Likely top stories this week: Brazil will reduce lending by 20 percent next year; Argentina wins a stay on its $1.33 billion payment; Tropical Storm Sonia Hits Mexico; Honduras’ police chief denies abuses; Brazilian delegation opposes Uruguayan marijuana legalization.
Brazil to Reduce Lending Due to Budget Deficit: Brazilian Finance Minister Guido Mantega said Friday that Brazilian development bank BNDES will reduce lending by 20 percent next year, down to about 150 billion reais ($66.6 billion) from this year's estimated 190 billion reais. The announcement came after an Oct. 31 report showed Brazil’s budget deficit widened to 3.3 percent of gross domestic product, the most since November 2009. Some experts speculate that Brazil's credit rating could be cut.
U.S. Court Upholds Stay on Argentine Debt Payment: The 2nd U.S. Circuit Court of Appeals ruled in favor of Argentina on Friday by denying a motion that would have forced the country to start paying $1.33 billion to holdout bondholders. Friday’s decision will permit Argentina to make a second appeal to the U.S. Supreme Court before it is forced to pay the $1.33 billion to NML Capital Ltd and other holdout bondholders who did not accept a debt swap in 2005 and 2010.
Tropical Storm Sonia Hits Mexican Coast: Tropical Storm Sonia hit Mexico's Pacific Coast on Monday morning near the city of El Dorado in Sinaloa. By the time the storm made landfall, it was downgraded to a tropical depression and winds had decreased to about 35 mph. Though the storm is weakening, the U.S. National Hurricane Center said it could still cause floods and landslides in the region. Mexican authorities issued storm warnings from Mazatlan north to Altata on Sunday, and the government of Sinaloa state canceled classes on Monday in five municipalities.
Honduran General Denies Role in Police Abuses: In an interview, Honduran general and police chief Juan Carlos Bonilla denied knowledge or involvement in a wave of police abuses this year in which at least seven detainees have gone missing or been killed in police custody. He also said that he was not involved in setting up death squads starting in 1998, as reported by the police department's internal affairs section in 2002.
Brazilian Delegation Concerned About Uruguayan Marijuana: Brazilian political leaders from the southern state of Rio Grande do Sul will travel to neighboring Uruguay this Tuesday to oppose Uruguayan legislation that will legalize marijuana sale and consumption in the country. The Brazilian delegation will testify before the Uruguayan Senate's health committee in an attempt to prevent the country from moving ahead with legalization.
Barrick Gold Corporation, a Canadian mining company and the world’s largest gold producer, announced Thursday that it has temporarily halted operations at its Pascua-Lama gold mine in the Andean border region between Argentina and Chile. Production was scheduled to begin by early 2014, but environmental regulations, depreciating gold prices and declining company profits led to a decision to indefinitely suspend construction at the mine. Barrick said it has already spent over $5 billion of the total estimated project cost of $8.5 billion. The company told investors in a quarterly earnings statement that the postponement would provide capital savings of up to $1 billion in 2014.
Barrick’s stock prices fell 8.65 percent in April when a Chilean appeals court announced that it would block operations at Pascua-Lama due to “environmental irregularities.” The announcement came after members of Diaguita Indigenous communities filed a complaint that the mine had polluted glacial deposits and contaminated scarce water resources in the Atacama Desert. Chilean Interior Minister Andrés Chadwick welcomed the April announcement and said he hoped the company would be able to address the court’s concerns and conduct environmentally sound operations. The Chilean government has not announced plans to revise or lift the restrictions.
Officials voiced greater concern in Argentina, where operations were not discontinued until the company’s recent announcement. On the Argentine side of the mine, Barrick operations provide thousands of jobs and accounts for a third of San Juan province’s economy. Officials there have advocated repeatedly for the project, and it remains unclear how the closure will affect the region’s economy. Nevertheless, Guillermo Calo, Barrick’s top official in Argentina, said the company still plans to invest $400 million there next year.
Voters in Argentina’s October 27 midterm elections delivered a clear message to the country’s politicians on Sunday: they are ready for change. The incumbent, Peronist-affiliated Frente Para La Victoria (Front for Victory—FPV), led by President Cristina Fernández de Kirchner, suffered key losses as the country voted on available seats in one-third of the Senate and half of the Chamber of Deputies.
