Argentina Votes Ahead of Radical Neoliberal Reforms

By Ronald J. Morgan

In what could be the economic policy showdown of the decade, Argentines will be either green lighting a radical neoliberal policy by President Mauricio Macri or signalling a need to put a break on pro business and government austerity reforms when they vote in congressional elections Oct. 22. 1,2,3,3a,3b,4

Former President Cristina Kirchner (2007-2015), who is facing investigations for corruption during the past administration, is nevertheless, leading the Left campaign against Macrism.  While the Kirchner campaigning has been formidable, the Macri forces are showing a growing strength.  Argentines gave the Macri Cambiemos (Let’s Change) Party a strong show of support in the Aug. 13 primary elections. Cambiemos won in Kirchner strongholds such as Santa Cruz, Cordoba and Salta. Anti-Kirchenr Chamber of Deputies candidates Elisa Carrio and Margarita Stolbizer, won large victories.

In the media-watched Buenos Aires province  senatorial race, however, Kirchner defeated Esteban Bullrich, the former head of government for Buenos Aires City under Macri, by a razor thin margin. But the close victory could not offset the overall Cambiemos win. The Cambiemos gains caused euphoria in the stock market and international business sectors.

“We’re are two weeks away from ratifying that we are convinced of the path that we have chosen,” The Argentine Daily Clarin reported Macri as saying to a gathering in Puerto Iguazu. We decided that we want to live with the truth, that we don’t want more lies, that we don’t want more mafias, narcos, nor corruption. That time has ended.”

Macri had a second good turn of  luck when better than expected economic news showed the economy pulling out of recession. Inflation also is headed downward after peaking at 40% last year. The Argentine Central Bank predicts 22.8% inflation at the end of the year.  The official statistics agency INDEC predicts year-end growth for 2017 of 2.7%.  Economic recovery in Brazil will also help stimulate Argentine economic activity. 5,6,7,7a,8

Whether the pain of the recent severe downturn is behind most Argentines is doubted however.  Since Macri took over in January 2016, what’s being termed the “Adjustment” has filled the streets with homeless and returned Argentines to the streets in protest in a way not seen since the 1990s.  Government and private sector firings, accompanied by radical price hikes, which caused a loss of consumer purchasing power, have been endured since Macri took office. 8a

Poverty conditions improved slightly in the first half of 2017. Official INDEC statistics showed a 1.7% drop in poverty from last year to 28.6%. Currently, 7.84 million Argentines are below the poverty line.  Some 1.7 million Argentines are classified as indigent.

See: Argentina’s Neoliberalism: Firings, Price Hikes, Austerity

Macri and his economic team are showing a conservative zeal on the eve of the elections. He has announced plans for passage of  a package of radical neoliberal reforms as soon as Cambiemos posts an expected strong win Oct. 22. Tax cuts, labor reforms, and further cuts to federal and state bureaucracies are ready for passage. More price hikes are also planned to reduce government subsidies. 9,10,11,11a

The Argentine labor confederation CGT (Confederación General del Trabajo de la República Argentina) has been meeting with pro union Peronist congress members and senators to form a strategy to block Macri anti-labor reforms.

In addition to the scary prospect of more onerous price hikes and government job cuts there have been some weaknesses in the Macri turnaround.  The government has been criticized for heavy borrowing from foreign lenders. After 15 years without access to the international bond market Argentina borrowed $16.5 billion in 2016. Then in 2017 it issued an unusual 100 year bond for $2.75 billion. A large trade deficit still looms and capital flight has been brisk. The Argentine peso also is still devaluing in an erratic manner. Multilateral borrowing has also increased. Total foreign debt now stands at $204.5 billion. Moodys credit rating agency criticized the foreign borrowing in October and said it was “credit negative”. 12,13,14,14a

The borrowing was channeled into infrastructure projects which are being used to stimulate the Argentine economy. Public works construction is evident throughout Argentina. The government plans to under take 59 major infrastructure projects worth $26 billion over the next three years. 15,16

Kirchner entered the senate race with the hope of forming a strong opposition in congress. If she wins, Kirchner would receive protection from arrest in various legal proceedings. The former president formed a new movement — Citizen Unity (Unidad Ciudadana) — and hit the campaign trail with a list of Macri failings and a plea to save the nation from a far right shift. “They are preparing a great adjustment after the elections. The question is whether society is willing to give a blank check to this government,” she said recently. Barring legal complications, Kirchner could run for president again in 2019.

The October 22 vote, will elect 127 out of 257 members in the Chamber of Deputies and 24 members of the 72 member Senate. Two elections for governor will also occur this year. Cambiemos won the Corrientes province race and an election for the governor of Santiago del Estero  province is still ahead. 17,18

As in previous elections a number of legal proceedings, and political crimes are influencing the election environment. Argentines are watching how the Macri government handles the investigation into the Aug. 1 disappearance of a 28-year-old  Argentine backpacker, Santiago Maldonado. Santiago disappeared in Patagonia when members of a Argentine Gendameria police unit attacked and attempted to dislodge a Mapuche encampment that was conducting a protest on land owned by the Benneton Coporation. 19

Another sensitive case being looked at closely by Argentines and the international human rights community is that of pro-Kirchner social activist in Northern Argentina Jujuy province, Milagro Sala. Sala, 53, headed the Tupac Amaru neighborhood association and was the recipient of government funds to build a low-cost housing project for poor and indigenous persons. She also served as a state deputy. Shortly after Marci took office Sala was arrested during a protest against Governor Gerardo Morales. She since has been charged with misusing $2 million in public funds and disturbing the peace.  Activists have charged that Sala is the victim of a vendetta by the governor and is the first to fall to a trend to criminalize protest. 20

Last September, the Argentina forensics group of the Gendarmeria police issued a report declaring the Alberto Nisman death in January 2015, a homicide and not a suicide. Nisman was the prosecutor in the AMIA Jewish center bombing case. The new turn further heightens concerns about the possibility of a political plot to kill Nisman. 21

In addition to the Nisman case, corruption proceedings are moving ahead against Cristina Kirchner and a number of associates. Fernandez has become a subject of investigation in three corruption cases involving bribes. 22,23

Fernandez is also being investigated for covering up Iran’s role in the AMIA Jewish center attack of the 1990s. Nisman originally proposed the investigation four days before his mysterious death.

SOURCES: 

1, CFK, de campaña en Lanús https://www.pagina12.com.ar/66778-cfk-de-campana-en-lanus

2. Cristina Kirchner’s Interview with Infobae, Explained http://www.thebubble.com/cristina-kirchners-interview-infobae

3. La entrevista completa a Cristina Kirchner en Infobae http://www.infobae.com/politica/2017/09/14/en-vivo-entrevista-a-cristina-fernandez-de-kirchner-en-infobae/

3a. Cristina Kirchner ganó las primarias en Buenos Aires por 20.000 votos https://elpais.com/internacional/2017/08/30/argentina/1504052963_172150.html

3b. Macri domina las primarias pero Kirchner empata en Buenos Aires

https://elpais.com/internacional/2017/08/13/argentina/1502630221_677668.html

4. Entrevista con el Pte. de Argentina, Mauricio Macri” Oppenheimer Presenta # 1728

5. Macri, sobre la baja de la pobreza: “Es una muy buena noticia, pero esto recién comienza” https://www.clarin.com/politica/macri-baja-pobreza-buena-noticia-recien-comienza_0_H1umkg3jb.htm

6. Indec: Poverty Rate Clocked in at 28.6 Percent in the First Semester of 2017 down 1.7%

http://www.thebubble.com/indec-poverty-rate-dropped-to-28-6-percent-in-the-first-semester-of-2017/

7. Analistas mantienen proyección de inflación en 22% http://www.cesla.com/detalle-noticias-de-argentina.php?Id=31425

7a. El FMI sube la previsión de crecimiento de Argentina a 2,5 % en 2017 y 2018 https://www.clarin.com/economia/economia/fmi-sube-previsiones-crecimiento-argentina-2017-2018_0_SJrJ1D53-.html

8. El Gobierno desa elecciones sean hoy http://www.lanacion.com.ar/2066773-el-gobierno-desea-que-las-elecciones-sean-hoy

8a. Unidad Ciudadana Spot Lorena Pokoik #AsíNoVamosBien https://www.youtube.com/watch?v=SYa4UvnSMuw&feature=youtu.be

9. Macri Readies Tax, Fiscal Bills for Post-Election Drive https://www.bloomberg.com/news/articles/2017-09-19/macri-is-said-to-ready-tax-fiscal-bills-in-post-election-drive?utm_content=economics&utm_campaign=socialflow-organic&utm_source=twitter&utm_medium=social&cmpid%3D=socialflow-twitter-economics

10. La redistribución macrista del ingreso https://www.pagina12.com.ar/67968-la-redistribucion-macrista-del-ingreso

11, Los 5 puntos del proyecto de Ley de Responsabilidad Fiscal que será enviado al Congresohttp://www.infobae.com/economia/2017/08/18/los-5-puntos-del-proyecto-de-ley-de-responsabilidad-fiscal-que-sera-enviado-al-congreso/

11a  La Agenda del Gobierno en El Congreso http://www.infobae.com/politica/2017/09/25/la-agenda-del-gobierno-en-el-congreso-el-paquete-de-leyes-que-buscara-aprobar-despues-de-las-elecciones/

12. ARGENTINA: Unhedged Foreign Borrowing Raises Risks For Sub-sovereigns – Moody’shttp://markets.businessinsider.com/news/interestrates/ARGENTINA-Unhedged-Foreign-Borrowing-Raises-Risks-For-Sub-sovereigns-Moody-s-1003032622

13. Argentina returns to global debt markets after 15-years https://www.reuters.com/article/us-argentina-bonds-bids/argentina-returns-to-global-debt-markets-after-15-years-idUSKCN0XG2W0

14. Argentina sold $2.75 billion worth of 100-year junk bonds http://www.businessinsider.com/argentina-sold-275-billion-worth-of-100-year-junk-bonds-2017-6

14a. Crece la cantidad de plata de argentinos en el exterior https://www.clarin.com/economia/economia/crece-cantidad-plata-argentinos-exterior_0_HJefzM6jb.html

15. Argentina’s Macri bets on bus lane, public works ahead of key election http://www.reuters.com/article/us-argentina-politics/argentinas-macri-bets-on-bus-lane-public-works-ahead-of-key-election-idUSKBN17S2ZT

16. Argentina prevé inversiones público-privadas por US$26.000M http://www.cesla.com/detalle-noticias-de-argentina.php?Id=31457

17. Corrientes elige gobernador: Cambiemos se impone y evita el ballottage

https://www.cronista.com/elecciones2017/Corrientes-elige-gobernador-Cambiemos-se-impone-y-evita-el-ballottage-20171008-0001.html

18. Elecciones 2017: qué elige cada provincia

https://www.cronista.com/elecciones2017/El-cronograma-de-elecciones-2017-que-elige-cada-provincia-este-ano-20170601-0085.htm

19. Santiago Maldonado: missing backpacker takes center stage in Argentina’s elections https://www.theguardian.com/world/2017/oct/06/santiago-maldonado-argentina-election-missing-backpacker?CMP=share_btn_tw

20. Argentina’s Milagro Sala: Criminal, or “Political Prisoner”?http://americasquarterly.org/content/argentinas-milagro-sala-criminal-or-political-prisoner?

21. Nisman también tenía lesionados un dedo y un diente https://www.clarin.com/politica/nisman_0_H1IauDOjZ.html

23. Día por día: la agenda judicial que enfrentará el kirchnerismo en el último tramo de la campaña electoral http://www.lanacion.com.ar/2066243-la-agenda-judicial-que-enfrentara-el-kirchnerismo-en-el-ultimo-tramo-de-la-campana

 

 

 

 

 

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Ecuador’s Moreno Announces Austerity Cuts

By Ronald J. Morgan

We all know that this has been extremely difficult since 2015. Not having the liquid resources, we turned to foreign and domestic financing. Entering in a complex economic situation the decisions that were taken were not as measured as they should have been and they put a limit to the sustainability of our economy. Today we find a country with more equality, with more infrastructure, services and a growing human talent. But we have to pay for it.” President Lenin Moreno during his July 28 televised address.

After being elected as the successor to President Rafael Correa, Ecuador’s new president, Lenin Moreno, has begun a startling political turn away from his mentor and from the policies of the last decade.

