August 12, 2014

12 Agosto 2014

After penning an op-ed which blames the U.S. backed cold war and drug war for leading to the recent surge in migration from Central America, the Guatemalan President has hired a cold warrior to lobby the U.S. for increasing drug war cooperation. Confused yet? Okay, let’s start over. Last week, Guatemalan President Otto Perez Molina wrote an op-ed in the Guardian arguing that the U.S. shared responsibility for a legacy that has spurred the current migration crisis involving the surge of unaccompanied Central American children arriving at U.S. borders: …the so-called cold war had one of its hot spots in Guatemala…Communist and anti-communist ideologies created in Guatemala one of the bloodiest conflicts in Latin America, with weapons and money mostly from countries outside the region. More damaging was that for decades governments diverted resources from social and economic programs to security and defense. … Nonetheless, after the curse of the cold war, we faced another war: the war on drugs. Again based on ideological motivations, this new war diverted scarce funding from policies to foster education, health and employment to programs to block the flow of drugs from producer countries in South America to the consumer countries in the north. The failure of the war on drugs is widely recognized today, both for its limited capacity to stop drug flow, and its terrible consequences, expanding violence, corrupting institutions and weakening the rule of law. While Perez Molina makes some fine points in his op-ed, he also completely leaves out his own role in the exact policies he’s criticizing. During the Cold War, Molina was a Guatemalan military officer involved in a “scorched earth” campaign that resulted in hundreds of thousands of deaths and he has even been personally linked to serious human rights violations from this time period. Pot, meet kettle.The situation took a turn for the ironic this week when O’Dwyers reported that Guatemala had hired notorious and far-right cold-warrior Otto Reich to lobby on the government’s behalf in Washington. Reich, who’s also been pretty much at the center of every lousy U.S. policy in the region since the Cold War, will be paid over $100,000 to, among other things: Design a strategy to move forward on the change of narrative from Guatemala to Washington, D.C., allowing representatives in the North American political parties that are willing to abandon the reference to Guatemala of the 1970’s and 1980’s, as well as the last century, and are eager to talk about the present and future of Guatemala of the 21st century.

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Wall Street Journal Uses Bogus Numbers to Smear Argentine President

By Jake Johnston and Mark WeisbrotJake Johnston y Mark Weisbrot

August 06, 2014

06 Agosto 2014

Last week the Wall Street Journal had a front page article on the net worth of Argentina’s first family since 2003, the year Néstor Kirchner was elected president. Based on financial disclosures with Argentina’s Anti-Corruption Office, the Wall Street Journal reported that, “the couple's net worth rose from $2.5 million to $17.7 million” between 2003 and 2010. Implying that such returns must involve some sort of corruption, the Journal writes, a “lot of people in Argentina want to know where that money came from.”But there is a serious problem with the way the data are presented here. The Journal is reporting the Kirchners’ net worth in dollars, without adjusting for local inflation. This makes the increase look much bigger than it is, since Argentina had cumulative inflation of nearly 200 percent during these years, according to private estimates.If the Wall Street Journal had taken inflation into account then the Kirchner’s net worth would have looked quite different. From $2.5 million in 2003, the Kirchners’ real net worth increased to around $6.1 million in 2010.Simply adjusting for inflation takes away more than three-quarters of the Kirchners’ gain. Should the Journal have known this and adjusted for inflation? The question answers itself. We won’t speculate about anyone’s motives.

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The World Cup Has Come and Gone and Brazil Didn’t Crash and Burn

By CEPRCEPR

August 01, 2014

01 Agosto 2014

Election season officially kicked off in Brazil on July 1st. For the past 7 months, amid wide-scale attacks on her competency -- and against the Brazilian economy -- coming from all sides of the political spectrum in the Anglophone media, President Dilma Rousseff’s poll numbers have remained stable, placing her far ahead of her closest competitor, Senator Aécio Neves of Fernando Henrique Cardoso’s PSDB party. IBOPE, Brazil’s most widely-respected polling agency, released numbers last week showing that 38 percent of the Brazilian public intends to vote for Dilma. According to IBOPE this is the same percentage who intended to vote for her in the last poll that was taken immediately before the World Cup, and roughly the same percentage that have supported her all year. Brazil has a multi-party system and she is currently far enough ahead of the remaining candidates that if the election were held tomorrow, she would win in the first round. According to another recent poll by Datafolha [PDF], Dilma is leading in every region in Brazil. The numbers are close in the wealthy Southeast and South, but her lead climbs in the poorer North and Northeast. In the Northeast, Brazil’s poorest and second most populous region, the percentage of people saying they will vote for her climbs to 55 percent. João Pedro Stedile, one of the national leaders of the Landless Peasants’ Movement (MST), breaks down the choices that voters have this October in the following manner: “Dilma Rousseff and (third-most-popular candidate) Eduardo Campos represent neo-developmentalism, and Aécio Neves represents neoliberalism.” Neo-developmentalism is a term that people on the Brazilian left use to describe the PT’s modern version of developmentalism. Developmentalism is a Keynesian-influenced economic strategy first developed in the 1940s in the Third World by economists like Raúl Prebisch and Celso Furtado based on income redistribution through social welfare initiatives, government stimulus for national industrial production and consumption, maintaining key sectors of the economy under control of state companies, and a high minimum wage, that was employed at varying levels by Brazilian president João (Jango) Goulart before the U.S.-supported military coup of 1964. Many people on the Brazilian left apply the “neo” prefix to the 12 years of PT government due to the neoliberal policies initiated in the Fernando Henrique Cardoso administration, such as an independent and monetarist Central Bank , that the PT has done little to revert and that blend with traditional developmentalist policies such as large minimum wage hikes, high social spending on welfare programs, maintaining state control over the petroleum industry and mortgage market and subsidizing the construction and manufacturing industries.