The results may reflect voters’ concern with issues such as rising inflation, corruption, and crime, which have become increasingly severe in recent years under the Fernández de Kirchner government. They also suggest that the 2015 elections may feature a divided Peronist movement—as well as a plausible non-Peronist alternative for the first time in 12 years.
Though the FPV maintains a majority in both houses of Congress—40 of 72 seats in the Senate and 132 of 257 seats in the Chamber of Deputies—their losses in 12 of 24 districts in Sunday’s elections indicate that the party’s popularity is slipping. Perhaps the most important loss took place in the province of Buenos Aires, a traditionally Peronist region with over 11 million registered voters.
As predicted in the August primaries, Sergio Massa, an ex-FPV candidate and mayor of the populous city of Tigre, secured a seat in the Chamber of Deputies. His new Peronist-inspired party, Frente Renovador (Renewing Front), provides traditional Peronist voters with an alternative to the FPV. On Sunday, Massa soundly defeated his FPV competitor, Martín Insaurralde, who trailed by over twelve points. Whereas the FPV considers itself a leftist party, Massa’s Frente Renovador appears to represent more centrist, business-friendly interests.
Clarín Group, Argentina’s largest media conglomerate, will have to sell off part of its holdings due to a Supreme Court ruling handed down on Tuesday. The high court declared constitutional the four articles of the Ley de Medios (Media Law), Argentina’s anti-monopoly broadcast law that congress passed four years ago but has stalled in the courts since.
The 2009 law reduces the number of radio and television licenses that a single owner could hold from 24 to 10, which the government has said is necessary to reduce market concentration. But Clarín Group sees it as an attempt by President Cristina Fernández de Kirchner to stifle opposition voices, saying in a statement that it “laments the ruling, which doesn't take into account the value of journalistic independence as a precursor for freedom of speech.” In its ruling, the Supreme Court found “no evidence in the case that there is a violation of freedom of expression derived from the law."
As a result, in addition to reducing the number of licenses it holds, the Clarín Group will likely have to break up its Cablevisión-Fibertel holding, the largest cable and internet operator in Argentina, and sell off its Canal 13 television network. The ruling was seen as a victory for the embattled administration of President Kirchner whose party suffered a setback in Sunday’s midterm elections. Clarín Group has not ruled out appealing the law in international courts.
With national legislative elections coming up on October 27, Argentina is abuzz with political activity. In addition to the high economic stakes—the country suffers from increasing inflation and faces the threat of a deep recession—many view this year’s elections as a harbinger of who will become Argentine President Cristina Fernández de Kirchner’s successor two years from now. The results of the August 11 primary races suggest a challenge to her influence, though perhaps not to Argentina’s political system.
Kirchner is serving her second and final term in office (though some debate whether she will attempt to run for a currently unconstitutional third term). The Peronist party, Frente para la Victoria (Front for Victory—FPV), has made several legal adjustments to the country’s electoral and judicial systems that could serve to boost its popularity. They have lowered the voting age to 16 in hopes of support from young voters, created bureaucratic obstacles that political parties must overcome to compete in elections, and reformed the Corte Suprema de Justicia de la Nación (Supreme National Court of Justice) so that two-thirds of its judicial magistrates must affiliate with a political party and run for election.
However, signs of popular dissent have hinted that a new leader might rise to power and bring ten years of Kirchnerismo to a close. First, the opposition has staged several massive protests, including those held in November of last year and this past April, each with larger turnouts than any popular protest since the 2001 economic crisis. Second, the primary elections held three weeks ago suggest that the president’s grip on power may be slipping. To the FPV’s surprise, the Frente Renovador (Renewing Front) candidate, Sergio Massa—the mayor of Tigre (a populous suburb just north of Buenos Aires) and a onetime-Peronist party member who has now distanced himself from the FPV—defeated Fernández de Kirchner’s pick, Martín Insaurralde, for representative of the province of Buenos Aires, a vital district for the president and a traditional Peronist stronghold.
Yet Fernández de Kirchner maintains a confident outlook on the October elections, and her supporters, organized into neighborhood groups, pledge their loyalty as strongly as ever. Yet Massa’s victory in the province of Buenos Aires and non-FPV victories in the provinces of Jujuy, San Juan, Chubut, and La Rioja—normally strong Peronist areas—indicate that many voters are ready for a change.
