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December 26, 2000
In Ecuador at year-end 2000, income per person stands at 1980 levels, and over 400,000 Ecuadorians emigrated in the last 12 months, to seek work abroad. Inflation is two percent a month. The globalizers' response? "Ecuador hasn't gone far enough" -- that's the upshot of The Economist's Dec. 23 treatment of the subject, which includes this (classic) line: "Oddly, the [Ecuadorian] Central Bank still has a monetary policy." Imagine that...A mere vestige of (dollarized) sovereignty....
While The Economist scratches its head, the corporate globalizers move forward. HSBC is moving to acquire Barclay's operations in Greece, according to the Greek daily newspaper To Vima. ANB Amro, sued last week for employment discrimination in the United States, says it will double its loans in Thailand in 2001. ING announced it's buying the Japanese consumer finance company NICE (which, according to reports from consumer groups in Japan, is in fact NOT so nice, to its borrowers...). The chaos around Korea's Kookmin Bank continued -- despite union protests, the local press reports that Kookmin is moving ahead with its merger and lay-off plans. Goldman Sachs, plurality shareholder in Kookmin, has yet to become the (secondary) target of the Korean bank workers' ire...
Globalization index: Guatemala has the highest rate of child labor in the Americas, according to a report just issued by the United Nations Verification Mission in Guatemala. The survey, conducted between 1998 and 1999, showed that 34.1 percent of children ages 7 to 14 were working, up from 28.6 percent in 1994. We repeat: this is a globalization index...
December 18, 2000
While the IMF presses for austerity and "structural adjustment" in Ecuador, the legislature has been voting down President Naboa's bills (for unfreezing bank accounts) and overriding his vetoes (to devote oil revenue to the military). But, at week's end, Ecuador's economics minister Luis Yturralde, who had spoken out against the IMF's demands, resigned (or was pushed) from Noboa's cabinet. The IMF... has its ways.
Under the watchful eye of the IMF, on December 11 Citigroup participated, as "North American coordinator," in loan talks with government officials of Turkey. In Sao Paulo on December 12, local Citibank president Alcides Amaral told reporters that Citi will total lending in the country between 30 percent and 50 percent next year, "as Brazilian companies are expected to export more next year and make new investments in their factories." Citigroup has $9 billion in assets in Brazil, with $7.5 billion in lending.... In Frankfurt on December 14, Citibank loudly (proudly?) announced that it expects to close about 800 accounts of U.S. citizens at its German retail branch as U.S. authorities increase pressure to comply with tax laws. Citibank says it has about 4,000 U.S. citizens as customers of its German branch. "We will have to close about 800 accounts or we will be in violation of U.S. law," said Citibank spokesman Mirko Kaminski. "This law has been on the books for some time but the pressure to enforce it by U.S. officials has increased. It is not an issue but it is regrettable because it created lots of administrative costs." Maybe that's why Citigroup has continued (according to the U.S. General Accounting Office) its involvement in money laundering -- stopping would "create lots of administrative costs"... In Mexico City on December 15, Citigroup took a piece of a $370 million loan to retail and industrial holding Grupo Carso. part of Mexican billionaire Carlos Slim's business empire. And on December 17, newspapers in Jerusalem reported the Citibank plans on opening six to eight new branches in Israel in the coming months...
In South Korea last week, when rumors grew that Kookmin Bank (11% owned by Goldman Sachs) was in talks with merge with Housing & Commercial Bank (whose largest shareholder is ING Barings), Kookmin's workers occupied the corporate headquarters. Kookmin's president Kim Sang Hoon barricaded himself in his office, and soon announced that the merger, which would result in lay offs and give Kookmin a 40% market share of South Korea's retail banking business, was no longer being discussed. But by December 16, Seoul media were reporting that the talks had started up again -- largely at the demand of Goldman Sachs and ING. Ah, globalization...
December 4, 2000
Well, Colombian government helicopters have now starting flying across the border into Ecuador. Satelital radio reports that the helicopters were apparently in pursuit of guerrillas and paramilitaries, citing information provided by Col Cesar Molina, commander of the 19th Napo Jungle Brigade, who said that three Colombian helicopters combed the Balastreras area situated in the General Farfan parish of Agrio Lake, in the province of Sucumbios. This does not bode well...
The exodus has continued. More and more Ecuadorian farmers are in the south of Spain, working on olive and grape farms. Reportedly, there is a flourishing cottage industry of human couriers transporting thousands of dollars in remittances from the migrants to their families in Ecuadorian towns, some of which have been depleted of adult men. Remittances are projected to climb to more than $ 1 billion in Ecuador this year, putting them behind only oil exports as the country's leading source of foreign capital, according to government statistics.
Not all Ecuadorian in Spain are working in the fields. Alejandro Penafiel, former head of Banco de Prestamos, was released from jail, where he is awaiting a ruling on Ecuador's extradition request, so that he could marry his Spanish girlfriend. "It's an odd and strange decision," said Ecuador's Vice-Chancellor Gonzalo Salvador, in Quito. "The judge's decision is worrisome because it means Mr. Penafiel could seek to escape." Ecuador is seeking to extradite Penafiel on accusations that he mismanaged funds deposited by clients at Banco de Prestamos. In August 1998, Ecuador dissolved the bank due to a lack of liquidity and failure to comply with requirements set by regulatory authorities. The bank was one of the first to fall in a massive financial crisis that pushed 15 of 35 private banks in Ecuador into state hands over the past two years.
