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Monday Memo: U.S.-Cuba Talks — Colombia Peace Talks — Latin American Currencies — New Uruguayan President — Peruvian Ecotourism

March 2, 2015

by AQ Online

This week’s likely top stories:U.S.-Cuba talks promising; New delegation for FARC peace talks; Dollar strengthens against Latin American currencies; Tabaré Vázquez takes office; Peruvian businesses to learn from Costa Rican ecotourism.

U.S.-Cuba Normalization Talks Promising: After two rounds of talks—one in Havana last month and the second in Washington DC on Friday—the U.S. and Cuba announced that the re-opening of a U.S. embassy in Havana before the April 10-11 Summit of the Americas is not out of the question. While U.S. Assistant Secretary of State for Western Hemisphere Affairs Roberta Jacobson and her counterpart—Joséfina Vidal Ferreiro, the director for United States Affairs at the Ministry of Foreign Affairs of Cuba—agreed that the talks were productive, Cuba remains on the State Departments Sponsors of Terrorism list and the Cuban Interests Section in Washington DC remains unbanked. While not a precondition for further normalization, Vidal emphasized that the removal of Cuba from the terrorism list was a top priority. U.S. Secretary of State John Kerry emphasized that the terrorism list was an issue separate from the negotiations, and that the review of Cuba’s position on the list would go through Congress. In simultaneous addresses on December 17, U.S. President Barack Obama and Cuban President Raúl Castro announced the re-establishment of relations after Cuba released 65-year-old former U.S. Agency for International Development (USAID) contractor Alan Gross on humanitarian grounds and the U.S. released the three remaining “Cuban Five.”

Colombian President Announces New Delegation for FARC Peace Talks: Colombian President Juan Manuel Santos announced on Monday that a new delegation of negotiators will be sent to Havana, Cuba on Tuesday to join the ongoing peace talks with the Fuerzas Armadas Revolucionarias de Colombia (Revolutionary Armed Forces of Colombia—FARC). The emissaries—five active generals and one admiral of the Colombian Armed Forces—are joining the peace talks with the purpose of discussing a bilateral ceasefire. Santos also commented on the possibility of reaching a solution with the United States to not extradite FARC leaders, should an agreement ending the conflict be reached. Last week, former UN Secretary-General Kofi Annan attended the talks, declaring that any agreement must be just and meet international standards. “Transitional justice is an issue of concern and controversy,” he said. “However, I would like to emphasize that justice must fit the Colombian context—while respecting international minimum standards. No one shoe fits all.”

Dollar Strengthens Against Latin American Currencies: Several currencies in Latin America are at their lowest levels in years, due to the decline in commodity prices and the expansion of the U.S. economy. Higher U.S. interest rates are expected to drive funds out of riskier emerging markets, contributing to currency weakness in the region. This week, however, several currencies may make profits, with operators seeking to exchange them for dollars to avoid the risk of a currency relapse later in the year, in which the dollar may weaken. In Brazil, the real may decline to 3 reais per dollar this week, causing a further devaluation of the Brazilian currency as market players turn to the dollar. The Colombian peso may move from 2,480 to 2,600 pesos per dollar in the next few weeks. In Peru, the dollar is expected to continue strengthening against the Peruvian Nuevo Sol from 2.96 to between 3.090 and 3.105 Nuevos Soles per dollar. The Argentine peso will likely continue its slight decline to an official 8.77 pesos per dollar, but the informal market levels continue to stay at 13 pesos per dollar. Increased purchasing of dollars may continue the Latin American currency devaluation trend seen in the past five years.

Uruguayan President Tabaré Vázquez Takes Office: Uruguayan President Tabaré Vázquez was inaugurated on Sunday, taking over from 79-year old President José Mujica. Vázquez, a 75-year old oncologist who served as president from 2005-2010, represents the Frente Amplio (Broad Front—FA), a leftist coalition party. In his inauguration speech, Vázquez called for national unity, particularly regarding public education, health and housing. Vázquez will inherit a growing economy and historically low unemployment rates. This transfer of power marks 30 years of uninterrupted democracy in Uruguay since President Julio María Sanguinetti‘s 1985 election ended the country’s 12-year dictatorship. “I would like to earnestly greet the 30 years of uninterrupted democracy we enjoy in Uruguay,” said Vázquez.