During a televised address July 28, Moreno announced that the nation was facing a critical economic situation. In May, Correa had left the presidency saying the “table was set” for further economic progress but Moreno reported that overspending had been greater than first reported and that overall indebtedness had reached 49% of GDP. (Finance Minister Carlos de la Torre has since lowered the amount to 43% of GDP) 1,2,

The government, he said, was facing an annual financing shortfall of  $8 billion. The deficit forced Ecuador to break with an OPEC oil production quota and begin pumping extra petroleum.

See: Lenin Moreno to Continue Ecuador’s Citizens Revolution

In the first 100 Days of the Moreno Administration the Correa legacy of a Decade Won has come under withering attack. Economic problems have resulted in the public sector role in the economy needing to be reduced. A new austerity program is being characterized as changing the Ecuadoran economic model toward one that depends on  private sector investment for growth.

Moreno and Correa have sparred publicly. There have been charges of a theft of Correa e-mails and Moreno has denounced that Correa did not inform him of a hidden camera in the presidential palace. 3,3a

Added to the economic crisis is a corruption scandal involving bribes by the Brazilian Olderbrecht Corporation  which has ensnared Vice President Jorge Glas. A corruption probe into money laundering and illicit enrichment in the state oil company Petroecuador is also underway. 4,5,6

Another scandal involving administration of the justice system and undo pressure of judges, threatens to bring down a number of former Correa officials. A recent release of Correa e-mails (The emails are likely stolen) has brought calls for prosecution of the former president for illegal influence over the justice system. 7

Moreno has moved to establish a more conciliatory tone for his administration by improving relations with the nation’s Indigenous movement. An indigenous organization headquarters has been returned to the organization and seven indigenous protesters have been  pardoned for criminal violations. Moreno has also undertaken an extensive dialogue with the political opposition and the private sector. 8,9

In what could spell the end of a number of the more controversial policies of the Correa period, Moreno has announced a possible public consultation on a number of Correa Administration laws and policies, including a recently passed right to an indefinite reelection, a restrictive media law, and a government agency charged with naming persons to major government posts. Also expected to be on the ballot are justice sector reform and a property tax law. 10,11,12

The public consultation and a new government austerity program will set the Moreno government on a more centrist course than expected. In foreign policy, Moreno has reduced Ecuador’s support for Venezuela slightly, by criticizing the number of  so-called political prisoners being held.

So far, Moreno is receiving strong support in Ecuadoran opinion polls. The opinion poll Perfiles de Opinion gave Moreno 84% approval. Many of those polled said they approved of the president’s opening of dialogue with the opposition. 13

See: Ecuador Elections: The Citizens Revolution Without Correa

In the past, Ecuador has experienced strong economic crises. And president’s who have betrayed their campaign promises have been overthrown by street protests.

A number of prominent official party members have criticized Moreno’s new policies as being too close to those proposed by the opposition. Former President Correa has accused Moreno of turning the country over to right-wing bankers and political parties interested in back room power sharing agreements.

Several important Moreno cabinet members have resigned in order to defend the original Alianza Pais platform. These include Ricardo Patiño, government counselor under Moreno and former Defense Minister under Correa, Paola Pabon, National Secretary of Political Administration, and Virgilio Hernandez, presidential counselor for Housing and Environment. 14

Correa loyalists in the Partido Alianza Pais have issued a strong criticism of Moreno’s political shift and said they will not support a public consultation which responds to the right wing agenda and the economic powers, the removal of political rights or the “destabilization of the national institutionalism”. 15,16

The pro Correa group has said if the consultation is too pro opposition they will propose a constitutional convention to consider political reform. Such a reform could allow Correa to run as a delegate.

Moves by the president which have angered Correa and his supporters include:

!. Appointment of associates of former president Abdala Bucaram (1996-1997) to government posts.

2. The turning over of a new digital money system to private bank operation. Under a previous plan the system was to be operated by the central bank. The new digital money will save on the amount of dollar currency which must be purchased each year.

3. Use of a decree to strip Vice President Jorge Glas of his ability to carry out duties as Vice President after he publicly criticized the president for turning away from the Citizens Revolution.

4. Depiction of the Correa economic policies as reckless overspending that lead to unsustainable indebtedness. Correa has maintained that the over all indebtedness is less than the Moreno government says. He also objects to the charge that corruption was widespread in the government. Moreno announced the government’s public debt at $57.788 billion while the Correa Administration figure for May, showed a consolidated debt of $26,896 billion.

5. Moreno reorganized and fired Correa backers at the government-owned media, including El Telegrafo. 17

The Moreno administration, faced with heavy debt ($8 billion dollars in public debt payments and $12.5 billion in total financing requirements) and less revenue due to low oil prices, low mineral prices and a dollar currency that makes Ecuador less competitive against its competitors, is falling in line with a regional trend toward more austerity and increased reliance on private sector investment to propel the economy forward.

Nevertheless, Moreno has vowed to push through a major housing program and maintain current social programs. Government salaries have been cut 10%, positions eliminated and new hiring restricted for a savings of $2.8 million per month.. Six coordinating ministers have been cut.  Government buildings, cars, presidential jets and other property valued at $107 million will be sold immediately with more to go on the auction block later. 18

Tax incentives to return money from offshore are also expected.

The total fiscal austerity plan will be presented in two parts: The 2017 updated budget passed in September and the 2018 budget which will be passed in October. A total of $365 million to $369 million is expected to be saved through the new strategy. 19,20,21

The objective of the fiscal austerity will be to reduce the non-financial public sector deficit from the current 7.6% of GDP to 2% of GDP by 2021.

The economy is expected to grow slowly from 2017 to 2020 : 0.7% 2017, 1.6% 2018, 2.39% 2019, 2.49% 2020. Annual inflation was 0.28% in August due to the dollar economy. Unemployment was 5.78% in June according to the Ecuadoran Central Bank.

The new Moreno strategy will eliminate most large government infrastructure spending projects. The focus will be on stimulating private projects in the  construction industry (The government will eliminate a new real estate tax aimed at stopping land speculation in hopes of increasing construction investment to $ 4.8 billion. Non petroleum exports will be promoted through the new European Common Market free trade agreement. Products such as bananas, shrimp, chocolate, tuna and cafe are expected to increase from $7.04 billion to $8.3 billion in 2020.

The government also expects to promote an increase in mining projects to offset dependency on petroleum.

The government plans to save on purchases of U.S. currency by implementing an electronic money system which eliminates the use of currency.

Public highways will be opened to private concessions. Other private-public partnerships will also be promoted.

Focusing of fuel subsidies will save S300 million.

Despite the austerity program, social spending will be increased 27%. The government major public spending effort will be new housing. This year the government will build 325,000 homes. Of those, 191,000 will be given away free to extremely low income families. 22

The housing program will begin with a $500 million dollar appropriation which will stimulate the construction industry and the economy in general.

Eight social programs known as Plan Para Toda La Vida will be budgeted at 878.3 million dollars.

SOURCES:

1. 28 de julio de 2017  20:26 Lenín Moreno dice que situación económica del país es crítica http://www.elcomercio.com/actualidad/leninmoreno-acciones-presupuesto-economia-ecuador.html

2. Cadena nacional del Presidente Lenín Moreno 28-07-17, You Tube https://www.youtube.com/watch?v=pXn3oxvEfMQ

3. 100 días del Gobierno de Lenin Moreno.

3a. Ecuador’s Succession Politics Get Ugly Mac Margolis https://www.bloomberg.com/view/articles/2017-07-17/ecuador-s-succession-politics-get-uglyEcuador’s Succession Politics Get Ugly 17 de julio de 2017 9:00 GMT-

4. 25 de agosto de 2017 16:30 Asamblea autorizó procesamiento penal del vicepresidente Jorge Glas http://www.elcomercio.com/actualidad/asamblea-autorizacion-enjuiciamiento-penal-jorgeglas.html

5- 9 de septiembre de 2017 00:00 Pareja Yannuzzelli acordó con la Fiscalía aportar datos sobre ilícitos http://www.elcomercio.com/actualidad/carlosparejayannuzzelli-acuerdo-fiscalia-corrupcion-petroecuador.html

6. 12 de septiembre de 2017 19:04 El CAL resolvió convocar a Gustavo Jalkh a la Asambleahttp://www.elcomercio.com/actualidad/cal-convocar-gustavojalkh-asamblea-judicatura.html4

7. Unidad Popular demanda a Rafael Correa por supuesto tráfico de influencias Martes, 12 de septiembre, 2017 – 12h5 http://www.eluniverso.com/noticias/2017/09/12/nota/6377989/unidad-popular-demanda-rafael-correa-supuesto-trafico-influencias

8. 16 de agosto de 2017 15:16 El Gobierno no concederá más indultos a líderes indígenashttp://www.elcomercio.com/actualidad/gobierno-indultos-lideres-indigenas-conaie.html

9. 10 de agosto de 2017 11:08 Comodato de la sede de la Conaie por 100 años se concretóhttp://www.elcomercio.com/actualidad/comodato-sede-conaie-mies-convenio.html

10. 30 de agosto de 2017   00:00 Consulta sobre la reforma institucional cobra fuerza
http://www.elcomercio.com/actualidad/consulta-reforma-instituciones-leninmoreno-asamblea.html#.Wab7kG10yR0.twitter

11. 1 de septiembre de 2017 00:00 13 organizaciones coinciden en la extinción del Cpccs http://www.elcomercio.com/actualidad/organizaciones-extincion-cpccs-consulta-popular.html

12. 9 de septiembre de 2017 17:07 Glas propone una Constituyente para ‘cambiar la estructura del Estador http://www.elcomercio.com/actualidad/jorgeglas-asamblea-constituyente-ecuador-leninmoreno.html

13. 21 de agosto de 2017 00:00 Moreno con alta aceptación, según sondeos de cuatro encuestadoras http://www.elcomercio.com/actualidad/presidente-leninmoreno-aceptacion-sondeos-encuestadoras.html

 14. Ricardo Patiño, Paola Pabón y Virgilio Hernández abandonan el gobierno de Lenín Moreno

Viernes, 25 de agosto, 2017 – 21h1

http://www.eluniverso.com/noticias/2017/08/25/nota/6348343/ricardo-patino-paola-pabon-virgilio-hernandez-abandonan-gobierno?&utm_source=twitter&utm_medium=social-media&utm_campaign=addtoany

15. Jorge Glas critica en carta pública acciones del gobierno de Lenín Moreno http://www.eltelegrafo.com.ec/noticias/politica/2/jorge-glas-critica-en-carta-publica-acciones-del-gobierno-de-lenin-moreno

16. 2 de agosto de 2017 12:30 Expresidente Correa propone un nuevo movimiento si AP calla ante supuesto pacto con Bucaram http://www.elcomercio.com/actualidad/expresidente-correa-movimiento-alainzapais-bucaram.html#.WYNZ6_nAvSg.twitter.

17. Moreno dinamita al correísmo en los medios públicos   en La Info  por http://4pelagatos.com/2017/07/12/moreno-dinamita-al-correismo-en-los-medios-publicos/

18.  27 de agosto de 2017 00:00 El desempeño económico será modesto los próximos cuatro años http://www.elcomercio.com/actualidad/economia-crecimiento-deficitfiscal-austeridad-leninmoreno.html#.WaNmMrulync.twitter

19. En la Asamblea Nacional hay al menos cinco prioridades en materia económica, 4 de Septiembre http://www.elcomercio.com/actualidad/asambleanacional-prioridades-economia-leyes-debate.html. Si está pensando en hacer uso del mismo, por favor, cite la fuente y haga un enlace hacia la nota original de donde usted ha tomado este contenido. ElComercio.com

20. 9 de agosto de 2017 00:00 USD 395 millones generarían las medidas de austeridad http://www.elcomercio.com/actualidad/leninmoreno-medidas-auteridad-inmobiliar-sueldos.html

21. 4 de septiembre de 2017 00:00 El Ejecutivo alista su agenda de reformas y proyectos de ley http://www.elcomercio.com/actualidad/ejecutivo-agenda-reformas-proyectosdeley-asamblea.html

22. 4 de agosto de 2017 00:00 USD 878,3 millones en subsidios al área social http://www.elcomercio.com/actualidad/ecuador-subsidios-area-social-economia.html:http://www.elcomercio.com/actualidad/ecuador-subsidios-area-social-economia.html. Si está pensando en hacer uso del mismo, por favor, cite la fuente y haga un enlace hacia la nota original de donde usted ha tomado este contenido. ElComercio.com

 

 

 

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Election Briefing: Opposition Vows to Defeat Re-election of Honduras President Hernandez

By Ronald J. Morgan

This November 26, Honduras will hold their third election since the 2009 military coup that overthrew leftist President Manuel “Mel” Zelaya. This time, a coalition of left and moderate forces will attempt to defeat what they see as an illegal attempt at re-election. The newly formed coalition has also warned of the danger of a massive voter fraud.

