February 22, 2007  Rafael Correa is leading Ecuador off a cliff and right in to the waiting arms of Hugo Chavez’s crime capitol. Every step that Correa has made to date appears as if it is fully coordinated with the Bolivarian coordinators now overseeing Rafael Correa’s intentions, whatever they are at the moment. To Hugo Chavez, Karl Marx’s Das Capital now means capital flows for his capitol of crime. Indeed, this is the new perversion of socialism as enabling criminals. Chavez’s capital is a capital crime scene in his new capitol.

Today, the Latin Business Chronicle notes that next to its state petroleum industry, the only thing growing in Venezuela today is systemic corruption and crime: hard crime. Murder, rape and kidnapping: the kind of crime that is always found in a failed state under an authoritarian fist. And that is the data that is partially permitted in to the public arena. As with much, if not most, Venezuelan information, all data and information is, like its Cuban misinformation specialists remind, always manipulated and never reliable.

To explain this, the article notes, “’A number of international criminal groups are moving ... there with a certain impunity in addition to general public insecurity and kidnappings increasing dramatically,’ says Frank Holder, founder of Holder International and a senior managing director of FTI Consulting.” Criminal groups operate inside a state with impunity only because that government self-enriches and partners with the crime cartels whose sole purpose is enrichment by manipulating the state, reducing the state to its pawn. Chavez has encouraged this. It is the real take-over of Venezuela and does now color the entire Andean region. It is the politics of crime and hatred and Chavez’s political murder spree is underway. Ecuador, like Bolivia, are currently engineering their own self-inflicted demise in to a Chavez-style criminal cartel for communist and Hezbollah style actors of dramatic proportions.

To understand Hugo Chavez’s crime spree is to understand the profound rejection in Venezuela and many Andean nations of every one of democracy’s tenants: free speech and media, rule of law, transparency and economic liberty by increased statism (sometimes known as state kleptocracy) and  the removal of sustained trade and employment.  Following the 1990s Latin economic meltdowns in most every Latin nation except Chile (thanks to its hot money shock averting Toobin Tax), the real reform work over the last fifteen years lost momentum in every Andean nation except Colombia under Uribe and even then it must be noted that his job is far from over. Support and funds for much needed democracy sustaining reforms were diverted or perverted  for so-called civil society political agendas such as encouraging abortion, transgender rights, and what one US AID contractor in Ecuador (currently active in Ascuncion, Paraguay) trumpeted as its open to the public classes for more effective protesting skills.

Their contract deceptively claimed these courses were part of “rule of law” reforms. While no known Andean nation does not know HOW to effectively protest, this aberration of misguided and misspent Ecuadorean and U.S. tax dollars is but one small example of Andean and U.S. “democracy monies” gone wilding and running amuck with no known adult supervision in Latin America. Not one serious effort to promote democracy’s core and stem real crime is underway outside Colombia although Mexico is making significant strides. Every single activity in most Latin nations to ostensibly support democracy building is colored under hidden agendas which actually turn away from functional democracy. It is its own perversion. In fact, the vacuum of functional democracy supports created during the Clinton years opened the door for foreign and homegrown cartels. A lack of transparency and law and order under Kangaroo courts and authoritarian governments always lead to dysfunction, failed economise, and increased crime.

The upcoming so-called constitutional reforms in most Andean nations will deliver structural backbone to enable the communist structures overwhelming the destabilized Latin nations. By refusing to actually support structural democracy, Latin nations will now get precisely what they started: non functioning nations under the false guise that human rights and kangaroo governments for the communist state is paramount. This is a ruse of startling- and expensive- proportions. The cancer of these criminals- who have no regard for any basic human rights whatsoever- has spread and now colors the entire Andean region while the U.S. and the EU has abandoned any functional team work in South America. To be sure, all state held oil revenues remain an open wallet, unaccounted for and literally off the books for useful purposes.

