Monday, April 16, 2007

NYT: "Paraguay’s Ruling Party Faces Threat of a Populist Bishop"

ASUNCIÓN, Paraguay, Feb. 24 — No political party currently in power anywhere in the world has governed longer than the Colorado Party here, not even the Kim family’s Communist dynasty in North Korea. But a charismatic Roman Catholic bishop recently suspended by the Vatican is threatening that hegemony and has emerged as the front-runner for next year’s presidential election.

Known as “the bishop of the poor,” Msgr. Fernando Lugo Méndez has been strongly influenced by liberation theology, which emerged in Latin America in the 1960s and contends that the Roman Catholic Church has a special obligation to defend the oppressed and downtrodden. But he is reluctant to position himself on the political spectrum, saying that he is interested in solutions, not labels.

“As I am accustomed to saying, hunger and unemployment, like the lack of access to health and education, have no ideology,” he said in an interview here. “My discourse, my person and my testimony are above political parties, whose own members are desirous of change and want an end to a system that favors narrow partisan interests over those of the country.”

The Colorado Party has been the ruling party here since 1947. Gen. Alfredo Stroessner led a dictatorship notorious for corruption and brutality from 1954 to 1989, but, thanks to its tight control of patronage and the bureaucracy, the party managed to retain control of the government even under the current system of free elections.

Monsignor Lugo, 55, is a spellbinding orator in both Spanish and Guaraní, the indigenous language spoken by the peasants and urban poor who make up a majority of the population in this landlocked country of 6.5 million. In speeches, he rails against corruption and injustice, saying, “There are too many differences between the small group of 500 families who live with a first-world standard of living while the great majority live in a poverty that borders on misery.”

Recent polls here support Monsignor Lugo’s status as the most respected and popular political figure in the country, and he runs ahead of all other potential candidates in such surveys. But both church and state are seeking to block his road to the presidential palace, which has led some of his supporters to threaten to take to the streets if he is disqualified.

The Constitution forbids ministers of any religious denomination to hold elective office, and the Roman Catholic Church enforces a similar prohibition on its clergy. Monsignor Lugo resigned from the priesthood in December to free himself from those restrictions, saying, “From today on, my cathedral will be the nation.” But the Vatican, while suspending him from his duties, has rejected his request to be laicized.

In a letter made public on Feb. 1, Cardinal Giovanni Battista Re, the Vatican official who supervises bishops, wrote that Monsignor Lugo must “remain in the clerical state and continue to be obliged to its inherent duties” because “the episcopacy is a service accepted freely and forever.” He added that “the candidacy of a bishop would be a cause of confusion and division among the faithful, an offense to the laity.”

Monsignor Lugo — he and his followers use the title, which is used for bishops in Latin America, despite his resignation from the clergy — ignored the ruling and declared his candidacy this month. Church officials have responded with warnings of more severe sanctions, with one Paraguayan bishop warning that he is “exposing himself to the punishment of excommunication” unless he desists.

With his clerical status in question, it seems likely that only the Supreme Court or the electoral tribunal here can determine his eligibility for office.

His legal advisers contend that the Vatican’s edict has no judicial validity in Paraguay. But both the court and the electoral tribunal are regarded here as beholden to the Colorado Party and therefore inclined to keep him off the ballot.

“The government is going to try to use the church’s arguments to kick him off the field, but Paraguay is a lay state, and the Constitution, not canon law, is the final authority,” said Rafael Filizzola Serra, a member of Congress who supports Monsignor Lugo and is a constitutional law specialist. “The pope does not have the authority to tell him he can’t run. Lugo has renounced the priesthood, and he has the same right as any citizen to be a candidate.”

José Alberto Alderete, the president of the ruling party, scoffed at speculation that the government was maneuvering to exclude Monsignor Lugo from the ballot, saying “We want to compete” and are confident of victory because “we are the party of change.” But he criticized Monsignor Lugo, calling him a dangerous and divisive rabble-rouser.

“Today he is preaching and inciting rebellion and confrontation” on the campaign trail instead of “advocating peace, understanding and unity from the pulpit,” Mr. Alderete said. “He is gaining support in some sectors, but he is awakening fear and suspicion in others.”

Monsignor Lugo’s adversaries have sought to undermine his support among the middle class, which has responded strongly to his anticorruption stance, by portraying him as a “Red bishop” and “radical priest” who would steer Paraguay sharply to the left. They suggest that if elected, he would immediately align himself with President Hugo Chávez of Venezuela and President Evo Morales of neighboring Bolivia.

In published interviews, Monsignor Lugo has described what Mr. Chávez calls his “21st-century socialism” as “interesting and different” and “very stimulating.” But when asked to be specific about what he likes there, he took pains to distance himself from the Venezuelan model and said his relationship with the United States Embassy here was “very cordial and open” and would remain so if he became president.

