that would result in land ownership, jobs, and more democratic rights have struck fear in the hearts of most of the bourgeoisie in Venezuela and its allies in the United States. Local capitalists and landlords, with Washington’s backing, have also protested the normalization of relations between Venezuela and Cuba and the presence of more than 20,000 Cuban volunteer doctors, literacy teachers, and agricultural technicians in the country.  

Alliances with China and Venezuela bolster Cuba

By Marc Frank in Havana 

Financial Times, April 7 2005 

Cuba's new alliances with resource-hungry China and oil-rich Venezuela and growing state control of the economy are finally allowing it to pull out of the gruelling crisis caused by the collapse of the Soviet Union in the 1990s.

That, at least, is the message that an increasingly optimistic President Fidel Castro has taken to delivering in weekly television broadcasts. 

And according to Francisco Soberón, the president of the central bank, the improved prospects are based on sound economics and the decision last month to revalue the peso was fully justified.

“The most important sectors of the economy, with the exception of sugar, are doing well and we all know the dollar is not,” Mr Soberón told the FT. He said tourism was up 7 per cent last year, high prices for nickel, Cuba's top export, appeared solid, and 40 years of investment in human capital, such as medical personnel, were bringing in significant revenues. Venezuela supplies cheap oil in exchange for medical and other services in a deal that could be worth as much as $750m (€584m, £513m) a year. China recently agreed to plough $500m into the nickel industry and Canada's Sherritt International $250m. 

“The balance of payments current account was positive in 2004, for the first time since 1993,” Mr Soberón said, crediting in part better control of resources. But he did not give figures.

According to separate government sources, the surplus was $176m compared with the deficits of $277m in 2002 and $132m in 2003. 

Cuba, with a long line of creditors waiting to be paid some $13bn, and behind on many short-term loans, has not published current account information since 2001, though some information is provided to the UN Economic Commission for Latin America.

Mr Soberón said the revaluation of the peso was part of a well thought-out strategy. The traditional peso in which Cubans receive their wages was revalued by 7 per cent, bringing its value to 25 to the dollar. The convertible peso, a parallel local currency that is pegged one to one against the dollar (which was removed from legal circulation five months ago), will be revalued by 8 per cent on Saturday. 

Mr Soberón said Cuba had begun to change course in July 2003 when the government started reversing 1990s market-oriented reforms by recentralising foreign exchange operations and forcing state-run companies to use the convertible peso. “I am optimistic our currencies will continue to gradually gain strength,” said Mr Soberón. Many foreign observers and even some Cuban economists argue that constant changes in monetary and regulatory policy are depressing productivity at a time when the sugar and other agricultural sectors are reeling under the worst drought in a century. 

Responding to business complaints that recentralisation has created new bureaucratic hurdles and slowed economic activity, Mr Soberón said the problems would be sorted out. “I would obviously be an irrational person not to expect problems [when] such a big change in economic policy is put into practice and that delays and irregularities would annoy companies.”

The peso revaluation is also designed to reduce inequalities associated with the legalisation of the dollar a decade ago. Cubans are paid an average 260 pesos a month plus subsidised food and services. But they must use state-run hard currency stores for some essentials, such as cleaning supplies and cooking oil, which are priced in convertible pesos. About 60 per cent of the 11m inhabitants have some access to hard currency but the rest must exchange some of their earnings to convertible pesos. 

Mr Soberón said that “an adjustment in purchasing power” was under way, reinforcing Mr Castro's message. Cubans are told repeatedly that power blackouts will soon be a bad memory, with Mr Castro promising to distribute millions of Chinese electric stoves to replace old ones based on kerosene and wood. 

In addition, Cubans are promised improvements in public transport, running at less than 30 per cent of the 1989 level, medical services, wages and pensions. 

US in new crackdown on exports to Cuba

By Edward Alden in Washington 

Financial Times, February 23 2005 

The US administration moved on Tuesday to disrupt agricultural exports to Cuba, ruling that the island nation will now have to pay cash in advance for all purchases in order to comply with US sanctions law.

The decision marked the latest effort by President George W. Bush to squeeze the government of Fidel Castro. But it immediately touched off an angry response in Congress and has set up a fight with the powerful US agricultural lobby.

The Treasury department said rigorous enforcement of the sanctions was part of the Bush administration's commitment “to helping the freedom-starved people of Cuba live lives free from Castro's oppression and tyranny”.

But Senator Max Baucus, a Montana Democrat who has supported Mr Bush in legislative fights over taxes and trade, vowed to block any Treasury department nominees who required Senate confirmation unless the administration relents on the issue.

The ruling, issued by the Treasury department's Office of Foreign Assets Control (OFAC), which administers US sanctions policies, could shut off US exports that grew more than 50 per cent last year to reach $380m.

