Why It Matters : Latin America

Songs in the Key of Chavez

Katie Paul — Fri, 21 Nov 2008 22:17:04 GMT

The Democrats have Bruce Springsteen, Republicans have Hank Williams, Jr., and Hugo Chávez has, well, Hugo Chávez.

As part of a political media blitz enveloping Venezuela this month, the bombastic president's United Socialist Party of Venezuela released an album of celebratory tunes in the run-up to this Sunday's state and local elections, widely seen as a national referendum on Chávez's socialist political project. "Music for the Battle" features eighteen songs lauding the Bolivarian Revolution and calling for electoral victory. What's more, to our great joy here at Why It Matters, the Web-savvy Chavistas have uploaded the whole thing onto their Website and made it available to the public free of charge.

El Comandante himself makes an appearance on two tracks. The highly recommend "Militants with Chávez" consists of excerpts of his speeches layered over a reggae-rap track. He also belts out a rousing ode to the cavalry in "El Corrido de la Caballería." It's not the president's first foray into the entertainment business; last year, he released his first album of schmaltzy folk hymns, "Songs for All Time," based on the musical selections that close his regular radio and TV broadcasts. Ever the ham, Chávez is also prone to breaking into song in the middle of his rallies, giving rise to a well-documented musical genre of his own on YouTube.

Will song and dance be enough? As voters head to the polls, it doesn't look like it. Even though El Comandante still enjoys approval ratings of some 60 percent, Chavistas are bracing for losses in key races for the first time since they swept to power along with their charismatic president. "People have learned to distinguish between Chávez and Chávez's candidates," one opposition figure told El País. Whichever way the electoral winds blow, though, Venezuela's leading man will surely continue to sing his swan song for years to come.

The Colombian Trade Disconnect

Mac Margolis — Mon, 17 Nov 2008 22:09:32 GMT

It's a long way from Washington to Bogotá, but that distance is growing. The problem is not a reshuffling of the geological plates, but a seismic shift in United States politics that has left millions of people in the lower tier of the Americas apprehensive and free traders running for cover.

What's a stake is the Free Trade Agreement–FTA in policy speak–between the U.S. and Colombia, which would grease the wheels of commerce between two of the most traditional allies in the western hemisphere. Díos knows the world economy could use some greasing. But indications are that's not what the Democrat party, which come January will own an even bigger majority of seats in both the Senate and the House, has in mind. Not for Colombia, at least.

Bolstered by trade unions and protectionist industries, from the corn belt to the rust belt, the Democrats have never been enthusiastic about free trade. A notable exception was the administration of Bill Clinton, who midwived the North American Free Trade Agreement (NAFTA), but the mood on Capitol Hill has become far more insular since then. The Columbia pact was dear to the outgoing administration of George W. Bush, but he is something of a toxic asset at the moment. What will president Barack Obama do?

It would take a symposium of semioticians to deconstruct Obama's campaign messages. A sois disant free trader, and even an enthusiast of globalization, he nonetheless missed few opportunities on the campaign trail to slam unfettered trade, especially NAFTA . He voted against the Colombia trade pact. Rahm Emanuel, Clinton’s field marshal in the battle for NAFTA, and now Obama’s chief of staff, was standing next to House Speaker Nancy Pelosi last April when she deep-sixed the idea of Congress expediting the Colombia deal. And last week Emanuel snuffed any hopes of resurrecting the pact as a rider on another economic stimulus package. Some analysts believe Obama may yet sign off on the Colombia deal. But you wouldn’t know it from the brooding among lawmakers.

The Democrats and their sponsors alleged no dearth of motives for killing the deal. First, they cited Bogotá’s spotty record on human rights, saying that Colombian trade unionists especially were in peril. Now they’ve found new ammunition in the General Accounting Office report last week showing that the government’s long and expensive war on drug trafficking has flopped. So why “reward failure,” the anti trade chorus asks?

In the wind chamber of Washington politics it’s hard to sort out the substance from the bunk in these arguments. But some perspective is in order. First, the deals boosters note, Colombia is hardly the only nation losing the war on drugs. (Cultivation of coca increased 15 percent from 2000 to 2006, and cocaine production is up 4 percent). Afghanistan, Bolivia and Peru have all seen well documented increases in the cultivation of narcotic plants–coca in the Andes, opium in Afghanistan–and drug trafficking. “By its nature, the drug industry is a moving target,” says Latin American expert Michael Shifter, of the Inter-American Dialogue.

The irony is that the heightened scrutiny falls on Colombia as the government in Bogotá has made dramatic improvements in security and cracked down hard human rights abuses. With bipartisan support in the U.S. Congress, Plan Colombia doubled the police and all but demolished the “narcoguerrilla group” FARC. Right wing military groups, who promoted their own bloodbaths, were also brought under heel.

Murders fell 40 percent and kidnappings by 75 percent since 2002, when Àlvaro Uribe became president. Violence against trade unionists has also subsided. Such improvements convinced the U.S. State Dept. to certify Colombia’s record on human rights and safety in 2007 and drew praise from the GAO in its Nov. 5 report, even as the U.S. auditors noted the government’s failure to curb the drug trade.

Human rights groups beg to differ. Recently, all of Colombia was shocked to learn that while right-wing paramilitary sponsored violence had subsided, rogue troops within the national armed forces were killing dozens of civilians and dumping their bodies in FARC controlled territory, in order to inflate the rebel body count. The scandal jolted Uribe into action; he fired nearly two dozen army officials, including generals, and scrapped the body count in favor of capture and surrender of rebels as the yardstick for the war on the narco guerrillas.

Yet the Congress seems unmoved. “Colombia has made progress, but the goalpost keeps shifting,” says Shifter.

That may be shortsighted. U.S. companies do more than $8 billion of business with Colombia every year. The trade pact would spare them a 35 percent average tariff on exports to the South American nation.