Peruvian Businesses to Learn from Costa Rican Ecotourism Best Practices: Sixteen Peruvian businesses are attending the Seminario Internacional de Desarrollo y Gestión de Productos y Servicios Turístico Sostenible (International Seminar for Development and Management of Sustainable Tourism Products and Services) in Costa Rica from March 1-8 to learn best practices regarding ecotourism.  Participants in the week-long seminar, organized by La Asociación Costarricense de Profesionales en Turismo (Costa Rican Association of Tourism Professionals—Acoprot), will visit Costa Rican businesses that have successfully created sustainable products and business models. The Peruvian entrepreneurs will learn from tourist guides, sustainable companies and hotels, and will participate in site visits to parts of Costa Rica that have applied sustainable tourism methodologies—the Monteverde Cloud Forest and La Fortuna volcano. The seminar offers technical round tables, keynote speeches and workshops.

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Dictator Gives Millions to Rio Carnival Winner

February 20, 2015

by Flora Charner

Thousands of performers and eight elaborate floats from the Beija-Flor samba school paraded through Rio de Janeiro’s Sambadrome arena last Monday. The 80-minute spectacle, meant to take spectators on a tour of the African country of Equatorial Guinea, was chosen as this year’s winner after receiving a nearly perfect score in every category from the judges.

But underneath the peacock feathers and gyrating dancers, lurked the dark shadow of allegations that a large chunk of the parade was funded by one of Africa’s most oppressive dictators.

Teodoro Obiang Nguema Mbasogo, Equatorial Guinea’s 72 year-old leader, reportedly funneled  $10 million Brazilian reals (roughly $3.5 million dollars) into sponsoring Beija-Flor’s carnival parade theme. A big fan of Rio’s carnival, the dictator has attended the pre-lenten festivities for more than 10 years.

Considered to be one of the world’s wealthiest and most corrupt leaders, Obiang is accused of squandering Equatorial Guinea’s oil wealth and keeping the majority of its 700,000 citizens living in poverty. He has been in power for more than 35 years after leading a bloody coup against his uncle and former dictator Francisco Macias, whom he had executed by firing squad.

Although it is common for samba schools to accept money from companies or countries sponsoring parade themes—past parades have been accused of laundering drug money and being funded by an illegal gambling scheme called the jogo do bixo—no school has ever received such a large sum. While many are shocked by the decision to crown Beija-Flor, others believe politics should not taint their performance.

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Tags: Beija-Flor, Carnival, Teodoro Obiang Nguema Mbasogo

UNASUR and CAF Announce Plans for Latin American Fiber Optic Cable

February 11, 2015

by AQ Online

The Unión de Naciones Suramericanas (The Union of South American Nations—UNASUR) and the Banco de Desarrollo de América Latina (Latin American Development Bank—CAF) announced plans on Tuesday to develop the first fiber optic cable exclusively financed by Latin American institutions.

The creation of the proposed Red de Conectividad Suramericana para la Integración (South American Connectivity Network for Integration) could reduce South America’s reliance on foreign businesses for the infrastructure needed to connect to the Internet, subsequently lowering costs of access as well as increasing connectivity speeds.

UNASUR Secretary-General Ernesto Samper explained in a press conference in Montevideo, Uruguay, that Internet speed in South America is significantly slower than in other countries because of the challenges of broadband connectivity in the region, causing prices to surge up to 20 times higher than in developed countries.

There are an estimated 22.3 million Internet users in Latin America, accounting for 54.7 percent of the region’s population. Samper expressed concern about the digital divide in South America, stating that “one who is not connected is lost” and that Latin America “needs to generate value added processes and create autonomous communications highways to strengthen its independence and cyber defenses.” 

CAF has pledged an initial investment of 1.5 million dollars for the first phase of the project, which will involve an in-depth analysis of the current Internet technologies in each South American country to determine how they will incorporate existing cables into the future fiber optic grid. The vice president of CAF, Antonio Sosa, stated that the study would focus on demographics, technical issues and institutional framework in each country.

