Weekly News Update on the Americas
Issue #969, December 7, 2008
1. Latin America: US Deficit Squeezes Credit
2. Argentina: Government Announces Stimulus
3. Mexico: Government Tries to Save Jobs
4. Mexico: Layoffs Up, Unionists Busted
5. Venezuela: Who Killed Aragua Unionists?
6. Links to alternative sources on: Bolivia, Peru, Ecuador, Colombia, Venezuela, Panama, Mexico, US policy
ISSN#: 1084-922X. Weekly News Update on the Americas covers news from Latin America and the Caribbean, compiled and written from a progressive perspective. It has been published weekly by the Nicaragua Solidarity Network of Greater New York since 1990. For a subscription, write to weeklynewsupdate@gmail.com. It is archived at http://weeklynewsupdate.blogspot.com
*1. Latin America: US Deficit Squeezes Credit
Efforts by the US to fight its own financial crisis may cut Latin American governments off from access to credit at a time when they need an estimated $250 billion for financing their 2009 budgets. The US has been issuing huge volumes of Treasury bonds and is running a fiscal deficit that could top $1 trillion next year. The Latin American Shadow Financial Regulatory Committee (CLAAF)--a group of economists including former Argentine finance minister Roque Fernández and former Venezuelan central bank president Ruth de Krivoy--warns that the massive borrowing by the US government may "crowd out" Latin American and other emerging economies from the credit markets.
The drying up of credit comes as the region is already suffering from other effects of the global crisis, notably a decline of demand for exports. The CLAAF said existing funding through the International Monetary Fund and other financial institutions is inadequate and that "unprecedented resources" are needed. (Financial Times (UK) 12/4/08)
*2. Argentina: Government Announces Stimulus
On Nov. 25 Argentine president Cristina Fernández de Kirchner announced an economic stimulus package that includes tax breaks for Argentines who repatriate money they've sent abroad and invest it in infrastructure, real estate, agriculture, industry or government bonds; tax breaks for firms that create new jobs; an amnesty on unpaid taxes for the smallest employers if they give formal employment status to off-the-books workers; and a $21 billion public works plan intended to double the number of jobs in construction.
On Dec. 5 Fernández announced an additional $3.85 billion stimulus package meant to boost the economy with $1 billion in cheap credits for the automotive sector, $1.1 billion in other consumer credits, and a 5% cut in export duties for wheat and corn--although probably not for the soy producers, who staged a series of strikes earlier in the year when Fernández tried to increase their duties [see Update #955].
The Fernández government has also been moving to regain control of funds and companies that were nationalized under the neoliberal policies of previous governments, especially during the administration of former president Carlos Menem (1989-1999). In November the government finalized legislation to nationalize some $24 billion in private pension funds [see Update #965], and some of that money will be used to finance the infrastructure program. On Dec. 4 the Chamber of Deputies voted 152 to 84 to seize the country's largest airline, Aerolíneas Argentinas, from the Spanish company Grupo Marsans; the airline was privatized 18 years ago.
Argentina enjoyed five years of strong growth after its dramatic economic collapse at the end of 2001, but now it seems to have been brought down by the world economic situation. The Center for Financial Investigations at Buenos Aires' Torcuato Di Tella University reports that consumer confidence dropped by 24% in November compared to the same period in 2007, while willingness to buy high-cost products like cars and refrigerators fell by 41%. (MercoPress (Montevideo) 11/26/08, 12/5/08; BBC 12/4/08)
*3. Mexico: Government Tries to Save Jobs
In a Dec. 5 interview with Bloomberg Television, Mexican Economy Minister Gerardo Ruiz Mateos said the government will react to job losses from the global economic crisis by spending $12.5 billion on roads, ports, railroads and other projects in the first quarter of 2009. He said the government is also studying programs to prevent layoffs in manufacturing. "In manufacturing we'll suffer the most in terms of jobs because of lower demand for our exports," he said. Mexico is especially vulnerable to the recession in the US, which buys 80% of Mexico's exports. Ruiz Mateos expects Mexico to grow at 1.5-1.8% next year, but a central bank survey of analysts reported a median estimate of just 0.38%. (Bloomberg 12/5/08) [Mexico's growth rate was about 3.3% in 2007, less than half the rates for Argentina (8.6%) and Venezuela (8.5%)--see Update #926].