Ironically, reelection is the issue which lead to Zelaya’s overthrow. (Zelaya was overthrown after attempting to hold a nonbinding plebiscite on calling for a constitutional convention. The military intervened with a coup after the supreme court ordered the plebiscite stopped and Zelaya indicated he was going ahead anyway. The Honduran Right had expressed concern the convention would approve reelection and keep Zelaya in power. 1,2,3,4,5

The Left has accused current President Juan Orlando Hernandez, 48,  of manipulating the supreme court into allowing reelection despite the 1982 constitution’s explicit prohibition. The Left also contends that the reelection decision did not allow for a vote by Hondurans on the change and therefore is illegal.

The three-and-a-half years under Hernandez have brought an ever so slight reduction in violence and a bit of an improvement in the economy — principally government finances. The question voters will face is whether the president is slowly leading Honduras out of an extremely serious social crisis or is now starting a dictatorship. So far, Hernandez is running first in the polls with 36% support according to a May 17 CID/GALLUP Poll. There is no second round in Honduran presidential elections.

Three parties have joined to form the Alianza de Opposicion Contra la Dictadura (Alliance of the Opposition against the Dictatorship) with the aim of countering Hernandez. The ticket is being led by Alejandro Nasralla, 64, of the centrist Partido Anticorrupcion (Anti-corruption Party) PAC. Nasralla is a well-known television personality and a political centrist. The Vice Presidential Candidate is Xiomora Castro de Zelaya, 57, of the Left Partido Libertad y Refundación, Libre, (the Freedom and Re-Foundation Party), and wife of former president Zelaya. The third party supporting the coalition is headed by Guillermo Enrique Valle, 47, of the center-left Partido Innovacion y Unidad Social Democratica (Innovation and Social Democratic Unity Party, PINU. 6

The group attempted to include the Liberal Party in the coalition but negotiations broke down when the Liberal Party (LP) wanted to head the ticket. The Conservative Liberal Party  Candidate Luis Zelaya, 50, an Ex-rector of Universidad Tecnológica Centroamericana, is now running second behind Hernandez in the opinion polls with 18% support.

In addition to defeating the National Party reelection effort, the opposition coalition advocates fighting corruption, and tackling social problems such as poverty and the need for free education and health care. They are also calling for an end to U.S. backed militarization policies, according to a recent report by Telesur. The group also wants to organize a constitutional convention to implement political reforms.

For years, the National and Liberal Parties controlled the Honduran political system. But after the 2009 coup the Left Libre Party and PAC Anti-corruption party began to show increasing power.

In the 2013 presidential election Hernandez of the National Party, NP, took the presidency with 36.89% of the vote, Libre finished second with 28.78%. The Liberal Party, LP,  was third with 20.30% and following in fourth position was the Partido Anticorrupcion, PAC, with 13.42%. The Partido Innovation and Democratic Unity Party, PINU, received 0.14% of the vote. Charges of fraud emerged after the election due to polls showing the opposition candidates ahead during much of the campaign. Nevertheless, the United States and the Organization of American States declared the election free and fair. 7

This year, ten political parties are fielding candidates. In addition, 47 independent candidates are also running. Honduras will also elect 128 congressional deputies, 20 Central American Parliament deputies. A total of  298 mayors, 298 vice-mayors and 2092 city councilmen will also be up for election. 8

Honduras remains locked in a political battle between supporters of the former Zelaya administration and the Honduran traditional right-wing. After taking office in 2006, Zelaya pulled away from the right-wing Liberal party in 2007, and supported Hugo Chavez. He joined the Left Petrocaribe and Alba organizations and began adopting a series of reforms, including sharp rises in the minimum wage. Briefly economic growth rose to 6%. Poverty fell by 10%. Zelaya continues to support the government of Venezuelan President Nicolas Maduro. 9

After the coup, the country teetered on the edge of being a failed state. Economically and politically the country was in shambles. In addition, Honduras slumped further into a violent Narco State situation and deaths soared. Street gangs took control of the streets. The police were riddled with corruption and impunity reigned.

On top of everything else, old political intolerance remained and remains a serious threat to the lives of all social activists seeking to change or to stop government sponsored activities. The Nongovernmental Organization Global Witness said in a Jan. 17, 2017 report that “More than 120 people have died since 2010, according to Global Witness research. The victims were ordinary people who took a stand against dams, mines, logging or agriculture on their land – murdered by state forces, security guards or hired assassins. Countless others have been threatened, attacked or imprisoned.”10

In March, 2016, Berta Cáceres’, a well known award winning environmental activist, was killed and became an emblematic case of anti-environmentalism murder. She was protesting the building of the Agua Zarca hydrolectric dam  She had documented 30 murders related to the dam protests and had been put under government security after having received numerous death threats. The Guardian, in an article Feb. 28, 2017, said the murder was being linked to military intelligence specialists. The company building the dam, DESA corporation, had ties to military intelligence and other government ties, the Guardian said. 11, 12, 13, 14, 15, 16

Dissatisfaction has been expressed with the government investigation. Resistance by powerful economic elites to outside investigations became evident in July when the Honduran Business Organization (Consejo Hondureño de la Empresa Privada (Cohep) called a press conference to condemn investigation efforts by the recently formed Support Mission Against Corruption and Impunity in Honduras, known as MACCIH-OAS. MACCIH, which is headed by Peruvian Juan Jimenez Mayor. Jimenez announced that the organization would investigate illegal contracting activities by the DESA organization.16a

Insecurity in Honduran cities pushed out-migration to the United States to emergency levels. Starting in 2014, unaccompanied children began pouring out of the country with the aim of crossing the U.S.- Mexico border. In four years, 41,000 unaccompanied children were arrested. This emergency lead U.S: President Barack Obama (2009-2017) to order a re-working of U.S. Central America policy.

Hondurans living in the United States have become a major support for the Honduran economy.  Remittances by immigrants totaled $3.9 billion in 2016. A recent Congressional Research Service report said that 588,000 Hondurans live in the United States and 67% are thought to be illegal aliens. 17

Since the overthrow and the 2014 out-migration crisis, Honduras has fallen back into conservative political reset and under policies developed by the United States and the International Monetary Fund. This Made in USA approach includes heavy militarization and radical economic austerity polices.

The effort, which is similar to Plan Colombia, has had some small success. Violent murders, which put Honduras on top as the most violent country in the world in 2011 with a rate of 86 murders per 100,000 population, have dropped to a still high 59.1 per 100,000. Honduras is now ranked the third most violent country after El Salvador and Venezuela. Impunity remains a problem as only 4% of homicides are successfully resolved. In 2014, Honduras began authorizing extradition to the United States for the first time and Narcos began to be arrested and sent to the United States for trial. A dozen major drug traffickers have been extradited. 18, 19,20

Major Honduran drug trafficking organizations have been broken up. But, overall, drug trafficking remains very strong as a result of use of the country as a transit zone. The country transports three to four metric tons of cocaine a month, according to the 2017  International Narcotics Control Strategy Report. The report mentions that new narco organizations also have begun to form in response to the old groups which have been broken up. This year, Honduras was criticized for failure in maritime sea smuggling interdiction. But drug plane flights are down 30%. 21

Criminal activities by the Salvatrucha, M.S. gang and the 18th Street gang, known as Maras, also are continuing. Some analysts have predicted an attempt by the Maras to form an international drug cartel but, so far, this has not occurred according to the drug report. A U.S. backed neighborhood program to assist and train youth to resist gang involvement has been recognized as improving conditions in some neighborhoods.

The United States assistance programs have focussed on retraining of the police and of formation of elite vetted units. Under Hernandez a purge of alleged corrupt police is occurring. So far, 3,900 police have been fired.  The United States also is financing a planned doubling of the size of the police force from the current 14,000 force to 27,000 by 2022.

In 2016, the United States approved $98.3 million in bilateral assistance to Honduras up from $41.8 million in the crisis year of 2014. The money is distributed as part of the the U.S. Strategy for Engagement in Central America and Central America Regional Security Initiative (CARSI). Another $95.3 million is earmarked for 2017. Further assistance to Honduras is being provided through the joint Central American-nation- created Plan of the Alliance for Prosperity in the Northern Triangle. Under the plan, which is being financed by the InterAmerican Development Bank and other lending sources, Honduras was granted $965 million in 2016. Most of this money will just be arriving in 2017.

The publication Insight Crime has rated this effort under Hernandez. In their article “Grading Honduras President’s Performance” the U.S. backed effort is given mixed reviews. The publication gave Hernandez a B for breaking up drug trafficking organizations. The combatting of gangs with Mano Duro policies was given a c+ and considered less than effective. Institutional Reform and Police Purging was judged “incomplete”. Formation of an Ant-impunity Commission (The Support Mission Against Corruption and Impunity in Honduras, MACCIH)  was judged lacking sufficient power to do its job. 22, 23

While Hernandez is credited with making gains in the effort to bring the Narco-gang violence under control the overall situation is still considered a less than win situation given concerns about embedded corruption and impunity among the most powerful Honduran elites. Use of Military police squads has also been sharply criticized as fomenting violence, according to recent complaints by members of the U.S. congress who are concerned about human rights violations.

Narcos on trial in the United States may provide some election season revelations that could severely rock the Hernandez administration. Insight on Crime  reports that testimony by Cachiros Cartel member Devis Leonel Rivera Maradiaga implicates members of the Honduras elite in drug trafficking and bribery activities.

Among those involved the, publication said, are the late Honduran tycoon Mauricio Facussé, the brother of the current President Hernandez, Antonio Hernández, and former President Porfirio Lobo Sosa (210-2014) and his son Fabio. Fabio, who pleaded guilty to cocaine trafficking in 2016, has attempted to implicate the brother of former President Zelaya, Carlos Zelaya Rosales, in the use of a military base for drug trafficking. Carlos Zelaya has denied the charges.

The Cachiros investigation also lead to prosecution of members of the Jaime Rosenthal family, a powerful business magnate, Jaime, 79, is being held under house arrest in Honduras. The family bank, Continental, had its assets frozen in 2015, on charges of drug trafficker money laundering. So far, only the daughter, Yani Rosenthal, has pleaded guilty. She will be sentenced in the United States in October.

Former president Rafael Leonardo Callejas Romero (1990-1994) has pleaded guilty to corruption charges involved in the FIFA soccer scandal. He will be sentenced in New York in December.

The Honduran Plan Colombia brought with it a neoliberal adjustment program which was also an aspect of reforms enacted in Colombia under President Alvaro Uribe (2002-2010). In 2014, The International Monetary Fund granted Honduras a $189 million credit in return for IMF designed austerity reforms. The program cut central government spending and froze transfers to local governments. Private participation was allowed in the telecommunications and electrical sectors. The government reformed the tax administration and began prosecuting tax cheats. Private-Public partnerships were enacted to make government infrastructure projects easier to finance. 24, 25, 26, 27

The reworking of the public sector reduced the government’s deficit from an out of control 7.6% of GDP to 1.4% of GDP. International Reserves have improved and are at $4.76 billion. Inflation is running at 3.6 %. The project has brought positive reviews from international Credit Rating agencies like Moodys which has improved the Honduras overall credit rating. The government has been so emboldened by the three-year results that it has approved legislation imposing further spending constraints on the government. 28.

Under the 2016 Fiscal Responsibility Law the government has committed itself to reduce government expenditures to an eventual 1% of GDP. While the government finances were in need of emergency help in 2013, the IMF program has been questioned as to its ability to reduce crushing poverty. Poverty has dropped slightly from 74.3% in 2013 to 66% in 2016. Growth rates above the current  modest 3.6% to 4% level are needed to bring this poverty down. Expenditures on health and education may need boosting. There is a need for more rural assistance programs as well. The poor are also being hurt by a 2013 rise in the sales tax from 12% to 15%.

Current improvements in the economy are also related to the drop in oil prices which has reduced Honduran fuel costs and helped the trade balance. U.S. and other international assistance has also been supplementing Honduran government costs. Large remittances from abroad are also helping the economy. Since the passage of the Dominican Republic, Central American Free Trade Agreement in 2006, the Honduran in-bond manufacturing (maquiladoras) sector has grown and total U.S. foreign investment increased to just over $1 billion.

President Donald Trump may affect both immigrant remittances and the level of foreign assistance. Free trade could also be affected by shifting winds at the White House. Trump announced in Miami that his Central American policies will be focussed mostly on enhancing security. He has proposed a 30% cut in assistance to Honduras in 2018.

