NotiSur-04/26/02 -Argentina, Colombia Via NY Transfer News * All the News That Doesn't Fit [Reminder: This is a private reading copy for your personal use only. It may not be redistributed under the terms of our subscription with LADB. Thanks -- NY Transfer] ------------------------------------------------------------ L A T I N A M E R I C A D A T A B A S E NotiSur - South American Political & Economic Affairs ISSN 1060-4189 Volume 12, Number 15 April 26, 2002 ------------------------------------------------------------ Copyright 2002, Latin America Data Base (LADB), Latin American Institute, University of New Mexico Director: Rebecca Reynolds Bannister Editor: Patricia Hynds Staff writers: Carlos Navarro, Robert Sandels LADB ARCHIVES: Back issues are referenced to provide historical background relevant to the articles in this newsletter. These can be accessed with a subscription to the LADB searchable on-line archives at http://ladb.unm.edu/ by clicking on Search Archive. For subscription information, e-mail info@ladb.unm.edu or call 1-800-472-0888. In This Issue: ARGENTINA: ECONOMY MINISTER RESIGNS AS CRISIS CONTINUES * Remes Lenicov goes to Washington * Congress balks at rushed legislation * Remes's resignation makes IMF agreement less likely * A weakened Duhalde now weighing options * Plenty of blame to go around COLOMBIA: PRESIDENTIAL CANDIDATES CAMPAIGN AMID VIOLENCE * Uribe favored to win despite charges of paramilitary links * Uribe picks running mate * Serpa accuses AUC of supporting Uribe * Legislative elections challenged * Archbishop's assassination also tied to elections ____________________________________________________________ ********************* ARGENTINA ********************* ARGENTINA: ECONOMY MINISTER RESIGNS AS CRISIS CONTINUES The Argentine government announced April 19 that an "indefinite" banking holiday would begin April 22, setting off a new round of anti-government demonstrations. Two days later, Economy Minister Jorge Remes Lenicov returned empty handed from meetings with international lenders in Washington. When it became clear that Congress would not quickly pass the legislation mandated by the International Monetary Fund (IMF), Remes Lenicov announced his resignation. President Eduardo Duhalde is now re-examining his strategy for saving the country and his presidency. The sudden worsening of Argentina's crisis began late on Friday, April 19, when the Central Bank ordered an indefinite halt to all foreign-exchange and banking transactions until the government could draw up a plan to stem the hemorrhaging of around US$100 million a day from the banks. Remes Lenicov and Central Bank president Mario Blejer said the action was necessary because the banking system no longer had enough money to meet obligations. In a radio address the next day, Duhalde told Argentines to prepare for even more difficult times. "We run the risk that the financial system could collapse," he said. Remes Lenicov goes to Washington The economy minister went to Washington while the IMF and World Bank were holding their spring meeting, which coincided with the meeting of the Group of Seven (G-7). Remes went with the message that Argentina was doing everything it could to comply with IMF requirements, but was desperately in need of an immediate infusion of cash. The prospect of a quick agreement receded as the IMF expressed its frustration with the Argentine government. Officials called on Argentina to fulfill earlier promises to cut provincial spending, stabilize the peso, and overturn the bankruptcy and "economic-subversion" laws, which the IMF says are being used to persecute bankers. Duhalde and the provincial governors--a majority of whom, like the president, belong to the Partido Justicialista- peronista (PJ)--say the called-for spending cuts could force firing up to 400,000 government employees when unemployment is already above 20%. At the G-7 meeting, the world's rich countries backed the IMF's demand for tough reform and said Argentina had failed to show that it deserved more aid. "The measures that have been taken have not been convincing," said French Finance Minister Laurent Fabius. "Decisions must be taken so that the commitments entered into are taken seriously. "Is the political leadership going to do the things necessary for their own people to have a bright and growing future?" said US Treasury Secretary Paul O'Neill to reporters. "It's come down to that clear and simple issue." Congress balks at rushed legislation On April 21, administration spokesman Eduardo Amadeo said the government was sending a bill to Congress to create the Banco Federal Nacional, which would merge Banco de La Nacion, Argentina's largest bank, and Banco de Inversion y Comercio Extranjero. He said the move would strengthen the banking system. "We need an efficient public banking system," Amadeo said. "The intention is to have stronger, more solid banks, so that they can make loans." His comments came just two days after the Central Bank suspended the activities of Scotiabank Quilmes, the 11th- largest bank, for 30 days because its Canadian headquarters refused to send more money to the Argentine