Fausta's Blog

American and Latin American Politics, Society, and Culture

Archives for November 2014

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Venezuela: AP does Orwell so well

And if all others accepted the lie which the Party imposed -if all records told the same tale — then the lie passed into history and became truth. ‘Who controls the past,’ ran the Party slogan, ‘controls the future: who controls the present controls the past.’ And yet the past, though of its nature alterable, never had been altered. Whatever was true now was true from everlasting to everlasting. It was quite simple. All that was needed was an unending series of victories over your own memory. ‘Reality control’, they called it: in Newspeak, ‘doublethink’.

George Orwell, 1984.

AP Report on Venezuela Touts How Chronic Shortages ‘Bury Mindless Consumerism’ (also at Bizzyblog)

It’s amazing how any reporter can cover the deepening economic crisis in Venezuela without saying a word about how the country got there.

But Associated Press reporter Hannah Dreier was up to the task. In a bizarre, sickening November 20 report on how its people are having to get “creative” in the face of chronic shortages of basic goods to get by, she acted as if those shortages — and the over five decades of worse problems in Cuba — somehow just happened.

Dreier also virtually celebrated the fact that conditions in that country can be seen as the fulfillment of a fond “dream” of deceased dictator Hugo Chavez’s dreams

Among Hugo’s “dream” you could count the Bolivarian [un]sanitary napkin.

I suggest Dreier try those.

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Argentina: Investigate Cristina, get impeached?

Argentine Probe Sparks Dispute Between Government, Judiciary
Judge Heading Investigation Into President’s Business Activities Faces Call for Impeachment

Last week, federal agents raided the office of the Kirchner family hotel company, Hotesur, as part of an investigation by Federal Judge Claudio Bonadio into allegations that the company hasn’t filed financial statements for years.

Investigators said that when they arrived at Hotesur’s registered headquarters in downtown Buenos Aires, they found abandoned office space.

Since the raid, the government has issued scathing attacks on the judicial system, saying Judge Bonadio is overreacting to a minor matter of missing paperwork.

In a message posted on the presidency’s official Twitter account, Mrs. Kirchner claimed Judge Bonadio owns a stake in a company whose paperwork isn’t up-to-date: “This is just like Hotesur. Will some judge now order a raid?”

Congresswoman Margarita Stolbizer filed a criminal complaint against Kirchner and Lázaro Báez, a longtime family friend and business partner of the Kirchner, amid allegations of money laundering.



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Mexico’s failures and immigration

Monica Showalter writes an IBD editorial on how Mexico’s President Celebrates Obama Amnesty, But Should Be Ashamed
About That Gloating From Mexico (emphasis added)

With the vast majority of America’s 11 million illegal Mexican citizens — who flee their country’s corruption, poverty, low growth, rampant crony capitalism and embedded socialism — protesting over the past decade against getting sent back there, Pena Nieto ought to be embarrassed to show his face in public.
Fact is, the Obama amnesty highlights the awful failure of Mexico as an economic entity that can’t even create an acceptable place to live for a large number of its citizens.

Two-thirds of the eligible beneficiaries of the Obama amnesty — 3.2 million people — are Mexican nationals who will benefit from the presidential decree, according to the Pew Hispanic Center.

They’re the longest-term residents, and nothing they’ve seen in Mexico over the decades has enticed them to return.

Why?

Mexico, according to the State Department’s country page, experienced average GDP growth of just 1.9% from 1960 to 2011. Income per capita in the same period has risen an average of even less, at 1.8%.

By contrast, Mexico’s labor force has grown an average of 2.2% since 1998 and more than that in the longer run. An average of 54,000 jobs have been created in each of the past five years, while its labor force has grown by about 224,000 a year over the same time, according to CIA World Fact Book and World Bank data.

What’s more, productivity gains have been low, with none lower than in those states that ship the most illegals — Zacatecas, Michoacan, Guerrero, Durango, Chiapas and Oaxaca, according to OECD data.

Unable to employ anywhere near the number who need jobs, it’s no surprise that 58.8% of Mexicans are underemployed or in informal off-the-book employment in the struggle to survive. Faced with that struggle, millions just head north to America.

And by the way, that figure includes 15.47% of all Mexico’s college graduates, according to a study in the Journal of Inter American Studies. (The U.S. figure, by contrast, is 0.45%.)

Tangled tax laws, overregulation, corruption and an unstable currency have all had their hand in the substandard growth that has not kept up with population.

Add to that the ruinous criminality, which has caused the death of hundreds of thousands.

But perhaps Peña Nieto is right to gloat: the U.S. government has done what he wanted, to provide – for the foreseeable future – an escape valve for internal pressures that would otherwise require him to act on.

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Venezuela: New deal with China

High hopes, we’ve got high hopes . . .

The Chinese pull the chestnuts (temporarily) off the fire:
China Loosens Debt Terms for Venezuela
With Default Threatening the Economy as Oil Prices Tumble, Caracas Gets a Lifeline From Its Biggest Creditor

Not only for Venezuela, but also for Argentina (emphasis added),

Last week the president [Maduro] used a $4 billion Chinese credit, traditionally earmarked by the Chinese government for infrastructure projects and held in off-budget funds, to increase reserves to $23.2 billion. China also recently lent $1.3 billion to help Argentina buoy falling reserves, giving President Cristina Kirchner , a close ally of Mr. Maduro, a cushion to help alleviate that country’s cash crunch.

Beijing’s largess may appear irrational given economic policies in Venezuela and Argentina that do not appear sustainable, said Barbara Kotschwar, a scholar who tracks Chinese investment in Latin America at the Peterson Institute for International Economics in Washington.

“On the other hand,” Ms. Kotschwar said, “they are so invested in Venezuela’s oil industry that they may have calculated that a political crisis would have a negative impact on their return on investment or on Venezuela’s repayment of loans.”

That’s putting it mildly; according to Maduro himself,

Venezuela’s oil revenues, which account for 96% of the country’s dollar income, are down by 35% in the past month

China has risked millions of dollars in Latin America to secure their supply lines, and as analyst Russ Dallen, managing partner at brokerage Caracas Capital Markets, put it, “for the short term, they’re secure.” However, considering that

China last month scrapped the requirement that Venezuela ship at least 330,000 barrels of oil a day as payment for its existing loans

the meaning of “secure” may be more fluid than we believe – and not only for the short term.



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Panama: Legal truble for Carlos Slim

Carlos Slim, best known in the USA for his Obamaphones, and who was bidding for Univision earlier this year, is looking to diversify.

A Panamanian judge, however, is cramping his style:
Panamanian Judge Orders Embargo on Carlos Slim Assets
A Panamanian judge has ordered an embargo on the local assets of Mexican billionaire Carlos Slim’s infrastructure company in a legal dispute over a concession to build and operate a hydroelectric plant.

The decision to embargo 10 properties, including the Bajo de Mina hydro plant, follows a complaint by Panamanian businessman Julio César Lisac, who charges that the Panamanian government unjustly canceled his right to the concession in 2006 and later gave it to Mr. Slim’s company, Panamanian newspaper La Estrella de Panama reported on Sunday

Slim’s Ideal also operates toll roads, water projects and public transport terminals in Mexico.

A commenter at the WSJ mentions that “had the exact same thing happen to him after he bought Comp-USA almost fourteen years ago now.” Here’s a link to that story.

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