Latin America

[Crafty_Dog]

Summary

China's growing economic activity and diplomatic involvement in Central America show Beijing strengthening its ties with the region, despite the United States' historical dominance there. The current presence of the Chinese government and corporations is relatively small, and Chinese strategy in Central America does not immediately threaten U.S. economic and political power in those countries. In the long term, however, China intends to use steadily increasing trade and investment to obtain access to Central America's emerging markets and gain political allies.
Analysis

China's strategy in Latin America seeks to fulfill three principal interests: securing resources abroad to maintain domestic economic growth, encouraging nations to recognize China instead of Taiwan and opening new markets for Chinese goods. For example, these objectives define the Chinese relationship with Venezuela. China has invested billions of dollars in joint ventures for oil extraction and maintained political recognition from Venezuela, while its trade relations with that country have flourished.

Central America's relationship with China differs from this because of its relative resource scarcity and deeply rooted political and economic connections to the United States. This lack of energy or mineral resources has led Chinese firms and diplomats to focus more on bilateral trade and political recognition.

The favorable geographic characteristics of the narrow Central American isthmus separating the Pacific and Atlantic oceans also stoked interest from Chinese representatives, among others, in constructing an alternate transit route to the Panama Canal. A proposed canal in Nicaragua, which has been envisioned for more than a century, would connect Nicaragua's Caribbean and Pacific coasts. In June, the Nicaraguan legislature approved a $40 billion proposal by a Hong Kong-based company to construct it. The company's owner said construction would begin in 2014 and end in 2020. The planned canal would be 286 kilometers (178 miles) long and allow ships displacing 400,000 tons to pass. Private Chinese companies have also expressed interest in studying the feasibility of proposed railroads between the Caribbean and Pacific coasts of Honduras and Colombia as alternatives to shipping cargo through the Panama Canal.

Despite reports of China's involvement in significant infrastructure projects, recognition of China and expanded trade remain the dominant issues in its relationship with Central America. China increased its trade with the region and obtained political recognition from Costa Rica by providing states with public works and economic incentives. In 2007, for example, China incentivized Costa Rica to expel Taiwanese diplomats and recognize China by offering the country a $130 million aid package and purchasing $300 million in Costa Rican bonds. Central America's relative poverty and lack of infrastructure make recognition of China a lucrative decision for regional leaders seeking financial aid. China has also increased its economic presence in Central American states more than Taiwan has, with China's exports to all nations there outpacing those of Taiwan. Costa Rica remains the only regional country to date that recognizes China, but Honduras previously expressed interest in reversing its recognition of Taiwan.

The United States' historical control of the area remains a barrier to any significant inroads by the Chinese. Central America's proximity to the world's largest importing market and U.S. political and military interventions in the region have ensured U.S. dominance.

Central America's proximity to the strategically important Gulf of Mexico makes it critical for the United States to ensure that no foreign competitor dominates that region. Central America also has traditionally acted as a buffer between the United States and any threats. During the first half of the 20th century, the United States secured Central American countries against internal political instability by conducting frequent military interventions to end conflicts and install U.S.-allied governments. After World War II, both the United States and the Soviet Union vied for ideological and material influence in the region. The result of these American efforts was its uncontested dominance of Central America and sensitivity toward potential threats from the region.

This U.S. authority discourages significant Chinese involvement in Central America. Any Chinese investment in significant infrastructure works, such as the proposed Nicaragua canal, could raise long-term political concerns in Washington. The entrenched U.S. influence in Central American political and economic systems makes such ambitious Chinese interaction with those states unlikely. Central America remains a valuable zone for U.S. strategic interests, which means Chinese influence there will likely remain focused on economic issues and modest political gains.

Read more: China's Growing Presence in Central America | Stratfor
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[Crafty_Dog]

 El Salvador's Fragile Gang Truce and Threats to Regional Peace
Analysis
July 12, 2013 | 0515 Print Text Size
An 18th Street gang member takes part in an event to surrender weapons March 9 in El Salvador. (JOSE CABEZAS/AFP/Getty Images)
Summary

A steadily increasing tempo of homicides throughout El Salvador in June and July could portend an end to a fragile truce between the country's two main criminal gangs, Mara Salvatrucha and Calle 18. In the year after the cease-fire took effect in March 2012, the country's murder rate -- which was then the second highest in the world after Honduras -- was reportedly cut in half. The apparent success of the truce, which was backed by the Roman Catholic Church and the Organization of American States, encouraged the Guatemalan and Honduran governments to consider striking armistice deals with gangs in their countries in hopes of similarly reducing murder rates. However, the recent surge in Salvadoran gang violence may weaken support for such crime reduction initiatives. If the tenuous peace in El Salvador indeed collapses, a rare opportunity to reduce violent criminal activity may be lost in Central America.
Analysis

The recent increase in homicides in El Salvador was punctuated by a spike at the beginning of July, when 103 people were reportedly murdered in one week. There have also been indications that Salvadoran gangs may be preparing for a future conflict, with reports suggesting that some gang members have continued acquiring firearms during the truce for later use.

El Salvador

According to local media, the increased violence may stem from when, in late May, El Salvador's newly appointed security minister, Ricardo Perdomo, withdrew from imprisoned gang leaders certain privileges, such as the right to call news conferences, that were allegedly part of the peace deal. Raul Mijango, a former guerrilla and lawmaker who helped broker the truce, said the killings increased because the jailed leaders have lost control over lower-ranking members on the streets. Whatever caused the violence, it appears to have alarmed Salvadoran officials, with Salvadoran President Mauricio Funes summoning Mijango to an emergency meeting on July 4.
The Rise of Central America's Gangs

Though Mara Salvatrucha and Calle 18 are present throughout North and Central America, they do not operate as monolithic entities. The gangs are organized into regional cliques, each with control of their own territory, and only loosely connected at national and international levels through financial ties and cultural identifiers.

The two major gangs, along with several smaller criminal groups, have undermined security severely in Guatemala, El Salvador and Honduras since the early 1990s, when Salvadoran immigrants who had founded the gangs in Los Angeles were deported. Mara Salvatrucha and Calle 18 then swelled in size -- with combined membership reaching an estimated 27,000 members in El Salvador and 100,000 throughout Central America by 2011, according to Salvadoran police estimates -- and became involved in a range of criminal enterprises, including human trafficking, drug trafficking, arms smuggling and extortion. The subsequent rise in murders, and the gangs' control of entire urban neighborhoods, turned gang-related criminality into a major political challenge for Central American governments.
The Evolution of Mexico's Cartels

As small, resource-poor countries that historically have lacked strong institutions, El Salvador, Guatemala and Honduras were particularly affected, and the region's expanding role as a trafficking corridor for South American cocaine exacerbated their problems. The drug trade fueled dramatic rises in crime in each country, eroding the governments' control over large areas of territory and preventing them from providing even minimal levels of security to their citizens. Crime became a major domestic and foreign policy issue for regional leaders, and the alleged involvement of the gangs in international drug trafficking networks controlled by Mexican cartels has made Central American security a concern for the United States.
Negotiations and Challenges to Peace

In search of a viable way to stem the violence, El Salvador's ruling Farabundo Marti National Liberation Front became open to striking a deal with Mara Salvatrucha and Calle 18, despite misgivings from conservative political opponents. Mijango began negotiations with the alleged approval of former Security Minister David Munguia Payes in late 2011 or early 2012. In exchange for a promise to stop the killing, government representatives reportedly agreed to transfer high-ranking gang members out of a maximum-security prison and provide financial incentives, among other rumored concessions. While the exact details of agreements remain unclear, the government apparently made similar offers to both gangs.

The initial success of the cease-fire attracted attention from gangs and religious leaders in neighboring Honduras, where jailed gang leaders indicated their willingness to reach a similar deal with the government. The Organization of American States suggested recently that a peace agreement could be reached with Guatemalan gangs by the end of 2013. But the collapse of Salvadoran truce would endanger these initiatives and possibly deny regional governments a similar means of reducing violence, regardless of what has caused the recent wave of killings.

Government leaders in all three countries -- particularly those from conservative or opposition parties that typically oppose bargaining with criminal groups -- would likely undermine future peacemaking attempts, since such leaders would consider more truces politically risky and potentially expensive. The United States, which Central American governments rely on heavily for security funding, also does not support negotiations with the gangs.

Still, there is some hope that the decentralized leadership structures of the gangs will make them willing to negotiate even if the current truce fails. Since individual cliques often operate in isolation from one another, the end of the Salvadoran cease-fire would not necessarily impact the decisions of gang leaders in Honduras or Guatemala. The concessions that could be gained in the deal may prove tempting enough to keep such groups at the negotiating table.

Read more: El Salvador's Fragile Gang Truce and Threats to Regional Peace | Stratfor
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[Crafty_Dog]

http://www.washingtontimes.com/news/2013/jul/15/chinese-tycoon-plans-to-rival-panama-canal-with-40/

[Crafty_Dog]

http://dogbrothers.com/phpBB2/index.php?topic=1880.0

[Crafty_Dog]

http://www.conservativeactionalerts.com/2013/11/whom-is-john-kerry-representing/

[Crafty_Dog]

 Panama Canal Expansion: The Dangers of Long-Term Delays
Analysis
January 27, 2014 | 0518 Print Text Size

Summary

Significant delays to the Panama Canal expansion project are increasingly likely as negotiations between the multinational construction consortium, Spanish financiers and Panamanian authorities drag out. The Grupo Unidos Por el Canal consortium is threatening to stop work at the end of January after already extending the previous deadline past Jan. 20. According to the Panamanian Dispute Adjudication Board, which is arbitrating the negotiations over who will cover cost overruns, a work stoppage could mean that the canal will not be completed until as late as 2020.

Because the project has been delayed once already, from an estimated completion date of 2014 to mid-2015, a postponement of a year or so would be well within the bounds of previous setbacks. How long it is delayed now will be determined by several factors, including whether the project will need a new consortium of builders and financial backers; such decisions will be shaped by ongoing negotiations between the principal stakeholders. The duration of any holdup itself will be critical in determining whether the ongoing dispute is geopolitically significant. A delay of a year or less is unlikely to have major consequences. On the other hand, a five-year delay could strain regional ports and transportation infrastructure, particularly as the United States continues to emerge from its economic downturn.

Analysis

The expansion project will enable significantly larger bulk and container ships to pass through the canal. In essence, it will improve connectivity between Asia and the eastern coasts of North America and South America by making an all-water route accessible to a wider range of ships. The U.S. Gulf Coast and trade ports in the Caribbean stand to benefit the most from the increased shipping volumes of larger ships. East coast ports that have the capacity to handle new, larger Panamax ships will be in direct competition with west coast ports and interior transportation lines for trade traffic.

These effects will be seen regardless of the timeline of the project's completion, but depending on the length of the delay, different elements of infrastructure -- particularly port and railway industries -- and their associated companies will be affected in different ways.

Necessary Modifications

Ports in the Western Hemisphere are watching the ongoing negotiations with much anticipation. Ship designs are always changing to maximize efficiency, but at this point it appears that the canal improvements will permit ships that can carry up to three times as much containerized cargo as the current Panamax ships. The maximum bulk cargo weight of standard vessels is expected to increase by roughly 50 percent, to around 120,000 metric tons. This increased capacity will give ports the opportunity to handle greater cargo volumes and generate additional revenue.

But to be ready to do that, ports will have to be modified to receive the larger post-Panamax ships, requiring hundreds of millions of dollars worth of upgrades. New Panamax ships -- with significantly larger hulls and displacement -- draw much more water than current Panamax ships. This means that ports will need to have channels and berths at least 15 meters deep. For many locations, this will require significant dredging. This is particularly true of Gulf coast ports such as Houston, which tend to be relatively shallow, but even east coast ports will have to deepen their channels and berths. For example, the Port of New York and New Jersey began dredging key channels to depths of 15 meters in 2005. The New York and New Jersey Port Authority is also raising the Bayonne Bridge by 19.5 meters to allow enough air clearance for larger tankers entering the port. The project is taking place without disrupting traffic and is expected to cost $1.29 billion.