Meanwhile, Ecuador's president Gustavo Noboa has signed a decree limiting the spending of state telecom companies Andinatel SA and Pacifictel SA ahead of their planned privatization in the third quarter of 2001. "We have seen a certain liberty of costs which could hurt the transference of the companies to the private sector," said Ricardo Noboa, head of the state modernization committee. Nepotism and privatization: a great combination.
November 20, 2000
In Ecuador on November 16, the manager of the state Deposit Guarantee Agency (AGD), Luis Villacis, told reporters that the government is seeking ways to fund $34 million in debt owed to international banks in December. Fifteen of Ecuador's 35 private banks are currently in government hands due to "irregularities in management" and a lack of liquidity. As a result, the AGD has assumed responsibility for their debts to international banks. According to the manager of one of the international creditors, who asked not to be identified, "after hearing the government tell the media it is going to pay, we're calm, but we are still a bit worried about what will happen with future payments. We know they (Ecuador) want to restructure the debt but we would prefer to seek our own solutions," he added. That "seek[ing of] our own solutions," by private creditors, sounds ominous...
Meanwhile, tension mount along Ecuador's border with Colombia, particularly in the province of Sucumbios. "We worry the violence will come here," said Maximo Abad, mayor of the Sucumbios capital of Nueva Loja, 23 miles from the border, a town of 25,000 people with some 2,000 houses, 12 paved streets and five stop lights. Comparing the situation to Vietnam, one analyst in Quito called the plan "a hearts and minds campaign" designed "to keep the FARC from using Ecuador like the Viet Cong used Cambodia." Ecuador has received $16 million in U.S. military aid since 1997, and is to receive $20 million from the $1.3 billion U.S. package. But officials say they need far more to buy trucks, boats and helicopters needed to properly patrol the jungles and porous border.
In San Salvador on November 17, at a closing session in El Salvador of the Latin American Banking Federation assembly, former Argentine President Carlos Menem said that the "themes of dollarization and creation of a single American currency are definitely on the region's political and economic agenda... As the world economy globalizes, local currencies become incompatible with a flow of capital that does not recognize frontiers." El Salvador Vice President Carlos Quintanilla said his nation and its neighbors had not ruled out dollarization. "It's an idea that will continue to be debated, continue to be a possibility for our government," he said.
In El Salvador in July 2000, the legislature approved a U.S. request for a drug-surveillance operation carried out by the U.S. military. The agreement with the Salvadoran government limits the U.S. presence to 15 military personnel and aircraft that are based in the United States but are stationed in El Salvador temporarily -- usually for about six months, says Stephen Lucas, spokesman for the U.S. military's Southern Command, based in Miami. The operation is run out of a Salvadoran military base at Comalapa International Airport near San Salvador, which also functions as the country's principal civilian airport. U.S. flights have already begun....
At the Asia-Pacific Economic Cooperation (APEC) summit in Brunei on November 15, U.S. President Clinton said that both Al Gore and George Bush would continue support for globalization and deregulation: "The world can rest easy because both our candidates made strong commitments to do that," Clinton told an audience of business executives. "One of the things that both Vice President Gore and Governor Bush agreed on in this election is that the United States should continue its strong leadership for a more integrated global economy and for expanded trade," Clinton said.
In (related) financial news last week, U.S.-based investment bank Morgan Stanley is reportedly moving in on bankrupt Japanese insurance company Daiichi Mutual Fire & Marine; U.S.-based insurer AIG bought a 90% stake in Egyptian insurer Pharaonic Insurance Co.; J.P. Morgan's newly acquired bank in Korea, KorAm, is nearing a deal for Hana Bank, which would create Korea's second-largest lender. How's THAT for a "more integrated global economy"?
November 6, 2000
Now, for a virtual definition of "structural adjustment," with reference to the IMF's strong-arming in Ecuador: "The International Monetary Fund has said it will end a $300 million standby loan agreement with Ecuador if the government fails to present a measure containing tax increases to congress. 'I don't see that we can proceed without tax reform and banking reforms,' said John Thornton, who is heading an IMF review mission in Quito. 'The tax reform must certainly include tax increases.'"
Meanwhile in Ecuador, observers see an ever-increasing US involvement with the Ecuadorian base of Manta, in conjunction with Plan Colombia. The base's infrastructure is being extended to accommodate Awacs aircraft and more than 400 US military personnel. Is a sick quid pro quo developing? That is, "you don't have to raise taxes so much, if you just let us use your country as a staging area"?
November 16 will see the ribbon cutting at a new factory in Ecuador, one where cars of the Russian auto company Avtovaz will be assembled. Avtovaz' chairman, Vladimir Kadannikov, said, "All the capital investment was made by the Ecuadorian side," while Avtovaz provided technical support. According to Kadannikov, the VAZ-2107 automobile is being registered in Ecuador as a domestically produced car. "Today, supplying Ecuador with unassembled car kits is a highly profitable business, bringing in more profits than supplies of assembled car," Kadannikov reported.