The Trump anti-illegal alien and gang member crackdown may also affect remittances. He has also advocated ending a temporary stay program, known as TPS, which grants a stay on deportation when there are economic disasters in a country. This program has allowed 57, 000 Hondurans to stay in the United States as refugees. An increase in deportees and the return of TPS holders could further exacerbate unstable conditions in Honduras. 29, 30

The U.S. Congress, also,  is showing a desire to review the Honduran assistance program. Pressure is forming to enact cuts in aid do to the failure by Honduras to adequately  prosecute numerous attacks on social activists. A certifying of Honduras, Sept. 16 2016, on human rights compliance by the State Department has been criticized as faulty and insulting to congressional intent.

A recent Inspector General’s Report also criticized the DEA for misleading congress about civilian deaths in a 2012 drug operation.  In addition to DEA operations some 500 U.S. Troops are based in Honduras as Task Force Bravo. They carry out anti-drug operations and development and humanitarian missions. Security assistance is also being provided by Israel and Colombia. 31

A  sign-on letter to Secretary of State Rex Tillerson by 78 members of the U.S. Senate and House of Representatives called for the State Department to more closely monitor Honduran human rights compliance.

“We are concerned that U.S. assistance has been provided to the Honduran government despite recurring threats and assassinations of human rights defenders and environmental activists, and contrary to the requirements in section 7045(a) of division K of Public Law 114-113, including that civil society be able to “operate without interference”. We support continued U.S. engagement in Honduras to achieve common goals. However, it is essential to ensure effective scrutiny of Honduras’ compliance with human rights conditions on U.S. assistance.” the letter said.

In addition, 24 Democratic members of congress have introduced the  H.R. 1299, the “Berta Caceres Human Rights in Honduras Act.” The act calls for a cut off of Honduran U..S. assistance and multilateral lending assistance until the government successfully investigates a number of human rights crimes. 32 

###

SOURCES:

1. The Impending Battle on Presidential Reelection in Honduras http://www.huffingtonpost.com/marco-caceres/the-impending-battle-on-p_b_5722830.html

1a. Opposición se une para frenar reelección presidencial en Honduras https://www.youtube.com/watch?v=t_Xua-Hm1lI

1b. Honduras: Supreme Court Approves Presidential Re-election https://www.youtube.com/watch?v=Wlw44PJCTzI

2. Honduras legalizes reelection – issue at heart of 2009 coup ://www.csmonitor.com/World/Americas/Latin-America-Monitor/2015/0428/Honduras-legalizes-reelection-issue-at-heart-of-2009-coup

3. Honduras’ constitutional quagmire http://latinamericagoesglobal.org/2016/09/honduras-constitutional-quagmire/

6. ‘The Right Wing Is Finished’: Honduran Activist on Elections http://www.telesurtv.net/english/news/The-Right-Wing-Is-Finished-Honduran-Activist-on-Elections-20170524-0041.html

7. Report from Honduras: How the Election Was Stolen http://nacla.org/blog/2013/12/9/report-honduras-how-election-was-stolenThe

8. Honduras: Diez partidos y 46 candidaturas listas para las elecciones generales http://tiempo.hn/elecciones-generales-en-honduras-4/

9. Accomplishments of President Manuel Zelaya https://en.wikipedia.org/wiki/Manuel_Zelaya

9a. New York drug case opens window on dark period for Honduras Published March 31, 2017 http://www.foxnews.com/us/2017/03/31/new-york-drug-case-opens-window-on-dark-period-for-honduras.html

9b. Ex President Rafael Callejas Conocera su Sentencia en Diciembre nota: http://www.laprensa.hn/honduras/1080086-410/expresidente-rafael_callejas-sentencia-eua-corrupcion-fifa-corte_nueva_york-
Copyright © http://www.laprensa.hn http://www.laprensa.hn/honduras/1080086-410/expresidente-rafael_callejas-sentencia-eua-corrupcion-fifa-corte_nueva_york-

10. HONDURAS: THE DEADLIEST COUNTRY IN THE WORLD FOR ENVIRONMENTAL ACTIVISM https://www.globalwitness.org/en-gb/campaigns/environmental-activists/honduras-deadliest-country-world-environmental-activism/

11. The Intercept, Drugs Dams and Power//theintercept.com/2016/03/11/drugs-dams-and-power-the-murder-of-honduran-activist-berta-caceres/.

12. Rep. Johnson reintroduces the “Berta Caceres Human Rights in Honduras Act”March 2, 2017 Press Release https://hankjohnson.house.gov/media-center/press-releases/rep-johnson-reintroduces-berta-caceres-human-rights-honduras-act

13. H.R.1299 – Berta Caceres Human Rights in Honduras Act https://www.congress.gov/bill/115th-congress/house-bill/1299/text

14. Congressional letter https://www.globalwitness.org/en/blog/us-congress-calls-action-honduras-response-murders-land-and-environmental-activists/

15. Country Reports on Human Rights Practices for 2016 Honduras https://www.state.gov/j/drl/rls/hrrpt/humanrightsreport/index.htm#wrapper

16. Honduras: justice on the tightrope https://www.amnesty.org/en/latest/news/2017/05/honduras-justicia-en-la-cuerda-floja/

16a. DESA y Agua Zarca piden disculpa pública de la MACCIH por presunciones http://tiempo.hn/desa-agua-zarca-piden-disculpa-publica-la-maccih-presunciones/

17. Remittances https://tradingeconomics.com/honduras/remittances

18. Congressional Research Report Honduras https://fas.org/sgp/crs/row/RL34027.pdf

19. U.S. Strategy for Engagement in Central
America: Policy Issues for Congress: https://fas.org/sgp/crs/row/R44812.pdf

20. Homicide Rates in 2016 http://www.insightcrime.org/news-analysis/insight-crime-2016-homicide-round-up

21. 2017  International
Narcotics Control
Strategy Report  https://www.state.gov/documents/organization/268025.pdf

22. Calificaciones del presidente de Honduras en cuanto a seguridadhttp://es.insightcrime.org/analisis/calificaciones-presidente-honduras-cuanto-seguridad

23.  Problemas de seguridad persisten en Honduras, a pesar de disminución en los homicidios

24. IMF Staff Concludes Visit to Honduras June 1, 2017 https://www.imf.org/en/News/Articles/2017/06/01/pr17203-imf-staff-concludes-visit-to-honduras

24a. Honduras 2017 General Budget Leaves Out The Necessities Of The Poorest https://www.youtube.com/watch?v=8WOCLJkiBGM

25. Honduras as Seen by the IMF – November 2016 The institution highlights the restoration of macroeconomic stability, reduction of the fiscal deficit and the rate at which credit to the private sector is increasing. http://www.centralamericadata.com/en/article/home/Honduras_as_Seen_by_the_IMF__November_2016

26. Analysis of the Honduras 2017 budget. Instituto Centroamericano de Estudios Fiscales  http://icefi.org/publicaciones/honduras-analisis-y-recomendaciones-al-proyecto-de-presupuesto-publico-2017

27. Honduras: IMF Austerity, Macroeconomic Policy, and Foreign Investment ://cepr.net/publications/reports/honduras-imf-austerity-macroeconomic-policy-and-foreign-investment

27a. Honduras as Seen by the IMF – November 2016 The institution highlights the restoration of macroeconomic stability, reduction of the fiscal deficit and the rate at which credit to the private sector is increasing. http://www.centralamericadata.com/en/article/home/Honduras_as_Seen_by_the_IMF__November_2016

27b. Fiscal law http://country.eiu.com/article.aspx?articleid=1304136914&Country=Honduras&topic=Economy&subtopic=Forecast&subsubtopic=Fiscal+policy+outlook&u=1&pid=535435637&oid=535435637&uid=1

28. Moody’s upgrades Honduras’ ratings to B2 from B3; positive outlook remains The document has been translated in other languageshttps://www.moodys.com/research/Moodys-upgrades-Honduras-ratings-to-B2-from-B3-positive-outlook–PR_349459

29. Return of US military-led foreign policy https://www.theguardian.com/us-news/2017/jun/13/central-america-us-foreign-policy-deportations-aid

30. Inside Trump’s Disastrous ‘Secret’ Drug War Plans for Central America http://www.thedailybeast.com/inside-trumps-disastrous-secret-drug-war-plans-for-central-america

31. DEA and Deadly Honduras Shootings http://www.nbcnews.com/news/latino/dea-misled-congress-deadly-shootings-honduras-drug-operations-n764256

32. Congressional letter https://www.globalwitness.org/en/blog/us-congress-calls-action-honduras-response-murders-land-and-environmental-activists/

33.Why Congress should support the Berta Cáceres Human Rights in Honduras Acthttps://vimeo.com/206184044

 

 

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Venezuela Crisis Deepens

By Ronald J. Morgan

Venezuela has become the worst political crisis in Latin America in decades. And with no end in sight, the human toll is expected to keep rising.

An electoral and constitutional crisis which began taking shape shortly after the opposition won a majority in the 2015 congressional elections has touched off months of opposition street protests which have left 67 dead as of June 13.

The opposition has accused the government of staging a self-coup twice in recent months. The government claims the protests and opposition international lobbying are aimed at forcing Venezuelan President Nicolas Maduro, 54,  from power.

The opposition protests have called for Maduro to call new presidential elections, release so-called political prisoners and  attend to a humanitarian crisis. While many outside observers would like the two sides to enter into serious talks aimed at ending the crisis the Maduro government has so far chosen to defy the right-wing opposition by moving farther to the left.

The decision, May 1, to call a constitutional convention in the midst of a dispute over delayed regional and local elections and the thwarting of congressional power has worsened the impasse. In early April, one of Venezuelas top opposition leaders Henrique Capriles,44, who is serving as governor of Miranda state, was banned from running for the presidency for 15 years by the Venezuelan Comptrollers Office.

The opposition has found its strongest supporter in Luis Almagro, General Secretary of the Organization of American States. Almagro, a former Left foreign minister from Uruguay, has described Venezuela as a dictatorship which should be condemned internationally. The criticism has led Venezuela to withdrawal from the OAS, a process which will take until 2019. Resurgent righ-wing parties in Argentina, Brazil and Paraguay have expelled Venezuela from the Mercosur trade organization last December due to a dispute over entrance requirements just as Venezuela was about to assume leadership of the organization.

So far, the U.S. strategy has been to focus criticism on alleged human rights abuses, and corruption. In a new twist on the execution of American power, the United States has chosen to target sanctions against Venezuelan individuals. Sanctions against the Venezuelan economy as a whole are not being imposed in order to prevent further hardship. The U.S. congress passed the Venezuela Defense of Rights and Civil Society Act. in 2014.

Among the charges leveled by the United States are a Aug. 2016 federal cocaine trafficking indictment against Interior Minister Nestor Luis Reverol. Vice President Tareck Al Aissami also has been alleged by the United States to be involved in drug trafficking. Two nephews of First Lady Cilia Flores have also been charged with cocaine trafficking.

The U.S. government has imposed visa restrictions on 60 persons which it accuses of undermining democracy. Asset blocking orders were also issued under the Barack Obama administration.

Recently, the United States targeted members of the Venezuelan Supreme Court. The sanctions were for interfering with numerous democratic initiatives by the opposition controlled congress.

In 2016, $6.5 million in democracy assistance to the opposition was approved. Outgoing President Obama budgeted $5.5 million in his proposed 2017 budget. Covert assistance could be significant as well.

Human Rights  and democracy critics allege that Maduro has been ruling largely by emergency decree since 2013 and that he is kept in power by a triad of the National Election Council, the Supreme Court and the Military. The United States has expressed concern about a May 17 announcement to issue arms to a 500,000 Milicia Nacional Bolivariana to protect the state.

After an escalating crisis in 2016, Venezuela now stands at the precipice of a less democratic socialism or a harrying collapse that could have untold effects for years. How the Latin American Left, in general, is perceived could also be affected.

Unfortunately, the death of President Hugo Chavez  in 2013, brought his hand picked successor to power just as oil prices began collapsing. Maduro won the April 2013 election by a narrow 1.4% vote. The opposition alleged the vote included numerous irregularities. The refusal of the National Election Commission to carry out a full recount lead to violent 2014 protests known as La Salida or the Exit. Some 48 persons were killed.  The government arrested protest leader Leopoldo Lopez and sentenced him to 14 years in prison in a trial that has been criticized by human rights organizations. Other political opposition members have also been arrested.

The opposition has responded with a campaign to rally international support calling for their release. And over the past two years they have garnered increasing support from a number of nations.