“For me, the value of the Venezuelan experiment is the social dimension, the better distribution of wealth for the benefit of the poor majority,” he said. But that approach, he said, was also “linked to a strong dose of statism, totally at the service of one person,” and “a lack of pluralism,” which “is dangerous for a real democracy.”

He made clear his discomfort with the idea that he is any kind of “savior” or “messiah” for Paraguay, as both his followers and critics have sometimes suggested. His political style, say those who have observed him, stresses cooperation rather than confrontation, and collaborative leadership over a cult of personality.

“As a priest, he has a good command of group dynamics, and is also a superb organizer,” said Marcial Riquelme, a Paraguayan sociologist. “He knows how to bring people together who don’t like each other and then to mediate all those various sectors to reconcile interests. That’s a remarkable ability in a country where we are normally at each other’s throats.”

Copyright 2007 The New York Times Company

BBC: "Ecuador leader celebrates 'win'"

Ecuador's President Rafael Correa has been celebrating an apparent landslide victory in a referendum on overhauling the political system. An exit poll showed 78% of voters backed his call for a people's assembly that would by-pass Congress and rewrite the constitution.

Mr Correa said the country had "said yes to the future". He also threatened to kick out the World Bank's representative and said he would no longer deal with the IMF.

Mr Correa has said reform of the country's political system is essential. But his critics accuse him of being authoritarian and following in the footsteps of Venezuelan President Hugo Chavez.

Mr Chavez was quick to congratulate Mr Correa after the referendum, saying: "That is how Latin America is moving forward, from victory to victory, from triumph to triumph."

Counting for the referendum is expected to be a long process and official results will not be available for a number of days. However, the BBC's Daniel Schweimler in Quito says supporters of President Correa were out on the streets just minutes after polling stations closed at 2200 GMT.

The president was shown on national television celebrating at a hotel in the country's largest city, Guayaquil. A Cedatos-Gallup exit poll of 40,000 voters nationwide showed 78% in favour and 11.5% opposed.

Mr Correa said "fear had been left behind". "The future was at stake, the country was at stake and Ecuadoreans have said yes to that future."

Mr Correa responded to the referendum with an announcement that Ecuador had repaid its final debt to the International Monetary Fund. He added: "We don't want to hear anything more from that international bureaucracy." The president also warned he would kick out the representative of the World Bank in Ecuador if the government received, as he put it, pressure from the organisation.

Mr Correa has railed against corruption in the country's political system, labelling Congress "a sewer".

But many of his critics have accused him of trying to increase his power and follow President Chavez, who has brought in controversial reforms in Venezuela.

Former Ecuador president Oswaldo Hurtado said of the referendum: "It's not a project for a better democracy. It's a project to accumulate power. All dictators always have had constitutions made to fit them." The assembly at the centre of the vote would be elected within three months and have six months to draft the constitution. The document would then be put to a second referendum.

Mr Correa has said he wants to depoliticise the courts and decentralise the state. The referendum had sparked a political crisis in the country. An electoral court sacked 57 lawmakers in March for trying to block it. When the dismissals were ruled illegal, police prevented the legislators returning to their offices and the deputies were kicked and punched by Correa supporters.

Story from BBC NEWS:
Published: 2007/04/16 03:59:25 GMT

Venezuela and Its Neighbors Reject IMF Report

Venezuela and Its Neighbors Reject IMF Report
Saturday, Apr 14, 2007
By: Chris Carlson -

Mérida, April 13, 2007 (— Venezuela, along with other countries of the region, rejected the latest report by the International Monetary Fund on the economic growth of the region. The recent report released by the fund predicts that Latin America will not grow as much in 2007 as it did in 2006. Leaders of the region assured that the international organization keeps getting it wrong on Latin America.

"For three consecutive years now they've gotten it wrong with Venezuela," said Venezuela's Minister of Finance, Rodrigo Cabezas, yesterday, in response to the IMF report. "It seems like their prognoses have a kind of political commitment in order to discredit the success of the Venezuelan economy in the last few years," he said.

On Wednesday the international organization released their annual report entitled World Economic Outlook. The report forecast that the world economy will continue to grow, but that Latin America's growth will slow down.

The report projected that economic growth in the region will drop to 4.9 percent this year from 5.5 percent in 2006. Venezuela's growth, which was 10.3 percent last year, is projected to drop to 6.2 percent in 2007, and inflation was predicted to be 21.6 percent.

But Cabezas questioned the motives of the International Monetary Fund, saying that they continuously register low growth rates for Venezuela. In 2005, the IMF predicted a 1.1 percent growth rate for Venezuela, when the real actual growth rate ended at 10.3 percent. In 2006 the IMF said 3.8 percent, when Venezuela actually grew 10.2 percent.

"The IMF hasn't realized that we have 14 quarters, almost 4 years, of sustained growth," said Cabezas, "something that hasn't been achieved in Venezuela since 26 years ago." Cabezas assured that the growth rate for 2007 would be above 7 percent, and could pass 8 percent. The government's goal for inflation is 12 percent.