branches when they ran out of cash. When Remes Lenicov returned from Washington, he told Duhalde that, unless the necessary legislation was passed immediately, no money would be forthcoming. The next day, April 22, Duhalde sent a proposal to Congress for authorization to exchange fixed-term deposits-- already frozen--for 5-year peso and 10-year dollar bonds bearing 3% and 2% annual interest rates respectively. Repayment of the principal would begin next year for the peso bonds and in 2005 for those in dollars. "If the parliament is not in agreement, it will have to elect another president," Duhalde said. "The bond switch is definitely the lesser of two evils since the alternative is a total collapse," said a Wall Street banking analyst. "This may save the banks. It's just a shame the government took so long to do the inevitable." The president also asked Congress to overturn the bankruptcy law and the economic-subversion law, which serve as the basis for the lawsuits being brought against business owners and bank executives. Annulment of those laws is one of the IMF requirements for release of any more funds. Duhalde was counting on Congress to go along because, as he put it, "It is to no one's advantage that I go." But Congress evidently did not see it that clearly. Many lawmakers criticized the bill, saying it would transfer to the national treasury the debt that private and public banks have had with depositors since the government of Fernando de la Rua in December decreed the freeze on bank accounts (see NotiSur, 2001-12-14). Thousands of people have, however, won access to their savings through court orders overturning the freeze, called the corralito, and the government says those withdrawals have left the banking system on the brink of collapse. But the news of the proposed bond exchange brought angry unemployed workers, pensioners, and government employees into the streets in protests around the country. Opponents of the legislation accused the government of trying to force Congress to rush passage of the bill. "This bill is being proposed to benefit bankers rather than the people. It will force savers to take bonds from a bankrupt state that won't be able to honor them, while the banks get off scot-free," said Deputy Mario Cafiero. Later that day, Congress postponed debate on the measure because of the stiff opposition from legislators. "There are two positions: either we take the side of the banks or we take the side of the people," said PJ Deputy Mario Becerra. Remes's resignation makes IMF agreement less likely Remes Lenicov quit on April 23 as protesters gathered outside Congress and legislators again postponed debate on the bills. Many economists say his departure has erased Argentina's chance of getting emergency help from the IMF in the foreseeable future. "Remes was the only figure in the Cabinet who had any credibility with the markets," said Alberto Bernal of Wall Street consultancy IDEAglobal.com. But not everyone was sorry to see Remes go. The daily Pagina 12 said that with the departure of Remes went the "humiliating strategy of asking the IMF what to do, trying to implement the demands, receiving missions from the IMF in Argentina who would judge whether the compliance was sufficient, and then going to Washington to see whether an agreement with the IMF could be signed and money received." A weakened Duhalde now weighing options Some administration sources said Remes Lenicov's exit could bring a change in the "orientation" of the relations with the IMF. They said they did not foresee a rupture with the IMF but rather a "suspension" for five or six months until the Argentine government was able to reactivate the economy. Presidential aide Anibal Fernandez indicated the president would no longer press for immediate compliance with IMF demands, which PJ stalwarts say are impossible to carry out and make a loan deal essentially impossible. Diarios y Noticias news agency quoted Fernandez as saying Duhalde was rethinking his economic strategy. "The new plan must lead to reactivation of the economy," said Fernandez. A group of respected economists from the Universidad de Buenos Aires, the "Grupo Fenix," have advised the government to act more independently of the IMF. "This country must get back on its feet by itself, and then it should talk to the fund," said Aldo Ferrer, president of the group. "But it has been doing things the other way around and that's not the way out." Duhalde is said to be considering re-establishing a peg to the dollar, perhaps at 3.50 pesos to the dollar, to halt the peso's drop. The peso is now over 3.0 to the dollar and currency fears have brought soaring inflation. Duhalde, who said the decision to float the peso had been a "mistaken demand" by the IMF, was meeting with governors to try to find a successor for Remes Lenicov. Despite Duhalde's search for consensus, many were calling for new presidential elections. The president always said that he did not have a Plan B and that his future and that of his administration depended on IMF help. Political analyst Felipe Noguera said Duhalde is now much weaker and dependent on securing the support of