The OFAC said the current system, in which Cuba makes payments after receipt of the goods, was not acceptable and ruled that from now on payments must be received before the shipments leave US ports.

US farm groups said on Tuesday the ruling could immediately halt all exports to Cuba.

US rice producers, who saw sales to Cuba last year grow by 500 per cent to $64m, called the ruling “a blatant and ill-disguised frontal assault on US farmers and ranchers, who once again are the uncompensated victims of 42 years of failed foreign policy”.

Cuba is unlikely to agree to pay cash before the goods are shipped from US ports, in part because of fears of other laws that allow the US government to seize Cuban property on US soil.

Mr Baucus and 19 other senators have introduced legislation that would overturn the OFAC decision.

In recent years Congress has been willing to override the administration to permit some trade with Cuba.

Farc poised for new battle in long war

By Andy Webb-Vidal 

Financial Times, April 10 2005 

Rubén Sánchez, an army corporal, squints at the distant horizon of Colombia's Andean highlands for any sign of movement. Clouds swirl over the nearby peaks. The thud of a Black Hawk helicopter fades into silence.

On patrol in Sumapaz, a bleak, 3,500m-high mountain pass south of Bogotá, the capital, Cpl Sánchez feels that his part of the war against the rebels from the Revolutionary Armed Forces of Colombia (Farc) is being won.

“There was some combat against the Farc last year, but we are consolidating control over this area now,” says Cpl Sánchez. Farc insurgents built the gravel road that snakes through the pass on Colombia's highlands to prepare for a long-plotted final offensive: the seizure of Bogotá.

Today, the Farc's 40-year old armed battle to overthrow the sitting government appears more distant than ever, as President Alvaro Uribe and his US-supported military engage in their third year of tough security policies. In sub-zero temperatures, the 1st High Mountain Battalion's 1,400 troops have secured the Sumapaz guerrilla corridor, one of a series of landmarks in the counter-insurgency.

“This is a strategic point,” says Col Pablo Gómez, the battalion's commander. “We have to remain here because we are the containing wall against any plans the Farc bandits have to again launch an offensive to reach the capital.”

A two-year old nationwide military campaign has forced the Farc into more remote regions, resulting in a dramatic decrease in kidnappings they fell 49 per cent in 2004 to 746 a tactic favoured by the guerrillas.

But the insurgency by the 15,000-strong Farc, a terrorist group in the eyes of the US and Europe, is far from over and may be poised to bounce back.

Farc guerrillas last week killed 17 soldiers in an ambush in eastern Arauca province. Since the start of this year at least 120 soldiers and civilians have been killed in Farc attacks, raising suggestions that the guerrillas are preparing a counter-offensive. 

In February, Raul Reyes, the Farc's second-in-command, said the preceding spate of attacks was “only the start of what is coming”.

Last year, while 2,518 members of outlawed groups died in combat, 455 members of the security forces were killed.

Gen Hugo Gutiérrez, director of army intelligence, says that the military is on alert for a potential surge in armed attacks during the months ahead as Colombia approaches elections scheduled for the first half of next year. 

“Our analysis suggests that it's possible that the bandits will execute some isolated terrorist acts as a last desperate effort to demonstrate that they still exist,” says Gen Gutiérrez. “But it will not be a generalised offensive.”

Foreign observers are less sanguine. Some suspect that the Farc guerrillas will choose their moment for maximum impact. “The Farc seems to be attempting to conjure up a spectacular military operation or two,” says a US consultant familiar with the conflict. “They are not having a lot of success so far, but it does not keep them from trying and it does not mean that they will not be successful in the near future.”

Intelligence officers warn that the Farc may have dug into its multi-million dollar war chest to buy “advanced weaponry” such as ground-to-air missiles for deployment in the near future.

“Uribe may have won the short-term, or maybe even the medium-term, part of the strategy,” says Colonel Joe Nuñez, professor of strategy at the US Army War College. “The question now is: can this be sustained for the long haul?”

'El Loco' back in Ecuador, with a promise of revolution

By Hal Weitzman in Lima 

Financial Times, April 5 2005 

Ecuador's fragile political environment appears to be deteriorating following the return from exile of a former president who promises a “revolution of the poor” modelled on Hugo Chávez's Venezuela.

Declaring himself “older and crazier than ever”, Abdalá Bucaram, the self-styled “Loco” (madman) of Ecuadorean politics, returned from Panama to his home town of Guayaquil last weekend, vowing to lead a populist anti-American movement in the Andean country.