President of Argentina Nestor Kirchner also responded to the IMF report, rejecting their recommendations. Although the report indicated that Argentina would have the highest growth in the region, Kirchner rejected the suggestions given by IMF director Rodrigo Rato. "He can no longer tell us what we have to do," he said. "We already saw what happened to us when he told us what we had to do."

The President of Ecuador, Rafael Correa, also spoke out against the IMF this week. On Wednesday, he stated that the new Bank of the South, a regional fund being created with the joint efforts of Venezuela, Ecuador and Argentina, would end the region’s subjection to the control of the IMF and World Bank.

"They want to put us on our knees so that the IMF and the World Bank will give us funding," said Correa. "That is the new way of subduing countries. Now they don't need aircraft carriers or bombers, only dollars."

The IMF also recommended that Latin America further open their economies, and create a better environment for investment. According to IMF director Rodrigo Rato, Latin America's growth is behind that of other regions "because their markets are not open or competitive enough."

In what appears to be a veiled call for privatizations, the fund says that the nations of the region should also reduce the role of state-owned companies in the economy. This goes directly against the politics of the Chávez government, which has drastically increased state participation in the economy. Also, Venezuela should control their public spending which has grown "exceptionally fast," they said.

Venezuelan Finance Minister Cabezas responded by saying "the experience of the last three years should demonstrate to the IMF that the problem is not the amount of spending, but the quality of spending."

Cabezas also pointed out that the IMF "ignores" that the percent of homes in Venezuela in conditions of poverty has dropped from 25 percent in 2003 to 9.1 percent in 2006. They also "ignore" that the minimum wage in Venezuela is US$ 238 per month, the highest in Latin America after Chile, and even higher than Chile if food supplements are included, he said.

According to Cabezas, the IMF's calculations are "not technical, nor economic, but political, and they have the intention of discrediting our model."

See also: New Report Raises Doubts about IMF Growth Projections on Venezuela and Argentina

Doubts about IMF Growth Projections

New Report Raises Doubts about IMF Growth Projections on Venezuela and Argentina
Friday, Apr 06, 2007
By: Center for Economic and Policy Research

Washington, DC: On the eve of the IMF/World Bank Spring Meetings, a new paper from the Center for Economic and Policy Research raises serious concerns about IMF projections for Argentina's GDP growth since 1999 and Venezuela's since 2003.

"It's hard to look at the pattern of these large, repeated errors — especially for Argentina — and not wonder what went wrong," said economist Mark Weisbrot, CEPR co-director and co-author of the paper with David Rosnick.

Weisbrot recommended that the IMF address this problem at their Spring Meetings this month. "It raises questions regarding the reliability and objectivity of the IMF's growth projections," he said.

The report, Political Forecasting? The IMF's Flawed Growth Projections For Argentina and Venezuela, shows that the IMF consistently made large errors in overestimating Argentina's GDP growth for the years 2000, 2001 and 2002. This was during the country's 1998-2002 depression, when the IMF was lending billions of dollars to support policies that ultimately ended in an economic collapse.

These overestimates then changed to large underestimates for the four years 2003-2006, as Argentina's economy grew rapidly. During this time, the IMF had an increasingly antagonistic relationship with the Argentine government and opposed a number of its economic policies. In April 2003, the IMF's Director of Research called Argentina's growth "a hiatus at the moment from its long economic fall."

Argentina has now completed a five-year economic expansion with the fastest growth in the Western Hemisphere, with real GDP growth of 47 percent.

The paper looks at the record of IMF public documents and finds evidence that faulty economic analysis and political considerations may have contributed to these errors. Similarly, the authors suggest that the IMF's repeated large errors in underestimating Venezuela's GDP growth for the years since 2004 may be related to its apparent dislike for that government.

According to the report, with regard to Venezuela, "IMF projections for the years 2004, 2005, and 2006 underestimated GDP growth by 10.6, 6.8, and 5.8 percentage points respectively."

Sunday, April 15, 2007

Economist: "Colombia's Uribe running into problems"


The perils of “parapolitics”

From The Economist print edition

After four years in which he transformed his country, Álvaro Uribe is running into problems. Some of them are symptoms of success.


ON THE outskirts of María la Baja, a nondescript town on Colombia's swelteringly hot Caribbean coast, the road is lined with palm-thatched mud huts. They are the new homes of some 7,000 people displaced by violence from their small farms in the nearby hills. They say that their problems began when the guerrillas of the Revolutionary Armed Forces of Colombia (FARC) appeared in the hills in 2000, stealing their cattle. Matters deteriorated further when right-wing paramilitaries began to kill people whom they thought were guerrillas and forced others to sell or yield their land at gunpoint.

But in the past couple of years “things have improved a lot,” says Carlos Ortiz, one of their leaders. The reason: on July 14th 2005, the local paramilitary group handed over its weapons and disbanded under a peace agreement with the government of President Álvaro Uribe in which some 30,000 of the militiamen have demobilised across the country. As part of Mr Uribe's security build-up, marines have set up a base on the edge of the town, while police patrol the main road north to the port of Cartagena.