Occidental Petroleum has begun test drilling on the tribal lands of the U'wa tribe in Colombia. At the same time, according to the Rainforest Action Network, the Democratic National Committee last week circulated a letter, from a lawyer purporting to represent the U'wa, endorsing Al Gore. RAN has shown that Al Gore's connections to Occidental Petroleum go far beyond $1 million in stock: Al Gore senior worked for Oxy for 28 years, and Junior's remained in touch, in more ways than one, every since.
In Argentina, in a working class suburb of Buenos Aires, the government last week demolished four high-rise apartment buildings, where 100,000 people lived. These housing projects were locally known as "Fort Apache" -- a reference, twenty years later and thousands of miles away, to the Paul Newman movie, "Fort Apache, The Bronx." Demonstrators tried to block the demolition (of dwindling affordable housing stock); the police responded with rubber bullets. So, as with that movie, the question is: WHO are the "savages"?
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September 11, 2000
Before recapping the week's news in our current victim-of-globalization example, Ecuador, there was a quote by World Bank president James Wolfensohn, reported on the Inter Press Service on September 6, that is of particular interest, in the lead-up to the September 26 protests of the WB/IMF meetings in Prague. In Washington, Mr. Wolfensohn sought to defend his decision to proceed with financing the controversial Chad-Cameroon oil pipeline, for a consortium including Exxon/Mobil and Chevron. He is quoted by IPS: "I have 1,000 Africans working at the Bank, who unanimously support the Chad-Cameroon pipeline. And I vigorously support the Chad-Cameroon pipeline . This is not for people in Berkeley to decide" [Here, IPS adds, "referring to Northern NGOs" -- just in case one missed the reference.] "This is for people in Chad to decide. And I think it's important that we have a proper balance between the Berkeley mafia and the Chadians, and I for my part, am more interested in the Chadians."
Whoa! What happened to the new diplomacy, the new openness, at the World Bank? Wolfensohn, in more thoughtful (or scripted) interviews, has been offering to meet with opponents; see last week's Report, below, of the IMF's new tone. But -- "the Berkeley mafia"? To say nothing of Mr. Wolfensohn's defense that "I have 1,000 Africans working ". This does not bode well (As to why, readers of this page may wish to bookmark a new section ICP is beginning this week, covering "The Movement(s)" (against corporate globalization). This page will be news, while that page will be... well, "muse").
Meanwhile, in Ecuador, the IMF is calling for more "tax reform," while still dangling the rest of its already-voted-on loan like a carrot. Ecuador's now looking for investment banks to assistance in the privatization of two telecom companies. We're sure the IMF will like that -- as will the investment companies bidding, which include Credit Suisse (see item at the top of last week's report, re Credit Suisse's acceptance of funds from Nigeria's 1993-98 dictator).
Also last week, J.P. Morgan, along with the Carlyle Group, bought a bank in South Korea; Lehman Brothers faces a lawsuit for "trying to take improper advantage of the Thai baht's collapse." (Reuters, Sept. 7). And the beat goes on
* * *
September 5, 2000
Flash -- at deadline, word reaches us from Zurich that the Swiss Federal Banking Commission has released a report strongly criticizing six bank (three of them units of the Credit Suisse Group) for being funnels for money from Nigeria's former dictator General Sani Abacha, who ruled from 1993 until his death in 1998. The government of Nigeria is seeking return of these looted oil revenues. Credit Suisse issued a statement saying that it "currently sees no cause to take further action with regard to our private banking operations." How the Swiss FBC report may impact Credit Suisse's proposal to acquire DLJ remains to be seen. It should be noted (and ICP and other advocates have noted, and will be raising) that Credit Suisse is involved, in the United States, with a number of questionable subprime (high interest rate) mortgage lenders: for example, as an underwriter for Delta Funding, charged by numerous government agencies with racial discrimination in lending, as an adviser to the subprimer Ocwen, and funder of ContiMortgage In one (limited) view, these issues are unrelated. However, as a matter of corporate responsibility, and of applicable legal standards (managerial integrity), they present of picture of the Credit Suisse Group on two continents.... Below's an impromptu poem; more to follow...
And now (relatedly), this week's report:
Tales of corporate globalization: last week, International Monetary Fund First Deputy Managing Director Stanley Fischer announced that the IMF is finally releasing $37 million of the $310 million loan that the IMF has been dangling over that country for months. Fischer praised recent moves toward austerity in Ecuador, but called for further reduction of subsidies on domestic fuels. Perhaps Mr. Fischer and the IMF called for more? Later in the week, Ecuadorian banking superintendent, Juan Falconi Puig, said he would select separate "international companies" in December to assume the running of Filanbanco and Banco La Previsora, which together have a 20% share of Ecuadorian bank deposits. Indigenous began a protest on September 4, in Quayaquil; president Naboa called the groups "bulls in a china shop," whose civic activism somehow "endangers" democracy.