Though Massa has yet to secure a victory as representative of Buenos Aires province in October and the presidential elections remain two years away, it appears that he is gaining momentum on a potential run for the presidency. While some doubt he has the personal charisma to become a national Peronist leader, others—Peronists and anti-Peronists alike—are drawn to Massa. In recent interviews I conducted in Buenos Aires, a range of voters said that Massa focuses on “real issues” that affect Argentines and that he seems removed from the claims of corruption they perceive in the Fernández de Kirchner administration. His victory in the upcoming midterm elections would present a threat to the Fernádez de Kirchner legacy.
Ultimately, however, Massa may represent more continuity than change. In addition to cutting his teeth as a Peronist mayor, well versed in its politics, his intensely personalistic campaign does not diverge greatly from that of Peronist “super-presidents”—from Juan Domingo Perón himself to Carlos Menem and Fernández de Kirchner. Massa may stress “policy over politics,” but he also abruptly announced his candidacy less than two months before the primaries and relied largely on his own attractive image to garner support. His campaign posters, hung throughout Tigre and Buenos Aires province, display only a clever spelling of his name, “+a,” in bold letters, along with that of his newly formed political party, Frente Renovador (Renewing Front), against a black background.
The current political climate suggests that Fernández de Kirchner will likely be forced to step down in 2015, bringing the reign of Kirchnerismo to an end. However, it is not clear whether an opposition candidate would take the country in a new direction, despite some Argentines’ disillusionment with the politics of the Fernández de Kirchner administration. The leading possible contender has, at least as far as his campaign is concerned, continued the personalistic style of his predecessors.
¿Cómo se teje la democracia en red? Construyendo un puente entre el clic y el voto. Así de simple y ambiciosa es la propuesta de un grupo de jóvenes argentinos expertos en tecnología, que busca alcanzar una curul en la legislatura de Buenos Aires en las elecciones del próximo 27 de octubre, para representar la voz ciudadana en toda la extensión de la expresión.
Estos jóvenes crearon el Partido de la Red, un partido político que tiene como objetivo rescatar el concepto griego de democracia pero en la era digital: dándole poder al pueblo a través de un software. El partido ha recogido más de 6000 firmas (esas sí de manera personal, pues constitucionalmente solo el puño y letra es legal en Argentina) y la Justicia Electoral Argentina les validó 4244 adhesiones a comienzos de septiembre.
Así se convirtieron legalmente en una opción política alternativa, y es un hecho que a la hora de ejercer su voto los bonaerenses encontrarán una boleta con su logo: una figura de una red tejida por nodos, que simboliza los pares y cuyo diseño fue escogido mediante un proceso de crowdsourcing.
En las urnas, los ciudadanos podrán elegir una lista cerrada, con la promesa de que si el partido llega a alcanzar una curul, el diputado electo votará los proyectos de ley tal y como lo decida la mayoría de quienes usen su plataforma (de código abierto y libre).
¿El fin? Votar por ideas en lugar de personas para implementar un modelo de rendición de cuentas participativo. En vez del “que se vayan todos” de la caótica argentina del 2001, el partido propone un nuevo paradigma: “entremos todos a tomarnos la legislatura.”
“Sentimos que el sistema no nos representa y queremos construir esta nueva sociedad en red. ¿De dónde partimos? de la legislatura,” afirma Pía Mancini, politóloga, quien figura como número dos de la lista de candidatos del Partido para las elecciones legislativas. La antecede el licenciado en sociología Agustín Frizzera, y la componen 28 jóvenes más entre 20 y 40 años, más 30 suplentes. “Con que solo alcancemos una banca, vamos a demostrar que la herramienta es efectiva,” Mancini agregó.
Una red de 200 voluntarios entre los que hay al menos 50 programadores comenzó a tejer esta idea desde mayo de 2012. Ahora hilvana cómo hacer para que el software—el cual simulará una botonera como la de los diputados para marcar “Sí,” “No” o “Abstención”— permita además a los ciudadanos argumentar su voto y debatir con otros.