Many Mexican companies are wholly or partly owned by foreign-based transnationals. As the crisis intensifies and the demand for credit increases in the more industrialized countries, the Mexican subsidiaries have sent more and more of their capital back into the countries where the transnationals are based. According to a report by the Banco de México, Mexico's central bank, the Mexican companies sent $2.287 billion abroad in the first nine months of 2008, almost as much as the $2.619 billion they sent abroad in all of 2007. Reinvestment in Mexico by these companies dropped precipitously during the summer of 2008. They reinvested $2.19 billion in the first quarter and $2.610 billion in the second, but in the third quarter the number fell by 95% to $134 million. (La Jornada (Mexico) 12/1/08)
The same phenomenon has been occurring with Mexican business owners, who moved more than $19 billion out of Mexico from January through September to deposit in foreign bank accounts or to buy into foreign businesses. The outflow, which doesn't include money for buying real estate abroad, is a major cause of Mexico's balance of payments deficit, according to the Banco de México. It is 22% higher than the $15.560 billion direct investment that foreign capital made in Mexico during the same period. (LJ 12/3/08)
*4. Mexico: Layoffs Up, Unionists Busted
On Dec. 2 Altos Hornos de México (AHMSA), Mexico's main steelmaker, announced plans for laying off 8,500 contract workers in its Proyecto Fénix modernization project and 3,500 of its own employees. (La Jornada 12/3/08) In the two days after the layoff announcement, the Mexican government froze some funds belonging to the National Union of Mine and Metal Workers of the Mexican Republic (SNTMMRM), which represents AHMSA workers, and arrested two union leaders. Based on complaints that the union mishandled a $55 million miners' fund, the federal Attorney General's Office (PGR) arrested the union's Vigilance and Justice Council president Juan Linares Montúfar on Dec. 3 and political affairs secretary Carlos Pavón Campos on Dec. 4.
The government said the complaints came from workers, but the union charged that the arrests are part of an anti-union drive by the government, AHMSA and the Grupo México mining company. Carrying the fight to the entire mining and metal industry, on Dec. 5 the SNTMMRM started open-ended strikes at mines belonging to Industrias Peñoles, the world's largest silver producer, to demand the union leaders' release and the unfreezing of the union's funds. The strike affected the Met Mex Peñoles plant in Torreón, Coahuila, and Peñoles mines in Fresnillo, Sombrerete (Sabinas), Zacatecas (Francisco I. Madero) and Concepción del Oro municipalities in Zacatecas state.
The SNTMMRM has been fighting the government since early 2006 when charges were filed against union general secretary Napoleón Gómez Urrutia, who fled to Canada. Walkouts since then--including a strike at Grupo México's giant Cananea copper mine since July 2007 [see Update #945]--have cost the mining companies more than $2.5 billion, according to the Mexican Mining Chamber of Commerce. (Bloomberg 12/5/08, LJ 12/6/08)
According to the Mártires de San Angel Textile Industry Workers Union (STMSAIT), the textile sector has lost 150,000 jobs in the past five years, and 3,286 companies have shut down, partly because of competition from China. The union's head, Fermín Lara Jiménez, was jailed on Aug. 15 on charges of fraud involving $40 million; this was based on a complaint from the national export bank, Banco Nacional de Comercio Exterior (Bancomext). (LJ 12/7/08)
*5. Venezuela: Who Killed Aragua Unionists?
On Dec. 2 Venezuelan interior and justice minister Tarek El Aissami announced the arrest of Julio César Agrinzones (also given as "Arguinzones") Romero the night before on charges of killing three leftist Venezuelan unionists- -Richard Gallardo, Carlos Requena and Luis Hernández--the night of Nov. 27 in the city of Cagua, southwest of Caracas in Aragua state [see Update #968]. Although El Aissami said the government had not established who was behind the killing, he implied it was "over a job," hinting at internal conflicts in the pro-government National Workers Union (UNT), in which the victims were leaders.