The 2-21-07 Goldman Sachs’ Emerging Market Daily Economic Comment noted that “President Correa also stated that the new assembly will have no limits regarding its scope of action (full legislative powers) and should decide what to do with the current Congress (hinting that it could be dismissed).

Business Associations Still Pressing for Trade Agreement with US

Business associations continue to press the government to negotiate a free trade agreement with the United States to substitute for the ATPDEA benefits.

However, the government is still ideologically opposed to negotiate such an agreement despite the fact that Colombia and Peru managed to negotiate similar deals in 2006.”

It is clear that Rafael Correa’s seemingly unending efforts to destabilize Ecuador and transform that nation in to an unstable zone proceeds while still yet no adults are active as the willfully unconstitutional Correa-agenda rolls forward. Rafael Correa states that he alone defends “the people” when in fact “the people” of Ecuador are neither represented nor defended whatsoever in his sandbox of adolescent agendas based on uneducated prejudice and foolish, NGO-style hate-filled presuppositions. The politics of hatred have risen, like a bad yeast, to fill the void left by Ecuador’s own failure to insert functional democracy, which today stands to be utterly wiped off the map. There is nothing positive at all to report out of Ecuador and no sane person would applaud the daily manipulations by the current regime.

Walter Molano in the 2-20-07 Latin Business Chronicle (below) provides an excellent overview on U.S.-Latin relations which do not amount to much since around 1997. As the Goldman Sachs and Molano pieces state, Ecuadoreans do want a full free trade deal with North America as Peru, Chile, Colombia, Panama, Mexico, and the Central American nations intend to further. Molano notes that Correa’s regime will “recuse” itself from the FTA agreements and will repeat its falsity that the “people” do not want jobs and a future which can only be had under a full FTA and cannot be found from Chavez’s hand outs, as is the Correa plan. There is only one reason that Correa will reject the FTA: he, besides being chock full of irrational hatred for all things North American or legitimate, refuses to concur and support the two important provisions of the free trade accords: respect for rule of law viz. the Intellectual Property Rights (IPR) and the Bi-Lateral Investment Treaties (BIT), such as is already in place in Ecuador but utterly disregarded by the aberrant Correa. Correa intends to convert Ecuador in to a lawless, irresponsible zone which does business only with the global criminal underbelly of his Hugo Chavez-backed politburo. Correa, instead of acting legitimately and responsibly to further Ecuadorean job growth, standard of living and quality if life, will perversely and unconstitutionally subvert Ecuador in to a land of huge unemployment, daily fright, and economic unsurety of profound and shocking proportions unless he resigns promptly or is impeached, as he should be for a growing list of lies already on the table.  While Ecuador’s increased and completely engineered instability may benefit Correa’s off the books arbitrage profiteers, in no way do his acts benefit his own people who are watching him daily turn his back to them in preference for his adolescent hedge fund managers, sometimes called NGO groups and his advisors, who self enrich from his wild eyed machinations.

Today, any deal with Hugo Chavez is a deal with a dictator and a criminal cartel. Rafael Correa knows this and has stated that he intends to join fully with Chavez’s intentions. The Congress of Ecuador and its citizens are locked inside a situation which can only be remedied with full due diligence, exposure of the facts, application of what few constitutional remedies remain, and every Chavez-Correa money making scheme. Doing business with Chavez and his Banco del Sur is like doing business with a giant opaque monopolistic, manipulative state cartel. We can only wonder how long it will take before Ecuadoreans embrace the cartel crime world or reject Correa’s insistence on criminal behavior. Do not look to the regional NGOs to be of much assistance (currently seen at table with the Correa and Chavez golpistas in every sense- aiding and abetting the removal of constitutional democracy in Ecuador) or the local media who seem quite happy to ignore the fact that most every major, legitimate international media outlet has already pointed out the suicidal intentions of Rafael Correa’s ridiculous plans for Ecuador. It is past time for Ecuadoreans to stand up like adults and reclaim their nation from this gaggle of criminals and adolescents who have already wrecked ruin. It is time to bring back some adults whose silence has lately been deafening and irresponsibly vapid. A good place to begin would be to mimic Uribe’s stabilizing reforms in the economic growth zone now called Colombia. Correa today expends much of his time, in guided steps from his intimates across the anti-Plan Colombia ngo activist gaggle of badly informed and overpaid sycophants ( sometimes called his Cabinet and NGO advisors) in assaulting the phantom that Uribe’s Colombia is somehow his enemy. As we have noted before, Colombia is no enemy to any Latin nation, unless of course one intends, as Correa does intend, to make the best the enemy of the good.