“No creemos en las estructuras verticales. Al contrario, apelamos a la inteligencia colectiva, incorporar al otro, crear nudos de conocimiento y confianza. Hay un sistema viejo que no quiere oír, mientras la tecnología se ha convertido en la válvula de conexión entre el Estado y la ciudadanía,” explicó Mancini.
El partido está inspirado en el Partido Pirata de Suecia que fue pionero en difundir el modelo de la llamada “democracia líquida,” la cual no es otra cosa que la posibilidad de cualquiera de participar con un voto virtual, directo o delegado en las decisiones de los parlamentos de este país escandinavo. En suma, el objetivo es brindar a los ciudadanos la posibilidad de ocupar escaños. Actualmente existen cerca de 20 partidos piratas en el mundo pero, como explica Mancini, estos usan el sistema de la red para tomar decisiones internas de los partidos, donde solamente votan los afiliados.
En las elecciones de abril pasado en Paraguay, el Movimiento Despertar Ciudadano intentó implementar una propuesta de software similar, pero no alcanzó la curul en los comicios. Los jóvenes de este partido siguen reforzando su propuesta con charlas por todo el país con miras a las próximas elecciones.
“La idea es llegar a una co-creación de proyectos de ley, que los ciudadanos también propongan. Incluso que otros partidos usen el software que es libre. Hace falta mucha transparencia en la política y la agenda del diputado debe ser pública,” agregó por su parte Don Powa, otro de los pares de esta red quien figura como el número 22 en la lista.
Argentina aprobó este año el voto a partir de los 16 años y los partidos más poderosos afinaron su artillería para seducir a esos novatos. El Frente para la Victoria de la presidente Cristina Fernández de Kirchner y Propuesta Republicana (PRO) de Mauricio Macri, que gobierna en capital, tienen las agrupaciones militantes más emblemáticas: La Cámpora (peronista) y Jóvenes Pro. Siendo los jóvenes quienes más consumen contenido en Internet, es un riesgo que inunden la plataforma para tergiversar los votos a favor de una corriente política.
“Como los proyectos son públicos y también el sistema, los usuarios deben registrarse con nombre, DNI y domicilio de la ciudad de Buenos Aires, para poder votar. Estamos trabajando para evitar que la plataforma sea cooptada por usuarios falsos”, explicó Powa.
Como una red que se va tejiendo de a poco, lo que ha logrado el Partido de la Red hasta ahora es una personería transitoria de 12 meses, que les permitirá ser partido nacional solo cuando tengan presencia en cinco distritos. Pero como bien explican los pares, cuando se habla de red, “la aspiración de poder es distinta,” y es allí donde, por ahora, una banca es suficiente para arañar la democracia.
The United States, Argentina and Costa Rica secured their place in the 2014 World Cup in Brazil last night, becoming the first three teams in the Americas to do so. The U.S. and Costa Rica represent the Confederation of North, Central American and Caribbean Association Football (CONCACAF) and Argentina plays in the Confederación Sudamericana de Fútbol (South American Football Confederation—CONMEBOL).
The U.S. beat archrival Mexico in Columbus, Ohio, to secure their place in the tournament, becoming the fourteenth team to qualify for seven consecutive World Cups. While the U.S. benefited from Mexico playing its first game under a new coach, Tuesday’s match came only days after the same U.S. team suffered a crushing 3-0 defeat to Costa Rica at the Estadio Nacional in San José—a game that was plagued by controversy and ended the U.S.’ 12-game winning streak. Costa Rica tied Jamaica to book their ticket to Brazil.
Argentina managed a convincing 5-2 away game win against Paraguay, with Lionel Messi scoring two penalties kicks to tie Uruguay’s Luis Suarez as the conference’s top goal scorer. Argentina is in first place in the CONMEBOL table with 29 points and two qualifiers left to play. Colombia, Chile, Ecuador, Uruguay and Venezuela—all within 7 points of each other—are vying for the last three qualification spots from CONMEBOL.
The group stage of the World Cup begins on June 12 in the Morumbi Stadium in São Paulo.
Likely top stories this week: U.S. Secretary of State John Kerry visits Colombia and Brazil; Argentines vote in congressional primary elections; FARC and Colombian government hail progress in peace talks; Panama concludes its inspection of the North Korean ship Chong Chon Gang; and documents reveal details of Brazilian dictatorship-era spying.