Other ports in the Western Hemisphere have already invested or are preparing to invest in the improvements necessary to receive increasingly large ships. These include Norfolk, Va., and Savannah, Ga.; Kingston, Jamaica; Cartagena and Buenaventura in Colombia; and Suape and Santos in Brazil. These are long-term investments designed to keep the ports relevant and competitive in a global climate in which ships are becoming larger each year, regardless of the status of the Panama Canal.

For the ports that are set to complete their expansions by the mid-2015 Panama Canal benchmark, the delay could mean a longer timeframe for recouping upgrade costs. But these are large infrastructure projects requiring enormous efforts and financing. As such, they are subject to their own delays, and a hold in the completion of the canal expansion may give some of these ports more breathing room and time to complete their own improvements before the canal upgrade affects regional trade dynamics. Longer delays to increased trade volume would likely create serious financial implications for a great number of ports.

A shorter delay, however, will provide a reprieve for west coast ports in North America that are likely to become slightly less competitive once high-volume all-water routes to the east coast become viable. This is a potential boon for inland railways that transport goods from west coast ports to east coast consumers, which could see higher-than-expected demand if the expansion is delayed. The prospect of the eventual completion of the canal would reduce incentives for substantial additional infrastructure investment, meaning that a long delay of five or more years would leave North America reliant upon existing infrastructure. As the U.S. continues to recover economically, additional imports could begin to seriously strain existing infrastructure at west coast ports and railways if the Panama route does not open. South American ports, for the most part, serve localized markets and are unlikely to see these kinds of distributed risks.

A longer delay to the canal becoming fully operational would also substantially impact liquefied natural gas exports from the Gulf Coast to Asian consumer markets. Whereas the current canal is too small for most liquefied natural gas tankers, the new canal dimensions are big enough to fit the majority of the tankers currently in operation. As a result of the boom in natural gas production in the United States, the first liquefied natural gas export facility at Sabine Pass, La., is expect to come online in 2016. The majority of the export contracts being signed by prospective liquefied natural gas exporters are with Asian countries. Therefore, being able to go through the Panama Canal would be substantially more efficient than having to go around the capes of South America or Africa. Expanded capacity at the Panama Canal will also be a boon for exporters of oil derivatives on the U.S. Gulf coast.

The investment boom in Western Hemispheric ports -- as a result of the planned expansion as well as the gradual enlargement of ships in the global fleet -- has introduced a multitude of variables that will affect the eventual outcomes of the canal. Every port in North America hopes to improve its competitiveness to secure a larger share of the anticipated uplift in maritime trade. The individual financial profiles of seaports will determine their resilience in the face of a delayed Panama Canal upgrade. Looking at the maritime distribution system as a whole, however, it becomes clear that while a short delay will have a limited impact globally, a long delay could put serious stress on existing North American infrastructure.

Read more: Panama Canal Expansion: The Dangers of Long-Term Delays | Stratfor

[DougMacG]

IIRC, we used to own and manage a canal there.

[captainccs]

Colonialism is over. The French and the Brits used own Suez. For that matter England used to own a big chunk of North America as did the Russians, the French, the Spanish, and the Dutch,. If you want to go back to biblical times just look at present day Middle East. There needs to be a statute of limitation on absentee ownership.

[Crafty_Dog]

http://thehill.com/blogs/defcon-hill/policy-strategy/201305-putins-quiet-play-for-latin-america

[Crafty_Dog]

Hat tip to CCS:

American "intrusion" is both welcome and not welcome, depending on what it is and depending on who minds and who does not mind.  In any case, The US is losing LatAm with Obama's extreme "flexibility."


One day's Yahoo Latin-America headlines:

Japanese PM opens LatAm tour with Mexico energy deals

Chinese president ends regional tour in cradle of Cuban Revolution

Chinese leader signs accords, wraps up Cuba visit

Chinese president backs Cuba's economic reforms

China, Venezuela deepen economic ties during visit

Cuba hopes for more investment as Chinese president arrives

China, Russia leaders seek South American inroads

Chinese leader woos Latin America with deals

Brazil, China sign several trade, business deals

Russia set to reopen Soviet-era spy post on Cuba: source

China seeks to build railways in Brazil to ship out commodities

BRICS meet South American leaders after bank deal

Putin, Kirchner seek 'multipolarity' in Argentina visit

China's leader Xi departs for South America tour

Putin signs nuclear energy deal with Argentina

Putin in Argentina, building Russian ties

Putin in Cuba, Nicaragua to rekindle Latin America ties

BRICS to launch bank, tighten Latin America ties

Putin kicks off Latin America tour with Cuba stop

Putin pledges to help Cuba explore for offshore oil

Putin in Cuba to rekindle Latin America ties

http://news.yahoo.com/latin-america/

[Crafty_Dog]

AS we were reminded last summer when thousands of unaccompanied children showed up on our southwestern border, the security and prosperity of Central America are inextricably linked with our own.

The economies of El Salvador, Guatemala and Honduras remain bogged down as the rest of the Americas surge forward. Inadequate education, institutional corruption, rampant crime and a lack of investment are holding these countries back. Six million young Central Americans are to enter the labor force in the next decade. If opportunity isn’t there for them, the entire Western Hemisphere will feel the consequences.

Confronting these challenges requires nothing less than systemic change, which we in the United States have a direct interest in helping to bring about. Toward that end, on Monday, President Obama will request from Congress $1 billion to help Central America’s leaders make the difficult reforms and investments required to address the region’s interlocking security, governance and economic challenges. That is almost three times what we generally have provided to Central America.

Last summer, as our countries worked together to stem the dangerous surge in migration, the leaders of El Salvador, Guatemala and Honduras asked for additional assistance to change the climate of endemic violence and poverty that has held them back. In June, I made it clear to these leaders that the United States was ready to support them — provided they took ownership of the problem. Mr. Obama drove home this point when the leaders visited Washington in July.

And they responded. Honduras signed an agreement with Transparency International to combat corruption. Guatemala has removed senior officials suspected of corruption and aiding human trafficking. El Salvador passed a law providing new protections for investors. Working with the Inter-American Development Bank, these three countries forged a joint plan for economic and political reforms, an alliance for prosperity.

These leaders acknowledge that an enormous effort is required. We have agreed to intensify our work together in three areas.

First, security makes everything else possible. We can help stabilize neighborhoods through community-based policing, and eradicate transnational criminal networks that have turned Central America into a hotbed for drug smuggling, human trafficking and financial crime. Some communities in Guatemala and El Salvador are already seeing the benefit of United States-sponsored programs on community policing, specialized police training and youth centers similar to Boys and Girls Clubs in the United States. As I learned in crafting the 1994 United States crime bill, these programs can reduce crime.

Second, good governance begets the jobs and investment that Central America needs. Today, court systems, government contracting and tax collection are not widely perceived as transparent and fair. These countries have among the lowest effective tax rates in the hemisphere. To attract the investments required for real and lasting progress, they must collect and manage revenues effectively and transparently.
Continue reading the main story Continue reading the main story
Continue reading the main story

Third, there is not enough government money, even with assistance from the United States and the international community, to address the scale of the economic need. Central American economies can grow only by attracting international investment and making a more compelling case to their citizens to invest at home. That requires clear rules and regulations; protections for investors; courts that can be trusted to adjudicate disputes fairly; serious efforts to root out corruption; protections for intellectual property; and transparency to ensure that international assistance is spent accountably and effectively.

We are ready to work with international financial institutions and the private sector to help these countries train their young people, make it easier to start a business, and ensure that local enterprises get the most out of existing free trade agreements with the United States.
Continue reading the main story
Recent Comments
Roy M. Barbee
1 minute ago

These are noble intentions and necessary changes....but the cultures of corruption in government and military in these countries will take...
Harry
1 minute ago

About time - and this Jewish family encourages the billion dollars come from the aid to Israel. Obviously the Israelis don't need it or...
Vince Luschas
1 minute ago

We should link any and all aid to the region's progress equilizing wealth -- the wealth gap, according to an article in International...

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The challenges ahead are formidable. But if the political will exists, there is no reason Central America cannot become the next great success story of the Western Hemisphere.

The region has seen this sort of transformation before. In 1999, we initiated Plan Colombia to combat drug trafficking, grinding poverty and institutional corruption — combined with a vicious insurgency — that threatened to turn Colombia into a failed state. Fifteen years later, Colombia is a nation transformed. As one of the architects of Plan Colombia in the United States Senate, I saw that the key ingredient was political will on the ground. Colombia benefited from leaders who had the courage to make significant changes regarding security, governance and human rights. Elites agreed to pay higher taxes. The Colombian government cleaned up its courts, vetted its police force and reformed its rules of commerce to open up its economy. The United States invested $9 billion over the course of Plan Colombia, with $700 million the first year. But our figures show that Colombia outspent us four to one.

The cost of investing now in a secure and prosperous Central America is modest compared with the costs of letting violence and poverty fester.

Mr. Obama has asked me to lead this new effort. For the first time, we can envision and work toward having the Americas be overwhelmingly middle class, democratic and secure.

That is why we are asking Congress to work with us. Together, we can help Central America become an embodiment of the Western Hemisphere’s remarkable rise — not an exception to it.

Joseph R. Biden Jr. is the vice president of the United States.

[Crafty_Dog]

Summary

The idea of a canal across Nicaragua, easing transit flows between the Pacific and the Atlantic, is as old as the country itself. But despite numerous surveys and plans across the centuries, no Nicaraguan canal has ever been shown to be economically viable for the investors. The United States, European and numerous Asian countries and companies have explored both "wet" and "dry" canals — the latter utilize rail between ports on both sides of the isthmus.

Lately a Chinese businessman has been exploring the idea. His efforts have raised similar questions to previous attempts: Is a canal in Nicaragua economically sound, environmentally responsible or even necessary, particularly given the near completion of the widening of the Panama Canal? The answers are mixed and often depend who is doing the assessment and from what perspective. The man behind the attempt, Wang Jing, may no longer be sure of the answers himself.
Analysis

Questions aside, the Nicaraguan government has approved the plans and is promoting the construction and affiliated investment. As the man at the forefront of the operation, Wang is preparing not only to have the canal dug (and managed) but also to build the affiliated infrastructure — port expansion and telecommunications projects as well as tourism and real estate deals along the canal route. Money is already flowing, environmental studies are underway, Western public relations and accounting firms have been hired, and early assessments and visits are being made to determine the cost and difficulty of buying up land along the route, often meeting opposition from locals. All the while, the cost estimates for the canal construction continue to rise; they are currently at upward of $50 billion and by some estimates are likely to reach $100 billion.

Money spent upfront on surveys and even early moves to purchase land do not mean the canal will be completed, just as the economic and environmental obstacles do not necessarily mean the canal will stall out before completion. The world is littered with hero projects that, in retrospect, perhaps would have been better left unbuilt or at least proved more costly for their investors than anticipated. But the construction and plans have raised numerous questions about who is really behind the canal project.

The Investor

Wang Jing, chairman and CEO of the Hong Kong Nicaraguan Canal Development Group (HKND), which has the contract to build, develop and manage the Nicaraguan canal, is one of China's richest men, worth some $6.6 billion according to Forbes. He has been involved in telecommunications and mineral operations, though by most accounts he owes his fortune more to good luck and timing than through connections with Beijing.

Wang established HKND in August 2012, one month after the Nicaraguan government established its Grand Interoceanic Canal Authority, which paved the way for realistic investment into a canal project. A month after it was established, HKND had a memorandum of understanding with the Nicaraguan government to conduct the feasibility study for the canal project. In June 2013, the Nicaraguan legislature formally voted to approve the construction of the canal, and within days the contract was awarded to HKND.