“We go back to our farms by day now,” says Julio César Azeredo, another of the displaced. But, he adds, “it's not safe to stay at night.” If this corner of northern Colombia is no longer marked by the bloody massacres of a few years ago, its new-found peace is fragile. “The people have lost confidence in everyone, they don't trust any authority,” says Giuseppe Svafrena, an Italian Catholic priest who is helping them.

Fragile it may be, but the improvement in security in places like María la Baja is real enough. On the strength of it, Mr Uribe secured a second four-year term with a landslide 62% of the vote in an election last May. But his second term is proving to be more complicated than his first.

Mr Uribe faces two immediate problems. One involves the future of the former paramilitaries, and the risk that many return to violent crime. The other involves their past: the government has been rocked by a series of revelations of links between politicians, officials and the paramilitaries. Those revelations (dubbed “parapolitics”) risk doing serious damage to Mr Uribe's standing abroad, and especially in the United States. But for most Colombians the more pressing issue is consolidating the gains in security. In opinion polls some 70% of respondents continue to support Mr Uribe, despite the parapolitics scandal. To understand why requires some recent history.

During the 1980s and 1990s, the left-wing guerrillas of the FARC and its smaller rival, the ELN, grew steadily, reaching a peak of almost 20,000 troops. Their expansion owed much to money from drugs, kidnapping and extortion. They were also helped by Colombia's impossible geography and relatively weak state. The flip side of a long democratic tradition has been that Colombia's politicians never allowed the army to become strong.

In response, some army commanders and landowners formed paramilitary militias (known as “self-defence” groups) to fight the guerrillas. Yet some of these were quickly taken over by drug-traffickers and many imposed a reign of terror equal to or worse than that of the guerrillas. Colombia began to look like a failed state. That prompted Andrés Pastrana, Mr Uribe's predecessor, to start to strengthen the security forces and to seek American aid.

Mr Uribe was elected on a pledge to get tough after the FARC had shown no interest in peace in three years of talks with Mr Pastrana. He has expanded the security forces by a third, adding 60,000 troops and 30,000 extra police. He placed permanent police detachments in 150 municipalities (out of a total of 1,080) that lacked them. He created a new force of 20,000 part-time “popular soldiers” for local guard duties. Six new mountain battalions occupied the high Andean massifs which had served as corridors and refuges for the FARC. He turned the army into an offensive force, with nine new mobile brigades.

All this changed the course of the war. The FARC were driven from central Colombia, from the populated triangle marked by its three main cities, Bogotá, Medellín and Cali. For the first time in years, Colombians can drive between most of the country's cities without risk of kidnap or hold-up. Partly as a result, the economy has rebounded as businesses from oil companies to manufacturers ramp up investment (see chart). “My administration began the process of taking back the country,” Mr Uribe says.

This security build-up and Mr Uribe's reputation as an implacable foe of the guerrillas enabled his government to persuade the paramilitaries, grouped in the United Self-Defence Forces of Colombia (AUC), to disarm. They did so under a controversial Justice and Peace Law. This stipulates that those accused of massacres or other barbarous acts can benefit from a reduced sentence (of no more than eight years) if they confess and surrender illegally obtained assets. The biggest incentive is that the government will not extradite them to face drugs charges in the United States as long as they co-operate.

This peace process has been highly controversial. One set of criticisms concerns its terms and another its implementation. Many human-rights groups, the paramilitaries' victims and much of the opposition considered the law too lenient and its application too lax. So did the Constitutional Court, which stiffened the law.

Only last August were the top leaders jailed pending court hearings. Rafael Pardo, a Liberal senator who broke with the president over the law, says that he thinks the paramilitaries have demobilised their counter-insurgency apparatus and moved out of drugs to avoid extradition but are moving, unchecked, into other crime rackets.

Double standards

Mr Uribe's defenders argue that Colombia is doing something which no other country has managed. “It's a peace process with an undefeated military group in which justice is being applied with no amnesty,” says Eduardo Pizarro, who heads the government's reconciliation commission. Mr Uribe accuses his critics of double standards, since they never complained about (and some benefited from) past peace talks with guerrillas in which total amnesties were offered.

But the process is certainly a messy one. The attorney-general's office—a branch of the judiciary rather than the executive in Colombia—has been swamped. A special unit of 35 attorneys has been set up, but it needs more staff and resources. Some 25,000 people have registered as victims of the paramilitaries. Mario Iguarán, the attorney-general, says that charges may eventually be brought against up to 400 of the leaders; he hopes to begin cases against 57 jailed chiefs this year.