That fact has not been lost on the Europeans, who are poised to sign their own agreement on a free trade deal between the EU and Colombia. Starting in June of next year, $3 billion in yearly European exports will enter the South American nation duty free–thanks in good measure to the safer conditions that the U.S. taxpayers paid for.

Cocaine: A Thriving Industry

Newsweek — Tue, 11 Nov 2008 22:16:10 GMT

By Sarah Garland

The expanding cocaine trade in Colombia is undermining President George W. Bush's effort to push through a free-trade agreement with his southern neighbor. Despite opposition from Democracts, Bush is trying to seal a deal before he leaves office in January by hitching it to a bailout for U.S. automakers. Álvaro Uribe, the Colombian president, has argued that free trade would produce jobs in Colombia that would provide alternatives to the illegal drug trade. With the global economy in the cellar, that argument has lost much of its luster.

Now it appears the cocaine business is stronger than previously thought. As the United States was pouring $5 billion into Colombia to fight drugs over the past eight years, particularly cocaine, the country’s drug cartels were finding new routes through West Africa and shipping their wares to expanding markets in Europe, Africa, and South America. The U.S. General Accounting Office reported last week that instead of reducing the cultivation and production of drugs by 50 percent, the stated goal of the U.S.-funded Plan Colombia, Uribe has presided over an increase in coca cultivation of 15 percent and an increase in cocaine production of 4 percent.

The report was ordered by Vice President-elect Joseph Biden, meaning President-elect Barack Obama, one of the main barriers to the free trade deal, probably took note.

Brazil: ‘The Beginning of Moral Regeneration’

Mac Margolis — Wed, 05 Nov 2008 18:01:48 GMT

Rio de Janeiro- Though most Latin Americans were asleep when Barack Obama claimed victory late last night, they woke up in a state of grace. From morning newscasts to talk radio, from coffee shops to cyberspace, the chatter was all about Obama’s victory and its portents for the region and the world. The legion of pundits and commentators proclaimed a new era of “esperanza”—hope—echoing in the vernacular Obama’s patented slogan, but also a kind of end of days for a brand of politics that had won the United States global enmity. “The beginning of moral regeneration,” heralded a leading columnist in La Nacion, the big Argentina newspaper. “How incredible that the United States, whose chief enemies recently were named Hussein and Osama, has elected a President Hussein Obama.” wrote Hermógenes Pérez de Arce, a columnists for El Mercúrio of Chile. The Brazilian daily O Estado de São Paulo was more succinct. “Change Has Arrived,” blared the banner headline.

Latin America, not unlike the rest of the world, has long been loco por Obama, of course. Opinion polls consistently gave him a 7 or 8 to one margin over McCain in Central and South America. “What took you so long,” you could almost hear them gasping. Latin media were deployed in record numbers to cover the campaign, following the candidates from stump to stump. (No matter that Obama the candidate rarely missed an opportunity to pillory free trade agreements; he voted against the Colombia-U.S. bilateral trade pact and has called for an overhaul of the North American Free Trade Agreement between the U.S., Mexico and Canada that most Latins and U.S. Latinos enthusiastically support.) Obama is “the better choice for U.S. president…for Latin America, for the Hispanic community, for the United States and for the world,” said Poder, a leading Hispanic monthly edited in Miami and distributed widely in Latin America.

In a way that’s surprising. A mid October poll by Latinobarometro, conducted in 18 countries in Central and South America, shows that while Latins may be enthusiastic about Obama, they have low expectations. Asked which candidate would be best for Latin America, Obama won by a margin of almost four to one. But 63 percent of respondents said that it didn’t matter, they had no opinion, or declined to answer. Only 22 percent said they thought the next U.S. president would pay more attention to the region. The Brazilian ambassador to the United States recently told of penning a four-page letter to Obama laying out key regional policy issues. In the name of four Latin nations, he hand delivered the letter to Dan Restrepo, a top Obama aide in August—and never heard another word about it. But don’t tell that to Luiz Roberto Costa, a computer technician in Rio de Janeiro and an ardent Obama fan. “Here is a guy who worked and studied and lifted himself up. He’s a ray of light,” says Costa. “Like it or not, we are all connected to the U.S. Our economic stability depends on you [Americans]. He is change and that change is going to be good for Brazil and good for the world.” But as a Brazilian saying goes, “hope is the last to die.”

What the World Thinks of Barack Hussein Obama

Newsweek — Wed, 05 Nov 2008 17:24:09 GMT

By Barrett Sheridan and Fred Guterl

The most common reaction across the world to Barack Obama’s Tuesday night victory was a simple one: “Thank you.” It was a sentiment directed not at the president-elect himself, but at the American people. Having felt abandoned by the United States for so long, and especially after the 2004 reelection of George W. Bush, people across the world saw Obama’s victory as an affirmation that yes, America still does represent something special. Nelson Mandela, in a congratulatory letter to Obama, perhaps summed it up best: “Your victory has demonstrated that no person anywhere in the world should not dare to dream of wanting to change the world for a better place.” It was also a good excuse to celebrate. Kenya, the home of Obama’s father, declared a national holiday, and Brazilians proclaimed a new era of "esperanza". The few disappointed by the final tally—a dour-looking Tory in London, some security-conscious Israelis—did little to dampen the global celebration.

Parisians reacted with enthusiasm and relief to the news, some of them turning on a dime to become Amero-philes. The French newspapers, after 8 years of George W. Bush, might perhaps be forgiven for getting a little tipsy on Obama. Obama fervor reached South Asia, too, although the candidate's promise to follow terrorists into Pakistan with or without Islamabad's approval cooled the excitement of some there. In Iraq, everyday citizens have their doubts about what Obama means for peace in the country, but politicians agree that he is "presidential material." South Koreans struck a balance between pessimism and optimism; they worry over the future of a pending free trade deal with the U.S., but are encouraged by Obama's attitude towards negotiations with the pariah state to their north. In Japan, Obama's victory served to remind some voters of stagnation in their own domestic politics.