Starting in 2015, the government began moving to thwart growing right-wing opposition power. The opposition won a majority in the Dec. 6, 2015 General Assembly elections. The opposition Mesa de la Unidad Democrática, MUD coalition won 172 seats to the official Partido Socialista Unido, PSUV´s 55.  The election, which on the surface seemed to be a major gain for the opposition, began a serious disruption in democratic procedures. The outgoing assembly packed the supreme court with 13 new judges . The Supreme Court then reduced the opposition´s majority by 3 seats, disqualifying three congressional candidates in the Amazonas state.

See Venezuela: Will New Congress Be The Boss?

Later, the Supreme Court became a recurring break on the General Assembly by blocking bills and approving emergency powers and enabling decrees.

In 2016, the opposition MUD began a recall election effort against Nicolas Maduro. The Venezuelan constitution contains procedures for such an election but the Venezuelan Election Commission delayed the procedure throughout 2016 and then on Oct. 21, 2016 it  permanently blocked the drive.

Scheduled  local and regional elections also were delayed. Regional elections due in 2016, were recently rescheduled for December  2017. Local elections will also be in December.

CORRECTION Regional elections for state governors and state assemblies will be held Dec. 10. Municipal elections will not be held in 2017.

The regional election vote could be delayed by actions of the new constitutional convention.

Presidential elections are scheduled for 2018 and recently, in May, after announcing the constitutional convention, President Maduro promised that they will be held.

The recall and election crisis touched off a number of protests. But the situation grew more serious when on April 1, the Supreme Court issued a ruling limiting the General Assembly´s powers and revoking the legal immunity for congressmen. This decision was later modified but had already touched off charges of an attempted self-coup by the Maduro government. Major Easter protests began and are still under way. As of this article there have been over two months of protests. Violence is escalating  and ten of thousands of Venezuelans are caught in the middle of the growing power struggle.There have been deaths on both sides.

The Venezuelan political stand off has been accompanied by a historic economic depression. During the 14 years of Chavez rule the country had reduced poverty by 20% and expanded social and economic opportunities. But the tremendous drop in oil prices in 2013, brought a unraveling of the economic fabric. A major humanitarian crisis has occurred, including shortages of medicines, food, water, healthcare and clothing. Hiper inflation is making the crisis worse.

The collapse of the Venezuelan economy has brought repeated calls for immediate changes in the government´s policies. The opposition has accused Maduro of mounting a self-coup because  he is too weak politically to continue to prevail in upcoming elections. The Maduro government has said that currently the situation is too unstable for elections and economic decline is the result of economic sabotage by the Right.

The decision by Maduro to call a Constitutional Assembly has brought the most serious criticism that the government is engaging in a self-coup and that Venezuelan democracy is going to be further harmed. Maduro, however, has said the convention will be the foundation for a new peace.

The procedures for the constitutional convention do not include a vote by the populace to authorize the holding of the convention. Delegates will also be elected in a nontraditional manner.  There will be 545 assembly delegates. 364 will be elected by territory i.e. states and cities. Some 173 will be elected from grass roots social sectors and 8 delegates will come from indigenous communities.The election is scheduled for July 30.

The opposition has charged that the assembly will be packed with a pro Maduro majority and will be used to ensure continued official party dominance of the political system. They will not accept the activation of a Constituent Assembly and have called upon the military to intervene and for the president to resume the calendar of elections and ensure the presidential elections scheduled for 2018.

The dispute over the Constitutional Convention has lead National Prosecutor  Luisa Ortega Díaz, 59, to confront the Maduro government over the legality of the procedures and has thrust her into the limelight as new opposition figure.

Former presidents of Spain, Panama and the Dominican Republic as well as Pope Francis have attempted to mediate between the two sides. Special U.S. Envoy Tom Shannon has also engaged in talks with Nicolas Maduro. But the opposition seems reluctant to enter into further ,mediation efforts. The crisis has heightened with the call for Maduro to resign and for the Constitutional Convention to be rejected.

In the streets, violence is increasing along with police repression. Use of military courts to try some protesters is also causing concern among human rights monitors. Since April there have been 3, 132 arrested according to Foro Penal Venezuela.

The issue of what role foreign governments should play in criticizing Venezuela for its internal actions has left a split in Latin America. Vociferous support for the Maduro government still exists among most elected Left governments and former Left Presidents. More centrist governments have been stepping up criticism and advocating a dialogue as the only avenue left to prevent outbreak of possible major violence.

A meeting of the Left Comunidad de Estados Latinoamericanos y Caribeños (CELAC),  regional Latin American body May 2, in San Salvador could not create a consensus document on the situation in Venezuela. Venezuela had called the meeting to discuss the situation and explain its position on the current crisis.

The OAS also is having problems reaching a consensus on what should be done about the Venezuela crisis.  So far, the proposals of Secretary General Almagro have not been acceptable to all.  The May 31 General Assembly meeting failed to produce a two-thirds support for any position on the Venezuela crisis. Most, however, see a negotiated internally reached solution as the only way out of  the impasse. A renewed effort is scheduled for June 19 to 21.

Numerous useful articles, reports and documents have emerged during this season of protests. I have put in some of the ones that seem useful in trying to update knowledge of Venezuela and to help form an opinion of the current crisis.

SOURCES

Protests

Timeline of the 2017 Venezuelan protests https://en.wikipedia.org/wiki/Timeline_of_the_2017_Venezuelan_protests

Cronología: 64 muertos en protestas en Venezuela hasta el 31 de mayo http://www.el-nacional.com/noticias/sociedad/cronologia-muertos-protestas-venezuela-hasta-mayo_182987 ..

Constitutional Convention

Nicolás Maduro: Constituyente es el camino a la paz en Venezuela http://www.telesurtv.net/news/-Nicolas-Maduro-Constituyente-es-el-camino-a-la-paz-en-Venezuela-20170518-0004.html

Pdte. Maduro convoca a Asamblea Nacional Constituyente https://www.youtube.com/watch?v=EFC0_VKqpWU&feature=youtu.be

Nuevo Constituyente en 7 preguntas http://www.elespectador.com/noticias/el-mundo/entienda-en-siete-preguntas-como-se-elegira-la-constituyente-de-maduro-articulo-696080

Venezuela opposition blasts president’s plan to rewrite constitution and delay elections https://www.theguardian.com/world/2017/may/24/venezuela-nicolas-maduro-constitution-elections-delay

 Humanitarian Crisis, Refugees

Venezuela’s Humanitarian Crisis https://www.hrw.org/report/2016/10/24/venezuelas-humanitarian-crisis/severe-medical-and-food-shortages-inadequate-and

Venezuelans leave 21st-century socialism for US, Spain http://www.dw.com/en/venezuelans-leave-21st-century-socialism-for-us-spain/a-18815399

Venezuela’s Lost Generation https://www.buzzfeed.com/karlazabludovsky/the-brain-drain-from-venezuela?utm_term=.twYlGOe55#.tbgwjBLxx

Human Rights

Human Rights Watch Blog https://www.hrw.org/es/americas/venezuela

Henrique Capriles banned from public office http://www.aljazeera.com/news/2017/04/henrique-capriles-venezuela-banned-public-office-170407230838078.html

Venezuela opposition leader Capriles banned from politics http://www.bbc.com/news/world-latin-america-39534732

Venezuela Prosecutor Decries Maduro Plan, Unrest Worsens https://www.usnews.com/news/world/articles/2017-05-22/venezuela-prosecutor-decries-maduros-new-congress-plan-deepening-riftOAS fails to agree on Venezuela as protests continue http://www.bbc.com/news/world-latin-america-40118288

Political Overview

Has Venezuela reached a tipping point’?http://www.aljazeera.com/programmes/upfront/2017/05/venezuela-reached-tipping-point-170519081258186.html

What Is to Be Done in Venezuela? https://www.thenation.com/article/what-is-to-be-done-in-venezuela/

Venezuela’s irreconcilable visions for the future http://www.bbc.com/news/world-latin-america-39980403

Why is Venezuela Spiraling Out of Control? http://fpif.org/why-is-venezuela-spiraling-out-of-control/

El Tiempo: ¿Qué sostiene a Nicolás Maduro en el poder? http://www.el-nacional.com/noticias/gda/tiempo-que-sostiene-nicolas-maduro-poder_179789

Bolivia dice que Venezuela no necesita protectorados http://www.eldeber.com.bo/bolivia/Bolivia-dice-que-Venezuela-no-necesita-protectorados-20170531-0057.html

25 ex presidentes alertaron a cancilleres de la OEA sobre Venezuela

http://www.el-nacional.com/noticias/politica/presidentes-alertaron-cancilleres-oea-sobre-venezuela_184852

¿Quién financia la violencia opositora en Venezuela?https://actualidad.rt.com/actualidad/239831-financia-violencia-opositora-venezuela

“Opposition does not want democracy or elections” https://zcomm.org/znetarticle/venezuelan-opposition-does-not-want-democracy-or-elections/

The Need to Radicalise the Bolivarian Revolution (Part 2) https://zcomm.org/znetarticle/the-need-to-radicalise-the-bolivarian-revolution-part-2/

Radiografía de la violencia en Venezuela
http://www.eltelegrafo.com.ec/noticias/columnistas/1/radiografia-de-la-violencia-en-venezuela

¿Por qué los organismos internacionales no dicen nada de los líderes revolucionarios asesinados en manifestaciones opositoras en ?.

Venezuela opposition blasts president’s plan to rewrite constitution and delay elections https://www.theguardian.com/world/2017/may/24/venezuela-nicolas-maduro-constitution-elections-delay

United States and Organization of American States

U.S. senators seek sanctions, other ways to address Venezuela crisis http://www.reuters.com/article/us-venezuela-usa-congress-exclusive-idUSKBN17Z13Z

US slaps sanctions on Venezuela Supreme Court judges http://www.aljazeera.com/news/2017/05/slaps-sanctions-venezuela-supreme-court-judges-170519052123333.html

Venezuela And The OAS: The Logic Of Withdrawal http://www.huffingtonpost.com/entry/venezuela-and-the-oas-the-logic-of-withdrawal_us_590389c8e4b084f59b49f8b5?ncid=engmodushpmg00000004

OAS, Report of the Secretary General to the Permanent Council on the Situation in Venezuela, May 30, 2016, at http://www.oas.org/documents/eng/press/OSG-243.en.pdf

Overview of recent events, especially 2016. Venezuela: Issues for Congress, 2013-2016 https://fas.org/sgp/crs/row/R43239.pdf

Maduro prometió un ‘fusil para cada miliciano’ http://www.elnuevoherald.com/noticias/mundo/america-latina/venezuela-es/article145054754.html

OAS, Report of the Secretary General to the Permanent Council on the Situation in Venezuela, May 30, 2016, at http://www.oas.org/documents/eng/press/OSG-243.en.pdf

Estados Unidos estrecha el cerco alrededor de Nicolás Maduro http://www.el-nacional.com/noticias/politica/estados-unidos-estrecha-cerco-alrededor-nicolas-maduro_184724

Corruption

International Narcotics Control Strategy Report Volume I Drug and Chemical Control March 2017

Implican a Nicolás Maduro en el escándalo de Odebrecht http://www.el-nacional.com/noticias/bbc-mundo/implican-nicolas-maduro-escandalo-odebrecht_182086

Economy

Venezuela’s worst economic crisis: What went wrong? http://www.aljazeera.com/indepth/features/2017/05/venezuela-worst-economic-crisis-wrong-170501063130120.html

El petróleo en Venezuela, un sector en crisis profunda sin visos de mejora http://www.el-nacional.com/noticias/petroleo/petroleo-venezuela-sector-crisis-profunda-sin-visos-mejora_184175

Goldman Sachs makes an irresponsible deal with the corrupt Venezuela regimehttps://www.washingtonpost.com/opinions/goldman-sachs-makes-an-irresponsible-deal-with-the-corrupt-venezuela-regime/2017/06/04/f3e3994c-47a8-11e7-bcde-624ad94170ab_story.html?utm_term=.d29c993aff42

Venezuela Gasps On Capitalist Bond Buying: Goldman & Spinhttp://www.barrons.com/articles/venezuela-gasps-on-capitalist-bond-buying-goldman-spin-1496250006?mod=yahoobarrons&ru=yahoo&yptr=yahoo

Russia to Ship 60,000 Tons of Wheat to Venezuela in Major Deal http://www.telesurtv.net/english/news/Russia-to-Ship-60000-Tons-of-Wheat-to-Venezuela-in-Major-Deal-20170519-0022.html

Venezuela and China Sign New $2.7 Billion Development Deal

Pope Francis hints at new mediation initiative in Venezuela http://elpais.com/elpais/2017/05/01/inenglish/1493639890_646588.html

Leaders attempt dialogue between Venezuela government, opposition http://edition.cnn.com/2016/05/29/americas/venezuela-political-dialogue/

Finaliza la Celac en El Salvador sin resolución por ausencia de 7 paíseshttp://www.elsalvador.com/noticias/nacional/344180/inicia-sesion-de-la-celac-en-el-salvador-pese-a-escasa-asistencia-de-cancilleres/

Pope Francis hints at new mediation initiative in Venezuela http://elpais.com/elpais/2017/05/01/inenglish/1493639890_646588.html

 

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Lenin Moreno to Continue Ecuador’s Citizens Revolution

By Ronald J. Morgan

This year’s Ecuadoran Elections wrapped up on a sour note and with the prospect of rising political confrontation. Right-wing Opposition Candidate Guillermo Lasso has refused to recognize the results of the second round voting.