The IMF's Mr. Fischer, at the U.S. Federal Reserve's conference in Jackson Hole, Wyoming in late August, noted the April 2000 protests of the IMF and World Bank meetings in Washington, D.C.. Last week, IMF head of external relations Thomas Dawson directed reporters to Fischer's remarked, and said that the IMF will be "reaching out" to protesters at the upcoming IMF/World Bank meetings in Prague on September 26. Mr. Dawson graciously said he considered it "appropriate" that nongovernmental organizations will seek to demonstrate. ICP will provide round-up coverage of events in Prague, following this upcoming week's United Nations / Global Compact protests. But one final note on the Fed's Jackson Hole jabbering: from the full text of Chairman Greenspan's speech, a most interesting paragraph:
"Any notable shortfall in economic performance runs the risk of reviving sentiment against market-oriented systems [which] resonate[s] in some of the arguments against the global trading system that emerged in Washington, D.C., and Seattle over the past year. Although most of these arguments may be easy to reject, those of us who support continued endeavors to extend market-driven globalization need to understand and, if possible, address the concerns that give rise to the desire to roll back globalization."
The reference, obviously, is to the anti-World Trade Organization protests in Seattle in late 1999, and the protests of the World Bank and International Monetary Fund in D.C. on April 16-17, 2000. And the formulation, "market-driven globalization," is not a bad one. "Corporate-driven" is more accurate, but we won't quibble.
Compare this paragraph with FRBNY president McDonough's statements to the El Mercurio newspaper on August 28: "I can assure you that the political situation does not matter to us It is often said that in our next [FOMC] meeting, we cannot do anything because there are elections. That is a lie. It's all false," McDonough said.
While McDonough was directly referring to the likelihood of interest rate moves before the Nov. 7 election, the claim that "the political situation does not matter to" the Fed has become something of a mantra. But how can Chairman Greenspan's open "support [for] continued endeavors to extend market-driven globalization" be portrayed as apolitical, or non-political? The affects of corporate globalization are seen as eminently political issues, in most countries in the world. Organized labor's (unsuccessful) intervention into the Congressional debate around trade with China earlier this year demonstrates that Fed Chairman Greenspan's position is a "political" one, even in the United States. The first step toward democratization of these debates is to recognize the various positions as just that: positions, political positions.
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July 31, 2000
Ecuadorian officials are preparing to travel to New York (on August 1) and London (on August 2), pitching to the countrys investors / controllers a plan to write off 40% of the defaulted Brady bond debt. The countrys effectively been put up for sale. Most recently, a consortium of foreign oil companies is said to have the inside track to build a $2 billion oil pipeline in Ecuador. The consortium includes Alberta Energy Co. Ltd., Agip Petroleum, Kerr McGee Corp., Repsol-YPF and Occidental Petroleum Corp. -- the same Occidental thats by under fire world wide for its proposals in Colombia, which would undermine (and worse) in the indigenous Uwa tribe...
The United Nations last week announced, with a slew of transnational corporations, a set of voluntary social and environmental policies. Most activists are skeptical, some analogizing it to U.S. Secretary of States strategy of constructive engagement with South Africas apartheid regime. The New York Times coverage of July 27 reported, in its second paragraph, that Secretary General Kofi Annan organized the session to encourage companies that operate across borders to spread Western-style human and environmental values or risk seeing the erosion of the consensus that favors open trade and investment. The Times (or Kofi Annans?) implication that human rights and environmental safeguards are only of concern in the West is troubling...
July 5, 2000
In this (U.S.) holiday-shortened week, weve decided to revisit the scene(s) of the anti-imperialist struggles of the 1980s: Central America... Following the Sandinista revolution in Nicaragua in 1979, some norteamericanos expressed solidarity, and demonstrated against President Reagans funding of the contras, training of military regimes in El Salvador and Guatemala, and manipulation of Honduras (which, having been used as a base for the Bay of Pigs invasion of Cuba, and, before that, as a staging ground for the U.S.s unseating of Guatemalas Jacobo Arbenz in 1956, was used as the headquarters of the contras, throughout the 80s).
When the Sandinistas lost the Nicaraguan elections in February 1990, this norteamericano solidarity abruptly ceased. The organizations that had organized brigades of volunteers to Nicaragua ceased operations, and the U.S. media quickly reduced coverage of Central America (back to zero).
Of course, history does not end there. Truth commission have now confirmed the U.S. CIAs involvement in some of the worst massacres of those years (click here for a report on Guatemala); now, the U.S.s involvement is a sub-set of its larger war on drugs, similar to its higher-profile engagement with / pressuring of the government of Colombia (and activities in Ecuador, from the Manta Base, see above).
The president of the Central American Human Rights Commission (Codehuca), Panama's Celia Sanjur, recently reported that violations of basic rights, especially the right to life, are becoming more frequent in Guatemala, Honduras and El Salvador.
The latest annual report of Amnesty International, "A Year of Broken Promises", released in June, also identified Guatemala, El Salvador and Honduras as the Central American countries with the worst human rights records.
Codehuca has documented "a deterioration of human rights in Central America," said Sanjur. The April murder of Guatemalan Bishop Juan Gerardi "is typical of this situation," she said, maintaining that the government of Alvaro Arzu lacked the "political will to clarify the murder and other grave human rights violations."
"If death squads are able to kill a bishop, what can the rest of Guatemalan society, and especially human rights activists, hope for?" wondered Sanjur.
Amnesty International reported that in Guatemala "torture, disappearances and extrajudicial executions" at the hands of "members of the security forces and armed groups apparently backed by the government" have been recorded.
The United Nations Verification Mission to Guatemala (Minugua), in charge of overseeing compliance with the peace accords, said on Jun. 22 that a rash of public lynchings and extrajudicial executions had evoked "a profound feeling of revulsion and indignation" which it fully shared with society at large.