The government's scheme to integrate the former paramilitaries into civilian life has been flawed. They receive a monthly stipend of up to 358,000 pesos ($162), but two-thirds of them have yet to receive promised training and only two-fifths have jobs. The government did the demobilisations “with a system which was only just being created and the system collapsed,” says Frank Pearl, whom Mr Uribe recruited from the private sector last year to sort out the programme.

The big fear is that many will return to violence. The best estimates are that between 2,500 and 3,600 have joined “second-generation” paramilitary groups. But officials say that some of these are drug-trafficking outfits or purely criminal bands.

For all its flaws, Colombia's peace process has quickly acquired a momentum of its own. One of the strongest signs of that is the parapolitics scandal. This began when police arrested a paramilitary leader who had failed to rendezvous in a designated area, confiscating his computer. This contained a treasure trove of information concerning the political contacts of the paramilitaries, who once boasted that they controlled a third of Colombia's Congress.

The revelations are an embarrassment to Mr Uribe. The ten politicians (nine legislators and a provincial governor) so far arrested, all from the north coast, belong to parties that support him. But most of the allegations against them date from 2002, when they backed the official Liberal candidate against Mr Uribe, who ran as an independent. More damaging is the arrest of Jorge Noguera, whom the president named to head the intelligence service.

Mr Uribe's critics have seized on all this to argue that the president is in cahoots with the paramilitaries. But there is no evidence. The president counters that he has supported judicial investigations and full confessions by the paramilitaries. “The country needs to know in depth the realise what is the future we need: a country of institutions, without guerrillas, paramilitaries, drug-traffickers and corruption,” he said in an interview with The Economist. If Mr Noguera is found guilty, Mr Uribe promises to apologise.

That the parapolitics investigations have got so far is in part a result of greater security. “Witnesses are coming forward because they do not have to fear,” says Mr Iguarán. “Who would have dared before to go to the district attorney or the judge and declare that the chief of the AUC was in league with the government, the mayor or a congressman? It's an unanticipated consequence of the Justice and Peace Law.”

It also shows how widespread penetration of politics and government by the paramilitaries was. Officials are quietly attempting a similar clean-up of the armed forces. A decorated colonel was charged before the civilian courts last year after subordinates said that he passed off murdered civilians as dead guerrillas. The defence minister, Juan Manuel Santos, is easing out other officers and working on reforms of military training. He says that control of territory, rather than bodycount, will henceforth be the army's performance criterion.

Colombia is only at the beginning of a long and difficult road to peace. Cleaning up the army is a necessary condition for vanquishing the paramilitaries completely, argues Alejandro Reyes, a sociologist at Bogotá's Rosario university. “Otherwise the civilian population won't collaborate with the security forces.”

Such collaboration is vital. The FARC are diminished but unbeaten. They think history is going their way: Hugo Chávez in Venezuela has expressed sympathy for them in the past; so has Rafael Correa, Ecuador's new president. It will take more fighting to persuade them to negotiate, let alone submit to the Justice and Peace Law.

And parapolitics risks weakening Mr Uribe's grip on Congress. A tax reform that would have raised government revenues has been watered down. The government did manage to renew a wealth tax which should provide $4 billion over the next four years. That money will go into more helicopters, and surveillance gear to try to track down the FARC leadership.

The other task is to achieve lasting security in places like María la Baja. There Pedro Vásquez, a former policeman who spent seven years as a paramilitary leader, says that townspeople still come to him to complain of crimes and extortion “because they don't trust the police”. Some of his former troops want to return to action, something he doesn't want to do.

Carlos Gaviria of the centre-left Democratic Pole, Mr Uribe's defeated opponent in last year's election, says more is needed than just the presence of the army. The state should be present, too, with “schools, hospitals and job-creation”.

Colombia's peace process has hitherto relied on the driving will of the president, a workaholic whose face is grey with permanent fatigue. Lacking are teamwork and institutions. Luis Alfonso Hoyos, who heads the president's social-development agency, points proudly to a situation-room next to his office where representatives from 13 ministries co-ordinate policy and action. But that is in Bogotá, a long way from places like María la Baja.

Peru: "President's popularity soars"

President's approval rating soars to over 60%
Garcia, known to have the 'gift of gab' boasts of a 61.4% approval rating.

© Andina
(LIP-jl) -- So far so good. Peruvian President Alan Garcia, considered to have been one of the worst leaders in Peruvian history due to the chaos in which he left the country after his first term (1985-1990), appears to have reinvented himself among the Peruvian population.

The latest survey released by the University of Lima's Public Opinion Group indicated that the Peruvian leader boasts of a very healthy 61.4% approval rating.

However not all was perfect for the APRA political party leader as the survey, which was administrated in the Lima-Callao metropolitan area, also revealed a 30% disapproval rating.

The survey also highlighted other key figures in Peru's often eventful political arena.

Lima city mayor Luis Castañeda has maintained his astronomically high approval rating of 89.3%, despite news that a congressional committee will begin an audit on the financial makeup of large projects conducted under the mayor's administration. Allegations have surfaced suggesting projects, such as the Via Expresa Grau, were grossly overcharged to the Peruvian government.
Peru's most popular politician: Lima Mayor Luis "Lucho" Castañeda enjoys an approval just shy of the 90% mark.