Tags: Internet and communication technology, UNASUR, CAF

Brazilian Authorities Question Workers’ Party Treasurer in Petrobras Scandal

February 6, 2015

by AQ Online

On Thursday morning, Brazilian police questioned the treasurer of Brazil’s governing Partido dos Trabalhadores (Workers’ Party—PT), João Vaccari Neto, in connection with the deepening corruption scandal that has engulfed the state-run oil company Petroleos Brasileiros SA (Brazilian Petroleum SA—Petrobras). Vaccari’s questioning came just a day after the oil giant’s chief executive, Maria das Graças Foster, and five other executives resigned in connection to the scandal. After the interrogation, Vaccari released a statement on the PT website. “All the questions asked by the police chief were clarified,” Vaccari declared. “I answered everything transparently, and with total candor and tranquility.”

Vaccari has been under suspicion for months, since a former Petrobras director, Paulo Roberto Costa—detained last March and now cooperating with authorities—alleged that Vaccari was the intermediary between corrupt elements of Petrobras and the PT. Another informer in the case, Pedro Barusco, has alleged that Vaccari had collected 200 million Brazilian reals (about $72 million) for the PT. “[Vaccari] never received cash payments as treasurer of the PT,” Vaccari’s lawyer is reported to have said. The PT has reportedly released a statement declaring that the party has only received legal donations, and that all donations have been registered with the country’s electoral authorities.

While formal charges have not been lodged against Vaccari, his questioning represents a further challenge for Brazilian President Dilma Rousseff, as opposition parties prepare to launch a congressional probe into the scandal. This morning, her government moved quickly to stanch the fallout from Wednesday’s crisis, naming Aldemir Bendine, the current president of the Banco do Brasil (Bank of Brazil), as the new chief executive of Petrobras.

Tags: Petrobras Scandal, Lava Jato, corruption

Monday Memo: Venezuela Protests – Haiti Elections – Caribbean Energy – AT&T – Brazil Olympics

January 26, 2015

by AQ Online

This week's likely top stories: Venezuelan opposition leaders halt protests in Caracas; Haiti swears in its nine-member Provisional Electoral Council; the U.S. hosts the first-ever Caribbean Energy Security Summit; AT&T acquires Nextel Mexico; Rio’s environment secretary announces that Guanabara Bay will not be clean in time for the 2016 Olympic Games.

Opposition Curbs Protests in Caracas: Protests in Caracas—against Venezuelan President Nicolás Maduro, chronic consumer staple shortages and a 64 percent increase in consumer prices—were called to an abrupt end by student opposition leaders over the weekend. Coming nearly a year after the violent demonstrations that led to 40 deaths and the incarceration of opposition leader Leopoldo López, the protests were quickly disbanded after several protestors clashed with police. Former opposition presidential candidate Henrique Capriles canceled his speech and organizers emphasized safety, encouraging protestors to go home. A day earlier, in a nationally televised addressed, Maduro held his opponents responsible for Venezuela’s economic troubles, accusing them of organizing an “economic coup,” and criticizing an attempt by former presidents Felipe Calderón of Mexico, Andrés Pastrana of Colombia and Sebastián Piñera of Chile to visit López in prison.

Election Council Selected in Haiti: Haiti swore in a nine-member Provisional Electoral Council on Friday, in a step towards holding legislative and local elections that had been scheduled for 2011. Haitian parliament was dissolved and President Michel Martelly has been ruing by decree since January 12 due to the stalled elections. The electoral council was sworn in shortly before a United Nations Security Council arrived in Haiti, coming after nearly eight weeks of violent protests calling for Martelly’s resignation. Presidential elections are expected this year.

U.S. Hosts Summit to Discuss Alternatives to PetroCaribe: Caribbean leaders are gathering in Washington today—with the exception of Cuba—for the first-ever Caribbean Energy Security Summit to brainstorm regional alternatives to the Venezuelan PetroCaribe oil subsidy program.  The program has kept cash-strapped Caribbean governments afloat with $28 billion worth of oil on favorable financing terms since 2005. Although this perennial petroleum pipeline has been a lifeline in the region, its members owe a combined $12 billion to Venezuela. As the economic situation in Venezuela continues to deteriorate with the declining price of oil, PetroCaribe’s 17 members are now seeking alternative energy sources. Capitalizing on this opportunity to wrest back regional energy influence, U.S. Vice President Joe Biden is hosting today’s summit—along with the Council of the Americas and representatives from the EU, UN, World Bank, Inter-American Development Bank, and other organizations—to advise Caribbean leaders on financing opportunities and regulatory changes that would allow them to incorporate natural gas and renewable sources into their national energy grids. 