Wang's involvement in the canal appears to stem from a meeting with the son of Nicaraguan President Daniel Ortega, whom he met with either in Nicaragua or Beijing. Wang was looking to expand his telecom business into Nicaragua as part of broader global expansion, and his company, Xinwei, acquired contracts in 2013, though there has been little work reported toward fulfillment of those contracts. Rather, amid discussions with Ortega's son, Wang became enamored with the opportunity for a Nicaraguan canal that, he hoped, would carry massive bulk cargo ships from Brazil to China — ships that were too big for the Panama Canal and, incidentally, were in some cases blocked from Chinese ports because of their size and Chinese concerns for maritime shipping competitiveness.

A Nicaraguan canal may make more sense for international traders than it does for its potential investors. Though most studies argue that investors are guaranteed to lose in the canal construction, if the canal is built and managed efficiently, it does offer complementary routes for trade between Asia and the East Coast of North America, something that could interest shipping companies given the perception of unreliability of United States' West Coast ports. It also could provide speedier passage of bulk cargoes from Latin America, particularly Brazil, to Asia (read China), and as a redundant route, may ease congestion in the Panama Canal.

But the canal itself is not the only prize. Wang's vision includes the expansion of Nicaraguan ports, the establishment of new tourism venues to rival nearby Costa Rica, and the creation of new free trade zones in Nicaragua to take advantage of its location for manufacturing and distribution. With China slowly losing its place as the primary source of international low-end manufacturing, a Chinese-backed free trade zone in Nicaragua could take advantage of regional low labor costs and the nearness to larger Mexican, South American and U.S. markets. Stratfor counts Nicaragua among our so-called Post-China 16 countries, those positioned to take advantage of the changes in global manufacturing supply chains. The canal fits with the desires of Nicaragua's president, but the add-ons are potentially the more significant prize for Wang and his fellow investors.


Wang has not had an easy time drawing in the financial backing that a project of this magnitude needs. Already he has spent by some estimates more than $5 billion of his own money as well as that of his family and friends, whom he solicited early to capitalize the project. Some major state-owned enterprises have steered clear of the project, including major Chinese shipping companies (COSCO for example already has a stake in the Panama Canal). But others, particularly construction companies looking for large projects overseas, have expressed interest or engaged in a partnership with HKND, and HKND is urging those companies to become partners, bringing with them their own financing. In this way, HKND can spread the cost and potentially still profit from a canal project that others before had determined would not turn a profit.

Interestingly, despite the obvious questions about Wang and Chinese involvement, the Chinese government does not seem to be involved directly. Wang has worked somewhat outside the normal channels of Chinese political networks, and Beijing has been cautious about the project from the start. Beijing has no formal diplomatic relations with Nicaragua; rather, Nicaragua is one of the few nations left that maintains formal recognition of Taiwan. In 2012, as news of the canal construction heated up, the Chinese Ministry of Commerce cautioned Chinese companies, noting the lack of diplomatic ties in addition to border issues between Nicaragua and Costa Rica. Beijing is not interested at this time in drawing Nicaragua to alter diplomatic relations to the mainland, since that would undermine Beijing's management of the Taiwan issue.

Furthermore, though Beijing has backed many economic projects in Latin America and has special economic and political relations with countries such as Venezuela, Chinese leaders are cautious about engaging in a project that clearly appears to challenge U.S. interests in the region — particularly given the high cost and minimal rewards of the Nicaraguan canal. Wang himself purportedly tried to gain U.S. backing and investment through contact with former U.S. officials, but found little support. Publicly serving U.S. officials have actually raised concerns about the project, though primarily for environmental reasons.

One of the reasons the Chinese government was cautious was the belief that the canal project would not be viable without U.S. support, or at least without avoiding U.S. opposition. With Beijing facing difficulties at home regarding its overall economy and the parallel anti-corruption campaign and consolidation of power under President Xi Jinping, there is little appetite among China's leaders to pick a fight with the United States in its own backyard over a project that appears to bring little gain while being fraught with political risk.

According to some people familiar with the situation, Wang is now having second thoughts about the entire project as well. Having already thrown in some $5 billion, however, it would be difficult for Wang and HKND to back out. Without the more active backing of the Chinese government, or at least a surge in interest by potential partners, HKND is likely to find it increasingly difficult to raise the money for the canal project. Environmental opposition will probably grow and may draw in international organizations to support the local population. And this does not even consider some of the physical obstacles of such a massive undertaking.

The Nicaraguan government has based a lot of its future economic projections on the projects related to the canal construction and affiliated investments, and that is riding on Wang's company and his ability to raise the funds and support necessary to bring the project to completion. But by most accounts, Wang does not have the political or economic backing of Beijing, certainly not formally and perhaps not at all. Perhaps the attention will shift to the affiliated development — the ports, the free trade zones and the tourism facilities. But whether the entirety of the project itself is ultimately completed, the renewed attention to a Nicaraguan canal, and to Nicaragua itself, emphasizes the changes in international attention to areas of the world picking up as the next manufacturing hubs.

[DougMacG]

http://www.businessinsider.com/conservative-mauricio-macri-elected-argentina-president-2015-11
Argentina's new conservative president is about to turn the country on its head
BUENOS AIRES — Conservative challenger Mauricio Macri turned Argentine politics on its head on Sunday, kicking the ruling Peronist movement out of power with a promise to liberalize the ailing economy and end a culture of divisive politics.

Macri, the son of an Italian-born construction magnate, won the election by tapping into frustration over anemic growth, high inflation, and corruption
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Also see:  http://scottgrannis.blogspot.com/2015/11/congratulations-argentina.html

[captainccs]

Argentina used to be the leading economy in Latin America based on exports and industry until Peron and his wives ruined the country. Apparently economic sanity is returning to the country. Maybe to LatAm.


A morality tale in Argentina’s debt epiphany
A newly elected president is near a deal to end Argentina’s long debt woes. The country’s 15-year saga provides a lesson for a world awash in red ink.
Christian Science Monitor By the Monitor's Editorial Board
3 hours ago
 
One of the world’s longest sagas over a debt default may soon be coming to end. Argentina is nearing a final deal with foreign creditors – almost 15 years after it first defaulted on nearly $100 billion that it owed. A successful conclusion to the extended legal battle could offer a morality tale for a world awash in red ink.

What is the tale? It is that Argentines decided last year to elect a new president, Mauricio Macri, who, like a returned prodigal son, has quickly begun to shed many of the country’s profligate habits and plans to abide by the obligations of global financial rules.

“We have to be a predictable and trustworthy country,” he said. “Argentina wants to have a good relationship with the whole world.”

Largely cut off from world capital markets and foreign investments, Argentina’s economy has stagnated. Mr. Macri’s election was a turning point for the resource-rich South American nation, whose wealth per capita was once on par with Canada’s. While Argentina’s 43 million people have practical economic reasons to make good on the nation’s sovereign debts, the legal drama has also helped. Many of the creditors were able to convince a United States federal judge, Thomas Griesa, to impose tough restrictions on Argentina’s assets around the world.

It also helped that Judge Griesa labeled Argentina’s actions as “immoral.” In fact, Argentina’s snub of its creditors pushed the International Monetary Fund, which helps rescue countries in financial trouble, to stiffen its rules. “No More Argentinas” become a mantra at the IMF.

The issue of morality is often woven into today’s international struggles over debt collection or debt leniency. Since the 2008 financial crisis, the European Union has pushed Greece to curb its overspending and its lapsed tax collection before receiving loan bailouts. Greece is not alone in the EU. Many European banks remain saddled with nonperforming loans, which may total more than $1 trillion. And the official debts of Italy and Portugal are still at dangerous levels.

China could be dealing with the biggest case of moral hazard in financial obligations. The debt of its corporations, most of which are state-controlled, has risen to an estimated 140 percent of China’s gross domestic product. That is about double the debt-to-GDP ratio for US corporations. The possibility of massive debt defaults in China is a major reason for the global economic slowdown.

Argentina’s final solution to its debt may be unique but the uniqueness only shows that the legal and moral rules for debt resolution are not yet set in stone. The IMF has changed its rules in recent years as each financial crisis demands specific solutions. The IMF, for example, bent its rules to help Ukraine solve its debt woes despite the country’s apparent inability to pay. The action reflected the West’s concerns about Ukraine falling under Russian control.

This month, the IMF announced it had again reassessed its debt-rescue rules. This time the agency hoped to be able to send the proper signal to any country tempted to renege on debt obligations.

Debt is a necessary tool for individuals and countries to support each other. But it also is tied to virtues such as honor and respect. “There is a moral as well as a purely economic case for the global marketplace,” says Steven Weisman , author of a new book, “The Great Tradeoff: Confronting Moral Conflicts in the Era of Globalization.” To set rules for global commerce, he adds, requires the morality of global cooperation.

As Argentina returns to the fold of international credit markets, its story should elevate the search for the best legal – and moral – standards to honor debt obligation. It shouldn’t take a country some 15 years to figure out the right course.

http://news.yahoo.com/morality-tale-argentina-debt-epiphany-225837079--politics.html

[Crafty_Dog]

Not real impressed with some of this but FWIW here it is:

By Reva Bhalla

Washington seems to be hitting numerous walls these days when it comes to its foreign policy. How do you preserve European institutions when each member will logically put its interests ahead of the bloc in fighting migrant waves? How do you stem a migrant crisis when the dissolution of Sykes-Picot boundaries creates massive power vacuums for militants to fill? How do you enforce a lasting cease-fire in Syria when Russia is still holding out for concessions from the West on sanctions and Ukraine? How do you get Kiev to agree to recognize elections in eastern Ukraine when the government can barely stand on its own?

It may not be a coincidence that this whirlpool of seemingly zero-sum conflicts is centered on Eurasia, a part of the world where geography tends to do a poor job of keeping competitors from clashing in terrifically violent ways. The picture looks remarkably rosier, however, when Washington looks to its south.
Left-Wing Populism in Tatters

Even if the United States can't take much of the credit, Latin America seems to be sorting itself out quite nicely. Now on the verge of returning to international bond markets, Argentina is biting the bullet of painful economic restructuring. Brazil is willing to detain even the most grandfatherly and charismatic populist of his time in the name of fighting corruption. Colombia is in the final stages of making peace with the Revolutionary Armed Forces of Colombia after more than 50 years of armed conflict. And while Caracas is burning, pragmatic Cuba has excused itself from its Bolivarian alliance duties to make nice with the United States. From Caracas to La Paz to Quito to Managua, the pink tide of left-wing populism is in tatters.

We can see why U.S. President Barack Obama chose this geopolitical backdrop for his next trip abroad. Washington finally has room to maneuver again in a region where the raw economics, as opposed to the entrails of the CIA, has done most of the dirty work in phasing out all those problematic populists who long vexed U.S. policymakers and investors alike. By supporting anti-corruption bodies, an increasingly popular foreign policy tool in Washington's kit, the United States can more subtly influence the politics of the region over time while working to strengthen institutions.

The United States also has a more favorable climate this time around to temper paranoia over a perceived return of neoliberalism. China now follows the United States as the region's second-largest trading partner and has helped enable the creation of the New Development Bank to create financing alternatives for the developing world. U.S. economic imperialism is a lot harder to argue against when China forms such a large piece of the regional trade picture.

Even the International Monetary Fund, the very embodiment of the Washington Consensus prescription of reforms that offended the social consciousness of the region and fueled populism, has seen a bit of a Keynesian resurgence since the 2008 financial crisis. The IMF has been articulating a higher tolerance for spending, the need for closer examination of social costs and the use of a wider array of fiscal tools that can be tailored to countries grappling with recession. In short, the death of populism in Latin America does not simply equate to a return of draconian economic policy prescriptions drawn up in Washington.