Our team of foreign correspondents has cavassed the globe for the morning-after reaction to this historic election. The event was cause for celebration and contemplation in London, Paris, Jerusalem, Seoul, Durban, Lahore, Baghdad, Tokyo, Russia and Rio.

Employment Help for the Oldest Profession

Mac Margolis — Thu, 23 Oct 2008 14:22:27 GMT

With legacy brands crumbling on the world's trading floors and pink slips raining on Main Street, times are tough all around. So it might be heartening to know that help is on the way. The Brazilian ministry of labor has dedicated a link on its official Web page to assist aspiring sex workers. That's right, prostitutes.

Buying and selling sex in Brazil is perfectly legal, as long as the transaction takes place between consenting adults, involves no intermediaries (pimps, agencies), and puts no one physically or psychologically in harm's way. The minders of South America's largest nation apparently felt the need to go a step further and extend a helping hand to this unsung class of workers. Think of it as the official employee's manual for the oldest profession.

The site is chock full of helpful vocational itips, including a complete job description, an accessories checklist, and a guide to better client relations guide. According to the Labor Ministry, the conscientious sex professional:

- always carries a well stocked "work kit", including perfume, makeup, condoms, moisturized towelettes, mobile phone and business cards;

- demonstrates personal abilities (giving seductive looks, being playful, inventing erotic fantasies) and a knack for persuasion;

- can effectively negotiate client services (stripease, story telling) and manage a budget;

- knows how to administer first aid.

Practicing professionals are encouraged to regularly attend "trade association" workshops and to help organize other sex workers. By law, anyone 18 years or older is eligible for sex work, the Web site says. But rookies beware. "The best results generally come with at least two years of experience," the government advises.

How the World Sees Sarah Palin

Barrett Sheridan — Tue, 07 Oct 2008 15:35:24 GMT

Sarah Palin may not have much experience with the rest of the world—she didn’t even hold a passport until well after her 40th birthday—but the rest of the world has had enough experience with her to know exactly what it thinks. Those thoughts range from mild bemusement to borderline horror. Much of the world, especially in Europe, has spent the last four years counting down the days until President Bush’s final hours in office, and for them, Palin’s folksy ways carry too many echoes of the sitting president. That sentiment doesn't rule out the possibility of a little satirical fun at Palin's expense, of course.

Take Italy, for example. Ironically for a temperate nation that borders on the Mediterranean, the Italians take special offense at Palin’s stance on polar bears. (As governor, she sued the U.S. Interior Department for listing the polar bear as a threatened species.) “Polar bear killer” is second only to “pitbull” as the nation’s preferred nickname for Palin. Greenreport.it, a web site for Italian environmentalists, started a petition against her, citing her views on polar bears.

But the Italians know how to embrace the lighter side of politics--a talent they honed during years of living under President Silvio Berlusconi, a garish media mogul prone to spectacular gaffes. Paola Cortellesi, the Italian Tina Fey, has followed in the footsteps of her stateside counterpart and launched satirical broadsides against the Palin phenomenon. In one, the faux-Palin smiles and fires a shotgun at the audience. “Sarah Palin is a spectacle,” Cortellesi has said in response to why she chose the American vice-presidential candidate as her latest victim. “The hair, the glasses—and she loves sub-machine guns.”

In France, no need to find a Gallic Fey—they import the real thing. The first Tina Fey parodies hit the net with French subtitles soon after their American debut, leaving viewers with the unique problem of trying to translate “boner-shrinker.” But others in the country take the task of Palin-bashing very seriously. French media outlets have sent reporters to Alaska to glean Wasilla color up close. Le Figaro, the popular daily, said of its foray into “Sarah Palin country” that it wanted to portray the reality of a land in which “the fact that Sarah Palin knows how to slaughter and carve up a moose in no way posed a disadvantage to her electoral chances.”

That doesn’t mean they’re sympathetic, of course. Even French right-wingers feel uneasy about the prospect of a Vice-President Palin. Nadine Morano, who currently serves as State Secretary for Families and is a member of the right-wing UMP party, admits that “she has talent, but on sex education, abortion or the gun lobby, she has convictions that are more than conservative.” Morano added, “I’m as attached to the family as she is, but I don’t have the same vision. That’s the least I can say.”

The sober-minded Brits find a perverse appeal in her plain-spoken ways. "She could never exist in the British political system," says London Times columnist and former political satirist Alice Miles. "Or we don't think she could. We're all men in suits saying very, very safe things." Her exoticism has obsessed many, including tennis coach Jack Garvey, who admits to staying up until two a.m. to catch the vice-presidential debate last week. "I found myself shouting at the screen, imploring someone to push her on a few issues," he says. "But everyone was too polite to challenge her. The idea of her facing off against Putin or being in any way near power is just frightening." Even her fashion choices offend the Isles; the Guardian dedicated an entire column to her Alaska-shaped earrings, which, "with terrifying literal-mindedness...express everything we need to know about her pride in her roots and her people."

Across the Atlantic, optimistic Republicans might have hoped for a bit of favorable coverage in Brazil, where evangelical Christians are the fastest-growing religious group. No luck. Palin's been lampooned in cartoons there, and Sergio Augusto, a columnist for the daily newspaper, O Estado de Sao Paulo, joked that "judging by appearances alone, [Palin] could have swapped politics for synchronized swimming or been singing covers of 'Pink Shoelaces.'" Win or lose, Palin should exercise sound judgment in determining how best to make use of her new passport.

With reporting from Barbie Nadeau in Italy, Tracy McNicoll in Paris, Sophie Grove in London and Mac Margolis in Brazil

Photo: Associated Press

Will America's Cold Make Brazil Sneeze?