The country's political divisions have coalesced around the purging of the Supreme Court last December, a move widely seen as a “power grab” on the part of President Lucio Gutiérrez. The US embassy in Quito told the FT on Tuesday that it was concerned about the “judicial crisis” in Ecuador.

Mr Bucaram was cleared to return last week when the court, which has been packed with Mr Gutiérrez's political allies, cleared him of criminal charges.

Mr Bucaram's Roldosista party (PRE) helped prevent Mr Gutiérrez's impeachment by Congress last November. Their own leader's rehabilitation is widely viewed as their reward. 

One of Mr Bucaram's first statements back on Ecuadorean soil was to express sadness at the death of the Pope, who he said “did not want to die until the leader of the Ecuadorean people returned to his homeland”.

Mr Bucaram drew a rally of thousands at the weekend. His return injects fresh uncertainty into a delicate political situation and forces the opposition to show its strength.

In Pichincha province, which includes the capital Quito, Ramiro González, the prefect, has called for an indefinite general strike to begin on April 12, with the aim of ousting Mr Gutiérrez. Walter Spurrier of the Universidad Casa Grande in Guayaquil said Mr Bucaram's anti-American rhetoric was both personal and political. 

“In 1997, the US accused Bucaram of being corrupt,” he said. “Bucaram and his allies still feel today that that gave a green light to his opponents to oust him.”

But Mr Spurrier added that Mr Bucaram was quite capable of changing his views abruptly from day to day. “For instance, he now says he opposes dollarisation, but as president he proposed a currency board, pegging the sucre to the dollar.”

Mr Bucaram, who was president for six months in 1996-97, was dismissed by Congress for “mental incapacity” and allegedly embezzling public funds. He fled to Panama, where for eight years he continued to lead the PRE in exile. In its rulings last week, the Supreme Court also enabled Gustavo Noboa, the former president, to return from exile in the Dominican Republic. Alberto Dahik, the former vice-president who fled Ecuador at the controls of his own private aircraft in 1996, has also been allowed to re-enter the country. Mr Dahik has been living in Costa Rica.

Political instability has done nothing to improve Ecuador's reputation among international investors. Last week the finance ministry called off a high-profile bond swap, citing unfavourable market conditions.

Merrill Lynch on Tuesday lowered its recommendation on Ecuador's debt from market-weight to underweight, saying Mr Bucaram's return “may deepen the political crisis to its low point”.

“We see such confrontations as leaving very tiny chances that Congress will approve any of the reforms included in the maxi-bill sent by the president a month ago,” Merrill Lynch added. 

Chile leader aims to woo Chávez over top OAS post

By Andy Webb-Vidal in Caracas 
Published: April 19 2005 

Ricardo Lagos, Chile's president, will have one aim when he meets Hugo Chávez on Wednesday: to persuade his Venezuelan counterpart not to spoil Chile's chance of winning the top diplomatic post in the Americas.

The meeting, due in Caracas on Wednesday, will mark a crucial step in Chile's renewed lobbying effort to secure its candidate as the next secretary-general of the Organisation of American States (OAS). 

José Miguel Insulza, the Chilean interior minister, tied 17-17 in a vote last week with Luis Ernesto Derbéz, the Mexican foreign minister, after five rounds of voting at the OAS's headquarters in Washington.

The race for the top post at the OAS, which traditionally has been dominated by the US, is the most hotly contested since its creation in 1948. Since last week's tie, the Chilean and Mexican candidates have begun redoubling efforts to win diplomatic support from wavering countries ahead of a new round of voting on May 2.

But Mr Lagos's task in Venezuela is an unusual one. While Mr Chávez has vocally backed the socialist Mr Insulza and helped him win votes within the Caribbean bloc of nations, analysts say he has polarised the vote in the Americas with his anti-US stance.

Chile is concerned that Mr Chávez's overtly fierce rhetoric against the US could damage Mr Insulza andin fact alienate, rather than secure, crucial votes.

Mr Lagos was due to arrive on Tuesday night from Brazil, which supports the Chilean candidate, and is afterwards scheduled to visit Colombian president Alvaro Uribe, who backs Mr Derbéz.

“Lagos's tour is an effort to show that Insulza is not a candidate that just applauds Chávez's radicalism,” said Elsa Cardozo, an international relations analyst in Caracas. “Without losing the crucial support Chávez has delivered, Lagos will want to ensure that Venezuela doesn't spoil the party for the Chileans.”

In recent weeks, during public appearances Mr Chávez has criticised the US almost daily for its supposed interference in Latin America. “The true destabilising factor in this continent has always been the US, the source of violence and war, with the goal, as ever, of using us as if we were their colonies,” he said on Monday.

