Wednesday June 29: Latin America stories of the.week with Fausta Rodriguez Wertz…..click to listen……. https://t.co/AvitbyVBEV
— Silvio Canto, Jr. (@SCantojr) June 29, 2016
Anybody out there planning to go to the Olympics? This is not a good headline:
Rio de Janeiro’s acting governor warned Monday that the Olympic Games could be a “big failure,” because of budget shortfalls that threaten to compromise security and mobility during the games.
In an interview with Rio’s O Globo daily, Francisco Dornelles said the state is still awaiting a 2.9 billion Brazilian real ($860 million) payout from the federal government aimed at shoring up state coffers ahead of the Aug. 5-21 event. The funds were allocated last week but have not yet reached the state, and Dornelles warned that without them, police patrols may grind to a halt by the end of the week, for lack of gas money.
“How are people going to feel protected in a city without security,” Dornelles was quoted as asking.
“I’m optimistic about the games, but I have to show reality,” he said. “We can have a great Olympics, but if some steps aren’t taken, it can be a big failure.”
And this guy wants tourists to get on a plane and visit Rio?
On top of everything, from a really juicy political crisis to the zika virus, the police are protesting against the late payment of salaries and a lack of equipment ranging from car fuel to toilet paper.
And these are the police officers that will provide security in Rio?
It is a terrible shame that things have deteriorated like this. However, this is more than bad luck. Brazil probably wasn’t ready to do World Cup and Olympics in 2014 and 2016. Add to all of this the country’s penchant for corruption and toilet paper may be the last thing that we will have to worry about.
Finally, security is even more critical now than ever because of terrorism. We saw what happened at the Boston Marathon in 2013 where a couple of guys with bombs killed and injured many.
It’s probably too late to pull the plug but a lot of people, and even some athletes, won’t go. It’s just too much of a risk for people to take.
A few years ago, I was talking to a Spanish friend from Madrid who exports to the U.S. He complained then about the “euro”. He said that the euro was killing Spanish exports or making them more expensive in the U.S.
He longed for the days when Spain had its own currency (“la peseta”) and could manage its own economy.
Wonder what he is thinking today? My guess is that he is happy with the UK vote.
My sense is that the EU has been good to Germany but not to those smaller countries who depend on trade or tourists, such as Spain.
Exports to the U.S. are a major portion of the Spanish economy:
Exports from Spain amounted to US$283.3 billion in 2015, down by -5% since 2011 and down -11.1% from 2014 to 2015.
Spain’s top 10 exports accounted for 57% of the overall value of its global shipments.
Based on statistics from the International Monetary Fund’s World Economic Outlook Database, Spain’s total Gross Domestic Product amounted to $1.636 trillion in 2015.
Therefore, exports accounted for about 17.3% of total Spanish economic output.
My friend wold argue that the “euro” is the reason that exports to the U.S. are down.
He is not alone, as we can see in this 2015 BBC report that I read last year:
As Spain emerged, under-developed and economically weak, from the isolation of the Franco dictatorship, the EU was seen as its benevolent benefactor.
Now, six years into an economic crisis which has left 27% of the population unemployed, it is viewed as the belligerent bully which is forcing Spain to its knees with austerity measures.
Since 2007, Spanish approval of the EU has almost halved.
It’s fair to say that the benefits of the EU were oversold to a Spanish nation yearning for modernity a decade ago.
During the Franco years, the trains ran on time and the streets were extremely safe. At the same time, he isolated Spain from globalism and progress.
Will Spain be next? Time will tell but don’t be surprised if it does. The Brits have a lit a fire and it will spread quickly.
All of a sudden, the lefties of South America are running for cover.
Let’s start in Argentina, where ex-President Fernandez has just been indicted:
A judge in Argentina on Friday indicted former President Cristina Fernández de Kirchner and other officials on charges of manipulating the nation’s Central Bank during the final months of her administration.
Mrs. Kirchner and the officials are accused of entering into contracts to sell the Central Bank’s dollars at below-market rates during her presidency in order to shore up the Argentine peso.
The judge, Claudio Bonadio, said that it was “unthinkable that a financial operation of this magnitude” could have been carried out without the explicit approval of “the highest political and economic decision makers of government.”
Judge Bonadio will now deepen his investigation, legal experts said, to decide whether the case goes to trial or is dismissed. Mrs. Kirchner can appeal her indictment.
Mrs. Fernandez followed her late husband Mr. Kirchner in the presidency. I guess that corruption finally caught up with them. At the same time, the couple has a lot of supporters in the public bureaucracy so don’t count your chickens yet.
By the way, Nestor and Christina Kirchner remind me a lot of the Clintons.
Over in Brazil, President Rauseff will be watching the Olympics from home rather than presiding over the opening ceremony as head of state. A trial has begun that could remove her permanently from the office. In the meantime, there will be an interim president.
Over in Venezuela, the situation has now hit the “expletive deleted” fan. President Maduro has declared a 60-day emergency because of what he defines as threats from the US government.
These 3 crises have a few things in common beyond the fact that the leaders where once the darlings of the left.
First, corruption is rampant, a natural consequence of concentration of power or using state resources to win elections. It worked great in Venezuela and Brazil as long as commodities and oil prices supported the inefficient state operations.
Second, the economies of Argentina, Brazil and Venezuela are basket cases.
Brazil, one of the top 10 GDPs in the world, is mired in a deep recession.
Argentina is a better off but still paying the price of the Kirchner-Fernandez disregard for the rule of law.
And Venezuela is such a disaster that we won’t cite numbers because the country is indeed falling apart.
Argentina will be the first to improve because President Macri is already correcting the excesses of his predecessors.
Brazil and Venezuela could descend into chaos.