the powerful, but often fractious, provincial PJ governors. Duhalde's political future "will depend on what he does in the next few days," Noguera said. "The only thing helping Duhalde is that no one else wants his job. On the one hand, nobody wants Duhalde to do anything, but nobody wants him to leave, either," said Christian Stracke with Commerzbank. On April 24, Duhalde and the PJ governors signed an agreement promising tax and banking system reforms, efforts to curb inflation, and steps to end "unnecessary" bureaucratic and political spending, but the agreement was short on details. Duhalde also abandoned the proposal to convert deposits into bonds and instead proposed legislation, which the Congress passed, to severely limit depositors' ability to withdraw money, even with a court order. Judicial experts immediately said the plan was unconstitutional. Plenty of blame to go around Meanwhile, criticism of the IMF is widespread. Mark Wiesbrot, co-director of the Washington Center for Economic and Policy Research, said it is profoundly unjust to hold Argentina accountable for failed policies that were the joint project of the IMF and the Argentine government. Other critics say US foreign policy has a hand in the IMF stance toward Argentina. The IMF made impossible demands on Argentina because it had no intention of giving the country more money, since it has no geopolitical importance for the US, said US economist Walter Molano of BCP Security. "There will be no rescue for Argentina because the money isn't there, and, if it were there, they would give it to Turkey or other countries important to US global politics," said Molano in a radio interview. He said, that "instead of telling the country that there is no money, the IMF asked for things that could not be done." While the IMF and the US share much of the blame for the Argentine crisis, a long line of Argentine leaders is also guilty. As Tim Frasca writes in The Nation, "The sacking of Argentina could not have occurred had not a willing political class put out the "For Sale" signs long ago." [Sources: Knight-Ridder/Tribune services, 04/22/02; Inter Press Service, 04/18/02, 04/22/02, 04/23/02; The Financial Times (London), 04/21/02, 04/23/02; Notimex, 04/22/02, 04/23/02; Buenos Aires Herald (Argentina), Pagina 12 (Argentina), 04/23/02; Associated Press, 04/18/02, 04/20/02, 04/21/02, 04/23/02, 04/24/02; Reuters, 04/22-24/02; BBC News (London), Clarin (Argentina), 04/22/02, 04/24/02; The Guardian (London), Spanish news service EFE, 04/23/02, 04/24/02; Agence France- Presse, The Washington Post, 04/24/02; The New York Times, 04/21-23/02, 04/25/02; The Miami Herald, 04/21/02, 04/24/02, 04/25/02; The Nation, 05/06/02] ********************* COLOMBIA ********************* COLOMBIA: PRESIDENTIAL CANDIDATES CAMPAIGN AMID VIOLENCE Violence hangs over the presidential campaign in Colombia, and keeping the candidates alive is a major task for law enforcement. Alongside the violence, however, questions about the transparency of the electoral system and the influence of drug money and armed groups in the campaigns are having an impact on the race. Ten candidates will be on the May 26 ballot competing for the presidency for the 2002-2006 term, according to the Registraduria Nacional del Estado Civil. Front runner Alvaro Uribe, the hard-line right-wing dissident from the opposition Partido Liberal, who is running as the candidate of the multiparty Primero Colombia, survived an apparent assassination attempt April 14 when a bomb exploded as his campaign caravan drove down a city street in Barranquilla. Three people were killed and 13 others were injured in the blast. Police said explosives, loaded into a parked bus, detonated as the end of the caravan passed en route to the airport. Uribe isn't the only candidate who's been targeted. Ingrid Betancourt, candidate for the small environmentalist Oxigeno Verde, was kidnapped by Fuerzas Armadas Revolucionarias de Colombia (FARC) rebels in February and is still being held (see NotiSur, 2002-03-01). In December, officials revealed an alleged paramilitary plot against the main left-leaning candidate, former labor leader Luis Eduardo Garzon who is running for the Polo Democratico. "It would be suicidal to continue carrying out the campaign as though nothing has happened," Garzon told local RCN television after the attempt on Uribe's life. The violence has altered many candidates' campaign strategy, with much more effort going into television propaganda and less into personal appearances. President Andres Pastrana condemned the attempt on Uribe's life and invited all leading candidates to the presidential palace to discuss security for the final weeks of the campaign. Pastrana said the government was considering giving candidates more free television time as one way to help them get their message across safely. On April 19, Uribe called off all campaign trips and said he would make limited public appearances only in the capital and would use radio and television more. Uribe favored to win despite charges of paramilitary links Colombia's presidential race began to heat up in late March with a televised debate