© Andina
Peruvian opposition leader Ollanta Humala received a low approval rating of 15.2%, however that was not interpreted as much of a surprise since Humala's stronghold lies outside of the Peruvian capital.

Other political figures highlighted by the survey: Prime Minister Jorge Del Castillo (44.5% approval/42.6 disapproval), Parliamentary President Mercedes Cabanillas (60.6% approval/30.9% disapproval), former presidential candidate Lourdes Flores (46.6% approval/41.8% disapproval), and former Peruvian President Alejandro Toledo, who received a whopping 72.5% disapproval rating.

Peru: "Coca farmers renew protests"

Coca farmers renew protests against government, block roads

Tocache coca farmers are back at it again.

© La Republica
(LIP-jl) -- They are back at it again. Not surprisingly, coca farmers from one of Peru's largest coca growing regions started protests in the wake of the Peruvian government's relaunching of its forced coca plant eradication program.

Showing there discontent with federal government's eradication efforts, coca farmers from Tocache Province (department of San Martin) blocked a 400 meter stretch of the Fernando Belaunde Terry Highway, near the district of Nuevo Progreso, with boulders, logs, and dirt.

"The group of protesters is quite large and their manifestation is seriously impeding traffic from continuing through to their destinations," stated a police officer.

According to law enforcement authorities from the Nuevo Progreso Police Station, the protest began yesterday morning at 8 a.m. and lasted until the afternoon after heavy rain caused much of the protesters to seek cover.

The highway is the main artery which connects the central jungle cities of Tocache with Juanjui, Tarapoto, and Tingo Maria.

Just last month, striking Tocache coca farmers met with government officials to help protect them from forced eradication operations.

After meeting with Peru's Agricultural Minister both parties came to an agreement.

However, just last week Peruvian President Alan Garcia strengthened his position against Peru's war on drugs and called for a dramatic increase in anti-drug operations.

Peru: "President orders 'bombings' of illicit coca"

Peru | 2 April, 2007 [ 18:08 ]
Peru's Alan Garcia has taken a hard stance against the country's drug trade.

© Andina
(LIP-jl) -- "The Peruvian government will not give up nor budge an inch against threats versus the expansion of illicit coca plant cultivations," declared Peruvian President Alan Garcia at the inauguration of the II Inter-American Forum on Security and Human Coexistence.

Garcia's anti-drug rhetoric was highlighted by his call to "bomb" and "gun down" all narcotics maceration wells and clandestine airports used to produce and transport illegal drugs out of the Peruvian jungle.

"If we don't kill off the danger of expanding narcotics operations immediately, then Peru may very well face insurgency problems as large as what is happening in Colombia," Garcia affirmed.

"Use A37 attack planes, bomb and gun down airports and maceration wells. And at the same time, take out the benefactor, the drug baron," emphasized the Peruvian leader.

He indicated that the Peruvian government cannot budge an inch on their anti-drug measure, otherwise, "the international community will put us on the 'black list' of global drug suppliers."

Garcia added, "I am positive that we can identify which coca farms are cultivated for traditional purposes and which are produced for criminal purposes."

| digg it!

Peru: Country Forecast

Mar 7th 2007
From the Economist Intelligence Unit
Source: Country Forecast

The president, Alan Garcia of the centre-left Partido Aprista Peruano (Apra), will continue to enjoy a comfortable level of popular support. Having gained the backing of the country’s business sector, unlike in his ruinous first term as president (1985-90), Mr Garcia will continue to implement the investor-friendly policies of the past decade. Mr Garcia has inherited a strong economy and is fortunate to be in power at a time of record-high mineral prices. The extra revenue provided by strong economic growth will provide scope for him to implement his social policies, but will also raise expectations. With over half of the population living in poverty, Mr Garcia will, within the constraints of maintaining hard-won fiscal stability, attempt to reduce inequalities by boosting public investment in basic infrastructure, such as water connections, sanitation and road construction. Economic growth will be driven by investment related to the Camisea natural-gas project, as well as by growing exports of minerals, textiles and agricultural produce. Vigilant monetary policy and a stable currency will help to keep inflation anchored around the 2% Central Bank target. The current-account surplus will narrow in 2007-08, as softening commodity prices contribute to an erosion of the trade surplus.

Key changes from last update

Political outlook

The Garcia administration suffered its first major setback in February with the resignation of the interior minister, Pilar Mazzetti, after a controversy stemming from the purchase of police vehicles at inflated prices. An Apra congressman, Luis Alva Castro, will replace her in the post.

Economic policy outlook

In February Peru swapped and bought back US$2.3bn of old Brady bonds and a global 2012 paper as part of its debt management strategy.

Economic forecast

After revising up the Economist Intelligence Unit’s forecasts for private consumption and fixed investment, we expect GDP growth to reach 6.8% in 2007.