“I will never recognize the victory of a candidate declared by the National Election Council,” Lasso, 61, said shortly after a final vote recount  April 18. Speaking from a Guayaquil Hotel the president stressed, “I can’t be a participant to a fraud, I can’t be a participant to a deception of the voters, of a process full of illegalities, of abuse and of constant arbitrariness.” 1.

The charges, however, did not receive backing in the international community. The United States, the Organization of America States and the Union of South American Nations election  vouched the April 12, second round election was free of fraud. 2, 3, 4, 5

After the recount of 1.2 million votes the Ecuadoran National Election Council  declared the official result 51.16% for official Country Alliance (Alianza Pais) Party Candidate Lenin Moreno against 48.84% for Creating Opportunities (Partido CREO-SUM) Candidate Lasso.

Lenin Moreno, 64, and his vice president, Jorge Glas, 47, will continue the left policies of outgoing President Rafael Correa (2007-2017).  Both men have served as vice president under Correa.

See: Ecuador Elections: The Citizens Revolution Without Correa

Moreno, who is paraplegic as a result of a crime assault, has vowed to continue expanding social benefits and create more housing and universities. But he is constrained by low oil prices, which have created a recession and heavy government debt. Following the vote recount, Moreno thanked  voters  in a Tweet for their support and promised not to defraud them. He also said he was open to a national dialogue. “It is time for agreements on the great national objectives. Democracy has been strengthened. We look ahead, the future will not be detained.” 6, 7, 8, 9, 10, 11

He will be inaugurated May 24.

Ecuador has also elected a new 137 SEAT congress and has approved a referendum restricting politicians from having offshore accounts.  The referendum passed with the support of 55.12% who voted, some 5 030 579 votes. Some 44.88%, some 4,096,559 votes were cast against the measure.  The new congress will draw up a law implementing the offshore restriction. 12, 13, 14

In congress, the official Country Alliance (Alianza Pais) party saw their number of seats drop. The party won 74 seats, down 26 seats from the last election.

The Right-wing  Creating Opportunities Party (Partido CREO-SUMA) won 34 seats. A gain of 22 seats.

The Right-wing Social Christian Party (Partido Social Cristiano) of Cynthia Viteri won 15 seats. Up 9 seats.

The results, while showing the right making gains, nevertheless leave the Country Alliance with a working majority in congress.

Expectations of a right-wing win in the presidential vote drove the election from the start and have led to the current standoff. Lasso had promised to cut taxes and create jobs. He vowed to be advocate of democratic change in Venezuela and to review Ecuador’s loans with China. He also said he would ends Wikileaks Founder Julian Assange´s asylum at Ecuador’s London Embasssy. 14a

At the time of the Feb. 19, first round elections Lasso, a banker, seemed within striking distance of an upset. Lenin Moreno fell just short of the 40% plus 10 percentage point difference in votes needed to win in the first round with 39.36% of the vote. Lasso followed with 28.9% vote. In third place was right-wing Social Christian Party’s Viteri with 16.32% of the vote. A four-day delay in completing the vote count produced the first uncertainty regarding fraud in the Lasso opposition.

Throughout the second round election campaign there were poll predictions that Lasso would win. Recent right-wing shifts in Argentina and Brazil,  and a right-wing victory in a reelection referendum in Bolivia, also added to the expectation of an opposition win.

The April 2, election night brought the two sides into dispute when inaccurate exit polls showed Lasso winning. Lasso pronounced himself the winner early on election night and a number of  television stations announced that exist polls showed Lasso ahead giving the impression of an opposition victory. Adding to the confusion, was a cut off of the vote tally website for 20 minutes.

President Correa has said this cutoff  was the result of a cyber attack coming from somewhere in the United States. When the website returned to operational and Lenin was shown winning, Lasso accused the government of fraud.

On April 5, Lasso announced that his party had found irregularities in 1,795 voting documents. Some 592,350 votes were affected, Lasso said. Lasso demanded a vote by vote recount. The Ecuadoran National Election Council decided to recount a sample of 1.2 million votes in public on April 18. 15

Lasso said it was not enough and did not attend the recount. Lasso charged the judges of the CNE were biased.

The elections took a further tense and angry turn when President Rafael Correa charged that there was a conspiracy at work throughout the 2017 elections. Correa has charged that two polling firms and the television stations, Ecuavisa and Canal Uno, had engaged in an effort to make it look like Lasso was winning on election night. The Polling Firm Cedatos pronounced Lasso ahead based on exit polls and the polling organization Participacion Ciudadana called their poll a technical tie but their actual result showed Moreno winning.

As a result criminal charges are being considered against the polling firms Cedatos and Participacion Ciudadana and the televsion stations Ecuavisa and Canal Uno. The polling and media outlets have denied any wrong doing. The investigation also extends to whether the Creo-Suma party paid for positive polling results throughout the campaign. 16, 17, 18

The election  news coverage also produced a dispute over whether a newspaper should be required to reprint a news story related to one of the presidential candidates. A Ecuador Nongovernmental Organization, Observatorio por la Calidad de la Información brought a complaint before the government press regulation board (Superintendencia de Información y Comunicación) contending that 7 newspapers had failed to print relevant information contained in a March 15 Argentina Newspaper  Pagina 12 article related to candidate Lasso’s taxes and finances. 19

The government press regulatory body voted to fine the seven major newspapers 3,750 dollars each. The media include El Comercio, El Universo, La Hora, Expreso and T.V. stations Teleamazonas, Ecuavisa and Televicentro. The case is under appeal.

The refusal to concede defeat by Lasso and the  government investigation into the possible manipulation of polling data to favor Lasso have increased political tensions. A possible Venezuela like standoff between the opposition and the government will be casting a cloud over the Moreno inauguration.

The situation has brought criticism from one of Ecuador’s most influential right-wing politicians, Guayaquil Mayor Jaime Nebot.  Nebot has publicly criticized Lasso’s inability to prove his election fraud accusations. 20

In another move that is aimed at keeping opposition pressure on the government, a new opposition group, Movimiento Unidad, Cambio y Progreso,
 has filed an action with the Ecuadoran National Election Council calling for a referendum to call a new constitutional convention. The convention would make major political reforms, including eliminating indefinite reelection and changing how judges on the National Election Council are chosen. 21

(For full elections results see wikipedia: Elecciones presidenciales de Ecuador de 2017)

SOURCES: 

1. Lasso: ‘Jamás reconoceremos la victoria de un candidato declarado por el CNE como presidente electo’ _El Comercio 19 de abril de 2017 http://www.elcomercio.com/actualidad/elecciones-discurso-guillermolasso-recuento-cne.html#.WPeaQhRx9H8.twitter

2. OAS Observer Mission Hails Ecuador Elections, Dismisses Fraud http://www.telesurtv.net/english/news/OAS-Observer-Mission-Hails-Ecuador-Elections-Dismisses-Fraud-20170403-0037.html

3. ‘Impossible’: Ecuador’s Electoral Missions Address Fraud Claims  http://www.telesurtv.net/english/news/Impossible-Ecuadors-Electoral-Missions-Address-Baseless-Fraud-Claims-20170329-0042.html

4. Misión de la OEA en Ecuador destaca participación democrática y llama a resolver cuestionamientos por la vía institucional  3 de abril de 2017http://www.oas.org/es/centro_noticias/comunicado_prensa.asp?sCodigo=C-021/17

5. Estados Unidos felicita a Lenín Moreno por su victoria electoral http://www.elcomercio.com/actualidad/estadosunidos-felicitaciones-leninmoreno-elecciones-ecuador.html

6. 19 de abril de 2017 12:13 Lenín Moreno agradece apoyo y llama a un acuerdo nacional http://www.elcomercio.com/actualidad/leninmoreno-acuerdos-recuento-elecciones-cne.html

7- 21 de abril de 2017 00:00 Lenín Moreno tiene pendientes en agenda 32 ofertas de campaña http://www.elcomercio.com/actualidad/leninmoreno-ofertas-pendientes-ecuador-politica.html

8. Ecuador Elections: Housing, Poverty Reduction Will Drive Lenin Moreno’s http://www.telesurtv.net/english/news/Ecuador-Elections-Housing-Poverty-Reduction-Will-Drive-Lenin-Morenos-Government-20170329-0028.html Government

9. 24 de abril de 2017 13:59 Cepal calcula crecimiento de 0,6% para la economía de Ecuador http://www.elcomercio.com/actualidad/cepal-calcula-crecimiento-economia-ecuador.html

10. Ecuador supera la recesión económica y cerrará el 2017 con crecimiento del 1,42% Esta noticia ha sido publicada originalmente por Diario EL TELÉGRAFO bajo la siguiente dirección: http://www.eltelegrafo.com.ec/noticias/economia/8/ecuador-

11. 26 de abril de 2017 00:00 El Gobierno presentó su plan de financiamiento en Londres http://www.elcomercio.com/actualidad/gobierno-plan-financiamiento-londres-deuda.html. Si está pensando en hacer uso del mismo, por favor, cite la fuente y haga un enlace hacia la nota original de donde usted ha tomado este contenido. ElComercio.com

12. 26 de abril de 2017 00:00 Alianza País renueva la cúpula de la futura Asamblea Nacional http://www.elcomercio.com/actualidad/alianzapais-asamblea-asambleistas-elecciones-cargos.html

13. Elecciones legislativas de Ecuador de 2017 https://es.wikipedia.org/wiki/Elecciones_legislativas_de_Ecuador_de_2017

14. Consulta popular de Ecuador de 2017 https://es.wikipedia.org/wiki/Consulta_popular_de_Ecuador_de_2017

15. ¡ATENCIÓN! ¡En Vivo! Presentación de fundamentos de impugnación a los resultados electorales https://www.pscp.tv/LassoGuillermo/1MnxnLlPOboGO?t=8

26 de abril de 2017 00:00 Alianza País renueva la cúpula de la futura Asamblea Nacional http://www.elcomercio.com/actualidad/alianzapais-asamblea-asambleistas-elecciones-cargos.html

16. Rafael Correa habla de complot en contra de los resultados electorales http://www.elcomercio.com/actualidad/rafaelcorrea-complot-resultados-elecciones-presidencia.html#.WOqEuIgEG-o.twitter

16a La batalla de Rafael Correa contra las encuestadoras http://internacional.elpais.com/internacional/2017/04/08/america/1491663240_194731.htm

17. CNE cuestionó a Cedatos y Participación Ciudadana http://www.eltelegrafo.com.ec/noticias/politiko-2017/49/cne-cuestiono-a-cedatos-y-participacion-ciudadana

18  10 de abril de 2017 11:31 El periodista Rafael Cuesta Caputi renunció a Canal UNO 27456 El periodista Rafael Cuesta Caputi anunció en su cuenta de Twitter su renuncia a Canal UNO. Foto: Archivo/ EL COMERCIO. El periodista Rafael Cuesta Caputi anunció http://www.elcomercio.com/actualidad/participacionciudadana-cedatos-apoyo-rafaelcorrea-elecciones.html

19.  Ecuador fines media for not publishing a story http://www.bbc.com/news/world-latin-america-39682264

20. Jaime Nebot lamenta que Guillermo Lasso no haya podido probar supuesto fraude electoral  http://www.eluniverso.com/noticias/2017/04/26/nota/6156361/jaime-nebot-lamenta-que-guillermo-lasso-no-haya-podido-probar

21. Un nuevo movimiento inició un proceso para impulsar una Asamblea Constituyente en Ecuador.  http://www.elcomercio.com/actualidad/nuevo-movimiento-proceso-impulsar-asambleaconstituyente.html#.WQDT9OSVlIk.twitter

 

 

 

 

 

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Argentina’s Neoliberalism: Firings, Price Hikes, Austerity

By Ronald J. Morgan

The second year of the Mauricio Macri Administration is beginning with what use to be called the Washington Consensus firmly in control. As is usually the case with such administrations the focus is on economic reforms that will lead to increased foreign investment.