Mac Margolis — Wed, 01 Oct 2008 20:20:15 GMT

Like samba, futebol and carnaval, “crise” (crisis) has long been a staple of the Brazilian popular lexicon. After all, Brazil suffered through nearly fifteen years of three digit price rises – the longest bout of hyperinflation in contemporary history – which ended only in 1994. But for the first time in recent memory Latin America’s largest nation is in a lather over someone else’s economic debacle. Talk of the U.S. credit crunch and its fallout permeates the chatter from newsrooms to boardrooms, and from beauty salons to corner bars. Newspapers and Web sites have broken out “crisis glossaries” to explain every nuance and twist of the gathering financial imbroglio – from subprime mortgages to stock market circuit breakers – to the curious and the bewildered.

Thanks largely to a bull run in the world’s tenth largest economy, which has kicked the economy into high gear (creating 1.9 million jobs this year alone) even as the U.S. economy stalls, until now many Brazilians have felt cocooned against the ruin in the international financial markets. National leaders have been remarkably calm and at times even flippant. “Thank God, the crisis has not crossed the Atlantic,” President Luiz Inácio Lula da Silva said as late as last weekend. “At the moment, the one who’s really worried is Bush,” he quipped to a reporter the day after Wall Street’s Black Monday, and even as the São Paulo Stock Market, Bovespa, fell by nearly 12 percent. Central Bank chief Henrique Meirelles predicted that, at most, Brazil might come down with “a bad cold” from the U.S. credit crisis.

Others are not so sure. Beyond the official spinmeisters, no one this side of the equator in the Americas is touting the wonders of decoupling anymore – that sunny notion that the emerging market economies will thrive even as the world’s largest economy stumbles. Upon learning of the stock market crash, Demétrio Martins, a fervent evagangelical Christian, who lives in the tough Rio de Janeiro favela Complexo do Alemão, said (channeling Sarah Palin) “we must be living the end of days.” Others are puzzled and a bit resentful over the potential fallout, as if a trusted world ally had suddenly let them down. “Just when Brazil’s economy is doing so well, along comes this guy [President Bush], screwing up everybody else’s lives,” says free lance office messenger Gilberto dos Santos Durval. Sebastião dos Santos Muniz, who sells fruit at a Rio street fair, was more philosophical. “My idea of the United States has totally changed,” he says. “How could a state that is so all powerful at the same time be so fragile and as vulnerable as everyone else?”

Bolivia's Democratic Divide

Newsweek — Wed, 13 Aug 2008 22:10:11 GMT

By Andrew Bast

This weekend witnessed a worrying twist of fate in Bolivia. Voters went to the polls in a national referendum on the country’s leadership, and President Evo Morales won in a landslide. He took more than sixty percent of the vote, higher even than the fifty-three percent he won in the 2005 presidential election. His enthusiasm was unguarded. "I dedicate this victory to all the revolutionaries in the world," he proclaimed in a nighttime victory speech from the balcony of his presidential palace in the capital of La Paz. He had reason to celebrate. The vote cemented his leadership and gave momentum to what could likely be his landmark accomplishment in office, rewriting the country’s constitution.

The twist is that voters not only cast ballots on the president, but on their local leaders as well, and a coterie of opposition governors in the country’s wealthy eastern provinces--Morales’ chief adversaries--also won in the referendum. For months they have been organizing against Morales. The departments of Santa Cruz, Tarija, Pando and Beni have all voted to become more autonomous from the central government, challenging Morales’ centralization of power in La Paz, his land reform initiative and his reengineering of the constitution. “The outcome of the vote in Bolivia is likely to only deepen the wounds between two fiercely antagonistic political projects,” says Michael Shifter of the Inter-American Dialogue. “Each side will be tempted to dig in even further.” How Morales plays his so-called revolutionary hand will very much determine Bolivia’s future. Morales would be wise to watch his autocratic ally, Venezuelan president Hugo Chávez, for what not to do; better to err on the side of democracy and demonstrate real skill as a politician.

Bolivia’s provinces, especially Tarija, are rich in natural gas, making the situation all the more volatile. After taking office, Morales nationalized the industry, straining tensions to the breaking point. Recently, autonomy protests in the provinces have turned violent, and the memories of the 2003 protests over the country’s natural gas reserves, which left eighty people dead, ousted President Gonzalo Sánchez de Lozada and helped bring Morales to power, are still fresh. The issue is as raw as any in the country and could give rise to conflict once again.

A resolution seems distant. Morales has said publicly that he is prepared to talk with the governors, though no one knows what, if any, concessions he would be willing to make. From the outside, the U.S. State Department has said it "stands ready to assist" the discussions, despite its tormented relationship with Morales’ government. Spain, Bolivia’s once-colonial administrator, has also offered to help nudge talks along. The most promising pledge came this week from the Organization of American States, which is headed by the Chilean José Miguel Insulza and had a major success earlier this year when it passed a resolution in March to resolve the standoff between Hugo Chávez and Colombia. In Bolivia, negotiations are the next logical step, but with both sides boosted by big wins at the polls, when, where or on what terms are all big question marks rather than agenda items.

In addition to touting his success as another victory for the revolution, Morales has said that his presidency “starts a new Bolivian history.” Indeed, he is the first indigenous president to be elected in Latin America, and his proposed constitutional reforms would lend political representation to the long-disenfranchised indigenous majorities in the country. But his presidency is not a revolution. It is the result of votes and process and democracy, and with that recognition comes the undeniable fact that he cannot write off the past, no matter how much he may want to.