Minugua reported that 120 lynchings -- described as "social cleansing" -- had taken place since March 1996, mainly in rural areas. In only 24 cases did the Public Prosecutor's Office undertake (inconclusive) investigations, while only two cases had been scheduled for trial.
Sanjur stated that a daily average of 22 people are still being killed in El Salvador today, victims of common crime and politically motivated violence. The perpetrators are rarely brought to justice. In Honduras, meanwhile, organizations of civil society and rights groups struggle "against impunity, corruption and the power that the army continues to wield inside the state," Sanjur said.
The president of the Honduran Human Rights Committee, Ramon Custodio, recently denounced that Military Counter-Intelligence Battalion 316, blamed for the abduction and disappearance of 184 activists in the 1980s, continues to operate.
Custodio said the group, comprised of army officers and soldiers, had killed some 70 indigenous and other community leaders in Honduras from 1992 to 1997, while around 700 suspected criminals were also apparently the victims of extrajudicial executions at the hands of Battalion 316 from 1990 to 1997.
Well end this week with a short remembrance of one of Battalion 316s victims:
In Memory of Father James Guadalupe Carney, 1924-1983
by Inner City Press, 2000
In East St. Louis, in 1961
Former high school football star Jim Carney
Became a Jesuit priest. Hed seen pictures
In the Orders magazines, of priests on horseback
In rural Honduras. Send me there, he said.
And it was done. But what he found there
Wasnt like the pictures. United Fruit
Owned all the land, Hondurans picked bananas
At gunpoint. Carney road a dirt bike
And tried to organize a union. In 1975
His fellow priest Jerome Cypher was castrated
By an army death-squad trained by the CIA.
Farmers were cooked in bread ovens. In 1979
Carney was deported from Honduras.
Back in East St. Louis, Carney confessed
That he hated the pomp of the Pope
The seminaries with golf courses
The dead theology of United Fruit.
He went to Nicaragua, ministered
To a mountain town, and wrote a book.
And when it was done, his brother came
To take the manuscript back north.
That was it. Carney became the chaplain
To a group of 100 rebels, re-entering
Honduras in 1983. Things did not go well.
The column was captured, and there
The paper trail ends. He was never seen again,
Jim Carney. The army claimed he died of exposure
In the jungle, abandoned by his flock. His family
Asked for more; in 1984
The right General Alvarez said his family
Only wanted to collect life insurance. In 1988
Florencio Caballero defected from Honduras
Battalion 316, and said hed heard Alvarez planning,
Along with the CIAs Mister Mike, to question Carney
And then kill him. And that Carney was, in fact, thrown
Out of a helicopter, alive, in the jungle.
The U.S. ambassador, John Negroponte, opined
That that could not be confirmed. Secretly they observed
Jims familys fight, and judged it not worth
Responding to. Only in 1997 did they release
Some documents, saying, yes, maybe, just maybe
Ex-Father Carney was thrown into the jungle.
The story is old. He took the Bible
June 19, 2000
Ecuador canceled its meetings with creditors in New York, which had been set for this week. Apparently, no renegotiation strategy has been arrived at. In Quito on June 15, demonstrators against dollarization bombed a branch of Citigroup. During a visit to London, Nina Pacari Vega of Pachakutic, the political party set up by indigenous groups, criticized the government's agreement with the International Monetary Fund, arguing that credits should be used to stimulate economic growth rather than used to help the banking sector.
Meanwhile, new IMF Managing Director Horst Koehler, is preparing to visit Africa on a listening tour, beginning July 2. In Nigeria, the IMF is seen as having ordered the recent cancellation of subsidies for gasoline. IMF spokesman Thomas Dawson (tellingly) said: There is no fuel price precondition in the proposed (Nigeria) agreement.... There are of course potential budget effects (to continuing the subsidies), but the budget is one of the things still being discussed.
In Mozambique, the IMF has asked the government to cut its tariff on sugar imports, in exchange for having $254 million of its debt forgiven. Many say this IMF demand would undermine the domestic sugar processing industry. But hey -- globalization by any means necessary, right?
Even the talking heads roll: at the World Bank, Ravi Kanbur, until now the lead author of the forthcoming World Development Report on poverty, has resigned. Coming six months after the resignation of former World Bank chief economist Joe Stiglitz, its becoming clear that the World Bank accepts no internal criticism, or questioning of its structural adjustment ideology. Sources see the hand of U.S. Treasury Secretary Larry Summers behind both resignations / firings. Kanbur will return to Cornell; the effect is nothing like that on residents of Ecuador, Nigeria or Mozambique. But the trend is the same: globalization (and its legitimating ideology), by any means necessary...
May 15, 2000
We will review, this week, events in Ecuador, and then consider, in both the present and the recent past, Sierra Leone, including in poetry.