Human rights naturally remain a sticky subject for the White House in dealing with this region. With two Cuban-Americans in the race for the Republican presidential nomination, we will hear plenty in the days leading up to Obama's Cuba visit on how the U.S. president is an apologist for brutal regimes and how the United States should be engaging only with a democratic Cuba. While we cannot expect the United States to lift the trade embargo on Cuba any time soon in the name of human rights, we also cannot expect a U.S. president to pass up the opportunity to knock the legs out from under Venezuela's Bolivarian alliance.
Cuba, Key to Venezuela

The Castros knew before anyone that the Venezuelan regime was imploding. Cuban intelligence became pervasive in Venezuela upon the invitation of former Venezuelan President Hugo Chavez, who decided he was better off trusting his Bolivarian brothers in Cuba than his own generals at home to safeguard his regime. With that Cuban access came direct knowledge and handling of Chavez's health up until the point of his death three years ago. Cuba could see there was no viable replacement for Chavez who could effectively manage the years of economic rot that had built up and still maintain popular support, much less maintain the subsidies to poor neighboring islands in the name of Bolivarian solidarity. Moreover, Chavez had tolerated an elaborate web of armed groups, from the barrios to the prisons, to make it too costly for any one of his rivals to challenge him. With Chavez gone, the fractured security landscape in Venezuela would become a nightmare for anyone trying to oversee a transition.

Cuba needed to create options for itself, and needed to do so while it still held some leverage with Venezuela. Washington will want the best information it can get from Havana to try to shape what will likely be a tumultuous transition in Venezuela. In other words, Venezuela was the catalyst for what was arguably an overdue normalization between Havana and Washington.

We can expect Obama to discuss at length the challenge that lies ahead in Venezuela when he visits Cuba later this month. Venezuelans have tolerated economic chaos for years, but the country is nearing its breaking point. Severe food, water and electricity shortages are now gripping Caracas, the urban core that the state always tried to prioritize when it came to distributing basic supplies to avoid triggering unrest.
Venezuelan Transition Scenarios

Venezuelan President Nicolas Maduro thus far has sought to avoid and neuter the opposition in the National Assembly, but this is a stalling strategy at best, and time is running out. For this deadlock to break before social unrest gets out of hand, Maduro's removal is the first step in any transition. Venezuelan Defense Minister Padrino Lopez will likely be one of several key figures involved in a potential intervention against Maduro, so long as he has the support of the military and the cooperation of certain segments of the opposition. Careful thought is being given to try to abide by the constitution and avoid the stigma of a junta to ensure support from Venezuela's neighbors and the West. Efforts will be made to draw support from Organization of American States and UNASUR to sanction a move against Maduro. The Vatican could also signal its support for a democratic transition in Venezuela at an opportune time to help enlist the support of the masses.

But much can still go wrong in a carefully orchestrated political transition. The military could use social unrest as a trigger to intervene against Maduro, though at the risk of sparking out-of-control protests. Chavistas on the chopping block, such as former National Assembly speaker Diosdado Cabello, will meanwhile try to leverage their clout with the National Guard and armed narco groups to negotiate an exit strategy as the threat of extradition to the United States hangs over their heads.

All parties, including Cuba and the United States, want to mitigate the security fallout as best as they can. That also means a great deal of responsibility will likely fall on the military, the only institution capable of managing what could be a highly volatile transition, even if that winds up compromising human rights. The timing of the transition is also critical: The military could use social unrest as justification for intervention, but it also cannot wait long enough for street protests to overwhelm the state. There is no guarantee of constitutional outcomes when desperation is spreading in the streets.

For all its unknowns, the Venezuelan crisis and its cascading effects in the region amount to a net positive for U.S. foreign policy. The transition will be messy and there is a long restructuring ahead, but this is not a process that Washington needs to drive itself, unlike the sticky web of conflicts it faces in Eurasia. Populist leaders have run out of economic steam and the politics are simply catching up across the region. Washington just needs to go along for the ride.

[Crafty_Dog]

Colombians stunned their government, the world and maybe even themselves Sunday when they voted to reject a government-negotiated peace settlement with the left-wing insurgency known as the Revolutionary Armed Forces of Colombia (FARC). There’s a lesson here about political leadership and public trust.

The polls had predicted an easy win for President Juan Manuel Santos, who has staked his presidency on negotiating an end to 50 years of FARC terrorism. Instead a passionate “no” campaign carried the day by some 55,000 votes. The result should mark the end of the Havana pact signed by the two sides in August.

Critics are blaming the defeat on former President Álvaro Uribe, who led the opposition after having done so much to defeat the FARC during his eight years in office. But the seeds of Sunday’s defeat were planted by his successor, Mr. Santos, and the way Mr. Santos conducted the negotiations and sold the agreement.

Mr. Santos spent five years negotiating in Havana, starting in secret and then extending deadline after deadline to accommodate escalating FARC demands. Making Raúl Castro a key player in the talks hardly reassured Colombians, nor did naming Cuba and Norway as guarantors of the accord and Venezuela and Chile as sponsors.

The final 297-page deal allowed FARC guerrillas to avoid justice for their crimes; they also were to receive unelected seats in Congress and control of 31 radio stations. Colombians live next to Venezuela and they know how radicals abused the privileges of democracy to take power in Caracas.

Mr. Santos told the BBC in December that in the plebiscite “the people can say ‘no we don’t like it’ and then there is no deal.’” Asked if that meant he would “just walk away” after a defeat, Mr. Santos said, “yes, because that’s the commitment I made since the very beginning.” He added: “But I am absolutely convinced that the overwhelming majority of Colombians will support me.”

Yet on Sunday evening a stunned Mr. Santos announced that he would send his negotiating team back to Havana the next day. “I won’t give up,” he said. This broken promise that the vote would be final is precisely why Colombians didn’t trust Mr. Santos and the FARC to implement and live up to a genuine peace. They fear that Mr. Santos wants a peace deal at any price, even putting at risk Colombia’s fragile democratic institutions.

The FARC says it won’t return to the battlefield for now, but Mr. Santos’s first obligation is to protect Colombians if the guerrillas do return to terrorism, kidnapping and other crimes-for-profit. They were likely to continue their drug-trafficking even if the peace deal had passed.

President Obama had also thrown U.S. prestige behind the Havana pact, partly to secure his detente with Cuba. The U.S. has responded to the defeat by saying it respects democracy, and if that’s true it will avoid pressuring Mr. Santos to make more concessions and offer to help Colombia if the FARC returns to its murderous ways. 

[captainccs]

In country after country people don't trust the establishment, that's why you have Trump and Brexit and a rejection of a bad deal with FARC. Expect some upsets in the upcoming EU polls.

Politics is too important to leave to politicians.

Denny Schlesinger

[DDF]

Just print more money... it isn't earned, is owned by everyone, backed by nothing, and should be distributed to all.

http://www.zerohedge.com/news/2016-10-27/venezuela-throws-towel-hyperinflation-will-print-200x-higher-denominated-bills

[G M]

Just print more money... it isn't earned, is owned by everyone, backed by nothing, and should be distributed to all.

http://www.zerohedge.com/news/2016-10-27/venezuela-throws-towel-hyperinflation-will-print-200x-higher-denominated-bills

Good thing that could never happen here.

[DDF]

Just print more money... it isn't earned, is owned by everyone, backed by nothing, and should be distributed to all.

http://www.zerohedge.com/news/2016-10-27/venezuela-throws-towel-hyperinflation-will-print-200x-higher-denominated-bills

Good thing that could never happen here.

Quit it.... you're making me laugh when I'm trying to keep a straight face.

[Crafty_Dog]

You are in the presence of a true master of deadpan snark.
 

[DDF]

"Immersed for ten years in an endless war against drugs, Cienfuegos publicly admitted "burnout" of his troops, ordered more troops before the immensity of the task and called for a legal framework to regulate their presence in the streets.
"There is burnout"; Obviously, we are working across the country, at all times, at all times; in the mountains, in the cities," General Cienfuegos, after inaugurating a seminar on National Defense.

http://internacional.elpais.com/internacional/2016/10/20/mexico/1476926996_750184.html?id_externo_rsoc=fbads_ep_mx_ejerc

[Crafty_Dog]

DDF: 


Interesting implications there.

Please note there is a thread here for Mexico and on the Spanish language forum too.  Please feel free to make good use of either or both.

[Crafty_Dog]

http://www.judicialwatch.org/blog/2016/12/spanish-military-report-islamic-terrorists-operate-raise-cash-latin-america-attack-u-s/?utm_source=SilverpopMailing&utm_medium=email&utm_campaign=Tipsheet%201-4-17%20%281%29&utm_content=

[Crafty_Dog]

 

Dear In Focus: Panama Reader,

I had been in Panama City for about a week when I found myself with a gun pointed at me. In the span of mere seconds, I went from casually walking down the street, minding my own business, to a strange man pointing an assault rifle at me in broad daylight. For me, a Canadian, it was rather perturbing.

It happened entirely by accident. The man didn’t know me, nor did I know him or his associates. All four of them were coalesced in a circle of an abandoned concrete shell of a building that was without walls. Each faced out with their guns’ sights scanning the front and back sidewalks. Two suitcases were on the ground in the middle of them. None of them wore a uniform that might explain why they were so heavily armed.

It was all over in a few short seconds, from the instant I saw them until I figured I was safely out of their sights. Other people walked by the building, seemingly unaware of the armed men, as they were partially hidden by a makeshift fence and two running SUVs, presumably theirs.

Who those men were (private security? undercover police? drug cartels?), why they were there, what was in the suitcases, and why they had their guns pointed on everyone who happened to be walking down that sidewalk that day, I won’t ever know.

After the incident, every time I walked past that house (it was unavoidably close to my apartment), I was focused on that abandoned building. A few months later, a taller fence was built around it, completely blocking off any view inside. Who knows what goes on inside that building now? It remains undeveloped, surrounded by the regular goings-on of the city. Maybe the armed men continue to use the building for their armed meetings. It’s no matter to me, I continue to walk by on a daily basis. Out of sight, out of mind.

Those guns were the first and last I’ve ever seen in Panama, other than those of police or armored-vehicle and bank guards. Sometimes I think I hear gunshots through my open window at night, but then I see the sparkle of fireworks over the city or a broken-down taxi backfiring down the block.

The first time I saw the Panamanian National Police with their guns I was a little intimidated, though. They were cruising around in their all black uniforms and visor helmets, two per motorbike, with the back rider clutching an assault rifle. I didn’t know they were police until the next day, when a friend filled me in. Again, for a Canadian, this level of armory for a simple street cop seems more than excessive—it’s almost fear inducing. Why should they need to be so well-armed? Is crime that bad? Is the street I’m on unsafe?

Given that Panama is one of the few countries in the world without a military, it’s understandable why these police—and, importantly, their weapons—are ominously displayed. It helps instill a sense of security in the general public. It probably also keeps overly ambitious revolutionary types in check.

Perhaps it’s simply due to my Canadian-ness, that the sight of a gun in public captures my attention. Even in my hometown of Saskatoon, repeatedly ranked as Canada’s most dangerous and murderous city (with rates close to U.S. national averages), firearms aren’t generally seen or heard of. Since that first instance in Panama, I haven’t seen or heard of guns much here in Panama either.

I’m a number guy, so I looked at some data to put it in perspective, and that helped put me at ease. While the murder rate in Panama is higher than in Canada (obviously, given Canada’s is one of the lowest on the world), it is much lower than in many U.S. cities.

I never felt unsafe on my recent visit to New Orleans, where the murder rate is higher than Panama’s national rate, so why should I feel unsafe in Panama? I shouldn’t. Especially given that the areas I tend to hang around in are some of Panama’s safest. And especially given that being a gringo tourist (i.e. someone with a lot of money) means the police have an extra eye toward my safety. The odds are ever in my favor.

Of course, shootings and robberies happen every day, all over the country, but that’s true many places. Crime doesn’t only happen in bad neighborhoods or to people crossed up with the wrong crowd. Walking down the street, sitting in a classroom, a church, a theater, or even opening your front door have all been instances of murders across Canada and the United States in recent years. Bad people exist, and bad things can happen to anyone, anywhere, anytime, even where you are—right now.