After a stinging defeat of his Venezuelan constitutional reforms in December, Morales’ staunch ally Hugo Chávez last week decided to instead issue his reforms by decree, subverting the democratic process. Morales would be wise to learn from his mentor, namely that such autocratic strategies make for bad so-called revolutions. Changing Bolivian history could mean bringing the country together, not fanning the flames of autonomy by strong-arming the opposition. Since they have popular support in their provinces, the governors’ grievances deserve a fair hearing, and if Morales has the political skill to bring them into the fold, 21st-century socialism in Bolivia could establish a sound democratic foundation. Considering the way that Chávez’s project is being left behind by less bellicose leaders like Luiz Inácio Lula da Silva in Brazil, Morales’ aim may be morally admirable, but his method will have to be more independently minded.

Brazil's Gross National Hubris

Mac Margolis — Mon, 28 Jul 2008 19:29:30 GMT

There are many ways to measure a society's fortunes, from per capita income to gross national happiness. In São Paulo perhaps the best thing to check is the skyline. High over this Brazilian hypercity, where office towers pierce the smog, helicopters swarm. Ferrying corporate rainmakers over the gridlocked streets, they light on rooftops and bank away again, steel dragonflies pollinating a stone jungle.

Brazil today boasts 1,100 privately owned helicopters (half of them in São Paulo), the world's third largest fleet and growing at the clip of 15 percent a year. For those below, condemned to battling one of the worst rush hours on the planet (on a bad day, traffic pileups can run to 160 kilometers or more), the view isn't so inspiring. But like the crowded skies, the clotted streets are emblems of the remarkable new moment in a nation that has hoisted itself from the ranks of chronic underachiever to emerging market upstart. (Read this week's magazine story, Weathering the Storm.)

The new bullishness has taken many by surprise. For half a century Brazil has been flirting with greatness, aiming for the clouds and then flaming out. At its loftiest the country has charmed a host of believers, but their convictions have wavered. Fleeing Europe to Brazil ahead of World War II, the Austrian writer Stefan Zweig famously declared his adoptive country “the land of the future” but then lost hope in the world and downed a lethal dose of vironal in 1942, in the middle of carnival, at that. The future would have to wait. Charles DeGaulle looked down his spacious nose at much of the world, but the Brazilians always took personally his generic snub that "Brazil is not a serious country."

It's poetic justice of sorts that the Brazilians are looking down on much of the serious world today. In the quarter century or so I've been keeping an eye on this country, this is the first time I can recall that the dark talk of "crisis" refers not to some domestic debacle but to the mess beyond national borders. "Hey, Bush, we've been waiting 20 years to grow," scolded president Luiz Inácio Lula da Silva in an impromptu speech the other day, referring to the global spillover from the U.S. subprime credit crunch. "Get your act together."

Except for on the football pitch or the catwalks, such hubris is new for this chronically underperforming country. Maybe it's the currency. When I first arrived in Rio, in the early 80s, with inflation topping three digits, the greenback was almighty. Converted into wads of pink and green cruzeiros or cruzados or new cruzeiros (pick your perishable banknote), a hundred U.S. dollars could buy you a week on the town. Now and then the officials in Brasília tried to do something about it, lopping three zeros off the currency and decreeing drastic price freezes, so bringing only a flicker of stability. It wasn't as bad as Bolivia, where I once saw them weighing money instead of counting it in the Chapare district, but it left the continent's biggest country dysfunctional, all the same.

I keep a box in my drawer stuffed with inflation memorabilia from those days. Lost in the rubble of half a dozen versions of soiled bank notes and a kilo or so of useless coins, there's a small paper chit with the number 2147 stamped on it. It's the waitlist number I drew for the São Paulo-Rio de Janeiro air shuttle, which thanks to the price freeze during the so called Cruzado Plan, of 1986, cost $38, about half the current bus fare. When prices are kept steady, goods tend to disappear, and the Cruzado Plan was no different; Brazil's airports became flop houses as stranded passengers waited hours for an available seat.

It's not always easy to pinpoint a nation's turning point, but 1994 has to be a modern Brazilian watershed. That was the year of the Plano Real, a radical new stabilization plan named for the eponymous currency, backed this time by fiscal discipline, not a price freeze or any of the other "heterodox" hocus pocus of former plans. Brazilians were skeptical and who could blame them, after a quarter century of band-aid reforms and Monopoly money?

Today, with foreign investors tripping over themselves to pour money into Brazil, the real has outgunned the world's top 16 currencies, from Euro to Yen, gaining 13 percent against the dollar this year alone, and nearly 60 percent since 2004. To my knowledge Brazilian supermodel Gisele Bündchen never actually turned down work for U.S. dollars, but when the rumor that she had went viral in Brazil I knew the earth had shifted in this part of the hemisphere. Now it's outbound Brazilians changing their reals into wads of greenbacks and having the time of their lives in Paris or Disney World.

You don't have to go that far to watch them frolic. The boom that has seen Brazil's economy soar has also deepened pockets. The country now boasts 20 billionaires on the Forbes list (up from just four in 2003) and 140 millionaires, a 19 percent rise year to year, against a 6 percent rise for the rest of the world. Boutique banks and private asset managers have decorated the skylines with their logos and heli-pads.

The bonanza is not just for those commuting in choppers. Climbing wages (overall payroll is up 16 percent year to year), a flood of consumer credit (growing by 30 percent yearly) and plenty of new jobs (1 million this year, 7.3 million since 2004), have hoisted countless poor into the consuming classes. Much is made of how China's surging economy has lifted tens of millions out of poverty. In fact, Dragonomics has increased the wealth gap, while Brazil has managed to reduce inequality at the same it booms. Brazil's poorest ten percent have seen their wages grow by 57 percent in real terms between 2002 and 2006, against a nine percent rise for the richest tenth, says economist and poverty scholar Marcelo Neri of the Fundação Getúlio Vargas, a business school.

And while the middle class in the developed world moans about slipping downmarket, Brazil's just keeps on rising. Some 20 million Brazilians have moved up to the middle class in the last decade, and are now putting 800 new cars a day on the road in São Paulo alone. Sound exaggerated? Check out rush hour.