John Kerry Travels to Brazil and Colombia: U.S. Secretary of State John Kerry will make brief visits to both Colombia and Brazil early this week to meet with high-level government officials in both countries to discuss trade and energy, as well as address the recent revelations that the U.S. conducted electronic spying in foreign countries by monitoring phone calls and e-mails. U.S. Vice President Joe Biden spoke to Brazilian President Dilma Rousseff and Colombian President Juan Manuel Santos by phone to offer an explanation for the National Security Agency program, but Santos said Thursday that he wants further explanation from the U.S., and Brazilian Foreign Minister Antonio Patriota expressed indignation about the program at the UN. Kerry will arrive in Bogotá on Monday and Brasília on Tuesday.
Argentines Vote in Congressional Primaries: Argentine voters went to the polls on Sunday for mandatory congressional primary elections that could serve as a bellwether for Argentina's October 27 midterm elections. By early Monday, candidates from the government’s Frente para la Victoria (Front for Victory—FPV) led in Senate races in six of seven provinces, but FPV candidates for the Chamber of Deputies trailed in the country’s most populous provinces, including the province of Buenos Aires and the city of Buenos Aires. A third of the country's Senate seats and nearly half of the Chamber of Deputies seats will be up for grabs in October, with the results likely to affect Argentine President Cristina Fernández de Kirchner's chances of reforming the Constitution and winning a third term in office.
FARC and Colombian Government Hail Progress in Peace Talks: The Colombian government and the Fuerzas Armadas Revolucionarias de Colombia (Revolutionary Armed Forces of Colombia—FARC) released a joint statement on Saturday praising the results of the 12th round of peace talks. Government negotiator Humberto de la Calle said that "nobody has come this far," acknowledging progress in discussions over the FARC's future participation in Colombian politics—the second item on a five-point peace agenda. The Colombian government has refused to call a ceasefire while peace talks are underway. On Friday, the Colombian military killed FARC commander Jesus Antonio Plata Rios, known as "Zeplin," who led the rebels in western Colombia.
Panama Concludes Search of North Korean Ship: The Panamanian government said Sunday that it has concluded its search of the North Korean vessel Chong Chon Gang, stopped in Panama on its way from Cuba on July 15 under suspicions that the ship was transporting drugs. Authorities said that they had spent nearly a month unloading hundreds of thousands of bags of sugar from the ship, revealing 25 containers filled with undeclared weapons and six military vehicles. The Cuban government has acknowledged the military equipment onboard, but says that it is obsolete and was being sent to North Korea for repairs. On Monday, a team of six UN inspectors arrives in Panama to investigate whether the shipment violated international sanctions against North Korea.
Brazil's Dictatorship-Era Spying: As Brazilian Foreign Minister Antonio Patriota prepares to meet with U.S. Secretary of State John Kerry this week to discuss U.S. electronic spying in Brazil, Brazil's O Estado de São Paulo revealed Sunday that the Brazilian military government spied on its neighbors—particularly Argentina—during the country's military dictatorship. Meanwhile, the digital archive Armazém Memoria (Memory Warehouse), Brazil's federal prosecutor's office, and other local and national entities jointly launched the "Brasil: Nunca Mais" (Brazil Never Again) digital initiative on Friday, which includes hundreds of thousands of pages of searchable documents and multimedia from 710 trials of dissidents during the 1964-1985 regime.
Last year when Argentina expropriated most of Repsol’s majority stake in YPF, the country’s flagship oil and gas company, the Spanish government and the European Union howled in anger, leading calls to sanction Argentina and restrict trade in retaliation. The high drama in April 2012 culminated in a few months of frosty relations between Spain and Argentina, but an embargo failed to materialize. It did not take even six months before Argentine energy companies returned to Spain to do business with Madrid’s blessing.
Now, Argentina seems to be poised to develop one of the largest unconventional oil and gas plays in the Western Hemisphere. Countering Europe’s whimper that the rule of law would always prevail over nationalism, a steady stream of suitors have been sidling up to the country’s formidable oil and gas resources. These suitors are not just national oil companies from the Middle East and Asia. Instead, they have included ExxonMobil, Apache, Statoil, and now Chevron, which recently signed an $1.5 billion deal to drill up to 1,500 wells that could raise production to 50,000 barrels of oil and 3 million cubic meters of natural gas a day.