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Update on Latin American Responses to Israel's Siege on Gaza

By CEPRCEPR

July 31, 2014

31 Julio 2014

[Below is an update to the blog post from July 21 reviewing how Latin America's political leaders responded to Israel's siege on Gaza.] In a coordinated move on Tuesday (July 29), several Latin American countries recalled their ambassadors to Israel, including El Salvador, Chile, and Peru, the latter two of which made a point to say they had consulted with each other before announcing their decision. This means that five countries so far have recalled their ambassadors over Israel’s attack on Gaza which began July 8th, since Brazil and Ecuador had done so earlier. According to reports from Haaretz, Israel’s Foreign Ministry responded by saying that El Salvador, Peru and Chile were encouraging Hamas by recalling their ambassadors. El Salvador announced its decision to recall its ambassador over “the serious escalation in violence and the realization of indiscriminate bombing from Israel into the Gaza Strip,” which they say has resulted in many deaths, injuries, an exodus of Palestinians fleeing their homes, and serious material damage. Chile recalled its ambassador the same day (July 29), saying that Israel’s military operations “comprise a collective punishment against the civilian population of Palestine in Gaza.” The same statement from Chile condemns rocket launches by Hamas against civilians in Israel, but argues that Israeli operations in Gaza “violate the principle of proportionality in the use of force, an indispensable requirement for the justification of legitimate defense.” The government of Peru recalled its ambassador and said that Israel’s military operations in Gaza “constitute a new and reiterated violation of the basic norms of international humanitarian law.” In addition, several countries put out new statements reacting to the conflict.

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Obama Throws Another Bone to the Right on Venezuela

By Mark WeisbrotMark Weisbrot

July 30, 2014

30 Julio 2014

On Monday, I wrote this article looking at the splits within the Obama administration on policy toward Venezuela and how they were manifested in the case of Venezuela’s former military intelligence chief Hugo Carvajal. Carvajal was arrested last Wednesda

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How Have Latin America’s Political Leaders Responded to Israel’s Siege on Gaza?

By CEPRCEPR

July 21, 2014

21 Julio 2014

On July 10th, just two days after Israel launched Operation Protective Edge (the largest attack on Gaza in several years) President Obama released a statement in which he “reaffirmed Israel’s right to defend itself.” With a death toll now over 550, it is important to look beyond U.S. government sources for information and perspective. Foreign policy among the countries in Latin America conforms to the long-standing, overwhelming international consensus that opposes Israeli aggression and occupation, but it also reflects the region’s “second independence.” Over the last 15 years, most countries in Latin America have increased their ability to pursue a foreign policy agenda separate from the goals of the U.S. State Department. In the vast majority of cases, reactions to the latest hostilities are fundamentally at odds with the U.S. position, but they are also varied: many governments directly criticize Israel, using words like “crimes against humanity” and “genocide” to describe recent events; other official statements limit themselves to calling for a ceasefire and a peaceful resolution to the conflict. Some of the strongest statements were issued by left-leaning governments in South America, including those of Argentina, Bolivia, Brazil, Chile, Ecuador, Uruguay and Venezuela. The government of Argentina issued a statement “strongly condemn[ing] that Israel -- defying calls by the Security Council, by the Secretary General and by the many voices of the international community – has decided to escalate the crisis by launching a ground offensive.” President Evo Morales of Bolivia announced that he had petitioned the United Nations High Commissioner for Human Rights (UNCHR) to consider a case against Israel at the International Court of Justice (ICJ) for “crimes against humanity” and “genocide.” (Bolivia broke diplomatic relations with Israel in 2009 over Israel’s Operation Cast Lead assault on Gaza.) The statement from Brazil reads in part:[1] The Brazilian Government vehemently condemns the Israeli bombardment of Gaza, with disproportionate use of force, which resulted in more than 230 Palestinians dead, many of them unarmed civilians and children. It equally condemns the firing of rockets and mortars from Gaza into Israel.