The G8: Butting Heads on Climate

Katie Paul — Mon, 07 Jul 2008 17:07:59 GMT

Finding ways of capping carbon emissions is on the agenda for this week’s G8 Summit, which begins today on the pristine Japanese island of Hokkaido. But if anything is getting capped, it’s expectations for a meaningful agreement on climate change.

A competing jumble of climate change negotiations have turned the forum itself into a debate topic as polarizing as the carbon markets and global targets being proposed. Not one, but two extra groups have joined the G8 at Hokkaido, each with the potential to reach its own set of conclusions. The G8 + 5 group brings major developing emitters like China and India into the fold, and the Major Economies Meeting (MEM), George W. Bush’s brainchild, adds three other big carbon emitters—Indonesia, Australia and South Korea—into the mix. Together, the groups account for 80 percent of greenhouse gas emissions. Washington would prefer to settle the major points at the MEM before tackling the unwieldy 200-country United Nations gatherings, which are coming up against their deadline for a post-Kyoto treaty to be approved in Copenhagen in December of 2009. Coming out of Hokkaido empty-handed will make pre-Copenhagen talks this fall just that much messier.

Still, while none of the three groupings at Hokkaido will likely produce a major consensus on emissions caps, they are producing a lively diplomatic chess match. E.U. members, who want the group to commit to steep cuts in carbon emissions by 2050, are butting heads with Bush over his unwillingness to commit to numerical targets. Meanwhile, Japanese Prime Minister Yasuo Fukuda is trying to broker a compromise. With a more green-friendly Obama or McCain administration only months away, Fukuda apparently believes that a tussle with Bush is counterproductive. Instead, he’s pushing for agreements on less-polarizing issues, such as encouraging carbon capture and storage technology for coal power plants, promoting nuclear energy and lowering tariffs on clean technology.

“There are some folks out there who think the rest of the world can settle on their own agreement and expect the United States to then come and join under a new administration,” said Council on Foreign Relations environmental expert Michael Levi on a recent press conference call. “But the Japanese understand that, regardless of substance, the United States is going to have to be part of creating whatever agreement happens if there’s any chance that the U.S. will end up being part of that agreement.”

Argentina: Showdown on the Pampas

Newsweek — Fri, 30 May 2008 01:30:00 GMT

Rolando Andrade/AFP-Getty Images
Protesting Prices: Farmers and their supporters demonstrate against the Government for raising export tariffs on soybean products in Rosario, Santa Fe province

By Brian Byrnes

In Argentina, history tends to repeat itself. Every decade or so, the country implodes in crisis: coup d’etats, dictatorships, hyperinflation, devaluation, crime--all trademarks of Argentina’s self-fulfilling prophecy of repeated and gross governmental failure.

The wounds of the 2001 economic collapse--popularly blamed on outside forces like the International Monetary Fund and Wall Street--have just barely healed, but Argentina once again looks to be on track for a meltdown, and this time it could be sparked by a showdown on the Pampas.

A conflict between the fledgling government of President Cristina Fernandez de Kirchner and Argentina’s influential farming sector over export taxes on commodities has dragged on since mid-March, and decimated the presidenta’s popularity. According to a poll released on May 22 by Poliarquia Consultores, Kirchner’s approval rating sank to 26 percent this month, down from 56 percent in January. This sharp decline was precipitated by the government’s inability to resolve the export-tax stalemate, but it has been deepened by the openly hostile stance that Cristina has taken with the farmers, and just about everyone else.

And it seems that they have had enough.

On Wednesday, farmers began their third protest in as many months, halting exports in a bid to hit government coffers. Braving the crisp Southern autumn air, they have once again mounted roadside vigils, blocking trucks carrying Argentina’s prized grains earmarked for foreign markets. Similar roadblocks caused food shortages and price increases in March and affected commodities prices worldwide, reflecting Argentina’s status as the planet’s third largest soybean exporter and second largest corn exporter. And with the current global food shortage, people take notice when an agricultural powerhouse doesn’t make its deliveries overseas.

Despite the trouble the strike caused for Argentines at supermarkets and butcher shops in March, an overwhelming majority seems to be supporting the farmers in their fight. An online poll conducted Wednesday by Clarin, Argentina’s largest newspaper, showed that 68 percent were behind the farmers’ decision to strike again.

Negotiations broke down this week after the government canceled talks following a pro-farm demonstration May 25--Argentina’s Revolution Day--which attracted 300,000 people to the river port city of Rosario. That drew the ire of the president and her husband and predecessor, Nestor Kirchner, who as leader of the country’s ruling Peronist Party is widely suspected to be calling the shots behind the scenes. His macho rhetoric made him a highly popular leader during his four and a half years in office, but this bravado is now being blamed by his detractors for stoking the flames of confrontation with the farmers. Kirchner himself has called their protests “antidemocratic.”

The farming conflict has also stirred up feelings about the new president and her combative style of government. In recent weeks, sporadic street protests--known as cacerolazos--have been taking place across Buenos Aires for the first time since 2001, when they brought down the administration of President Fernando de la Rúa. These rowdy, pots-and-pans banging protests are a sure sign that the middle-class is once again alert--and angry.

There is a palpable belief on the swanky streets of Buenos Aires and on the remote routes in Argentina’s farm belt that this conflict--which until now has been boisterous but mostly peaceful--will turn violent. It could become a bellwether for an array of issues that continue to plague Argentina: inflation, energy shortage, violent crime, unemployment and, perhaps most of all, the lack of transparency in the Kirchner government.

Inflation is chief of these concerns, and it continues to rear its ugly head, despite the state’s stubborn refusal to acknowledge it. The actual inflation rate is believed to be more than twice the official figure of 8.5 percent. This week, the province of San Luis put its April inflation rate at 3 percent, triple what the national statistics agency reports. The Kirchners have long since lost their credibility with both Argentines and overseas investors when it comes to inflation numbers. The resignation of the 36-year-old economy minister, Martin Lousteau--viewed as a fresh voice amongst other high-ranking Kirchner cronies--in April only added to the sense of impending trouble. Meanwhile, consumer and business confidence is down, and poverty is up.

