In the second quarter, the economy contracted by 1.4%. The Buenos Aires-based think tank Foundation for Latin American Economic Research (known by its Spanish initials FIEL) is forecasting 2012 GDP growth of only 1.5%. Inflation is estimated by independent economists at almost 25% annually. As salaries are adjusted upward to compensate for the loss of purchasing power, workers are being pushed into higher tax brackets. Argentines traveling abroad now have to explain their plans to government bureaucrats if they want to buy hard currency.
Add these pocketbook issues to the rising rate of violent crime, recurring corruption scandals, increasing antidemocratic efforts to silence independent media outlets and pronouncements from Mrs. Kirchner’s inner circle that it wants to amend the constitution to allow her to run for a third term. The Kirchner government has also angered labor leaders by letting it be known that it plans to shift union control of hundreds of millions of dollars in health-care premiums to the government.
As the result of a 2009 WTO ruling, Brazil now receives about $17 million in monthly payments from U.S. taxpayers — money being used to advance the Brazilian cotton industry with research on best practices, pest management and other issues. The Obama administration agreed to the payments as an alternative to either curbing government support for U.S. cotton growers or having Brazil slap import taxes on American goods to compensate for the loss to its farmers.
Henry de Jesús López, 41 years old, was captured Tuesday near Buenos Aires in an operation that involved Argentina’s intelligence service working alongside the U.S. Drug Enforcement Administration and Colombia’s national police, officials said.
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Mr. López’s stays in Venezuela and Argentina fit into a trend in which Colombian drug lords are setting up shop in neighboring countries to escape the pressure of Colombian security forces, which have a strong track record in fighting the country’s top drug cartels. Venezuelan police in September arrested Daniel Barrera, another alleged top Colombian drug trafficker who had been living in Venezuela for years.
Some Colombian cartels are now sending their cocaine shipments first to countries such as Argentina or Brazil before moving them to the U.S. or Europe, police say.
That makes the recent news from Israeli Radio that Iran has set up and supplied a Hezbollah training camp for 30 terrorists in Nicaragua near the Honduran border all the more significant. The base serves as a “meeting point for drug cartels” to acquire weapons and launder money, Israeli Radio says.
The shows highlight Argentine veterans’ difficult postwar adjustment process. A repressive military government mobilized the veterans, often conscripts from working-class backgrounds, for Argentina’s 1982 invasion of the islands in a last-ditch bid to rally popular support. Argentina’s leadership hadn’t expected the British to dispatch its own invasion force to retake the islands. Argentine troops were left underequipped and with only an improvised plan to confront the professional U.K. army.
The NYTimes magazine has a must-read report, Cocaine Incorporated (h/t AD), with a yowza,
In 2007, Mexican authorities raided the home of Zhenli Ye Gon, a Chinese-Mexican businessman who is believed to have supplied meth-precursor chemicals to the cartel, and discovered $206 million, the largest cash seizure in history. And that was the money Zhenli held onto — he was an inveterate gambler, who once blew so much cash in Las Vegas that one of the casinos presented him, in consolation, with a Rolls-Royce. “How much money do you have to lose in the casino for them to give you a Rolls-Royce?” Tony Placido, the D.E.A. intelligence official, asked. (The astonishing answer, in Zhenli’s case, is $72 million at a single casino in a single year.)
Anailin de la Rua de la Torre and Javier Nunez Florian, the 20-year-old Cuban-born actors, were flown from Cuba to the United States on Wednesday and were supposed to make their way to New York on Friday in order to promote the film. But instead, the pair stayed in Miami, according to 20-year-old Dariel Arrechada, the third star of the film who traveled with them.
Newmont Mining Corp. (NEM) (NEM)’s suspended $4.8 billion gold mine in Peru will be subject to “new conditions” that include the creation of 10,000 local jobs and a fourfold increase in reservoir capacity at the site to gain approval, Peruvian President Ollanta Humala said.
The company must pledge not to dry up highland lakes and invest in schools, irrigation canals and drinking water infrastructure in Cajamarca, a farming region in the northern Andes, Humala said in a speech broadcast yesterday on national television and radio.
Peru suspended the project and commissioned a review after Andean farmers, concerned that the project would dry up water supplies, blocked roads and destroyed Newmont installations in November. The project, which has cost $800 million to date, will cost more to build because of the recommendations of the review, Environment Minister Manuel Pulgar said April 18.
Costa Rica’s official tax stats are deceptive. In 2008 the central government’s revenues equaled only 15.9% of gross domestic product. But as Cato Institute scholar Juan Carlos Hidalgo pointed out in a January op-ed in the Costa Rican daily La Nación, that number doesn’t include local taxes or taxes paid to government entities like the Institute for Tourism and the Institute for Agrarian Development. Nor does it include social security taxes, which rich countries include when they discuss their tax-to-GDP ratios.
Tally up the total take and, according to Mr. Hidalgo, the burden for Costa Ricans in 2008 was 23.1% of GDP. In recessionary 2009 it fell to 21.7%. Compare that to the U.S. overall tax burden of 26.1% in 2008 and 24% in 2009 (the latest year for which Organization for Economic Co-operation and Development figures are available), and it is clear that Costa Ricans are not undertaxed.
Nevertheless, the country’s fiscal deficit as a percentage of GDP rose to 3.5% of GDP in 2009 from only 0.2% in 2008. In 2010, according to the United Nation’s Economic Commission on Latin America, Costa Rica’s fiscal deficit was 5.2%, the highest in Latin America. The government forecasts a deficit of 5.5% in 2012.
The problem is government spending. While revenues as a percentage of GDP are forecast to be 7.5% lower this year than they were in 2008, expenditures as a percentage of GDP are expected to come in 29.4% higher. Most of that money is going into an expanded bureaucracy, which grew by 20% during the previous PLN government of Oscar Arias. Mr. Arias was also generous with salary increases. Tocqueville predicted it.
Now Ms. Chinchilla’s “reform” proposes, among other things, a 14% value-added tax on all goods and services to replace a 13% sales tax on goods only and tax hikes on small and medium-sized businesses. Far from simply raising taxes on the rich, as the politicians want people to believe, this proposal will hit ordinary Costa Ricans hard.
Check out the Costa Risa website (in Spanish). Tax increases are for the clowns.
Ecuador’s President Rafael Correa may have received as much as $400,000 from Colombian guerrillas and their drug trafficking allies for his 2006 presidential campaign, a U.K. think tank concluded in a report released Tuesday.
The problem is not only reckless spending but also hostility toward business. The Heritage Foundation/Wall Street Journal Index of Economic Freedom, which once ranked El Salvador as the ninth freest economy in the world (2000), now places it at 39.
However, the Iranians are not limiting their activity to Brazil:
HACER continues on the story (emphasis added),
Along with the recruits in Belo Jardim, youth from Argentina, Chile, Colombia, Costa Rica, and Mexico traveled to Iran. The group’s ties to South America go beyond recruitment. The Federal Police has information that Rabbani came to Brazil a few times in recent years. In one of those visits, almost three years ago, he used methods that could cause a diplomatic crisis. The extremist embarked in Tehran bound for Caracas, Venezuela. From there, he entered Brazil illegally. Operated by Iran’s state airline, the Tehran-Caracas flight was called “Aeroterror” by intelligence officials for allegedly facilitating the access of terrorist suspects to South America. The Venezuelan government shields passenger lists from Interpol on that flight. Professor Rabbani’s movements were being monitored. The idea was to detain him in Brazil. Notified, the Federal Police set up an operation, but the order to execute this operation took a while, due to a complicated discussion about the political implications. Once again, the extremist escaped.
ARGENTINA