So never mind the guns, you probably won’t get shot in Panama... at least, no more than you would anywhere else.

Matt Chilliak

[Crafty_Dog]

https://www.wsj.com/articles/the-left-sets-honduras-on-fire-1512338216

[Crafty_Dog]

South America’s ‘Pink Tide’ in Transition
Mar 8, 2018

 
By Allison Fedirka

Leftist governments are staging a comeback in South America, right? The talk surrounding upcoming elections throughout the continent seems to suggest they are. Nostalgia for the days of economic prosperity in Brazil has lent credence to the notion that former president Luis Inacio Lula da Silva will run for president again. In Argentina, unpopular and painful economic reforms championed by President Mauricio Macri have breathed new life into rumors that citizens would prefer the populist policies of the previous administration. Other examples abound, but suffice it to say, the “pink tide” – South America’s peculiar brand of leftism – is in vogue again.

Or is it? It’s true that the left is alive and well. But the pink tide began to recede in 2015, and despite statements to the contrary, it’s still on its way out, not on its way in.

One Extreme to the Other

The pink tide came to be in the early 21st century. South America leaders mixed elements of populism and socialism into their governments. They lauded the working class, maintained a presence in many aspects of the daily lives of their subjects and regulated the economy. It was not a return to red communism; it was a paler shade of socialism. Hence the name pink tide.

The rise of the left was a result of two things: disillusionment with the ruling governments and higher commodity prices. The political climate of the time gave governments a mandate to more actively try to improve their citizens’ quality of life, renew economic activity and buck the country that so often told them what to do: the United States. Higher commodity prices gave these governments the money to fund large-scale social programs and spurred economic growth. With strong public and economic backing, leftist governments grew more popular, taking hold just about everywhere except Colombia.

But this newfound fervor would not last. Indeed, the political history of the past century suggests that countries tend to swing from one political extreme to the other. Policies that reflect whichever mode of government is in place are felt most acutely in economic management, and their economies depend largely on commodities.

Indeed, commodities – particularly metals, grains and more recently, oil – are the ties that bind South America to the rest of the world. In the 1920s, the region traded openly and primarily with the U.S. and Europe. Commodity prices tanked when the stock market crashed in 1929, and countries began to seek other ways to nurture their economies. World War II complicated things for these countries, since South America traditionally purchased finished manufactured goods from Europe and the U.S. With their industries going offline or reverting to the production of wartime materials, the region had limited access to manufactured goods, and what did arrive was extremely expensive.

It was during this time that countries of the region began to look inward for solutions. They subsequently adopted import substitution models to manage their economies. This model requires a strong hand to regulate the import of finished goods, provide production subsides to increase domestic consumption and devise other programs that facilitate the development of national industry. But the model never fully performed as advertised. Instead, it led to high government spending, debt and distorted markets. This continued into the heady days of the Cold War in the 1970s. Afraid that this would give communism a foothold in the Western Hemisphere, the United States countered leftist movements at nearly every turn, exiling, imprisoning or killing their members. The movements weakened accordingly.

By the time the Cold War ended in 1991, right-wing governments began to assume power throughout the region. Many South American economies had been in a precarious state. They were very far in debt, which they had trouble servicing, and in need of loans and investment. In what became known as the Washington Consensus, institutions such as the U.S. Treasury Department, the International Monetary Fund and the World Bank encouraged and promoted the adoption of fiscal reforms, privatization, market deregulation and opening to trade and investment in exchange for loans and investments. They honored the end of the agreement, but they were ultimately unsuccessful in transforming their economies. The right-wing, U.S.-friendly governments soon fell out of favor.

Conditions were ripe for a return to the left, a return we now call the pink tide. The era lasted roughly 10 years, which, uncoincidentally, were years of high commodities prices. It ended near the end of 2015.

Transitions

After that, open-market, internationalist, reformist governments came to power in several countries with center-left governments – most notably Argentina, Brazil and Peru. The trend continued last year in Chile, where right-leaning former president Sebastian Pinera was re-elected for a second term.

Few countries have been able to withstand the swing to the right. In 2017, Ecuador elected as president Lenin Moreno, who had served as vice president under President Rafael Correa. Correa himself was a leftist, but Moreno has already distinguished himself from his predecessor. He inherited an economy in disarray after the collapse of oil prices, so he adopted new fiscal policies and a more pragmatic approach to managing the economy rather than continuing with hefty government spending and protectionism. He has also tried to align the economy with global markets by re-negotiating the country’s previously preferential oil contracts with China.

Bolivia held out a little longer than others, mostly because Bolivia’s economy managed to grow despite low commodity prices. Its primary commodity is natural gas – which accounts for about half the country’s exports – and the price of gas remained high when oil tanked in 2014. (It started to decline only toward the end of 2015.) The public didn’t start to turn against President Evo Morales until 2016. There had always been opposition to his rule, but the opposition gained a lot of momentum when Morales’ traditional allies in Venezuela and Brazil, preoccupied as they were with their own problems, were no longer strong enough to support him. The opposition held a referendum that banned Morales from seeking re-election in 2019, though the Supreme Court would not uphold the results. Protests subsequently broke out, and though Morales is still in power, the rising social discontent, the declining natural gas production and ideological isolation are challenging the government’s hold on power.

Then there is Venezuela, where government this month announced that presidential elections will be held in May, after the initial April 22 date was rejected by opposition parties. Mounting pressures are pushing the country toward some solution that involves the end of the current leftist regime headed by Nicolas Maduro. The most recent dialogue with the opposition has failed, and neighboring Colombia and Brazil have both beefed up border security to help prevent any more spillover of desperate populations moving to border towns and depleting supplies meant for the local populations. Later this month the government will also start the first phases of its cryptocurrency, designed to help circumvent the U.S. sanctions that are restricting the government’s (and the national oil company’s) ability to conduct business and to access imports and U.S. dollars. Colombia already wants to propose a financial recovery plan for Venezuela that would be in line with carefully opening and deregulating the economy. Meanwhile, the United States has not ruled out further oil sanctions against Venezuela.

At GPF, we are not in the business of predicting elections; we are in the business of predicting geopolitical trends. So while we can’t say exactly when Venezuela and Bolivia will succumb to the pressures that felled their neighbors, we can say that eventually they probably will. After all, political transitions do not happen overnight.
The post South America’s ‘Pink Tide’ in Transition appeared first on Geopolitical Futures.

[Crafty_Dog]

By Allison Fedirka

Media coverage of Central America has tended to focus on drug cartels, organized crime and migrants fleeing violence in their home countries. But this focus reflects as much the political climate in the United States as it does the actual threats emanating from the region. Since the end of the Cold War, Central America has been a region the U.S. could largely ignore, but as it comes into its own – establishing more stable, if still at times shaky, political institutions and trade partnerships – its ability to affect more formidable countries to its north is increasing. This situation, combined with the political climate in the U.S., could result in growing interest in Central America from outside players.

Cold War Battlefield

Central America’s importance to the global system has ebbed and flowed over time. Central American countries made their geopolitical debut at the turn of the 20th century. By this point the U.S. – having survived a civil war and won wars against Mexico and Spain – had secured its status as North America’s uncontested power. In practice, this meant the United States had the capability not only to keep foreign powers out of the Western Hemisphere but also to expand the perimeter of its influence. In Central America, the U.S. employed a variety of methods to do so, including military interventions, supporting independence movements, buying up major infrastructure and monopolizing national economies through private businesses. But the onset of World War I brought a decisive end to major U.S. intervention in the region (at least for the moment). The U.S. had more pressing threats elsewhere, and the dominance it had already established in Central America meant that it could take a more hands-off role. It left behind economies dominated by monopolies, largely uneducated labor forces and unreliable political institutions.

But with the beginning of the Cold War, Central America once again became a region the U.S. wanted to control. Central America’s proximity to the U.S. makes it an area of potential vulnerability for the United States. The Soviet Union realized this and tried to spread its political ideology there, turning the United States’ own backyard into a Cold War battlefield. The U.S. response ranged from direct intervention to indirect support for political coups. When the Cold War ended, Central America no longer posed a threat to the U.S., and thus Washington’s interest waned.

Today, Central American countries continue to struggle to integrate into the global system, much the same as the countries of Eastern Europe, another Cold War battleground. U.S. intervention in Central America during that era led to hostilities, including civil wars, that resulted in political and economic instability across the region. But like Eastern Europe, these countries entered into a period of reconstruction. This process has garnered less attention than the turmoil of the Cold War era because there was no competition between outside powers and the stakes therefore were much lower.

The region is still trying to recover from this strife and establish its own political systems, but progress is slow. As recently as 2009, Honduras experienced a coup, and notably not one that was engineered by the United States. More recently, a wave of protests following President Juan Orlando Hernandez’s second electoral win last November resulted in calls for a national dialogue to try to restore peace mediated by a third party. (The leading three candidates to act as moderators are former presidents of Mexico, Guatemala and Chile.) There has also been an increase in the production of coca, the plant from which cocaine is manufactured.

Costa Rica has seen an increase in drug trafficking, and there have been calls for the government to develop a national security agenda, which critics say is lacking. The newly elected Costa Rican government will likely struggle to govern once it takes office in May, having already had to reach across party lines for help. In El Salvador, security remains the primary challenge. The country never fully achieved peace and security after the end of its civil war, which the U.S. contributed to through its military support of the government. In the first quarter of 2018, homicides in El Salvador totaled 939, an increase of 14 percent compared to last year.

Hard to Ignore

But free from Cold War ideological divisions, the countries of the region are now able to re-evaluate their allegiances with external powers and form partnerships of their own accord. Honduras has started talks to join the Pacific Alliance, a Mexico-led Latin American trade bloc. Panama and Costa Rica are on their way to full membership in the group. Panama also recently signed a free trade agreement with China, and China’s overall share of Central American trade has been steadily rising in recent years. Guatemala and Mexico have increased border cooperation to deal with security threats.

Nicaragua is potentially the most dynamic country of the region. The government of Daniel Ortega, who has been president since 2007, has pushed populist policies roughly resembling those in Venezuela, Russia and China. Nicaragua has managed to pursue a leftist agenda despite being so close to the U.S. geographically because it has received strong political backing and, to a lesser degree, economic and security support from all three countries, which have in turn used their support for Nicaragua as an indirect way to defy the U.S. With Venezuela’s economy in free fall and Russia’s and China’s economies slowing down, Nicaragua will be forced to reconsider its allegiances.

These changes are compounded by two new trends in North America: growing violence from Mexican drug trafficking organizations and the rise of nationalism in the United States. These developments have led the U.S. to pay increasing attention to events in Central America. Washington recently deployed the National Guard to the Mexican border in response to a caravan of Central American migrants in Mexico headed for the border. The U.S. has also tried to stem the production and trade of drugs in the region. This response was the United States’ way of trying to limit the effects of rising violence from reaching its doorstep, using the least amount of effort possible while leaving the burden of having to actually manage the problem to Mexico.

But the most important threat facing the United States from this region is not immigration or drug trafficking but the fact that Central America is trying to shape its destiny on its own terms – not on U.S. terms. Central American countries are in the process of building political institutions, trade relationships and international partnerships that will shape their future for decades to come, and they’re doing so without the United States, for the first time in a long time. In some cases, this will lead to stronger ties with countries like Mexico. In others, it may give China or Russia a boost in the region. Washington’s interest in Central America is still far from what it was at its peak, but the U.S. will in the future see it as a region increasingly difficult to ignore.

[Crafty_Dog]

Its Breitbart, so read with cautious eye:

http://www.breitbart.com/national-security/2018/04/18/experts-iran-hezbollah-radicalized-thousands-latin-americans/

[G M]

Its Breitbart, so read with cautious eye:

http://www.breitbart.com/national-security/2018/04/18/experts-iran-hezbollah-radicalized-thousands-latin-americans/

Nothing new here, they've been doing this for decades.