Capital flight is occurring, as well. In Buenos Aires, there are reports of people making large withdrawals from bank accounts and stuffing the cash under bedroom mattresses, or crossing the Rio del la Plata to deposit it in neighboring Uruguay.

Clearly, Argentines are once again preparing for crisis mode. But when this mentality becomes so ingrained in a country’s collective identity, as has been the case with Argentina for so many decades, is it still correct to call these situations a crisis? Perhaps a better word would be: reality.

Argentina: 'Queen' Cristina's 100 Days

Newsweek — Tue, 18 Mar 2008 22:17:03 GMT

By Brian Byrnes

The Queen’s honeymoon was over before it even began. Less than 72 hours after she donned the azure-and-white sash as Argentina’s first elected female president, her highness had already gone to battle.

Argentina’s Cristina Fernandez de Kirchner’s reputation as strong-willed, outspoken and sometimes flippant had earned her the faux-royal title, and it was proven in spades on December 13, when she took the podium at the Pink House in downtown Buenos Aires to blast U.S. allegations that Venezuela's Hugo Chavez had tried to fund her presidential campaign with clandestine petrodollars.

With pointing fingers and a steely glare, “garbage” was how she described a U.S. prosecutor’s charges that a suitcase from Venezuela stuffed with $800,000 in cash had been destined for her campaign coffers before it was detained at a Buenos Aires airport in August. Fully aware of the moment, Cristina played the gender card, vowing not to be “pressured” because she was a woman and -- in a not-so-subtle dig at the Bush administration -- promising to strengthen relations with “friendly” countries, like Venezuela.

Not exactly a winning start for a president who was expected to improve ties with the U.S. following a frosty four-and-a-half years under her predecessor (and husband) Nestor Kirchner, who routinely blamed the IMF and Wall Street for Argentina’s catastrophic economic collapse in 2001. Cristina--with her penchant for globetrotting, high fashion and political discourse--would surely be able to patch up foreign relations, or so everyone thought.

It turns out the post-inauguration dust-up was a sign of things to come. As she marks the 100th day of her presidency today, Fernandez de Kirchner’s approval rating remains high -- 54 percent according to one recent poll, 65 percent according to another – and Argentina is enjoying sustained 8 percent economic growth, but problems are mounting for the fledgling presidenta, chief among them a growing perception that the First Gentleman did a better job when he was in charge.

A poll released on Sunday found that few Argentines have faith in their new leader. When asked who inspires more confidence, 37 percent said Nestor, while just 18 percent answered Cristina. Nestor was known as an early riser and tireless worker; Cristina’s afternoon arrivals and long vacations have quickly earned her the title of “part-time president” in some local press.

Clearly not the ideal way to start a mandate, and there’s more trouble brewing.

Argentina’s powerful agricultural sector has been on strike since March 13, protesting the government’s new tax increase on commodity exports. Nestor’s administration clashed repeatedly with farmers, and they clearly still have a bone to pick with the Kirchners.

An energy crunch continues to nag Argentina and frozen utility rates have discouraged investment in the troubled sector. Cristina has taken token steps recently to try to reduce the crunch. In late December, she temporarily ordered Argentina’s clocks set forward one hour with hopes of shrinking electricity consumption during the sweltering South American summer. There are conflicting reports on whether that move was a success. She also called for millions of free low-watt light bulbs to be distributed around the country. But a cohesive plan to get Argentina’s energy grid on track is still lacking--as is one for tackling rising inflation.

The private sector and economists refuse to swallow the government’s suspiciously low official inflation rate of 8.5 percent (most put it at more than twice that number). A recent poll found that when asked if they believe the government inflation numbers, 74 percent said “no.”

Cristina did come out looking good both at home and abroad when she worked to calm tempers earlier this month after a conflict centering around the death of a Colombian rebel leader almost brought Colombia, Ecuador and Venezuela to war. She has also been actively working to secure the release of Ingrid Betancourt, the former Colombian presidential candidate held captive by the Revolutionary Armed Forces of Colombia (FARC) since 2002, and will meet with French president Nicolas Sarkozy on the issue in Paris next month.

But there seems to be more headaches than headway on foreign affairs issues.

A scandal involving foreign diplomats stationed in Argentina who allegedly imported and sold Hummers, Mercedes Benz sedans and other luxury vehicles at a profit is still unfolding, and it cost Argentina’s deputy foreign minister his job this month.

A human rights champion, Cristina raised eyebrows in February when the first state dinner she hosted was held in honor of visiting Equatorial Guinea dictator Teodoro Obiang.

And last week came the icing on the 100-day cake. Condoleezza Rice skipped Argentina on her South American tour, an omission viewed by many as a sign that relations between Buenos Aires and Washington have yet to thaw since Cristina’s ill-advised, anti-U.S. outburst in December. Local reports this week claim that Cristina – eager to be an international player – was furious at the State Department snub.

One telling illustration of the differences between the two Kirchner presidencies was published in a local newspaper on Sunday. Perfil reported that in his first 100 days as commander-in-chief, Nestor met with international heavyweights like George W. Bush, Tony Blair and then-U.S. Secretary of State Colin Powell--whereas Cristina spent time recently hanging with Latin leftists like Chavez and Evo Morales, as well as chatting up supermodel Naomi Campbell and hunky Spanish actor Antonio Banderas.

An audience fit for a queen, yes. But for a president?

Borderline Case

Mac Margolis — Fri, 14 Mar 2008 14:35:26 GMT

Politicians on both sides of the partisan divide in the U.S. rarely miss a chance to beat the drums over the perils of the immigrant tide and the imperative to "secure our borders." That might be a good idea. With the world's largest economy on a slide, the dream of making America is looking less lustrous every day, and now the U.S. risks seeing one of its most dynamic and creative sources of human capital blow away with the prairie dust.