Ecuador: A general strike is planned for May 15, to protest not only the ongoing dollarization of the country, but also the planned privatization of telecommunications, the hydrocarbons sector, power generation, shipping, airlines and water purification plants. In Quito on May 9, the leader of the Confederation of Indigenous Nationalities of Ecuador (CONAIE), Ricardo Urcuango, told a meeting of foreign journalists that "if in this region neoliberal economic policies go ahead and there is no ratifying by the International Monetary Fund (IMF) and the World Bank, there will be a tendency for social outbursts to come about not only in Ecuador, but in the whole region. The entire Andean region is becoming a laboratory of the dark side of globalization. Ecuadors shift on April 1 to the U.S. dollar has resulted in chaos: many five dollar bills have been changed to fifties (by adding a zero after the five); counterfeit bill are flowing into the country, mostly from Colombia. U.S. coins do not identify their value; people remain unclear how much, for example, a dime is worth. Three top military leaders stepped down last week, as did the head of the Central Bank. President Gustavo Naboa, at a police ceremony on May 9 said: "The dollarization process is not the solution or a cure-all for the country. No kidding. Click here for a sample of the debate on dollarization, on the Web site of the Ecuadorian newspaper Hoy.
Sierra Leone, trapped for years now in a brutal civil war, is back in the (Western) news. The 1999 peace agreement has fallen apart; in the capital of Freetown, Foday Sankohs army fired on civilian protesters, killing 19 and wounding 54. British troops on May 9 evacuated over 320 citizens of the European Union; the United Nations is pulling out its non-essential personnel. The ongoing slaughter in this West African nation has been left to fester, as the International (read, Western) community has focused on the Balkans, if anywhere.
This months Brills Content magazine has an eight-page article about the January 1999 death of Associated Press Television journalist Myles Tierney, shot in Freetown while being escorted by government troops to tour supposedly reclaimed parts of the capital (Hearts in Darkness, June 2000). Which gives rise to the following Global Inner City (Press) poem:
A Western Journalist Dies in Sierra Leone at the Cusp of the Millennium
by Matthew Lee, c. 2000, Inner City Press
A pile of hands, unmatched like socks, Sierra Leone
Anatomys laboratory in Freetowns streets - the glossy
Magazine profiles the senseless death of the thrill-
Seeking stringer, uploading footage (without socks)
Deemed to be too graphic (no human hook)
Prosthetic limbs (not an option in Freetown)
What do they think? (carrying water buckets handles in their teeth)
Wheres the outrage? (long since shifted to the now-rare white savagery)
Comparing Croatia to Freetown (like celery root to sweet potato)
Question: who can project (themselves into the drama of butchery)
He who broadcasted (lounged on a bed with imported beer)
A Romeo of self-destruction (hence the profile, sickeningly limited)
Four score of hands (versus one dream deferred by intent)
Their relation left open (like the nameless wrists of Freetown)
Mocking the Droits de LHomme (advertising tight underwear)
Narrative never to be resolved (at the margins, no teeth to brush)
A martyr calling attention (no matter how brief and vodka-selling)
The worlds eye and conscience move on (no lack of lead stories)
Famine becomes routine (were the poorer for it, that's the bon mot)
Was it worth it? (the paralyzed journalist is asked)
Since the answer is no (the depressing response is buried)
Somehow similar to the overdose on horse (of the scion of blue-grass journalism)
The standard for heroic so degraded (that cocktails stand in for thresholds)
He was blond, and he died (like the imaginary Aryan Jesus)
His voyeuristic concern for chopped hands (more human interest than the clipped)
Nameless he died for our sins (resurrected in glossy advertisements for vodka)
Empty trucks convey the signs (to those who choose their respite at random)
Drunkenly, like Columbus he discovered the slaughter (chopped into facts)
Like the hands, still moving (they dictated his frenetic homily)
Homo Sapiens, the species which seeks power (if necessary, by fear)
Unique and glossy (and nauseous, in the pile of hands)
Unmatched memories bundled (like socks, or the hands of Sierra Leone)
April 24, 2000
Throughout last weeks protests in Washington, the International Monetary Fund tried to present itself as enlightened, a savior and not an oppressor of less developed nations. A quick review of the weeks events in Ecuador calls it into question. The IMF, in exchange for loans to Ecuador, micro-managed the fiscal austerity and dollarization bills recently passed by that countrys parliament. On April 19, thousands of demonstrator, from indigenous organizations and labor unions, gathered in Quito to protest. Since the April 1 dollarization, [t]he cost of public transport has been raised from 85 to 100 per cent and the elimination of many transport services was scheduled for July 1. Ecuador must follow a rigid economic austerity programme designed by the International Monetary Fund to help right the economy and allow Ecuador to receive further credits. The quoted account (complete with the British spelling, programme) is from the hardly leftist Deutsche Presse-Agentur.
Meanwhile, another down-side to dollarization has emerged: merchants, particularly in rural areas, have had so little contact with the U.S. dollar that they are unable to distinguish counterfeit money. The printing presses are rolling, and, too late, the government is promising an education campaign, including in Quechua, the language of a quarter of the countrys people.
Back in the belly of the beast, theres some confusion about money, too. The Chairman of the U.S. Senate Banking Committee, Phil Gramm (R-Tx) has been demanding that the General Accounting Office spend taxpayer money to conduct a poll of over 1,000 Americans, asking them if the U.S. Mints advertisement for the new gold dollar have led them to believe that the coin is actually made out of gold. (Its not; rather, its 89 percent copper, with traces of manganese brass giving it its golden appearance). Gramms rationale for this survey? "I think they're just inviting potential fraud against some senior citizens and moderate-income people," the Senator intoned. Only 12 percent of those polled thought the coins contained gold. Still, Gramms now filed a complaint with the Federal Trade Commission, charging the U.S. Mint with false advertising.