[ccp]

to tarnish Trump on the 4th. This "news" obviously held to be  splashed  across the sinister* wing media outlets:

https://www.yahoo.com/news/us-official-trump-pressed-aides-venezuela-invasion-044213413.html

I have news for the LWM. Venezuelan people could only pray for an US invasion now to help them .  Was Panama better off with Noriega or Grenada with the Marxists in charge?


*  Latin sinister is left
           dexter is right

[Crafty_Dog]

I can easily imagine him wondering "Why not?" AND enjoying freaking people out with the question 

[DougMacG]

I can easily imagine him wondering "Why not?" AND enjoying freaking people out with the question 

[Trump allegedly asking advisers about invading Venezuela.]

Even if the right answer is to sit back in our comfort and watch this human tragedy transpire, as leader of the free world, how do you not at least ask the question, what can we do?

Giving food and giving money [to the brutal, ruling kleptocrats] does not fix the problem.  Maybe nothing else from the outside solves it either.  I don't know.

[Crafty_Dog]

By Allison Fedirka

The United States’ current policy toward Central America is pretty simple: increase border security to stem uncontrolled migration flows and offload as much responsibility as it can to Mexico. It offers some Central American countries basic security cooperation when it has to, but otherwise, Washington prefers to keep its distance. If Nicaragua stays on its current course, distance may not be a luxury the U.S. can afford for much longer.

Sudden Descent

Given how quickly Nicaragua’s security situation deteriorated, it’s easy to have missed – or to have forgotten – how it got as bad as it is. And it’s bad: Nearly three months in, the protests and violence show no signs of abating. They began on April 18, when President Daniel Ortega moved forward with plans to increase the contributions of workers and employers into the beleaguered social security system. The International Monetary Fund has been warning the government in Managua for more than a year that its social security system is dangerously low on funds as a result of years of mismanagement. After the first few days of unrest, Ortega reversed course, but it was too late to put the lid back on. Anti-Ortega groups had already seized on the controversial reforms to spark nationwide, anti-government protests. Students and pensioners have been joined by business groups, Ortega’s political opponents and nongovernmental organizations, each promoting its own cause but united in their opposition to the government.


(click to enlarge)

The protesters haven’t accomplished their objective of ending the Ortega administration, but they have succeeded in sending the economy on a nosedive. Before the protests started, the IMF projected 4.3 percent economic growth for Nicaragua. The country’s central bank was more optimistic, forecasting growth of 4.5-5 percent for 2018. At the end of May, however, the central bank revised its projection down to 3-3.5 percent. On June 29, the bank’s president dropped expectations further, to just 1 percent growth. The bank also noted that foreign direct investment in the first quarter had fallen 27 percent year-on-year to a mere $322.3 million, and it revised projected unemployment to 6 percent from 3.7 percent to account for an estimated 85,000 lost jobs.

Those are the optimistic assessments. The Nicaraguan Foundation for Economic and Social Development released in June an updated assessment of the country’s economic losses in the event the protests continued. It concluded that 215,000 jobs had already been lost – 2.5 times the central bank’s estimate. It also reported that in the best-case scenario (i.e., the crisis gets resolved by the end of July), the Nicaraguan economy would still contract 0.3 percent this year, and economic losses would total approximately $637.9 million. In the worst-case scenario (i.e., the crisis continues throughout the end of the year), the study estimated that the economy would contract 5.6 percent and see up to $1.4 billion in losses.

All indications right now suggest that the protesters won’t back down, the government won’t resign and the economy will continue to deteriorate. Several attempts at dialogue have ended in failure. The protesters have called for early elections, but the opposition has not yet presented a viable alternative to Ortega – and on Saturday, Ortega ruled out elections anyway. With dialogue and democracy off the table, one of the only options that remains is force. Here, too, there is stalemate.

The government has unleashed paramilitary groups on the protesters, but the protesters have proved resilient. A political organization known as the Broad Front for Democracy called on the military to disarm the paramilitary forces, but those calls have been ignored and likely will continue to be. But neither will the military put its thumb on the scales to defend Ortega. The Nicaraguan military was professionalized during the 1990s and is legally bound to the country’s constitution, not its president. Ortega has tried to politicize the armed forces since taking office in 2007. He favored loyalists for promotions, increased the presidency’s authority over the military and allowed officers to hold executive branch posts. He also bought loyalty with pay raises – something made more difficult since then by government austerity measures. Nevertheless, the institution of the armed forces has held steady and has respected the boundaries when it comes to domestic affairs. So long as Ortega has paramilitary groups policing demonstrators, this arrangement works.

Containment

Nicaragua’s descent into chaos makes the population vulnerable to lawlessness, particularly gang activity and drug trafficking, and encourages mass migration. The U.S. has generally been able to overlook Nicaragua, focusing its attention instead on containing migration from the Northern Triangle countries: Honduras, El Salvador and Guatemala. These countries have poor economies, a high prevalence of gangs and complicated recent histories fraught with violence. Nicaragua has largely been an exception, with minimal drug trafficking and a budding basic manufacturing sector.


(click to enlarge)

Though there hasn’t yet been an exodus from Nicaragua, neighboring Costa Rica has observed an influx of refugees. Their numbers will only grow the longer the instability lasts. And Costa Rica – which is dealing with its own financial problems as well as an increase in drug trafficking through its territory – is in no position to handle a flood of refugees. It is a long-standing U.S. ally that relies heavily on the U.S. for security. It would expect Washington to provide some assistance should things get worse, and failure to do so would damage a critical U.S. relationship in the region.

Bilateral cooperation between the U.S. and Nicaragua has been minimal. The ideological differences are strong, and the U.S. doesn’t approve of the Ortega administration’s alliances with Cuba and Venezuela. Instead, the U.S. approach toward Ortega has been similar to its policy toward the Nicolas Maduro government in Venezuela. During his recent visit to Latin America, U.S. Vice President Mike Pence called on Central American countries to work to solve the problems in Nicaragua, and on July 5, the U.S. placed sanctions on three key Nicaraguan security and political officials. (This comes less than a month after a dozen opposition senators from Nicaragua asked President Donald Trump to apply sanctions on governing officials.)

These measures alone will not bring down the Ortega government, and that is fine with Washington. The U.S. does not want to devote an abundance of resources to deal with the issue. It understands the potential for Nicaragua to further exacerbate the problems the U.S. confronts when dealing with Central America. Washington will avoid any decisive action unless it’s absolutely forced to act. In the meantime, it will encourage regional actors to assume responsibility and will gradually apply diplomatic and economic pressure on the Ortega government. The most important element of U.S. strategy toward Nicaragua isn’t that the Ortega government is demolished – it’s that whatever happens is controlled.

[DougMacG]

Walter Russell Mead
https://outline.com/jWkmbF
Things are not going well in the hemisphere. Good analysis.

[Crafty_Dog]

Highlights

    Thousands of Honduran migrants planning to request asylum at the U.S.-Mexico border will put the Honduran government in a difficult political situation with the White House.
    The Honduran political opposition may continue encouraging migrant groups to emigrate northward as a political tool to pressure the administration of Honduran President Juan Orlando Hernandez.
    The White House will keep threatening to cut foreign assistance to Honduras, Guatemala and El Salvador. However, the power to reduce or eliminate assistance rests with Congress, which will be reluctant to do so.
    Even if Congress agrees to major reductions in foreign aid, such a move could backfire for the Trump administration by spurring Central American governments to cozy up to China diplomatically in search of foreign assistance.

An estimated 7,000 Central American migrants making their way through Mexico toward the United States have become a prominent headline in the daily news cycle. The Central Americans intend to request asylum when they finally reach the U.S. border with Mexico, most likely in Texas' Rio Grande Valley. In response, U.S. President Donald Trump has threatened to cut assistance to Honduras, Guatemala and El Salvador, the three countries where most of the migrants come from.
The Big Picture

A majority of immigrants caught trying to illegally cross the U.S.-Mexico border come from Honduras, Guatemala and El Salvador. Now, a group of thousands of mostly Honduran migrants hope to cross Mexico to request asylum in the United States. This public show of mass migration is fodder for daily political rhetoric in the United States and Central America, but its significance goes beyond the immediate U.S. debate over immigration. Latin American countries could easily be drawn into the broader confrontation between China and Washington over trade, military competition and global influence.
See Crossing Borders

With U.S. midterm congressional elections less than two weeks away, it's no surprise that Trump, who made securing the U.S.-Mexico border a central part of his administration, has seized on the migrant caravan to rally his political base. But the caravan's significance stretches beyond Trump's desire to shore up electoral support or his administration's attempts to reduce illegal immigration and the number of asylum claims in the United States. The caravan is a product of the unstable internal politics and poverty in Honduras, where the majority of the migrants originated. Former left-wing Honduran legislator Bartolo Fuentes is a key organizer of the caravan, which has led to unverified claims that the Honduran leftist opposition led by former President Manuel Zelaya is behind the effort to encourage such public displays of emigration to the United States.
Migration as a Political Tool

The claim that Honduran opposition figures helped promote migration to the United States may be unverified but it is plausible. Since the country's contested election in November 2017, the opposition in Honduras remains divided between the leftist Liberty and Refoundation Party (Libre) and the more moderate Liberal Party of Honduras. However, Libre politicians may have discovered that emigration can be used to force a crisis with Washington to put pressure on the government of President Juan Orlando Hernandez. The movement of migrants through Mexico will also test the Mexican government's relationship with Washington, particularly if the White House feels Mexico's security forces are not doing enough to block or disperse the group.

The economic and social conditions in Honduras make emigration to the United States — almost always illegally — seem a viable path to economic advancement and an escape from security threats. About 65 percent of Hondurans live below their country's poverty line. The minimum wage is around $370 a month, but nearly half the working-age population is not employed by legally established, tax-paying businesses and often does not make minimum wage. High crime spurred by endemic drug trafficking and gang turf wars also makes daily activities, such as travel to work, risky for some Hondurans. In rural areas, drought conditions can drive food scarcity and extreme poverty, both of which are currently on the rise and may be further exacerbated by a forecast El Nino year. Similar conditions prevail in Guatemala and El Salvador, the other two countries where caravan members originated.

Regardless of whether Fuentes and Zelaya coordinated this effort, the caravan presents a thorny political problem for the Honduran government, and other caravans could form and leave from the country. Hernandez cannot easily crack down on migrant caravans without inviting public discontent against his government. Trying to stop migrant caravans on roads heading west toward Guatemala risks violent confrontations with the migrants, which in turn would likely affect the government's approval ratings. The Hernandez government may increase border security, but such moves may not prevent people from taking secondary routes.
A graphic showing the number of people detained or turned away at the U.S.-Mexico border.
Threatening to Cut Foreign Assistance

Regardless of the constraints on the Hernandez administration, the public nature of migrant caravans makes them a prominent political issue for the Trump administration. However, Trump faces his own political constraints. Lack of congressional funding thus far has thwarted the president's plans to erect extensive physical barriers where migrants frequently cross. Nor has the White House been able to get significantly greater funding for immigration enforcement measures, such as the hiring of thousands of new Customs and Border Protection and Immigration and Customs Enforcement agents. Trump's election created uncertainty among would-be migrants and their smugglers in late 2016 and into 2017, leading to a temporary lull in migration. But that uncertainty dissipated as the constraints to Trump's border enforcement plans have increased, and migrant flows are again on the rise. Still, illegal migration into the United States is well below its historic highs of nearly 20 years ago, when authorities detained about 1.6 million Mexicans at the southern border alone.
A chart showing U.S.-Central American economic ties.

Threatening to cut off foreign assistance to Honduras, Guatemala and El Salvador is one tool Trump will keep using to try to force Central American governments to curb illegal migration. But temporarily or permanently reducing foreign assistance to Central American nations also requires congressional approval, without which there is little the White House can do to make Trump's threats stick. Congress and government agencies such as the Department of Defense and the Drug Enforcement Administration would be reluctant to agree to such a policy change out of concern it would harm counternarcotics cooperation with Central American governments.