In Argentina, it’s a summer with 8% unemployment, higher air conditioning bills and little money available to go to the beach. Many people have been fired in the last year: 70,00o in the public sector and 162,000 in the private sector, according to a report by the Instituto Para El Desarrollo Economico.1

In  Macri’s first year much of the 12 years of Left nationalist and anti-neoliberal agenda was swept away. Macri is unabashedly pro-American and Anti-Chavez.

Macri’s cabinet is  a total about face in terms of who is in command of economic policy. Shaping a conservative pro business agenda is a troika made up of Marcos Peña, cabinet chief and architect of the Macri election victory, Mario Quintana, co-coordinator of the cabinet and founder of the Farmacity drug store group and the Pegasus conglomerate made up of Freddo Ice Cream shops, a mall and other interests; and Gustavo Lopetequi cabinet economic coordinator and former CEO of LAN Airlines Argentina. Much of the underlying ideas come from a Macri-related think tank,”Fundación Pensar”.

This December and January, the troika has been accused of firing officials who they have had differences with them on economic policy. Finance Minister Alfonso Prat Gray was axed after differences over a tax reform. He was a long time executive at J.P. Morgan.

See: Argentina’s Macri Takes Over

Macri, who has designated himself the top economic boss of the cabinet, decided to split the finance ministry in two. Luis Caputo was named Finance Minister and  Nicolas Dujovne was named Treasury minister. Caputo was head of the Argentina office of Deutsche Bank and has headed up an investment fund. Dujovne has been chief economist at Banco Galicia and has held a number of government economic jobs since the Carlos Menem era.

In Jaunary, Macri further showed an urge to ax dissident advisers by firing the head of Banco La Nacion, Carlos Melconian. Melconian was replaced by  Javier Gonzalez Fraga, a former Menem  Central Bank president. La Nacion is a development bank which assists the government in its economic policies. Gonzalez is a member of the board of directors of Peugeot auto company. Gonzalez also ran for vice president under the Cambio Radical party under Ricardo Alfonsin in 2011.

Macri was elected in 2015, with a just under 3% margin of victory. Voters seemed most upset with annoying controls on dollars, various price controls and growing recession. A spate of unresolved crimes, the lack of believability of official statistics and perceived politicization of the justice system also lead to a narrow defeat for the most powerful political movement since Juan Peron.

Shortly after taking office in 2015, the Macri administration benefitted from a number of corruption revelations involving former President Cristina Fernandez de Kirchner (2007-2015) and members of her cabinet.

But the Cambiemos coalition made up of the PRO party, the Radical Civic Union Party, and the Coalicion Civica ARI party finished the year with low popularity. While Macri gave himself a grade of 8 out of 10 for the year, a recent public opinion poll had the public scoring him with a 4. 2

Macri was no doubt voted into office to fix economic and political problems that became evident after the 2011 Kirchner re-election. But Argentines have had to suffer through a neoliberal fix sponsored by a cabinet led by multinational corporation executives and business magnates. Whether their recipé will stand up to the accomplishments of the now criticized Kirchner era remain to be seen.

The government is seen as a friend of the farming, mining and financial sectors. But ordinary Argentines have had to put up with a reduction in their incomes.

In 2015, Macri moved quickly to end the peso exchange rate controls putting the peso on a free float and allowing free access to dollars. He also resolved the outstanding Buzzard Bond holdout controversy by settling the foreign debt dispute with a $9.3 billion payment. He also lowered taxes on farm exports and freed controls on imports. Foreign corporations were allowed to send their profits home. The government statistics office known as INDEC was relaunched.

Confirming that Argentines had parked billions outside the country a tax amnesty on repatriated funds has brought in nearly $100 billion in offshore dollars and help raise government reserves to $38.7 billion.

The country was and still is in a steep recession with strong inflation. Statistics show a devastating third quarter, 2016, with inflation at its highest in 25 years at 40% and GNP dropping 3.8%. Consumer spending was down 3.1%.

Poverty was pegged by the new INDEC at 32%. Young families are particularly falling on hard times. Some 47% of children are living in poverty.

The precarious situation required the neoliberal government to boost spending on poverty programs and old age pensions. In the first half of 2016 Marcri boosted some welfare programs by 20% and implemented a VAT rebate for the poor. But by the end of the year the rising inflation and massive firings were causing larger and larger protests. 3

Pope Francis, an Argentine, joined with poverty organizations such as Barrio de Pie and the CGT Labor Federation in backing a government agreement to provide emergency assistance under a declared Social Emergency which will last until December 2019. The law passed congress Dec. 7 and will increase social relief programs by $1.8 billion.  In addition to the regular welfare increase, the law will boost unemployment insurance, and increase financing for soup kitchens. Informal workers will be allowed to a receive a compensation that boosts their income up to one minimum wage. Government cooperative jobs will be increased from 300,000 to 510,000. The plan also calls for a $125 dollar year end bonus for those on welfare.

Access to foreign borrowing has allowed the country to imagine restarting the economy. The Macri government after paying the Buzzard Bond foreign debt holdouts, were able to return to the international finance markets. They then borrowed $37.8 billion in new funds and they plan to borrow $13 billion more in 2017. This money along with economic reforms will restart the economy, reduce inflation and set the stage for 20 years of healthy economic growth the Macri financial gurus predict. 4

But  the year has begun under a cloud of certainty. The government contends the economy has started to move ahead and that inflation is headed downward during the last months of 2016. The official prediction for 2017 is 3% GDP growth. The IMF, however, recently backed off a rosy November assessment predicting  GDP growth of 2.7% in 2017 and now predicts a lower 2.2% growth.

The first year of Macri’s effort was lost to fighting inflation and reducing the budget deficit. The small political coalition enters the second year of its four-year term with October congressional elections threatening a sharp rebuke from the electorate.

Annoying Kirchner exchange controls have been replaced by annoying public price hikes and massive job firings that have cut Argentine spending power. The lower middle class has been hit hard in addition to the poor.

The Kirchner government has been criticized by the Macri team as relying too much on heavy government spending and consumer purchasing. From 2001 to 2014 government employment rose from 2.3 million to 3.9 million.

Macri plans to change the model toward investment growth. Early in 2016 he announced that the government had 1.5 million public jobs too many and began cutting.

The Macri government made its most dramatically  austere move by deciding to end government subsidies of public utilities and other public services. The  decision resulted in dramatic public sector price increase known as the Tarifazo. The Argentine think tank Ecolatina reported that government controlled prices increased 66% in the Buenos Aires capital area. This included 467% increase in electricity, a water increase of 300% and a gas hike of 254%. Public transportation jumped 70%. All this added 7% to the total inflation rate, Ecolatina reported. The peso devaluation and price increases pumped up Argentina’s inflation to 40% in 2016.

The increases, which are continuing this January, (30% more on electricity, a 8% hike in gasoline prices and a 130% increase in toll road fees) are supposed to show the international investment community that Argentina is putting its fiscal house in order and supposedly with such sound management international investment will come calling.

But with most Argentines facing an austere summer budget the financial gurus may have their priorities out of line with political reality. No doubt the Argentina that rejected  neoliberalism and the George Bush ALCA trade agreement at the 2005 Summit of the Americas is not the boss this year.

In 2016, the once derided International Monetary Fund, was back showing strong allegiance to Macri’s neoliberal priorities. In a Nov. 9 economic performance review the IMF team called the Kirchner approach “An incoherent and disturbing economic model.” The Macri team on the other hand was carrying out “a well managed and necessary transition.” 4a

The IMF said the previous subsidy of government service prices should be counteracted by focused poverty relief programs. An idea that is under way but has worked better on paper than in reality in the past.

The economy will be relaunched by using the recently borrowed money to undertake infrastructure and new housing programs. A year end tax reform which passed after tense negotiations with Argentina’s major CGT labor federation, is also supposedly going to free money for consumer spending.

Macri also obtained some labor concessions aimed at speeding development of the new Vaca Muerta shale oil fields. But the move to force labor concessions is already galvanizing labor resolve not to be short changed in too many economic areas. The votes of labor are looming in the balance over the perception that Macri wants a cheaper labor environment. 5

The failure of the government to pass regulations governing the recently passed Economic Emergency Law programs, a failure to hold down further job firings until March as agreed with labor; and issuance of a law weakening on- the-job injury protections, angered the powerful CGT labor confederation at its annual summer barbecue this January.

Labor also found the announcement of a cut in long weekend holidays to be too much. The threat of a major labor protest now looms in the near future.

As the election approaches in October, Macri and his team of advisers are in need of evidence of a real economic turn around. So far, they only have a couple of monthly statistics indicating a downward trend in inflation and a slight up tick in some production numbers. The minor good news came in the final months of 2016. 6

The big question is whether former President Fernandez de Kirchner will decide to run for a congressional seat. But whether she runs or not, Kirchner forces are expected to be campaigning against an administration which has fired tens of thousands and raised prices on government services to the max. The opposition may be strengthened if voters believe that, once again, neoliberal economics is asking the public to pay for an improvement in the business environment.

The official Pro coalition campaign  will likely have a strong ideological content focusing on alleged corruption and other wrong doing by the previous government.

But despite the charges of political wrong doing, the Kirchner economy from 2000 to 2011 remains hard to dismiss. This summing up on Argentina Wikipedia shows Cambiemos faces a significant challenge on the economic front:

“The economy nearly doubled from 2002 to 2011, growing an average of 7.1% annually and around 9% for five consecutive years between 2003 and 2007.  Real wages rose by around 72% from their low point in 2003 to 2013. The global recession did affect the economy in 2009, with growth slowing to nearly zero;  but high economic growth then resumed, and GDP expanded by around 9% in both 2010 and 2011 Foreign exchange controls, austerity measures, persistent inflation, and downturns in Brazil, Europe, and other important trade partners, contributed to slower growth beginning in 2012, however. Growth averaged just 1.3% from 2012 to 2014, and rose to 2.4% in 2015.”

SOURCES:

1.DESPIDOS MASIVOS EN ARGENTINA:
CARACTERIZACIÓN DE LA SITUACION Y
ANÁLISIS DEL IMPACTO SOBRE LA…
Wo rking Paper · December 2016.http://www.iade.org.ar/system/files/despidos_masivos_en_argentina_-_caracterizacion_de_la_situacion_y_analisis_del_im

2. Un año de Macri: el 43% de la gente hace un balance negativo de la gestión y el 26% la ve bien3 de Dic. 2016 http://www.clarin.com/politica/macri-gente-balance-negativo-gestion_0_BkJnKngml.html.

2a. Polls Shows More Argentines Think Macri’s Government Is Worse Than CFK’s Year end Poll http://www.thebubble.com/polls-shows-more-argentines-think-macris-government-is-worse-than-cfks/.

2b. Desde la UCA estiman que aumentó la indigencia en el último trimestre de 2016 http://www.cronista.com/economiapolitica/Desde-la-UCA-estiman-que-aumento-la-indigencia-en-el-ultimo-trimestre-de-2016-20170107-0010.html

3. Argentine Government Caves: ‘Social Emergency’ Bill To Go To Congress http://www.thebubble.com/argentine-government-caves-social-emergency-bill-to-go-to-congress/

3a. Macri trumpets welfare benefits April 17, 2016 http://buenosairesherald.com/article/212736/macri-trumpets-welfare-benefits

3b. Qué es la Ley de Emergencia Social La CGT y organizaciones sociales se manifestaron hoy para reclamar su aprobación http://www.lanacion.com.ar/1957488-que-es-la-ley-de-emergencia-social

4. IMF Executive Board Concludes Article IV Consultation with Argentina On November 9, 2016, https://www.imf.org/en/News/Articles/2016/11/10/PR16500-IMF-Executive-Board-Concludes-Article-Consultation-with Argentina

4a. “Hay tres objetivos: bajar el déficit, subir el gasto de infraestructura y disminuir impuestos distorsivos”, dijo Dujovne http://www.lanacion.com.ar/1971676-conferencia-de-prensa-nicolas-dujovne-caputo-gobierno-economia

4b.. How Argentina Settled a Billion-Dollar Debt Dispute With Hedge Funds times.com/2016/04/25/business/dealbook/how-argentina-settled-a-billion-dollar-debt-dispute-with-hedge-funds.html?ref=oembed&_r=0

5. Vaca Muerta: Macri pidió que el acuerdo se extienda a todos los sectores http://www.ieco.clarin.com/politica/vaca-muerta-macri-pidio-acuerdo-extienda-sectores_0_SyzixW78e.html.