Saturday, April 14, 2007

Oxfam: "Spread of Free Trade Agreements threatens poor countries"

Oxfam Press Release – 20 March 2007

Rich countries are using regional and bilateral trade deals to attain concessions they cannot get at the World Trade Organization (WTO), with serious implications for poor countries’ development, says a new report published by Oxfam today.

Twenty-five developing countries have now signed free trade deals with developed countries, with more under negotiation, according to the report, Signing Away the Future. In total, there are more than 250 regional or bilateral trade agreements in force, governing 30% of world trade.

“Trade is important for growth but these agreements are bad for development. They require enormous irreversible concessions from developing countries and almost nothing in return from rich countries,” said Celine Charveriat, head of Oxfam’s Make Trade Fair Campaign.

“These deals demand much faster liberalisation and stricter intellectual property rules than the WTO. They strip developing countries of the right to govern their economies and threaten their abilities to protect their poorest people and lift them out of poverty,” she added.

The report highlights a number of ways in which free trade deals can be harmful:

  • Investment rules in free trade agreements and bilateral investment treaties deny governments the right to protect workers, the environment and the economy, and can expose them to compensation claims that reach billions

  • Stricter intellectual property provisions threaten to deny poor people access to affordable medicines, undermine traditional farming methods, and remove rights to traditional knowledge

  • Harsh tariff liberalisation threatens farmers’ livelihoods and will impede future economic development

  • The web of different agreements undermines multilateralism and diverts trade.

The implications for development are significant. In the first ten years after the NAFTA agreement, Mexico lost 1.3 million agricultural jobs. Manufacturing jobs were initially created but competition from cheap labour in China led to 200,000 job losses between 2001-4 as firms relocated. In Peru, up to 900,000 people could be left without access to medicines if the US-Peru trade agreement goes ahead.

Meanwhile, a study commissioned by the EU has predicted that a proposed Economic Partnership Agreement with West Africa will lead to import surges of over 15% on key commodities, such as onions, potatoes, beef and poultry, which will devastate the rural sector.

Charveriat: “Poor countries are being pressured to open their markets dramatically through free trade agreements, but developed countries do not even have to touch their massive agricultural subsidies that lead to overproduction and dumping. It is hugely unjust.”

The report recommends that all trade rules, whether multilateral, regional or bilateral:

  1. Recognize that developing countries need special and differential treatment

  2. Allow developing countries to adopt flexible intellectual property legislation

  3. Exclude essential services, such as health, from liberalization commitments
  4. Recognize the right of governments to regulate foreign investors

  5. Ensure participation of civil society and other actors in the negotiating process.
For more information, please contact:
Amy Barry on +44 (0)1865 47231, or +44 (0)798066439,

© 2007 Oxfam International all rights reserved.

Reuters: "Ecuador's poor majority back referendum"

Ecuador's poor majority backs Correa's referendum
By Alonso Soto
8:02 a.m. April 12, 2007

QUITO – In Ecuador's shantytowns, where stray dogs rifle through garbage and mud-caked children in torn clothes play soccer on dirt tracks, supporting the president's constitutional reform plans is a way to hit back at the old elite. Polls predict Ecuadoreans will Sunday overwhelmingly back a proposal by leftist President Rafael Correa to set up an assembly to rewrite the constitution, a move that could curb the powers of a Congress widely seen as self-serving.

“He is going to change things in this country, because he can outsmart all those corrupt politicians,” said truck-driver Manuel Ordonez, 45, in Quito's crime-ridden slum of Pisuli.

“The assembly will bring the change we need,” he said, perched on the roof of his dingy one-room home where his mother was boiling a corn-cob for dinner.

Correa, who took office in January, says the proposed assembly could cut the influence of congressmen in the Andean nation's judiciary and state companies, and force them to live in the poor constituencies they represent.

In Pisuli, which clings to a bleak hillside overlooking a glitzy residential district, many are unsure what the new assembly would do but back it as the brainchild of the dashing, charismatic Correa. “I see hope in him, hope we never had,” said Gloria Sanchez, 57, a tiny mother of five who collects scrap metal for a living. “I really don't know what a new assembly can do, but we need change. I trust Correa,” she added, impervious to a chill, misty drizzle soaking the world's second-highest capital.

Although a Cedatos-Gallup poll found 63 percent of voters in the world's top banana exporter would back the new assembly, 98 percent did not fully understand what powers it would have.

If Ecuadoreans vote “yes” Sunday, there will be an election for assembly members later this year, most likely in September or October.


Correa, an ally of Venezuelan President Hugo Chavez, has ruffled Wall Street with his vows to renegotiate oil deals and the national debt.

But while the opposition warns in television campaigns that Correa is turning into a dictator and centering power around himself like Chavez, poncho-clad Indians have marched through poor mountain hamlets with placards saying “Vote Yes”.