Cutting U.S. assistance to Central America would risk unintended consequences. It could spur Honduras, Guatemala and El Salvador to seek more aid from China, where assistance would come with fewer political strings attached. Such a turn toward China most likely would be preceded by Honduras and Guatemala ending their diplomatic recognition of Taiwan. The White House confrontation with China over trade, military competition and political influence affects Central America as well, where the U.S. government has tried to pressure Honduras and Guatemala to continue to recognize Taiwan. But El Salvador already has revoked its recognition of Taiwan in favor of China. In September, the Hernandez insinuated that reduced U.S. foreign assistance could prompt Honduras to change its recognition of Taiwan.

[Crafty_Dog]

What We’re Reading: Uprisings in Central America, Life During Wartime

Weekly reviews of what’s on our bookshelves.
What We're Reading

GPF Staff |November 13, 2018


Inevitable Revolutions: The United States in Central America
By Walter LaFeber

George Washington was elected president of the United States in 1789, but it would be more than 100 years before a sitting U.S. head of state ventured outside his country’s borders for a diplomatic visit. That it was Teddy Roosevelt should come as no surprise, given his carefully curated reputation as a khaki-clad Man of the World. Also unsurprising was his destination. He could have gone to the United Kingdom, a country with which the U.S. had tangled diplomatically, and sometimes martially, ever since it gained independence. He could have gone to Spain, against which the United States had just won a war that we now know paved the way for U.S. dominance for decades to come. He could have gone to visit any great power, but he didn’t. He went to Panama – to observe the progress of the Panama Canal, a symbol of U.S. geopolitical power and, in time, a major contributor to it.

Roosevelt’s stewardship of the Panama Canal is well-known. But the U.S. was interested in the region, and in the prospects of an isthmian canal there, long before he became president. Thomas Jefferson wrote about the importance of Central America as early as the 1780s. He considered it a natural extension of the new American domain, the southern reach of what expansionists in the U.S. would later call Manifest Destiny.

If you’re a Founding Father, the sense of ownership is somewhat natural. As Walter LaFeber writes in “Inevitable Revolutions,” his excellent account of U.S.-Central American affairs, Washington, D.C., is closer to El Salvador than it is to San Francisco. Early leaders understood how the region could unlock their country’s trade potential. And, indeed, by the 1980s, when the book was first published, more than “two-thirds of all U.S. trade and the nation’s oil imports, as well as many strategic minerals, depend[ed] on the Caribbean sea lanes bordered by the five Central American nations.” (Such strategic considerations also touch on the United States’ obsession with Cuba.)

Which is to say that the canal’s construction was not the reason the U.S. was interested in Central America, or why it became powerful there. Its interest and subsequent power there were the reasons the canal was built.

There’s plenty more to say about U.S. interests beyond the canal – in fact, LaFeber doesn’t dwell on the canal for very long – but focusing solely on those ignores the moral context of the region’s modern history. And here is where LaFeber excels. Because U.S. leaders identified the strategic value of Central America early, the region became an early target of Washington’s imperial ambitions. First came the Monroe Doctrine, which, however toothless it was initially, laid the foundation for subsequent policies with much more bite. The Roosevelt Corollary, Taft’s dollar diplomacy, Wilson’s declaration on Latin America, the Good Neighbor Policy – all of them, each in its unique way, armored U.S. interests against Central American interests. It was a zero-sum game that the U.S. never really lost, some notable setbacks notwithstanding.

Through these policies, the United States tethered Central American nations to its own prerogatives. Once Washington solidified its position over the British and Germans, these countries became single-crop agrarian economies that depended almost entirely on U.S. markets. They received loans from Wall Street and Washington and from no one else. They imported most of their food from the U.S. And when anything compromised U.S. interests – for example, a leader, democratically elected or otherwise, who wanted to tip the scales away from the oligarchs who were the instruments of Washington’s policies – the U.S. would support insurrections against the usurper or simply intervene. As time went on, Washington preferred the former over the latter, but as LaFeber notes, between 1898 and 1920, U.S. Marines entered the Caribbean region no fewer than 20 times. (This is to say nothing of U.S. activity during the Cold War.)

The case of Honduras was especially instructive. In LaFeber’s words, the country was “less a nation than a customs house surrounded by adventurers.” Northern Honduras was effectively annexed to foreign corporate interests. Enterprising banana companies arrived around 1900, bought up the best tracts of land, built their own railroads, established their own banking systems and capitalized on the corruption of local government officials. The owners declined to share with the rest of Honduras the fruits of their prosperity.

After so many similar situations played out throughout the region, it’s little wonder that LaFeber regards the revolutions that ensued as inevitable. He writes: “Unable to deal with the products of its own system, reconcile the contradiction between its professed ideals and its century-old foreign policy, or work with other nations to resolve these dilemmas, the United States … has resorted to force.” Students of geopolitics know that the use of force often begets more force. Uprisings, then, were not incidental to the system that created and governed Central America; they were a consequence of it. The system was instrumental in making the United States the power it is today. Yet that power came at a cost – not just to the Central American nations that suffered the system, but also to the superpower that still has to deal with its repercussions.

[Crafty_Dog]

https://thehill.com/policy/international/418096-former-reagan-secretary-of-state-says-us-should-work-to-end-violence

[ccp]

New twist on old theory "

legalize drugs and remove the criminal profit motive

and viola  cartels are gone

The new twist is his proposition that this  will reduce or stop the illegals walking over here.  Actually may make it worse,
The cartels will find other ways to make money and send over more people


And what about all the people flooding here from nations elsewhere?  Like Asian Caribbean, Middle East Africa and Europeans who are coming here by the millions.

[Crafty_Dog]

I've always had tremendous respect for George Schultz, a truly fine American of deep and broad experience; I'm always glad to hear from him.

[DougMacG]

I've always had tremendous respect for George Schultz, a truly fine American of deep and broad experience; I'm always glad to hear from him.

Agree.  He was there in Reykjavik when Reagan stood up to the Soviet Union, but I don't know what to make of his suggestion here.  I am fine with drug decriminalization but I don't know what that solves.

If you legalize or decriminalize personal use but not mass distribution, aren't you monetizing the supply gangs?  If you legalize everything, what happens to the pharmacy industry?  Heroin and meth become street legal but Lipitor and Plavex stay under medical industry embargo?  

We face choices as a society.  With the liberty to do anything comes the burden to take responsibility for the costs of our actions.  Conversely, as we move toward public healthcare, we move away from the freedom of take personal risks.  I like liberty with personal responsibility but as a society we are headed swiftly in the other direction.  Are we seriously going to ban soda but legalize cocaine?

Check with G M but I don't think marijuana legalization made organized crime disappear.  And there was no real legalization, never is.  The consumer level pot industry moved to the government directed sector.  Drugs not legalized, sales greater than what is allowed and the transactions outside of the tax system are all still criminal activities - the domain of organized, national and international gangs.

Drug demand in the US is not going down.  To take the money out of Latin American drug crime we would have to make the domestic supply of previously illegal drugs cheap, plentiful and easy to buy.  Think opioid crisis.  That is not what the public wants nor the direction we are headed so it will not be an easy answer for Latin America.

The answer for Latin America (IMHO) comes from concepts like George Gilder's 'Wealth and Poverty' and the Heritage Freedom index.  The illegal drug trade dominates an economy when real economic opportunities are missing.  Poverty is the lack of wealth, not something of itself.  You can only study poverty by studying wealth and seeing which of its foundations are missing.  Every year the Heritage Foundation studies and ranks the countries around the world for economic freedom and every year these countries come up lacking.  

Heritage Freedom Index, Country Rankings:
73. Guatemala
75. El Slavador
94. Honduras
https://www.heritage.org/index/ranking
They don't want our advice.  They don't want our economic system.  But they want to come here and bring with them the failure they fled.  There are at least 72 countries where they could go for ideas to improvement their economic freedom and standard of living.
 Here's one.  

Chile is ranked 20th in economic freedom, per capita income = US$24,000
Honduras is ranked 94th, per capita income = US$ 4,600.  The correlation is undeniable up and down the list.

How about we export economic freedom instead of legalizing human destruction.

[G M]

https://www.elpasotimes.com/story/news/crime/2016/08/07/human-trafficking-among-mexicos-lucrative-crimes/88270930/

Human trafficking among Mexico's lucrative crimes
Lorena Figueroa, El Paso Times Published 4:28 p.m. MT Aug. 7, 2016 | Updated 11:13 p.m. MT Aug. 7, 2016

JUAREZ — After drug trafficking, human trafficking in México is the illicit activity that generates the most money for criminal groups, according to a high-ranked official of the United Nations Office on Drugs and Crime.

“It gives organized crime more revenue than human smuggling and gun trafficking,” said Mariana Alegret Cendejas, regional officer of International Cooperation of the UNODC, at a conference designed to prevent and combat human trafficking.

Considered a form of modern slavery, human trafficking involves the use of force, fraud or coercion to obtain some type of labor, involuntary servitude or commercial sex. It differs from human smuggling, which centers on the illegal importation of people into a country, officials said.

Mexican and U.S. officials, as well as representatives from area organizations, gathered in Juárez last week to learn about human trafficking and share information on how to fight it. The week-long conference was organized by the Inter-institutional Committee against Human Trafficking, which comprises representatives from the three levels of government and nonprofit groups.

Human trafficking generates more than $2.4 billion in revenues worldwide, Alegret Cendejas said, citing findings from the Global Report on Trafficking in Person 2014, the most recent report the UNODC has published. The report, released every two years, is based on the findings of 128 countries, including Mexico.

Alegret Cendejas said she did not have specific numbers for México.

However, it is estimated that human trafficking earns criminal groups about $42 million every year, according to a recent news report by Excelsior, a national Mexican newspaper.

The vast majority of human trafficking survivors are Mexican nationals, according to the report. Figures show that 352 of the 755 victims reported between 2010-13 were from Mexico. The rest of the victims were from countries from Central America, Western Europe, South and Eastern Asia, Alegret Cendejas said.

“In Mexico, domestic human trafficking is more prevalent because it mostly happens within the victims’ close circles,” she explained.

According to the report, a growing trend is forced labor, which experts said is difficult to identify and report despite accounting for 48 percent of all human trafficking cases in Mexico.

Forced labor is mostly seen in farms, construction sites, and mining and manufacturing plants, Alegret Cenejdas said.

Another trend that is growing at “alarming rates” is the number of children trafficked, she said.

In 2013, there were 107 children reported as victims of trafficking, compared to 51 in 2010, according to the report. More than half of those children were girls.

“Children who have access to Internet are the most vulnerable to fall victims of trafficking, aside from the indigenous, disabled and returned migrants,” Alegret Cendejas said.

She said that children are easily lured to become domestic servants or sexual slaves. Young girls, for example, are commonly persuaded by boyfriends to get into the world of commercial sex, she added.

Alegret Cendejas urged the Mexican government to implement policies to protect vulnerable groups from human trafficking through campaigns directed to each particular group.

Meanwhile, UNODC is working with Mexico to create an awareness campaign, expected to be launched in early 2017, she said.

The agency is also working with Mexican law enforcement agencies to give them more tools to fight human trafficking.

Mexico is one of the few countries that has a federal anti-trafficking law. The law prohibits all forms of human trafficking, prescribing penalties of up to 30 years.

“The result of this law has been a better understanding of the problem and an increase in reported human trafficking cases,” Wilfrido Campbell Saavedra, head of the National Institute of Migration in Chihuahua, said in a previous interview. The institute coordinates the committee that organized the conference.

He said there have been only 19 convictions in the state of Chihuahua since 2004. There have been no convictions in new cases or arrests so far in 2016, he added.

In Mexico, 86 traffickers were convicted, including some for forced labor, in 2015, according to the U.S. Department of State's Trafficking in Persons 2016 report.

They received sentences ranging from 15 to 58 years in prison, the report said, which was based on news reports.