5a. Flexiblization,Macri, Clarín y el empresariado: plan de guerra contra la clase trabajadora http://www.laizquierdadiario.com/Macri-Clarin-y-el-empresariado-plan-de-guerra-contra-la-clase-trabajadora

6. La encuesta de la Provincia que pone en alerta a Mauricio Macri y María Eugenia Vidalhttp://www.clarin.com/politica/encuesta-provincia-pone-alerta-mauricio-macri-maria-eugenia-vidal_0_Bkkgl-r8e.html

 

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Colombia: Plan B Peace Accord Approved

By Ronald J. Morgan

Colombian President Juan Manuel Santos has succeeded in having the Colombian congress approve a revised version of the peace accord with the Revolutionary Armed Forces of Colombia (FARC).

The passage of the accord officially ends 52 years of war between the  Colombian government and the FARC. The conflict which began in 1964, left 220,000 dead and more than five  million displaced according to a study by the Colombia National Center for Historical Memory. Demobilization of 7,000 FARC guerrillas will begin shortly.  (See WOLA comparison of the two peace accords and other analysis) 1.2.3.4.5.

The decision by President Juan Manuel Santos to approve the new peace pact by way of a congressional process  was not to the liking of the leaders who supported the NO victory over the original peace accord in the Oct. 2, plebiscite. The group wanted a second plebiscite to test support for the new agreement.

See: Peace Will Bring a Decade of Reforms to Colombia

President Santos told the nation shortly before the signing of the revised peace agreement that the time for delays was over. “My first and principal concern is for the peace process and for the risk that is growing every day of losing everything that’s been achieved given the fragility of the cease fire…We have to act there is no time to lose.”

Only a simple majority was required to approve the peace deal via Congress. The president carried the ball by using his political majority in both houses of congress through his Unidad Nacional coalition.  It now falls to the Constitutional Court  to issue a ruling allowing a Fast Track approval system to be used to convert the agreement into law. 6.

After the surprise defeat of the original agreement in an Oct. 2 plebiscite, the government consulted with major NO backers, took their suggestions and went back to the FARC for renegotiation. The intense period of effort went on for 41 days. The new agreement was announced Nov. 12. 7.

But backers of the No victory over the original peace accord are still defiant and unwilling to accept the new document. Rejection of the accord by ultra-right opponents lead by former President Alvaro Uribe Velez (2002-2010) has lead to a tense and polarized situation. Uribe backers have vowed to seek a referendum to undo the new peace treaty. During the debate before the vote approving the peace accord in the Senate on Tuesday, Nov. 29 and the House of Representatives on Wednesday, Nov. 30 the No coalition charged the congressional action was an illegal act violating the member’s legal duties (A crime known in spanish as prevaricato).

The final vote in the Senate was  75 votes  in favor, zero against, out of  102 seats. The House of Representaives voted 130 in favor with zero voting no, out of a total of 166 seats. In both houses oppostion supporters walked out at the time of the vote. 8.9.10.11.

See: Colombia Peace Accord: Can it be fixed after stunning No vote?

The proposed oppostion referendum will involve a complicated process and will be difficult to carry out successfully. It is more likely that it will be used to build support for an Uribe protegé candidate for president in 2018.. Overall, a new period of political conflict where the Right attempts to block any political gains by a new FARC political party is already under way. Violence against leftists has also surged.

The revised peace agreement was signed Thursday, Nov 24, in Bogotá. It is being called the Teatro de Colon agreement after the place it was signed.  The small and short signing ceremony had a more somber note than the original event in Cartagena, Sept. 26.

The Maximum Leader of the FARC Rodrigo Londoño, alias Timochenko, said while signing the new agreement: “We have enriched and modified the earlier accord. He also called for “the word to be the only weapon of Colombians” in the future. Londoño mentioned the recent increase in violence against social activists and called for a change in attitude. Colombians, he said, are tired of violence, political stigmatization and name calling. 12.

Despite long multi-hour sessions with government negotiators the Right Wing NO supporters have attacked the new document as has having been signed without a chance for review by the NO representatives.

Typical of opposition No comments were the following:

Marta Lucia Ramirez, ex presidential candidate of the Partido Conservador: “We find that the new text doesn’t satisfy important in-depth observations which generates an enormous lack of legitimacy.” El Espectador, Nov. 21, 2016

Former President Andres Pastrana (1998-2002) said: “In a few days without allowing the presence nor the review of the NO they signed without consultation, in contradiction with the electoral result, a document with the character of a final and definite decree.” Pastrana maintains Santos violated a court ruling dictating “that given the implications of the popular referendum the effects should reflect capably the preferences of the majorities of those who participated in the plebiscite.” El Espectador Nov. 20, 2016

Former Attorney General Alejandro Ordonez called the accord “The same agreement all dressed up.” i.e. cosmetically changed. He contends the reasons that people rejected the original accord remain in place. Congress, he contends, does not have the political legitimacy to pass on the accord and there needs to be another plebiscite. El Espectador, Nov. 15, 2016

Former President Alvaro Uribe Velez, leader of the No contends that points referring to drug trafficking, impunity, the Armed Forces, victims, and political eligibility of the guerrillas before completing their sentence, were not incorporated into the new accord. Uribe told a recent session of the Colombian Congress: “We will seek a mechanism of citizen participation to honor the defense of the points the government didn’t want to accept.” Prensa Democratico, Nov. 22, 2016  13.14.15.16

The final peace agreement took a controversial last minute turn when in the footnotes of the peace agreement, the significance of responsiblity of command was loosened. This change came the same day as the peace agreement was signed, Revista Semana reported.  This was taken as a 11th hour concession to the Association of Retired Colombian Military Officers. The change was criticized by Human Rights Watch as a lessening of the ability to prosecute military officers for wrongdoing by their subordinates.

Human Rights Watch had originally praised the new agreement as an advance over the original which they had criticized for allowing too much impunity. But then, a last minute change caused the organization to turn against the new accord too. Jose Miguel Vivanco, director of the Americas Division of Human Rights Watch, told Revista Semana that the change could affect prosecutions in massacre cases like those of the False Positive Murders (civilains murdered and then passed off as dead guerrillas). 17

The change requires that prosecutors for the Special Jurisdiction for the Peace prove that the commanders not only had control over their troops but were also in command of the crimes that were committed. This, Vivanco said, would be much more difficult to prove.

Briefly summarized, the new agreement changes the following:

  1. The whole of the peace agreement is no longer included in the constitution. Humanitarian aspects of the accord are to be included in the constitution for three presidential periods (12 years). In addition, the new agreement includes a clause requiring that the government and the FARC comply with all aspects of the accord.
  2. Under the transitional justice system adopted, those participating or convicted will have to remain in a restricted zone not larger than one Transitional Relocation Zone. Special permission will have to be granted to leave the zone. Those found to not be cooperating in confessing war crimes can receive up to 20 years in a normal prison.
  3. FARC gets to keep 10 special seats — five in the House of Representatives and five in the Senate from 2018 to 2026. But the FARC may not run candidates for the 16 special seats for conflict zones which will exist from 2018 to 2026.
  4. The new accord strengthens protection for private property and requires that all expropriations be done according to current legislation.
  5. The time table for peace accord investment in development programs is extended from 10 to 15 years. A proposed land census cannot be used to raise land values and increase taxes on landowners.
  6. Campaign finance assistant to the new FARC political party will be reduced from a planned 10% during 2018 to 2026 to the average amount given to all political parties and movements during the period.
  7. Special treatment for drug trafficking crimes will be dependent on a finding that the money earned went to support the FARC war effort.
  8. The Constitutional Court will be allowed to hear appeals of transitional justice court decisions. The move places the peace accord related justice system under the control of the Constitutional Court.
  9. Foreign Judges are eliminated from the Special Jurisdiction for Peace Court. The court will only exist for ten years and only for the first two years may requests for investigation be received.
  10. Changes text of focus on sex discrimination to say only that woman and men will be treated equally and recognizes that there are special circumstances affecting each group. Church groups had criticized the original wording as being pro homesexual.
  11. The new agreement requires that the FARC present a list of assets at the time of disarmament.
  12. Prosecution of  third party financiers of violence remains in place. But Nongovernmental organizations can not act as prosecutors but may provide information.
  13. New Campesino Zones, in addition to those already existing,  are not allowed.
  14. The accord excludes from transitional justice crimes committed for personal enrichment.
  15. Command Responsibility given last minute changes: The new text requires that prosecutors for the Special Jurisdiction for the Peace prove that the commanders not only had control over their troops but were also in command of the crimes that were committed. This could be much more difficult to prove in court.
  16. Eligibility for election remains for all FARC members even if they have been convicted of war crimes.
SOURCES:

1. Key Changes to the New Peace Accord Wola Nov. 15, 2016 http://colombiapeace.org/2016/11/15/key-changes-to-the-new-peace-accord/

2.Las claves del nuevo acuerdo de paz con las Farc 13 de Nov. 2016 http://www.elespectador.com/noticias/paz/claves-del-nuevo-acuerdo-de-paz-farc-articulo-665295.

3.Estos serían los candados del nuevo acuerdo de paz Nov. 15, 2016 http://www.semana.com/nacion/articulo/nuevo-acuerdo-de-paz-dejusticia-refrendacion-e-implementacion/505527

4.El nuevo acuerdo según las FARC Nov. 15, 2016 http://www.semana.com/nacion/articulo/proceso-de-paz-las-farc-y-el-nuevo-acuerdo-de-paz/505409

5.Cinco cosas que debe saber del proceso de paz con las Farc, 23 de Nov. 2016 http://www.eltiempo.com/politica/proceso-de-paz/cinco-cosas-que-debe-saber-sobre-el-nuevo-acuerdo-de-paz/16756941

6.Congreso terminó de refrendar el nuevo acuerdo con las Farc,Nov. 30, 2016 http://www.eltiempo.com/politica/proceso-de-paz/refrendan-nuevo-acuerdo-con-las-farc/16763099?_

7.Los 40 días y 40 noches que pasaron para conseguir el nuevo acuerdo, 21 Nov. 2016 http://www.eltiempo.com/politica/proceso-de-paz/cronica-de-las-negociaciones-para-lograr-nuevo-acuerdo-de-paz/16754195

8.La paz sin Uribe http://www.semana.com/nacion/articulo/acuerdo-de-paz-con-las-farc-posicion-de-uribe-y-los-del-no/506807

9.Uribe no aceptará el nuevo acuerdo si no se puede modificar 15 de Nov. 2016 http://www.semana.com/confidenciales-semanacom/articulo/alvaro-uribe-no-aceptara-nuevo-acuerdo-si-no-puede-modificarse/505648

10.Las Farc le cerraron la puerta a un encuentro con el Centro Democrático 22 de Nov. 2016 http://www.eluniversal.com.co/colombia/las-farc-le-cerraron-la-puerta-un-encuentro-con-el-centro-democratico-240755

 11.Uribismo acudirá a referendo contra el nuevo acuerdo de paz http://www.eltiempo.com/politica/proceso-de-paz/uribismo-pide-referendo-para-consultar-puntos-del-nuevo-acuerdo-de-paz/16758438

12.”Que la palabra sea la única arma que nos permitamos usar”: ‘Timochenko’24 de Nov. 2016 http://www.semana.com/nacion/articulo/timochenko-habla-en-el-teatro-colon-el-dia-de-la-firma-del-acuerdo-final/506466

13.Pastrana rechaza el nuevo acuerdo entre el Gobierno y las Farc 20 de Nov. 2016 http://www.elespectador.com/noticias/politica/pastrana-rechaza-el-nuevo-acuerdo-de-farc-articulo-666520

14.Congreso no tiene la legitimidad para avalar el nuevo acuerdo de paz: Alejandro Ordóñez 15 de Nov. 2016 http://www.elespectador.com/noticias/judicial/congreso-no-tiene-legitimidad-avalar-el-nuevo-acuerdo-d-articulo-665532

15.“En el nuevo texto no se satisfacen importantes observaciones de fondo”: Marta Lucía Ramírez http://www.elespectador.com/noticias/politica/el-nuevo-texto-no-se-satisfacen-importantes-observacion-articulo-666689

16.”Hay temas graves que no se modificaron”: Uribe, 22 de Nov. 2016 http://www.alvarouribevelez.com.co/es/content/hay-temas-graves-que-no-se-modificaron-uribe

17.”El Gobierno se rindió ante las presiones de los exmilitares”: José Miguel Vivanco 25 de Nov. 2016 http://www.semana.com/nacion/articulo/human-rights-watch-critica-cambios-en-el-acuerdo-de-paz-entre-gobierno-y-farc/506599

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