“Correa is the new outsider who battles the establishment and that has made him very attractive for Ecuadoreans,” said Carlos Cordova, a pollster with Cedatos-Gallup.

“People identify with him and he is still enjoying his honeymoon after only three months on the job. His popularity is fueling support for the assembly in Sunday's referendum.” But analysts warn that Correa could run into trouble if old foes such as former President Lucio Gutierrez, who was ousted in 2005 amid street protests and turmoil in Congress, get a strong foothold in the assembly, or if powerful Indian groups feel sidelined.

Ecuadorean politics are extremely volatile and Correa is the eighth president in a decade. Even the decision to hold the referendum sparked a bitter dispute in which lawmakers were fired and fought with the police.

Three presidents have been ousted by congressional and popular unrest in the last 10 years.

Michael Shifter, a Latin America analyst at the Inter-American Dialogue think-tank, said playing the populist card might not end Ecuador's hair-trigger volatility as Correa wants.

“I'm not sure the constituent assembly is the solution to Ecuador's fragmentation, particularity for the way Correa antagonizes the political forces,” he said.

“Correa's confrontational style may play well politically but not solve the country's instability.”

VOA: Ecuador Referendum May Bring Sweeping Government Changes"

By Brian Wagner
13 April 2007

Wagner report (Real) - Download 519k audio clipWagner report (Real) - Download 519k
Listen to Wagner report (Real) audio clip Listen to Wagner report (Real)

Voters in Ecuador are to cast ballots Sunday on whether to create a constituent assembly to write a new constitution for the Andean nation. In Miami, VOA's Brian Wagner reports approval of the referendum is essential to the new government of President Rafael Correa, who has promised sweeping political changes.

President Rafael Correa delivers a speech from the balcony of the Government Palace in Quito, 28 Mar 2007
<—President Rafael Correa delivers a speech from the balcony of the Government Palace in Quito, 28 Mar 2007

Ecuador's president, Rafael Correa, has been promoting the constitutional referendum as a way to end decades of corruption and government inefficiency.

He hopes the process will restructure the congress and end the dominance of existing political parties, blamed for recent government instability. Correa also wants to strengthen the role of the presidency to renegotiate what he says are unfair deals with international creditors and foreign oil companies.

Sunday, voters will have a chance to decide whether to embark on the president's sweeping reform process, explains Terry McCoy, political science professor at the University of Florida.

"I think he's got pretty big ambitions and plans in mind. He'd like to completely remake the Ecuadorian political system," he said. "I think most people would agree that's a good thing, because it's highly dysfunctional and institutionally weak."

Critics say constant battles between Ecuador's political parties have prevented lawmakers and officials from tackling key problems in recent years, such as poverty and the distribution of oil wealth.

Shelley McConnell, senior associate director of the Americas program at the Carter Center, says rewriting the constitution may help break with the past.

"You have an opportunity for consensus building around a national agenda and a new set of structures," she said. "But it's also a risky moment, because we're talking about the distribution of political power and resources, and those are hard fought things."

Already Mr. Correa has fought several political battles with parties opposed to the referendum. Earlier this year, opposition lawmakers moved to impeach him over the proposed vote, sparking a dispute that led to the firing of 57 opposition legislators.

Polls show the referendum is likely to win approval on Sunday, mainly because of public dissatisfaction with Ecuador's political parties and recent instability - it has had eight presidents in the past 10 years.

Mr. Correa has sought to distance himself from existing parties and portray himself as a relative newcomer to politics. Raul Madrid, associate professor of government at the University of Texas at Austin, says it may be unrealistic to replace the nation's entire political structure.

"There are lots of problems in the country. What we don't know is to what degree these changes will solve those problems, or will they simply impose a new system of corrupt, inefficient elites," he said.

One of Mr. Correa's biggest political allies comes from outside the country: Venezuela's President Hugo Chavez. Mr. Correa has said he is close friends with the leftist Venezuelan leader, but he does not subscribe to his program of socialist reforms.

Hugo ChavezHugo Chavez —>

Since taking office in Venezuela in 1999, Mr. Chavez oversaw the writing of a new constitution for his country and has called for other reforms that are similar to those being considered in Ecuador.

Madrid says that Mr. Chavez has become a model for leftist leaders, including Mr. Correa and Bolivia's President Evo Morales.

"Chavez is viewed by Morales and Correa as being fairly effective in his ability to get done what he wants to get done, and I think they're copying his methods," he said.

Bolivia has elected a constitutional assembly to write a new government charter, and officials in Nicaragua also have proposed the idea. Shelley McConnell of the Carter Center says there is a clear trend in the region.

"I think the demands for change are genuinely domestic to the countries where they are taking place," she said. "There is a broad debate about what democracy should look like."

If Ecuadorian voters approve the referendum on Sunday, a constituent assembly will be selected and installed by October. The assembly then will have at least six months to draft a new government charter, which voters then would have a chance to approve or reject in a new ballot.