among five candidates, many of whom pledged to get tough on rebels and even extradite their leaders to the US. Four candidates said they would agree to the extradition of FARC founder and leader Manuel "Tirofijo" Marulanda if the US sought it. Only Garzon said he would oppose extradition, and he said he considered the breakdown of peace negotiations a grave historical error. Retired Army Gen. Harold Bedoya, an independent who is lagging in the polls, was the rebel leader's sharpest critic among the candidates. "Tirofijo is not a guerrilla, he's a drug trafficker," said Bedoya, a former armed forces chief, adding that the FARC was "nothing but a drug cartel." Other candidates include former interior minister Horacio Serpa of the Partido Liberal, in second place in the polls, and former foreign minister Noemi Sanin, a dissident of the Partido Conservador who is running as an independent. While both Uribe and Serpa have lost patience with the FARC guerrillas, Serpa's tone is more conciliatory, and he warns that a Uribe presidency will translate into "total war." Uribe picks running mate Uribe named as his running mate journalist Francisco Santos, who founded a group that counsels kidnap victims and has advocated tougher government anti-kidnap policies. Santos was kidnapped by Pablo Escobar's Medellin drug cartel in 1990 and held for eight months. Uribe's hard line toward the guerrillas comes from his personal history. Guerrillas fatally shot his father, Alberto Uribe, in a 1983 kidnapping attempt. Uribe said his selection of Santos "pays tribute to the Colombian families who have suffered from the scourge of kidnapping." Santos, a graduate of the University of Texas, is a columnist and former managing editor of his family-owned newspaper El Tiempo. His decision to run on the ticket with Uribe caused concern at El Tiempo, the nation's main paper. Co-publisher Enrique Santos, Francisco's cousin, said he feared it would undermine the newspaper's credibility as an independent voice. Santos says Uribe is "very tough, but he's not the right- winger everybody thinks he is." Uribe wants more US military assistance and more US help in tracking planes that smuggle drugs from Colombia and bring in weapons. He is calling for the armed forces to double in strength to 200,000 troops. While Uribe's support seems based on public frustration with Pastrana's four-year unsuccessful attempt to negotiate peace, his candidacy is a concern to human rights activists who fear his policies would further trample human rights. Critics say the candidate is too close to Colombia's military and the paramilitary groups they support. He has publicly praised officers who were forced out by Pastrana for collaborating with vigilante groups and paramilitary units charged with carrying out massacres in 1996 and 1997. Most disturbing to human rights groups is Uribe's defense of Gen. Rito Alejo del Rio, who is under criminal investigation for collaborating with death squads. "The very least one would hope is that he would support government prosecutors and investigators and call for these trials to be carried out by civilian courts and in as impartial a manner as possible," said Robin Kirk of Human Rights Watch. As a state governor in the mid-1990s, Uribe supported armed citizen-watch groups, which were allegedly infiltrated by right-wing death squads who attacked suspected rebel collaborators. The groups were dismantled in 1999, but Uribe has called for mobilizing a million civilians to provide "intelligence" on insurgents as an "early-warning system." Serpa accuses AUC of supporting Uribe On April 1, Serpa filed a formal complaint with the attorney general alleging influence by paramilitary groups in the electoral process. Earlier, Serpa accused Autodefensas Unidas de Colombia (AUC) leader Salvatore Mancuso of supporting Uribe's candidacy. Mancuso recently said that the AUC had helped elect 95 legislators in the March balloting. "The intervention of the paramilitaries in politics is a notorious fact," Serpa said. "The paramilitaries, who launched an armed campaign during the last (congressional) election...are also carrying out an armed campaign in support of Dr. Alvaro Uribe's candidacy." "A fraud is being committed beyond the voting booths, obliging people to vote against their will," Serpa said. "An election under these conditions is suspicious." Santos, noting that Serpa trails in the polls by as much as 30 points, said the accusations were "poll desperation." Legislative elections challenged Meanwhile, the government is still investigating paramilitary influence in the March 10 elections, and Interior Minister Armando Estrada blamed leaders of the political parties and movements who are responsible for checking the background of their candidates. He said that the parties and movements "backed people who now appear to have been backed by the paramilitaries." Besides the influence of armed groups, credible evidence has emerged of widespread fraud. Some results are still not finalized, and the scandal is casting a shadow on the presidential race. On April 5, national registrar Ivan Duque filed a complaint alleging that more than 