Even in the face of a tough political climate and the geological difficulty of shale extraction, investors are lining up.
And they like what they see. The U.S. Energy Information Administration estimates that Argentina has 774 trillion cubic feet of recoverable shale gas, making the country’s reserves the third largest in the world (after China and the United States). A significant amount of petroleum sits alongside the shale gas.
Investors are focusing on the country’s Vaca Muerta shale oil field, and are banking on the potential to double Argentina’s output within a decade. If the Vaca Muerta formation reaches anything close to its full potential, Argentina could also become a regional gas powerhouse, capturing a greater share of exports to Brazil and Chile or filling liquefied natural gas (LNG) ships bound for Europe and Asia. This would reverse Argentina's need to import. It would also be a major victory for a country that has quickly gone from being a net exporter of LNG to requiring massive LNG imports, imposing a major challenge on fiscal resources and its balance of payments.
A little more than a year after Argentine President Cristina Fernández de Kirchner seized control of Argentine oil company YPF from Spain’s Grupo Repsol, Argentina has enlisted Chevron to develop its massive Vaca Muerta shale oil and gas field. The deal, inked Tuesday evening in Buenos Aires, confirms the California-based Chevron Corporation will invest an initial $1.5 billion over the next 12 months, drilling more than 100 wells to develop the country's shale oil deposits.
Oil companies and investors who have been waiting to tap into Argentina’s huge reserves are cheering the deal. But many who remember Fernández de Kirchner’s 2012 promise to return Argentina “to energy sovereignty” are left scratching their heads, and environmental activists say extraction of these unconventional hydrocarbons is a dangerous move.
The deal is the first major foreign oil investment in the country since the seizure of Repsol’s majority stake in YPF after the country’s energy deficit hit a record low in 2011. Last year, the Argentine government was forced to import energy for the first time in 17 years. Already this year, Argentina has imported $4.6 billion of fuel.
Now, officials say developing Vaca Muerta is the solution the country needs to fix its energy deficit. Vaca Muerta (“Dead Cow”), discovered in 2011, is said to be the world’s second-largest shale gas reserve and fourth-largest shale oil deposit.
Shale gas is found between rocks composed of mud and other minerals, far below the Earth’s surface (up to 10,000 feet underground). Hydraulic fracturing, or “fracking,” uses millions of gallons of water mixed with sand and chemicals at high pressure to break through the shale to free natural gas and oil.
On Monday, Fernández de Kirchner also initiated an incentives plan for foreign investment, answering the cries of analysts and industry executives who have said the production of the fields will require billions of dollars of investment. According to a presidential decree, companies will receive incentives—such as the ability to export 20 percent of production tax-free—if they invest $1 billion or more over a five-year period.
"Vaca Muerta is a world-class share and fits perfectly within our solid portfolio of non-conventional resources," said Chevron CEO John Watson, who signed the decree on Tuesday with YPF CEO Miguel Galuccio.
Yet there has been fierce opposition to the deal among environmentalists, local leaders and Indigenous groups. On Tuesday, hundreds of leftist activists protested outside YPF’s headquarters in Buenos Aires.
The Vaca Muerta region is widely uninhabited, but is home to the largest concentration of Indigenous Mapuche people in Argentina.
Nobel Peace Prize winner Adolfo Pérez Esquivel spoke out in opposition, and criticized the Argentine Supreme Court for overturning a November decision to embargo Chevron's assets in Argentina. A judge had declared the embargo because of a $19 billion judgment against the company in Ecuador for environmental damage and injuries to the health of Indigenous residents in the Amazon rainforest.
“Through this agreement with Chevron, Argentines are handing over our resources to the U.S.,” Pérez Esquivel said, “and turning YPF into a contamination-producing fracking company.”
On Tuesday, Mapuche groups protested in Neuquén issuing an online statement that declared: “We are tired of you failing to consult us about what is happening inside our own communities, when we will be the most affected.”
But the reality is that the world is in search of new energy sources in the never-ending quest to satisfy our insatiable energy demand. As Shefa Siegel points out in a recent AQ article, “extraction is inevitable.” But he also raises another important question around the Canadian oil sands that also pertains to the Vaca Muerta region. While extraction is going to happen, what can be done to control how we extract?