If (as Sen. Gramm claims) citizens of the United States are confused about the U.S. dollar, how much more so in Ecuador, particularly in rural Ecuador. But, according to the IMF, this will solve all of the countrys problems. Developing...
Almost unmentioned in the global(izing) press is the ongoing imposition of martial law in Bolivia, which General Banzer began on April 8. The campus of the University San Francisco Xavier in the city of Sucre has been taken over by the army. Rebellion by the soldiers themselves was only averted by granting them a 50% raise (compared to the 3% raise for other workers). The delivery of water is being privatized.
Readers who speak (or, to be more precise, read) Spanish may wish to follow the story in the Bolivian newspaper El Deber...
March 27, 2000
Dollarization wrap-up: Ecuadors Congress met March 23 to vote on further changes to the dollarization bill requested by President Noboa but requested by and directed to the International Monetary Fund. The IMF is dangling a three-year, $2 billion package, to be voted on by the IMFs executive board in two weeks. The Financial Times of March 24 quotes an unnamed New York analyst that Getting Congress out of the picture is good news. Everything else should run smoothly. Yeah, getting past even the mere trappings of democracy always runs smoother, particularly for speculators... While the investment community gets its perspective out in anonymous quotes, those affected can speak only through actions. The Associated Press of March 22 carried a photo from Ecuador, the caption reading: Two indigenous women build a fiery barricade on the Pan-American Highway on Wednesday in Cuzubama, about 25 miles north of Ecuadors capital of Quito, to protest efforts to privatize education in the country....
Privatization is whats being dictated to Ecuador. Another example: electricity distribution rights to Guayaquil, once held by Empresa Electrica de Ecuador (Emelec), are being sold off. The government seized the utility, which was run by the now-jailed banker Fernando Aspaizu. The utility is being sold in pieces, to pay back depositors in Aspaizus failed Banco del Progreso, a/k/a Banco del Criminal. It will be an international public auction -- as with the country...
March 6, 2000
On March 1, the Ecuadorian Congress passed President Noboas dollarization proposal, despite strong majority sentiment against the plan, reflected in every poll that been conducted. The labor umbrella group Popular Front said it clearly: This law benefits bankers and is against the interests of the people. The IMF, according to The Economist (March 4 U.S. edition) has lobbied for even greater concessions to banks.
Meanwhile -- jump cut! -- in Spain, Banco Santander Central Hispano SA said on March 4 that BSCH aims to raise its market share of Latin American deposits from the current eight percent to ten percent, over the next three years. FleetBoston versus BSCH in Latin America -- we call it, globalization.
In Fujairah in the United Arab Emirates, a 35-year told Indonesian woman has been condemned to death, by stoning, for the crime of adultery. Her partner, from India, fled the Emirates before the trial.
While the West belatedly sends helicopters and boats to Mozambique, in Zimbabwe land struggles have grown violent, and President Mugabe has proposed a law that Britain, and not his government, should pay compensation for land redistributed to the landless. Chaos spreads, but a peace keeping expedition is unlikely...
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February 28, 2000
A U.S. delegation, including ex-Federal Reserve staffer Edwin Truman, is in Ecuador, providing its views (most in Quito call them threats) to new President Gustavo Naboa on his proposal to dollarize the country. Recent polls show that 75% of Ecuadorians oppose the proposal. Quote of the week is from street vendor Transito Velasquez: The dollar is for rich people and robber barons. Representatives of the International Monetary Fund are also in Quito, suggesting modifications to Naboas proposal. And we thought that the U.S. and IMF denounced the indigenous uprising of January 21 because it was no democratic enough. Whats democratic about the U.S. and IMF dictating the terms of legislation in the Ecuadorian Congress? Noboa has given Congress until March 14 to pass the bill, or he will simply put it into effect. This is what the U.S. calls a constitutional regime. This storys not over...
In the Dominican Republic, Houston-based Enron has been threatening to turn off its electrical power plant, until it is paid $30 million this week. President Leonel Fernandez, who privatized the Dominican Electricity Corporation, now admits that the privatization was a disaster. As the private contractor moves toward shutting off the lights on the entire country...
January 18, 2000
Endgame in Ecuador, while the vultures opine and shrug. As reported last week, on Jan. 9, Ecuadorian president Jamil Mahuad announced a plan to dollarize the country. Reactions from New York: J.P. Morgans sovereign-debt strategist said, This is his last gamble. It will be his political end if it fails... There are huge questions whether the government or Congress will be able to keep to the ... fiscal discipline needed. HSBC Securities chief Latin American economist added, The best way to dollarize is to say I did it yesterday.... in the coming days, youll hit a wall in terms of market sentiment when investors realize that you need to undergo a lot of politically and economically painful adjustments to make this feasible.