Aragua union leaders rejected El Aissami's implication, saying that Agrinzones Romero was at work at the Pepsi Cola de Venezuela's plant in Villa de Cura in southern Aragua the night of the killing; Luis Hernández was president of the plant's union. Local unionists suspect the Colombian-owned Alpina food processing plant and state police under former governor Didalco Bolívar were involved in the murders. In a speech on Dec. 1 at the inauguration of the state's new governor, Rafael Isea, Venezuelan president Hugo Chávez suggested that an unnamed "foreign-owned company against which they [the murdered union leaders] were fighting" was responsible.
On Dec. 2 some 7,000 workers from 17 unions protested and blocked roads in Aragua to demand a thorough investigation of the killings. (El Universal (Venezuela) 12/2/08; YVKE Mundial 12/2/08; El Carabobeño (Venezuela) 12/4/08; Venezuela Analysis (12/3/08)
Another Aragua unionist was murdered on Dec. 4. Simón Caldea, a leader of the Bolivarian Union of Industry and Construction Workers (UBT), was riding in a pickup truck on the Barbacoas-Camatagua highway when unknown persons in another vehicle shot repeatedly at the truck. Caldea was killed instantly, and two other unionists, Yagle Agrinzones and Héctor Mijares, were wounded. (El Nacional (Venezuela) 12/4/08; El Universal 12/4/08) [The sources did not mention any possible relation of Yagle Agrinzones to Julio César Agrinzones Romero.]
*6. Links to alternative sources on: Bolivia, Peru, Ecuador, Colombia, Venezuela, Panama, Mexico, US policy
Bolivian opposition blasts report on Pando massacre
http://ww4report.com/node/6463
Zinc slump threatens Bolivian mining sector
http://ww4report.com/node/6464
Probe: Bolivian Peasant Killings an Anti-Gov. Massacre
http://upsidedownworld.org/main/content/view/1616/68/
Peru removes army chief, ends 125-year dispute with Chile?
http://ww4report.com/node/6461
Texan firm wins deal for Peru gas plant
http://ww4report.com/node/6462
Peru: Leftist Leaders Targeted by Anti-Terror Police
http://upsidedownworld.org/main/content/view/1613/68/
Ecuador backs Betancourt mission to free FARC hostages
http://ww4report.com/node/6465
Colombian consul recalled from Venezuela's restive Zulia state
http://ww4report.com/node/6466
Venezuela Proposes New Regional Currency During ALBA Summit http://upsidedownworld.org/main/content/view/1610/68/
Adentro Barrio Adentro: An American Medical Student in Venezuela http://upsidedownworld.org/main/content/view/1615/1/
Russian warship enters Panama Canal, first since World War II
http://ww4report.com/node/6460
US releases first tranche of Plan Mexico funds
http://ww4report.com/node/6451
Mexico: 13 killed in Sinaloa massacre
http://ww4report.com/node/6452
Mexico: home destroyed at contested Juárez barrio
http://ww4report.com/node/6453
Tijuana: army officers take over police force
http://ww4report.com/node/6439
Chiapas: Zapatistas to host "Festival of Dignified Rage"
http://ww4report.com/node/6454
Pain and Protest on the Day of the Butterflies: Violence Persists Against Women in Mexico http://upsidedownworld.org/main/content/view/1614/1/
The Presidential Transition and Latin America Policy: Optimism for Change Dims as Reality Sets In http://upsidedownworld.org/main/content/view/1612/1/
Dealing with Killers and Kidnappers: The High Cost of Free Trade http://upsidedownworld.org/main/content/view/1609/1/
Latin America and the U.S.: A New Policy Direction
http://upsidedownworld.org/main/content/view/1611/68/
For more Latin America news stories from mainstream and alternative sources:
http://nacla.org/news/feed
http://nacla.org/fromaroundtheweb/feed
For immigration updates and events:
http://thepoliticsofimmigration.blogspot.com/
END
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