While Mr Insulza's chances may improve in the coming days thanks to Mr Lagos's diplomatic efforts, he still faces a strong challenge. Mr Derbéz, who is from Mexico's governing rightwing National Action party, has the support of the US, and in turn Central American countries, as well as Canada, Colombia, Paraguay and Peru.

Venezuela is the world's fifth-largest oil exporter, and speculation has surfaced in recent days suggesting that Mr Chávez may offer cheap oil to an energy-strapped Central American country to swing the vote.

A victory for Mr Insulza could help Mr Chávez stave off moves against him by the US through the OAS's “democratic charter”.

Additional drama was injected into the race for OAS secretary-general by the withdrawal, three days before the April 11 election, of Francisco Flores, a rightwing former president of El Salvador and the preferred US candidate.

Argentina still in hostile territory

By John Dizard

Financial Times, April 15 2005 

Argentina’s march to victory over its bondholders is looking more like a walk in a minefield. The forced exchange offer, sorry, according to Argentina’s lawyers, “voluntary” exchange offer, has already had its April 1 closing postponed for an indefinite period. The when-issued price for the new bonds to be offered in the exchange has already collapsed by 12 per cent in a month; not a good start. 

This is all due to a clever legal manoeuvre by two investor groups, EM, and NML Capital, and to Argentina’s reaction to their ploy. EM and NML are attempting to seize about $7bn of the bonds tendered by the bondholders to Argentina’s agent bank, but not yet cancelled by Argentina and exchanged for new bonds. 

If this were just a one-off play through which a small group of litigious investors could get their hands on enough assets to gain 100 per cent, rather than 31 per cent or 32 per cent of their money, then the markets might consider it a sideshow. However, that’s not likely to be the case. 

Argentina and Cleary Gottlieb, its pit-bull-in-pinstripes counsel, have managed so far to avoid letting substantial assets get seized by bondholders with judgments. 

They’ve used the special access to the world financial system that a sovereign enjoys to keep trade flows and payments flowing. The point of the exchange offer was to give just enough to the country’s bondholders, after just long enough a fight, to induce governments, courts, and international institutions to once again give Argentina access to the capital markets. 

For a moment, it appeared as though it might work. Just after Argentina announced the exchange closed last month, the when-issued price on the bonds came within a percentage point of the spread paid by Brazil, which with some difficulty has kept pro-creditor policies in place. The Argentines thought they were geniuses. 

However, as they say, genius is an up market. Coincidentally, the Argentine exchange offer closed within a week of the peak in the world’s demand for risky credit. We’re on a downslope in risk appetite now, perhaps for a decade or longer. 

That’s a problem for Argentina. Since the late 2001 default, it’s been growing at an impressive rate. However, that growth was only possible due to the inventory of capital investments that had been paid for by the 1990’s debt binge. That headroom of productive capacity is running out. I thought the shortage of electricity capacity would put a lid on growth starting next year, or, at the latest, 2007.

Even I was too optimistic. The 12 per cent (recorded) inflation rate is saying that the economy is running short of capacity in many places even as unemployment remains in double digits. Domestic capital markets aren’t able to take up the slack of financing new investments. With short-term rates (six-month repos) at 8 per cent, local investors are being decapitalised. That would be made worse by threatened price controls.

So Argentina needs access to international capital markets. And there it runs into the EMs and NMLs. The litigious hold-outs are identifying tiny little moments when Argentine assets show up in international banks before the country and its lawyers whisk them off to the next stop. 

In the current court fight, the hold-out litigants are claiming that the bonds tendered to Argentina’s agents are the country’s property. Argentina says the bonds are still the bondholders’ property. Argentina says the bonds need to be cancelled for the exchange to go forward. The hold-outs point out that Argentina never committed itself to cancellation. Argentina says there would be no point to the exchange if the bonds were not to be cancelled.

That’s not exactly true. Argentina could hold the bonds in another government pocket. Then it could use the voting rights attached to the bonds to prevent hold-out bondholders from enforcing their rights as a class. The debt service would be reduced just as effectively as if the bonds were, in fact, cancelled. 

The fight has moved to the US Court of Appeals in Manhattan. Those judges will hear arguments on April 27. A decision will be handed down within a few weeks after that. 

If the hold-out investors win, Argentina will keep the appeals process going for a while longer. 

If it decides to not go ahead with the deal, it risks more lawsuits from bondholders who did tender their bonds, and who will want the country to do the exchange. 

If the hold-out investors lose, they have a series of back-up legal strategies to seize Argentine assets that appear, as one of Cleary’s lawyers said in court , “just in a nanosecond”. 

In the meantime, Argentina’s capital stock, and prospects, are running down. 

Chile leader aims to woo Chávez over top OAS post

By Andy Webb-Vidal in Caracas 

Financial Times, April 19 2005 