AT&T Acquires Nextel Mexico for $1.9 Billion: AT&T Inc., the second-largest U.S. mobile phone carrier, purchased NII Holdings Inc.’s (Nextel) Mexican wireless assets today for $1.9 billion. The acquisition of Nextel Mexico’s network of 76 million people, its license and its high-paying monthly subscribers will strengthen AT&T’s strategic initiative of providing its first cross-border service between the U.S. and Mexico. This is the Dallas-based company’s third major expansion south of the border in the past year, after its takeover of DirecTV Mexico and Grupo Iusacell SA.

Rio Opts for Damage Control Over Sewage Treatment: The latest chapter in Brazil’s water troubles is Rio de Janeiro’s notoriously polluted Guanabara Bay, the site of the 2016 Olympic Games’ sailing and windsurfing competitions. With just over one and a half years to go before the opening ceremony, the new state environment secretary, Andre Correa, announced on Friday that the city will not be able to deliver on its pledge to cut the flow of raw sewage and garbage into Guanabara Bay by 80 percent. Correa estimated that diverting sewage from the bay and extending it to the entire metropolitan area would require an investment overhaul of $3.8 billion, and there is no known financing timetable in place. Cleaning Guanabara Bay by cutting the flow of pollutants to the trash-lined bay was supposed to be one of the game’s enduring civic legacies. The cleanup failure could potentially endanger the health of Olympic athletes, but the real losers are the residents of the surrounding favelas.

Tags: Venezuela Opposition, Petrocaribe, Haiti elections, Mexican telecommunications, 2016 Olympic Games

Chasing Unicorns in Brazil

January 23, 2015

by Stephen Kurczy

On the border of Brazil and Paraguay, David Rodrigues Krug is chasing a unicorn.

That’s how he describes his work at the massive Itaipu Dam on the Paraná River, which forms a natural border between the South American neighbors. In three decades of operation, the five-mile-wide, 65-story dam has come close to generating 100 billion kilowatt hours (KWh) in a single year—but has never quite reached that goal.

“This is like our unicorn,” says Krug, chief of staff for Itaipu Binacional, the quasi-private company that owns and operates the hydropower plant. “We want to do it, but it has to be the perfect year in terms of water, in terms of the system. It would be our exceptional year.”

But the unicorn is getting more elusive amid a major drought that is depleting hydropower reservoirs across Brazil and tipping the nation into an energy crisis—underscoring its over-dependence on hydropower and the urgency to shift to other alternative energy sources, such as wind and solar. Brazil relies on hydropower for about three-fourths of its electricity, but across the southeastern and midwestern regions, dam levels are at one-fifth capacity, leading to electricity rationing and rolling blackouts across Brazil, including in the most populous state of São Paulo. This month, Brazil had to import electricity for the first time in five years.

The blackouts are due in part to Itaipu, which opened in 1984 and is now the second-largest hydropower plant in the world. Itaipu’s electricity generation fell 11 percent last year to 87.8 billion KWh— down from 98.6 billion KWh in 2013—causing it to lose its title of world’s largest hydropower generator to the Three Gorges Dam in China, which generated 98.8 billion KWh in 2014. (The Hoover Dam, by comparison, generates 4 billion KWh per year).

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Tags: Brazil, Paraguay, Itaipu Dam, Brazil Drought

I’m No Scientist, But It's Sure Hot in Rio

January 21, 2015

by Flora Charner

In last night's State of the Union address, U.S. President Barack Obama spoke about climate change (among many other things) and challengd climate change skeptics who "try to dodge the evidence by saying they're not scientists."

"Well, I’m not a scientist, either,” Obama said. “But you know what? I know a lot of really good scientists at NASA, and NOAA, and at our major universities. The best scientists in the world are all telling us that our activities are changing the climate, and if we do not act forcefully, we’ll continue to see rising oceans, longer, hotter heat waves, dangerous droughts and floods, and massive disruptions that can trigger greater migration, conflict, and hunger around the globe."