30,000 "phantom votes" showed up in the elections. "There is serious evidence that something is going on," said Duque, after a meeting with the Consejo Nacional Electoral (CNE). Votes were also evidently altered, creating serious discrepancies between the precount done by the Registraduria and the final count. "It is very suspicious that almost a month after the elections, the election authorities have been unable to finish the count of [the remaining] 3.5% of the ballots," said independent Sen. Jimmy Chamorro. Some re-elected legislators said that, after all votes were counted, they had fewer votes than the figure they were given with 95% of the count completed. Presidential candidate Noemi Sanin said that "the complaints of electoral fraud indicate that the Congress is illegitimate and the elections should be revoked." But CNE president Luis Felipe Vergara said the entire election should not be thrown out because of a few fraud allegations. "It would be like the money losing credibility because they've discovered a few counterfeit coins," he said. On April 10, Procurador General Edgardo Maya confirmed fraud in the elections through manipulation of votes and changes to the count certifications. He said the most flagrant manipulation occurred in Bogota. El Tiempo newspaper reported that, because of the alleged fraud, between 30,000 and 90,000 ballots may be thrown out. It also said that authorities have opened 249 preliminary investigations into the elections. The Procuraduria promised to finish the investigations quickly to avoid casting doubts on the presidential voting. But Maya said what is needed is a major revision of the electoral laws rather than annulling the elections, since, with the present system, a transparent election is impossible. On April 24, Sen. Chamorro said that fraud occurred in 17,000 of the 50,000 polling places in the March elections, and that at least 32,000 poll workers were involved. Archbishop's assassination also tied to elections Archbishop Isaias Duarte Cancino was assassinated on March 16 as he left a barrio church in Cali. He had spoken out against the violence and had said in February that drug money was funding some congressional campaigns. Duarte Cancino had also publicly criticized both the guerrillas and the ultra-right paramilitary groups. The archbishop refused to name the candidates whose campaigns he believed were funded by drug money, saying their identities were widely known in the community. Rev. German Robledo said Duarte made his allegations after parish priests showed him evidence that at least three drug trafficking organizations were buying votes and financing candidates. The police initially blamed the FARC, but Attorney- General Luis Camilo Osorio said evidence was pointing to drug traffickers. On March 18, Interior Minister Estrada said that "one of the main hypotheses...concerns the archbishop's denunciations of the role of drug traffickers in Colombian politics" before the congressional elections. In a related matter, the head of the Cali police Gen. Eliodoro Alfonso Roa resigned on March 21, saying he did so to facilitate the investigation into police responsibility, by omission, for Duarte's assassination. Witnesses said that the police had been called several times with complaints that two suspicious people were hanging around the church where Duarte was killed for several hours, but the police did not respond. John Jairo Maturana, the head of a Cali-based gang that trains young assassins, was arrested on March 27 in connection with Duarte's murder. Gen. Francisco Pedraza of the army's Third Division based in Cali said Maturana, "in the structure of organized crime, is the head of the assassins school." On April 12, the attorney general announced the arrests of the two suspected perpetrators of the killing, identified only by their street names of El Calvo and El Cortico. Authorities said they had been identified by witnesses. After Duarte's assassination, Uribe said Colombians cannot sit idly by as the country is torn apart. "We need to change our historic tendency toward violence, because we are living from burial to burial," he said. "The citizens need to get organized to support the security forces. [Sources: Znet, 03/16/02; BBC News (London), 03/17/02; The Houston Chronicle, The Washington Post, 03/18/02; Newsweek, 03/25/02; La Opinion (Los Angeles), 03/29/02; The Miami Herald, 03/18/02, 03/20/02, 03/27/02, 04/06/02; Colombia Update, 04/07/02; Notimex, 03/23/02, 03/24/02, 04/01/02, 04/03/02, 04/08/02, 04/10/02, 04/11/02; Reuters, 03/16/02, 03/21/02, 04/02/02, 04/05/02, 04/14/02, 04/15/02; Inter Press Service, 03/18/02, 04/15/02; Associated Press, 03/17-20/02, 03/25/02, 04/01/02, 04/15/02, 04/19/02; Spanish news service EFE, 03/17/02, 03/19/02, 04/12/02, 04/13/02, 04/18/02, 04/23/02] ================================================================= NY Transfer News Collective * A Service of Blythe Systems Since 1985 - Information for the Rest of Us 339 Lafayette St., New York, NY 10012 http://www.blythe.org e-mail: nyt@blythe.org ================================================================= pvtsa-04.26.02-00:36:13-22902