There are already troubling signs. A recent study by the Inter-American Development Bank reports that the flow of dollars Latin American and Caribbean immigrants send back home is slackening. In 2007, Latins living in the U.S. remitted $66 billion to their native countries. That's not half bad (a record amount, in fact) but what drew the Bank's attention was the modest 7 percent increase over the previous year. Until then the flow of dollars back home had been expanding at double digit rates every year. Last year the nominal sum of incoming migrant dollars actually fell in Brazil, from $7.4 billion to $7.1 billion.

The analysts are still mulling the numbers, but a likely factor is the collapse last year of immigration reform efforts in the U.S. Congress, which has made it more difficult for undocumented migrants to get working papers or residency. Another is the weakening U.S. economy, which has dried up the service and construction jobs that most immigrants flock to and also heightened discrimination, as native U.S. workers drop into a xenophobic crouch.

But a growing reason for the drought in remittances is that many immigrants may simply be calling it quits. With jobs evaporating and dollar wages buying fewer and fewer pesos, reais, escudos and bolivars, the onetime golden shores for newcomers are turning to sand. No wonder thousands of Brazilians in Massachusetts, New Jersey and New York are packing their bags and heading south. Even Mexicans are reported to be opting for "self deportation" as opportunities evaporate stateside.

This doesn't necessarily mean failure. While the U.S. founders, most other economies in the Americas are if not "decoupling" from the mothership then holding up gamely in headwinds. Brazil, which has exported tens of thousands of workers over the years, is on target to grow by 5-6 percent this year. The Argentine and Venezuelan economies are topping 8 percent growth (though inflation threatens both). Colombia, Peru and Chile are looking solid. That is encouraging news for the less fortunate parts of the hemisphere and at least partial compensation for the hole in the national coffers left by tumbling remittances, which for many nations are more important than official international foreign aid.

How beneficial the exodus will be the for the gringos is another question. For all the political huff over invading aliens filching employment and opportunities, the U.S. economy owes its foreigners, legal or not, a considerable debt. They shovel, sweep, serve and tidy up in jobs many pedigreed Americans would hold their noses over. At last count (2006) foreigners ran firms that kicked in 6 percent of U.S. GDP and 14 percent of all business spending on research and development. They also reinvested half their revenues locally ($71 billion), paid fully 13 percent of national taxes and generated one of ten private sector jobs in the U.S..

Alien agitprop? Hardly. I lifted those numbers from a Feb. 28 speech by David McCormick, the U.S. undersecretary of Treasury for International affairs. That's one that got by the border patrol.

How to Beat the Raging TB Contagion

Mac Margolis — Fri, 29 Feb 2008 11:57:20 GMT

Call it the cough heard round the world. The World Health Organization's Feb. 26 report on how super strains of tuberculosis are on the loose has shaken physicians and policy makers everywhere to the marrow. And rightly so. The study, based on a massive survey of 90,000 patients worldwide, is eloquent testimony to the ravages of a modern killer: multi drug resistant tuberculosis, known as MDR TB in the chilly shorthand of public health, and its even deadlier next of kin, extensively drug resistant tuberculosis, or XTR-TB, which is practically untreatable.

It's no surprise that poor countries, rife with malnutrition, claustrophobic slums, and especially AIDS are super TB's closest ally. Precisely because HIV strafes the human immune system, patients are sitting ducks for infection. That's why almost everywhere that AIDS is prevalent, tuberculosis is soaring. Worst hit are the fragments of the old Soviet Union (led by Baku, the capital of Azerbaijan, where one in four new tb patients have the super variety) and Africa, with the highest rate of TB in the world and the worst public health statistics (only six nations on the continent managed to report to Geneva). At this rate the Economic Forum at Davos might have to be scrapped in favor of the sanatorium that once crowned that Magic Mountain.

There is one bright spot in the developing world's deathlock with TB: Brazil. That may sound odd. Nearly a quarter of the 185 million Brazilians live below the poverty line, where contagions rage, and some 620,000 have AIDS, a third of all cases in Latin America. But unlike almost every other developing nation, Brazil has not seen the overall TB infection rate spike - much less a runaway outbreak of MDR-TB - among the most vulnerable population. The reason is as simple as it is controversial: free meds for HIV and AIDS patients. In 1996, the Brazilian congress passed a law requiring the government to hand out antiretrovirals to anyone with HIV free of charge. Drug companies were disgruntled, not least because Brazil browbeat them into slashing prices for the three-way cocktail of antiretrovirals, the state of the art medicine used to combat the virus. The same policy encouraged nearly two dozen other developing countries to take on the biggest pharmaceutical corporations as well.

No one ever claimed Brazil was a health spa, of course. After a brief lull, mosquito-borne dengue fever has come raging back, including the killer hemorrhagic variety. An outbreak of micobacteriosis, which causes a nasty hospital infection, leaves lasting surgery scars and can withstand all but the most drastic disinfectants, is on the loose. And while in theory anyone may be treated at the country's public hospitals, chronic underfunding has apparently forced brain surgeons in Rio de Janeiro to resort to common power tools, like home drills, in the operating rooms.

Still, it's hard to argue with success. A team of international scientists recently crunched the numbers and found that Brazilians living with AIDS who reguarly took the three-way cocktail of antiretrovirals had 80 percent lower TB infection rates than did patients who were not treated. (The study reviewed data from 1995 to 2001, but researchers say that the trend holds to this day.) The bottom line is that systematic use of cutting edge HIV/AIDS medicine may be one of the best ways to keep this millennial scourge at bay. That may not be the best news for Big Pharma's shareholders. But it ought to give public health authorites a shot in the arm.