Those who would suffer the pain were not so sanguine. The week began with a strike of bus and taxi drivers in the Pacific port city of Guayaquil. As the week progressed, riot police filled the streets of Quito, armed with tear gas and automatic weapons. Indigenous groups, under the umbrella group CONAIE, moved to block highways, in a general uprising calling for Mahuads resignation. Marches toward Quito have begun, and, on Jan. 17, a bomb exploded outside the government party office in Cuenca, the countrys third largest city. In New York, Bear Stearns head of Latin America research, Carl Ross, said, The dollarization, if implemented correctly, makes Ecuador a better credit risk than otherwise. Foreign policy by non-governmental lenders and investors. Now THIS -- is the true face of globalization...
Update on the murder of Larry Lee in December 1999 in Guatemala City: BridgeNews managing editor for Latin America, Tony Ralf, has confirmed that Larry Lee began work for Bridge in August 1998, focusing on the coffee and sugar futures markets. Just before his death, he had reported on the elections in Guatemala. While a Memorial Scholarship Fund (for University of Missouri, specifically its journalism school) is being set up (tel 573-996-2114), further investigation of his murder is needed.... Developing...
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January 10, 2000
Ecuador is sinking further into chaos, as Brady bond holders circle around like spectators at a rooster (or pit bull) fight. Since the country suspended external debt payments in October, 1999, the sucre has fallen precipitously against the dollar. President Mahuads popularity now stands at under ten percent. The Popular Front scheduled a general strike for January 6, as well as calling for Mahuads resignation, a continuing moratorium on external debt payments, and the reinvestment of those funds in small businesses and health, education and housing programs. Mahuad declared a state of emergency on January 5, to forestall the general strike. On Jan. 9, Mahuad announced the "dollarization" of the sucre (a move ruled out by the Central Bank on Jan. 5), and that the cabinet "has submitted its collective resignation." Workers at state oil firm Petroecuador have announced an indefinite strike starting Jan. 17; another general strike is scheduled for Jan. 12, and there'll be rallies by indigenous groups on Jan. 15.
Chase Manhattans head of emerging markets fixed income research, Joyce Chang, was quoted Jan. 3 that Ecuadors Brady plan requires unanimous support from bondholders for any restructuring to take place, which could result in an agreement with a small group of creditors, while allowing a much greater proportion of free riders than has been tolerated in the past. Richard Gray, of London-based Rogge Global Partners, lamented: theres no easy exit strategy -- you cant just put the underlying Treasury collateral in your pocket and walk off.
Meanwhile, Nicholas Brady, the arbitrageur of his earlier creations through Darby Overseas Investments, declaimed: Those parties that counseled Ecuador to default -- and I think that although they are now running for cover, the International Monetary Fund and the U.S. Treasury had a bid hand in that -- should own up to the consequences of this advice. Clinton did in fact call Mahuad on Jan. 7, to express support; U.S. Treasury Secretary Larry Summers on Jan. 8 stepped to the sidelines of an economic conference in Boston, and told reporters, We have been following developments in Ecuador closely. He declined to specify whether the U.S. would contribute money to a potential IMF rescue loan for Ecuador. Darbys current head of emerging markets income emphasized the overall success of Bradys creations, predicting Brady bond buy-backs in 2000 by Argentina, Brazil and Venezuela. Darby seems to downplay the mud slides in Venezuela, as well as the recent report by that countrys human rights watchdog, Provea, that in Vargas, just north of Caracas, presumed looters were forced to kneel on the ground and were then shot by soldiers....
Just after journalist Larry Lee was killed in Guatemala City on December 26, 1999, the French organization Reporters Without Borders estimated that 36 journalists were killed in the line of duty in 1999. On Jan. 7, the U.S.-based Committee to Protect Journalists (CPJ) put the figure at 33, while saying it is still investigating 19 other cases -- presumably including Larry Lees... An inquiry with CPJ staff elicited that Guatemala City is considered to me the third most dangerous city in Latin America, after Cali and Bogota, and that CPJ in monitoring the progress of the investigation of Larry Lees murder, but does not have any specific reason to believe that he was murdered because of his work as a reporter. Heres hoping the investigation continues, and those responsible are apprehended. Larry Lee won an RFK award a decade ago for dispatches he wrote about persistent poverty in Southeastern Missouri; in Guatemala, beyond reporting for BridgeNews, Larry Lee was working as a volunteer for Global Exchange. Rest in peace....
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January 3, 2000
Latin America Round-Up
The full scope of the tragedy in Venezuela is still not known. While revelers worldwide blew horns and watched fireworks on December 31, villagers in Venezuela continued to dig out the victims of flooding and mudslides. The death count has surpassed 30,000, and authorities now proposed declaring some town as memorials, never to be rebuilt. And on Wall Street, the vultures are recalculating the spreads on Venezuelas external debt.
In Ecuador on December 29, President Jamil Mahuad announced that the IMF will ratify the letter of intent it signed with the country back in September, 1999. Meanwhile Ecuadors Banking Superintendency entered and then vacated an order confining Finance Minister Alfredo Arizaga to the country, as regulators dig through the record of the failed Banco La Previsora, of which Arizaga was executive vice president until taking over as Finance Minister in September 1999.
BridgeNews reporter Larry Lee (no relation to the editor of Inner City Press, except as fellow human being and journalist) was found dead in his Guatemala City apartment on December 28, with his throat slashed, and blood on the walls and floor. He planned to decamp to Mexico City in January 2000. Victor Hugo Garrido of the Guatemalan Public Prosecutors office says the journalist defended himself before dying. How about solving the case?
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