That number, however, is only a fraction of the 578 individuals prosecuted in 2015 in Mexico, the report said.

A factor behind the low rate of human-trafficking arrests and convictions is the complex relationship between a victim and the perpetrator, which can hamper the victim's ability to seek help, officials said.

Lorena Figueroa may be reached at 546-6129; lfigueroa@elpasotimes.com; @LFigueroaEPT on Twitter.

[DougMacG]

Legalize it to break up the gangs? 

No.

[Crafty_Dog]

Honduran President’s Brother Charged for Trafficking Tons of Drugs with Help of National Police & Politicians​

As the migrant caravan that originated in Honduras treks north, the brother of that country’s president—a former lawmaker in the Central American nation—has been arrested and indicted in the U.S. on drug and weapons charges. His name is Juan Antonio Hernandez and he is the younger brother of Honduran President Juan Orlando Hernandez, who has blamed leftist interests for manipulating migrants to destabilize the country.

The younger Hernandez is a former member of the National Congress of Honduras and the feds say he’s a bigtime drug trafficker who has moved tons of cocaine through the region in the last decade with the help of Honduran politicians and law enforcement officials.

A few days ago, Hernandez was arrested in Miami, Florida and this week he was charged in federal court with conspiring to import cocaine into the United States, weapons offenses involving the use and possession of machine guns and destructive devices and making false statements to federal agents.

The case is being tried in a Manhattan, New York federal court and has been assigned to U.S. District Judge P. Kevin Castel, a George W. Bush appointee, according to a statement issued by the Justice Department. Manhattan’s top federal prosecutor says Hernandez was involved in all stages of trafficking multi tons of U.S.-bound cocaine through Honduras. The president’s younger sibling also arranged machine gun toting security for cocaine shipments, bribed law enforcement officials for sensitive information to protect drug shipments and solicited large bribes from major drug traffickers.

The former Honduran legislator and his criminal associates teamed up with some of the world’s deadliest transitional criminal networks in Mexico and Colombia, according to federal authorities, to flood American streets with illicit drugs.

“From at least in or about 2004, up to and including in or about 2016, multiple drug-trafficking organizations in Honduras and elsewhere worked together, and with support from certain prominent public and private individuals, including Honduran politicians and law enforcement officials, to receive multi-ton loads of cocaine sent to Honduras from, among other places, Colombia via air and maritime routes, and to transport the drugs westward in Honduras toward the border with Guatemala and eventually to the United States,” according to the federal indictment. “For protection from official interference, and in order to facilitate the safe passage through Honduras of multi-hundred-kilogram loads of cocaine, drug traffickers paid bribes to public officials, including certain members of the National Congress of Honduras.”

Not only did Hernandez work with large-scale drug traffickers in Colombia, Honduras and Mexico to import cocaine into the U.S., he was also involved in processing, receiving, transporting, and distributing multi-ton loads of cocaine that arrived in Honduras via planes, go-fast vessels and a submarine. He also had access to cocaine laboratories in Honduras and Colombia, where some of the drug was stamped with his initials.

“Hernandez also coordinated and, at times, participated in providing heavily armed security for cocaine shipments transported within Honduras, including by members of the Honduran National Police and drug traffickers armed with, among other weapons, machineguns,” the indictment states. The feds include a specific incident in which Hernandez and his drug trafficking cohorts collaborated with Honduran law enforcement and government entities.

This case helps illustrates the dire security issues created by crime infestation and rampant drug trafficking in Central America at a time when thousands of migrants from that region are demanding asylum in the U.S. Judicial Watch traveled to the Guatemalan-Honduran border to cover the caravan when it first left the northern Honduran city of San Pedro Sula. Besides gang members and mobs of young angry men, the caravan consisted of Africans, Bangladeshis, Sri Lankans and Indians.

Guatemalan officials confirmed that the “elaborately planned” movement is benefiting human smugglers and bringing disturbing numbers of violent gang members and other criminal elements through the country, into Mexico and possibly the U.S. One high-level Guatemalan government operative told Judicial Watch “MS-13 gang members have been detained and coyotes (human smugglers) are joining the march with clients who pay to get smuggled into the United States.”

With evidence from federal authorities that Honduran government and law enforcement officials are complicit in a major drug trafficking operation run by the president’s own brother, there’s no telling the level of criminals making their way north in the caravan.

[Crafty_Dog]

 
Bananas: How the United Fruit Company Shaped the World
By Peter Chapman
 
When we define geopolitics, we love to say it’s the study of people in place. Is that pretentious? A little. Reductive? Sure. Vague? Absolutely. But it’s probably as good a rendition as you’ll find of a discipline that defies strict categorization. Today, “people in place” has come to mean the nation-state, though by now we all know that it’s not such a simple matter, that nations don’t always fit into one category. Borders are arbitrary, communities are imagined, and nonstate actors – whether they’re stateless nations such as the Kurds or transnational jihadists such as the Islamic State – compel and constrain behavior just as much as nation-states do. And while we don’t ordinarily think of businesses in the same way, “Bananas: How the United Fruit Company Shaped the World” suggests that maybe we should.

Its author, Peter Chapman, who writes for the Financial Times, does well to explain the history of bananas and the banana trade, and in doing so, he gives this peculiar fruit the same treatment Mark Kurlansky gave salt, albeit on a much smaller scale. Make no mistake – this book is about one company, the men who built it and, to a lesser degree, the people who lived in its shadow. As Chapman notes, comparisons are inevitably drawn between United Fruit and the British East India Company, which, on the lawless seas of the 1700s, became a profiteering racket in all but name. United Fruit, after all, had its own fleet, and it had effectively created its own empire in the less-governed areas of Central America into which U.S. political influence couldn’t always reach. But Chapman suggests more accurate comparisons were found in the U.S. itself. United Fruit, he argues, was every bit the robber baron enterprise that the railroad, oil and steel industries were in the late 1800s. The only difference was that legislation eventually tamed those industries. The same was never really true for United Fruit and its baron, Minor Keith, the “Cecil Rhodes of Central America,” an “apple-headed little man with the eyes of a fanatic.” The company monopolized at will and solidified its power nearly with impunity.

And United Fruit was powerful. It brought down governments it didn’t like. It supported insurgencies. It used its monopoly early and often to threaten governments that dared to defy it. It dispensed with competitors in ways considered unscrupulous even at the time. It forged secret partnerships with other companies to circumvent antitrust laws. It killed strikers and organizers. It made educational material (read: propaganda) for American schoolchildren. Perhaps most telling, Keith himself married into Costa Rica’s first family.

If this is beginning to sound like the behavior of a bona fide nation-state, it should. Sometimes United Fruit’s interests aligned with Washington’s, and when they did, the two were willing partners. When they didn’t, they went against each other. Replace the name “United Fruit” with that of virtually any country in the world, and you would call it diplomacy.

For all its subject matter, “Bananas” is actually a pretty light read, fast and almost fun at times. Chapman laces the story with personal anecdotes, often citing titans of Latin American literature, such as Gabriel Garcia Marquez, some of whom were directly affected by United Fruit and its discontents. The company it once was is gone now.

Through years of financial decline, mergers and suicide, United Fruit transformed into Chiquita Brands International, and the path it charted resembles that of the banana itself, which is said to be on its way to extinction. If it does die out, it’ll be an ignominious end for what was once the world’s fourth-biggest food staple. That’s probably little comfort to the countries that were stunted by its trade.
Cole Altom, managing editor




 
Forgotten Continent: The Battle for Latin America's Soul
By Michael Reid
 
After many decades of isolation and U.S. domination, Latin America finally seems to have a chance to become a major player on the global stage. Latin American countries are expanding their trade and economic ties with countries beyond the region, including China and Russia, which are becoming more and more invested in the area. Still, the United States’ presence there remains strong, and Latin America still sits, for the most part, on the periphery of global events, as it continues to focus on problems closer to home. This tendency is due in part to the fact that, for more than a decade and a half, Latin American countries have been undergoing reforms that contributed to a sense of uncertainty and to slower economic development. More recently, drug trafficking and migration driven by violence and poverty have threatened to destabilize the region.
But to understand what’s happening in the region now, you need to first understand how it got where it is today. “Forgotten Continent: The Battle for Latin America’s Soul” by Michael Reid is a good place to start. Published over a decade ago, the book doesn’t deal with the significant events of the past 10 years – including the death of Venezuelan President Hugo Chavez, the political scandals in Brazil, the economic disarray in Venezuela and the impact of the 2008 financial crisis on Latin America. (There is, however, an updated edition of the book, published just last year, that addresses some of these more recent issues.)

I listened to the audio version of the original edition, and truth be told, I found it a bit hard to follow. The book covers a lot of Latin American history from the early 1800s on, and it was difficult to absorb. I needed to listen to several parts more than once to digest all the information. The book is also disorganized at times – the author moves quickly from country to country and from topic to topic, making it hard to connect the dots, especially if you’re listening to the audiobook.

But “Forgotten Continent” does offer a lot of deep political, economic and historical analysis of a region that is often overlooked. Latin America is home to over half a billion people. It’s neither extremely poor nor extremely rich, yet it has the world’s largest reserves of arable land, minerals and some of the most important energy resources. It’s often left out of discussions about the global system or foreign affairs, but considering that its problems have the potential to spill over into the world’s sole superpower, that may not be true for much longer. Either way, “Forgotten Continent” is a valuable read for anyone interested in the history of this region.

Ekaterina Zolotova, analyst

[Crafty_Dog]

https://www.newyorker.com/news/dispatch/how-climate-change-is-fuelling-the-us-border-crisis?utm_campaign=aud-dev&utm_source=nl&utm_brand=tny&utm_mailing=TNY_Daily_040319&utm_medium=email&bxid=5be9d3fa3f92a40469e2d85c&user_id=50142053&esrc=&utm_term=TNY_Daily

[Crafty_Dog]

https://www.newyorker.com/news/dispatch/the-epidemic-of-debt-plaguing-central-american-migrants?utm_campaign=aud-dev&utm_source=nl&utm_brand=tny&utm_mailing=TNY_Daily_040419&utm_medium=email&bxid=5be9d3fa3f92a40469e2d85c&user_id=50142053&esrc=&utm_term=TNY_Daily

[Crafty_Dog]

https://www.sfgate.com/news/crime/article/Peru-s-ex-President-Alan-Garc-a-shoots-himself-13774231.php?fbclid=IwAR01BcyWV587zTcxyqofSbE1Ay3KaH5Ufk5K5JdltX8XuB-QQY163jfbuf0

[Crafty_Dog]

Russian warnings for Latin America. The head of Russia’s military intelligence is sounding the alarm in the Western Hemisphere. He said militants affiliated with al-Qaida and the Islamic State are allegedly operating in Latin America, where they have begun to raise money and establish training camps. (It’s an old talking point, but it’s not without its merits – the region is home to a variety of militant groups that engage in illegal activities, and they aren’t above working with other criminal or even terrorist groups.) He also said the U.S. may be plotting to overthrow the governments of Cuba and Nicaragua after it removes Venezuelan President Nicolas Maduro from power. Not for nothing: The Russian Interior Ministry will provide anti-terrorism and anti-narcotics training to Nicaraguan police.

[Crafty_Dog]

Panama’s new president. Hailing from Panama’s center-left Democratic Revolutionary Party, Laurentino Cortizo appears to have won Panama’s presidential elections, though final results will be certified on Thursday and the margin between Cortizo and second-place candidate Romulo Roux is fewer than 40,000 votes. (Roux has already asked for a recount.) Cortizo’s victory would be good news for U.S. interests in Panama and the region. China has tried to boost relations with the strategically located linchpin between the Atlantic and Pacific oceans, but Cortizo is on record as saying that Panama needs to improve its relationship with the United States and more heavily scrutinize Chinese investment in Panama. He also, however, said Washington needed to pay more attention to Central America if it didn’t want other countries like China to increase their footprint there.