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The Problem with the Venezuela Sanctions Debate

By CEPRCEPR

July 18, 2014

18 Julio 2014

As murmurs of U.S. sanctions against Venezuela continue in the aftermath of the protest violence there, researcher Michael McCarthy recently published an article in World Politics Review making some good arguments for why they would be a bad idea. He points out that unilateral sanctions lack regional support, and argues that they would discourage dialogue within Venezuela, would likely be ineffective, and may even harm U.S. interests by scuttling efforts to improve and maintain ties in the regio

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NAFTA Advocates Continue to Make Misleading Claims

By CEPRCEPR

July 16, 2014

16 Julio 2014

In an effort to defend NAFTA and promote similar agreements, the Peterson Institute for International Economics (PIIE) – Washington’s most influential think tank on international economic policy – had a full day of events yesterday. The program highlighted one of their recent publications [pdf], which seeks “not to rehash old claims that may have been overstated but to clear the air so that the benefits and challenges of trade can be examined in an objective light.” In spite of this disclaimer, the authors grossly overstated the benefits of NAFTA for Mexico, and put forward a number of misleading claims, including a particularly egregious bait-and-switch used to justify a rant against the economic policies of the “Andean-3” aka Bolivia, Ecuador and Venezuela. It is a good example of how ideology can trump facts when it comes to commercial agreements made in Washington. Earlier this year, CEPR published a paper giving an overview of the Mexican economy in the NAFTA era (“Did NAFTA Help Mexico? An Assessment After 20 Years”), so I will focus here on the claims made about Mexico by the PIIE economists. In terms of their bottom line for Mexico, the authors’ findings concur with our conclusions. They say that “Mexican growth in the NAFTA era has been disappointing.” But they also argue that without NAFTA Mexico’s economy would be $170 billion smaller. In other words, they attribute half of Mexico’s (per capita) growth rate to trade in goods and services stimulated by NAFTA (see table below.) Given Mexico’s population (about 118 million), this amounts to a payoff of $1,441 per person, or about $4 per day. In a country where over 27 percent of the population lives on less than $4 a day – in rural areas it is over 48 percent of the population – this would be very significant. In reality, results such as these are produced by economic models that are highly sensitive to parameters which the researchers themselves determine, so it is easy to end up with results that corroborate one’s worldview.

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Does the US Have a Double Standard When it Comes to Spying on Latin America?

By CEPRCEPR

July 11, 2014

11 Julio 2014

Brazilians may have little love for Germany following Brazil’s historic World Cup loss to the German team Tuesday, but the two countries do have something in common: both have notably been targeted for espionage by the U.S. Yesterday, U.S.-German relations suffered a new blow after Germany announced it was kicking out the CIA station chief over revelations that an employee of the German defense ministry may have passed secrets to the U.S. government. Just last week a member of Germany’s intelligence service was arrested, accused of selling information to the CIA. These scandals follow disclosures made available by Edward Snowden last year of NSA spying on Germans, including German Chancellor Angela Merkel. Snowden has also revealed extensive political and economic spying by the NSA on Brazil. The Washington Post reported yesterday: “The representative of the U.S. intelligence services at the Embassy of the United States of America has been requested to leave Germany,” government spokesman Steffen Seibert said in a statement Thursday. … Seibert said the request for the CIA official’s departure was made “against the backdrop of the ongoing investigations of the Federal Prosecutor General as well as the questions pending for months about the activities of the US intelligence services in Germany, for which the Lower House of Parliament has also established a parliamentary inquiry committee.” German officials have also been angered by the revelations of former National Security Agency contractor Edward Snowden of widespread U.S. surveillance in Germany. Among the targets was Chancellor Angela Merkel’s cellphone, an operation that has since been halted. Germany is a key partner for U.S. intelligence, and Germany’s allegations and response are no doubt being taken very seriously by both the Obama administration and the media. While the administration clearly hopes it can downplay the scandal -- and while the CIA chooses to Tweet about its robotic fish rather than publicly address the incident (h/t Jonathan Schwarz) -- officials have underscored the gravity of Germany’s response in anonymous comments to press. The AP reported:

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U.S. on Its Own, Once Again, at OAS Meeting on Argentinean Sovereign Debt

By Alexander MainAlexander Main

July 09, 2014

09 Julio 2014

Once upon a time, the U.S. government ran a very tight ship at the Organization of American States (OAS), a multilateral institution created by Washington at the start of the Cold War. Though the OAS’ 1948 Charter calls on its members to uphold democrac

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