The comments come after NOAA's National Climatic Data Center released its annual State of the Climate report last week, showing 2014 was the hottest on record.

According to the report: "The December 2014 globally-averaged temperature across land and ocean surfaces was 0.77°C (1.39°F) above the 20th century average of 12.2°C (54.0°F), the highest on record for December since records began in 1880, surpassing the previous record set in 2006 by 0.02°C (0.04°F). This is the 10th consecutive month (since March 2014) with a global monthly temperature ranking among the seven highest for its respective month. December also marks the sixth month of 2014 to set a new monthly high temperature record."

Anyone who has been in southeastern Brazil for the past month can confirm that January will most likely surpass these records.

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Tags: Brazil, Climate change, heat wave

Monday Memo: Haiti – Nicaragua Canal – Oil – Petrobras Scandal – Guantánamo

December 22, 2014

by AQ Online

This week's likely top stories: Florence Duperval Guillaume is named Haiti’s interim prime minister; farmers set up blockades to protest the Nicaraguan canal; Saudis tell non-OPEC producers to reduce output; Brazilian President Dilma Rousseff says she will not replace Petrobras CEO; Four more prisoners are released from Guantánamo.

Interim Haitian Prime Minister Named: Haitian Health Minister Florence Duperval Guillaume was named Haiti’s interim prime minister on Sunday, filling the empty post left by former Prime Minister Laurent Lamothe, who resigned last week. Duperval is expected to hold the position for a month until Haitian President Michel Martelly presents a permanent candidate to Haiti’s Parliament. Protests and unrest have erupted across the country since early December, with Haitians calling for long-postponed legislative and local elections that were scheduled for 2011, and members of Haiti’s political opposition demanding that Martelly resign. Parliament could dissolve by mid-January if the elections are not held.

OPEC Pressures Non-Members to Scale Back Production: Nearly one month after the Organization of Petroleum Exporting Countries (OPEC) decided to maintain its crude oil production ceiling of 30 million barrels per day (bpd), Saudi Arabia and the United Arab Emirates said they would continue to meet their output targets, blaming non-OPEC producers for the oil glut of about 2 million bpd that has driven prices down by 20 percent since late November. By pressuring non-members to rebalance the oversupplied market, OPEC hopes to secure its share of market production in 2015. This could potentially soften the blow to the cash-strapped Venezuelan economy—which is almost wholly dependent on oil exports—but non-member Latin American states like Mexico, Argentina and Brazil will have to decide whether to reduce oil production or face even more devastating price shocks.

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Tags: Haitian Prime Minister, Nicaragua Canal, OPEC Oil, Petrobras Scandal, Guantanamo Bay

Brazilian Truth Commission Publishes Damning Report

December 11, 2014

by AQ Online

After more than two years of research, Brazil’s Comissão Nacional de Verdade (National Truth Comission—CNV) delivered its official report yesterday on human rights violations committed in Brazil between 1946 and 1988—with a focus on the country’s 1964 to 1985 military dictatorship.

According to the report, “Under the military dictatorship, repression and the elimination of political opposition became the policy of the state, conceived and implemented based on decisions by the president of the republic and military ministers.” The report increased to 434 the proven number of the dead or disappeared during the period of military rule, and calls for a revision of the country’s controversial 1979 amnesty law, which shields those accused of dictatorship-era human rights abuses from prosecution.

Brazilian President Dilma Rousseff—who was herself a victim of torture—broke into tears while delivering a statement on the report. “We who believe in the truth, hope that this report helps make it so the ghosts of a sad and painful past can no longer find shelter in the shadows of silence and omission,” she said.

In addition to documenting cases of human rights violations, the report names 377 perpetrators responsible for deaths and disappearances during the country’s dictatorship. According to the Spanish daily El País, 191 of these alleged perpetrators are still alive.

The CNV has no prosecutorial power, but the report’s non-binding recommendations posit that the amnesty law does not apply in cases of crimes against humanity. Despite President Rousseff’s pledge to “consider the commission’s recommendations” and take all necessary actions based on the proposals, it is not yet clear whether she will push for any change in the amnesty law.