- Pedro Camargo for ECrisis

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Latin Business Chronicle 2-20-07

Calvary to the Rescue

With flags furling and trumpets blaring, President Bush will ride into Latin America bearing treaties, money and arms.

BY WALTER T. MOLANO

The Bush Administration announced that Latin America was at forefront of its new foreign policy agenda. With its attention riveted on the Middle East, a power vacuum formed in the southern latitudes. Brazil should have stepped into the void, but it was preoccupied with its domestic issues. Lula is still licking the wounds from his re-election struggles. Itamaraty is also finalizing a new gas treaty with Bolivia. Unfortunately, the lack of regional leadership allowed a crop of rouge leaders to emerge. Led by Venezuela, several of the poorer countries in the region succumbed to the siren’s song of populism. The shift reached its zenith in 2006, during the regional presidential cycle. However, the pendulum turned when the electorates in Peru and Mexico finally rejected the leading populist candidates. Still, the threat persists. There is a good chance that Paraguay will soon join the ranks of Venezuela, Ecuador, Nicaragua and Bolivia. Fernando Lugo, a former Catholic bishop and a close ally of President Chavez, is gaining momentum, and he is the leading presidential contender in Paraguay. Given the growing prominence of rouge leaders and anti-American rhetoric, it was time for the U.S. cavalry to ride to the rescue.

REVITALIZED FREE TRADE INITIATIVE

With flags furling and trumpets blaring, President Bush will ride into the region bearing treaties, money and arms. Between March 8 and 14, the President will visit five Latin American countries -- Mexico, Brazil, Colombia, Guatemala and Uruguay. He hopes to bring along a revitalized free-trade initiative. Working groups, representing the new Democrat congressional majority, recently reviewed and amended the pending agreements, and they should be completed by the time the President travels. Although Ecuador will probably recuse itself from further negotiations, Peru, Colombia and Panama are anxious to complete the process. President Uribe wants to integrate Colombia with the U.S. through the free trade mechanism. Many Peruvians consider that a free trade agreement will force President Garcia to adhere to market-based economic policies, and President Torrijos sees the agreement as a way to heighten the role of Panama as one of the principal conduit into the U.S. mainland. The State Department is also putting the finishing touches on Plan Colombia II. The 2007 federal budget contained $586 million for bilateral assistance for Colombia. Of the total, $367 million will be for antinarcotics activities, $139.5 million for economic assistance and the balance for military equipment and training.

SUCCESS BREEDS INATTENTION

Although the Bush Administration can be faulted for its Middle East myopia, the improved economic climate in Latin America was the main reason why it fell out of sight. During the 1990’s Latin America was constantly battling balance of payments crises, requiring rescue programs, reviews and waivers. However, the rise of commodity prices at the start of the decade improved the region’s external dynamics, and it no longer warranted attention. Washington was all too happy to turn its gaze away. Nevertheless, the reduced presence in the region damaged U.S. interests. China and India made deep inroads into the region, increasing exports into Latin America, securing natural resource deposits and providing alternative sources of financing. Difficulties in gaining entry into the U.S. forced many Latin American students to look for alternate places to study, such as Europe, Australia or even Asia.  The dominance of North American culture is fading fast, with serious implications for U.S. manufacturers and service providers. Therefore, it is time for the U.S. to reassert its presence. Hopefully, Bush’s mission is a success, and it does not become a modern version of Custer’s Last Stand.

Walter Molano is head of research at BCP Securities.