As my late father used to say, socialism is great as long as the subsidized get their subsidies. If not, the subsidized turn on the ones who made the promises, as is the case in Venezuela and Brazil.
P.S. You can listen to my show (Canto Talk) and follow me on Twitter.
You probably saw a lot of celebrations around the theme of “Cinco de Mayo” in Dallas and elsewhere. Count me in. I love the day because there is Mexican food all over town as well as those little girls dancing in their traditional dresses.
This is what real diversity is. In other words, Americans celebrating their ethnic origins.
So what’s the big deal about “Cinco de Mayo”? What do we have these parties?
Allan Wall has a good summary for those of us who are not Mexican or studied Mexican history in school:
“Cinco de Mayo, literally “May the 5th,” is the holiday celebrating the Mexican victory over the French army on May the 5th, 1862, at Puebla, east of Mexico City.”
In the U.S., specially in the Southwest, “Cinco de Mayo” has turned into a Mexican version of St. Patrick’s Day in Boston, Columbus Day in New York or Polish Day in Chicago.
“Cinco de Mayo” is a Mexican-American celebration. Every year, our parades have gotten bigger and bigger.
As Mr. Wall writes, “Cinco de Mayo” is a very good day for local retail merchants :
“Cinco de Mayo is also a big beer-drinking day, with Mexican beer brands doing 5-10 percent of their U.S. sales for the occasion.”
So pass the beer, the chips and those wonderful enchiladas. I’ll catch the Rangers in Toronto and tell my friends again that “Cinco de Mayo” is not Mexico’s July 4th!
“Cinco de Mayo” is just a fun day to eat Mexican food!
José Niño wrote a great post over at Latin American Post, a wonderful website about Latin America.
His article is about the 3 big problems facing most of the countries south of the border. He calls them “the three myths”. They are:
1) Who Creates Wealth?
2) “Good Socialism”; and the most important, in my opinion,
3) Corruption Is Just A Symptom.
The corruption point really hit the target:
Many analysts and experts mistakenly believe that the rampant corruption that characterizes Latin America is the region’s cause of unrest.
Actually, corruption is just the result of interventionist policies that increase the power and size of the state to lord over people’s needs.
It is easy to talk about corruption, which is merely a symptom of the real disease — an oversized state — without providing an alternative to addressing the existing problem.
When offering a solution, many often refer to government run by enlightened experts or officials.
Crony capitalism and rent-seeking through privileges granted by the government are the disastrous results of an administration that operates out of its rightful role in society. When a nation exceeds its limitations, that becomes an incentive for businesses to resort to corruption.
Instead of creating commissions or Byzantine bureaucracies to investigate corruption, states must simply strive for the rule of law, repealing all bad legislation so that equality before the law and free competition flourish in society.
Frankly, the real problem with corruption is that most Latin Americans have put up with it. They’ve paid the price of corruption, bribes, for example, in exchange for political stability.
It’s like buying protection from an intrusive state: I pay a bribe and you stay out of my life.
Unfortunately, it has now become a way of life, for example in Brazil, where the cost of corruption is estimated at US$ 53 billion or about 2% of GDP. It also makes it more difficult to encourage foreign investment, such as U.S. companies forced to explain to their shareholders where the money is spent.
It corrupts the police and people can literally buy justice.
In Brazil, they used to say: “Rouba mas faz,” (“He steals, but gets things done”) They are probably saying now that he steals too much and does too little!
Yes, corruption is the biggest threat to growth in Latin America. Clean up crony capitalism and you will see a lot of the region’s problems disappear. Of course, I am also an optimist by nature.
Guests: Fausta Rodriguez Wertz, the edtitor of Fausta’s Blog…..plus Orestes Matacena, filmmaker and Cuban American activist……we will hear Orestes’ reaction to President Obama’s trip to Cuba as well as efforts to increase travel to the island………Fausta will update us on the impeachment proceedings in Brazil and the deterioration of Brazilian politics…..Venezuela the land of shortages and more shortages……Ecuador and the aftermath of the earthquake…..Puerto Rico and bankruptcy..…and other stories of the week………..click to listen:
Wednesday Apr 27: Brazil update, Cuba today and other US-Latin America stories this week…. https://t.co/7VwTX9nFWc
— Silvio Canto, Jr. (@SCantojr) April 27, 2016
Former President Cristina Fernandez was back in the news this week.
She is under investigation, as we see in the New York Times:
Former President Cristina Fernández de Kirchner testified in a Buenos Aires court on Wednesday as part of an investigation into allegations of misdeeds at Argentina’s Central Bank during the last months of her administration.
But the court hearing and Mrs. Kirchner’s return to the public eye quickly turned into a display of political theater as she claimed that she was being persecuted by her foes and reignited a debate about the independence of the country’s judges and prosecutors.
“I am not scared of you,” Mrs. Kirchner wrote in a statement she filed to the court. Even as her political capital has been ebbing, Mrs. Kirchner turned the hearing into a show of strength, speaking afterward to a large crowd of supporters outside the downtown courthouse. “We will return,” they chanted.
Frankly, there was indeed a lot of corruption in the last administration. It is the kind of corruption that happens when government has its fingers in everything. We call it crony capitalism. In Latin America, specially Argentina and Brazil, it is the corrupt relationship between a centralized government, public sector unions and big companies happy to go along to protect market share.
My guess is that nothing will happen to ex-President Fernandez. I think that President Mauricio Macri, a good guy, knows that this is a “lose-lose” game. It will turn Cristina into a victim and energized the left after the December defeat.
Here is my suggestion to my friends in Argentina: Get over Cristina and do something about a political system infected with crony capitalism. The answer is to blow up the system not put Cristina in jail.