Tags: Truth Commission, Human Rights, Brazilian dictatorship

Monday Memo: Brazil Petrobras — Haiti Protests — LatAm Currencies — Guantánamo Prisoners —Mexico Missing Students

December 8, 2014

by AQ Online

This week's likely top stories: Brazilian prosecutor plans to indict at least 11 in the Petrobras scandal; Haitian protestors in Port-au-Prince demand long-overdue elections; Latin American currencies drop as U.S. job growth surges in November; U.S. releases six Guantánamo prisoners to Uruguay; Meixcan government identifies the remains of one of 43 missing students.

Brazilian Prosecutor to Indict 11 in Petrobras Scandal: On Saturday night, Brazilian Prosecutor General Rodrigo Janot announced his plans to indict at least 11 construction company executives arrested in mid-November on charges of bribery and money laundering in connection with the Petrobras graft scandal. “We are following the money and we will reach all of these perpetrators,” Janot said. The historic scandal has rocked the nation since former Petrobras executive Paulo Roberto Costa exposed the wrongdoing in a plea bargain after his arrest in March. An opinion survey released on Sunday by Datafolha showed that 68 percent of Brazilians hold President Dilma Rousseff, the former energy minister and Petrobras board chairwoman, responsible to some degree for the bribery scandal. In a country plagued by political corruption and impunity, Janot will be arguing at the helm of a landmark case that has the potential to inject much-needed accountability into Brazilian governance.

Haitians Turn Out in Strong Numbers to Demand Elections: On Friday, thousands of anti-government protesters took to the streets in Port-au-Prince to demand that President Michel Martelly and Prime Minister Laurent Lamothe resign from office. Haitians are enraged by President Martelly’s continuous postponement of midterm and senatorial and municipal elections since 2011—a stalemate allegedly caused by political differences between the ruling party and a group of opposition senators. Protestors called for the long-overdue elections to be held without delay as they clashed with police in Haiti’s capital. The last major demonstration took place in late October, when the National Assembly failed to pass an electoral law in time for the scheduled election date. 

Latin American Currencies Remain Weak after November U.S. Job Surge: The United States’ surprisingly robust addition of 321,000 jobs in November has set the U.S. economy on its fastest pace of job creation since the Clinton administration. However, this positive job growth in the U.S. has had a decidedly negative impact on Latin American currencies, since the Federal Reserve is likely to respond to November’s labor boost by raising interest rates sooner than expected. As a result of this possibility, the Mexican, Chilean, Argentine and Colombian pesos and Brazilian real stagnated at the week’s end, and are likely to remain weak against the U.S. dollar for the visible future. Analysts will not be able to fully assess the scale of short-term losses for Latin American economies until a scheduled release of a report on Friday that will evaluate the United States’ 2014 Producer Price Index for the 2014 fiscal year.

Guantánamo Prisoners Granted Refugee Status: Six prisoners—four Syrians, one Tunisian and one Palestinian—were released this weekend from the U.S. Guantánamo Bay detention center after 12 years, bringing the total number of detainees transferred from the prison in 2014 up to 16. The six arrived in Uruguay after President José Mujuica agreed to patriate the prisoners on humanitarian grounds in March, calling their detention for their alleged ties to Al Qaeda “an atrocious kidnapping.” There are currently 126 inmates eligible for transfer at the Cuban-based detention center who have not been released, due to instability in their home countries. The six detainees, now considered refugees in Uruguay, were never charged with a crime. Uruguay is the second Latin American country to receive former detainees from Guantánamo; El Salvador accepted two Chinese Muslim refugees in 2012.

DNA Links Charred Remains to One of Mexico’s Missing Students: Despite calls for caution from forensic experts, the Mexican government on Friday hailed the identification of the charred remains of Alexander Mora Venancio as confirmation that the 43 students abducted on September 26 after clashing with municipal police in Iguala were incinerated in a Cocula landfill by the Guerreros Unidos gang. The Argentine Forensic Anthropology Team insisted that the search for the missing students continue, stating that the evidence linking the site of the massacre with the site where the remains were found was largely based on witness testimony. The parents of the remaining missing students pledged to continue protesting until all of their sons have been found. Meanwhile, embattled Mexican President Enrique Peña Nieto unveiled a plan to disband municipal police forces, putting them under federal control through constitutional reforms late last month.

Tags: Petrobras Scandal, Governance in Haiti, Currency, Guantanamo Bay, Ayotzinapa

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