MercoPress ran a story about how Argentina has paid down US$32 billion worth of foreign debt by using Central Bank reserves under the nine years of the Kirchners, between current President Cristina Fernandez Kirchner (“CFK”) and her immediate predecessor (also her husband), now-deceased former President Néstor Kirchner.
Speaking at a conference, Central Bank President Mercedes Marco del Pont explained that despite the payments, Central Bank reserves remain strong. Admitting that it is not ideal to replace one debt with another, Marco del Pont asserted that “it’s better to be indebted with the central bank than with foreign creditors.”
Marco del Pont described this strategy as “the centre piece of the policy to recover sovereignty by cutting indebtedness.” Even a cursory overview (to read more on the Falklands/Malvinas, click here and here; for more on oil policy, click here) reveals that national sovereignty is one of the key issues in modern Argentine politics.
Yet, questions remain as to whether CFK truly seeks national sovereignty for Argentina, or if it’s really just about appearances.
If the Kirchner Administrations really have paid off US$32 billion in foreign debt, that’s pretty impressive. But I couldn’t help but remember this February 2012 article by The Economist, explaining why the official inflation rate reported by the Argentine government would be removed from The Economist’s indicators page:
Since 2007 Argentina’s government has published inflation figures that almost nobody believes. These show prices as having risen by between 5% and 11% a year. Independent economists, provincial statistical offices and surveys of inflation expectations have all put the rate at more than double the official number (see article). The government has often granted unions pay rises of that order.
What seems to have started as a desire to avoid bad headlines in a country with a history of hyperinflation has led to the debasement of INDEC, once one of Latin America’s best statistical offices.
It’s certainly possible that things really are going as well in Argentina as reported. But given the track record on reporting inflation rates in the “Kirchner era”, it might be worth fact-checking other government claims related to financial stability.
Analysts and pundits have long criticized Presidents George W. Bush and Barack Obama alike for not doing enough to reach out to Brazil as a rising power in the Americas.
However, the VI Summit of the Americas, hosted by Colombia last weekend, was sandwiched between a couple of U.S.-Brazil bilateral meetings: Brazilian President Dilma Rousseff traveled to Washington, D.C. April 9-11, with Secretary Clinton visiting Brazil immediately after the Summit.
MercoPress reported on a press conference and a speech at the National Confederation of Industry on the first day of Secretary Clinton’s visit:
“I believe that the opportunities and potential for greater investment, trade, growth and jobs is only now being tapped,” Clinton said.
In order to promote economic growth for both countries, Clinton outlined key priorities.
“We need to redouble our efforts to conclude a double taxation treaty. We need to explore a bilateral investment treaty. We need to consider in the future a free trade agreement”, underlined Hillary Clinton.
As a proponent of job diplomacy, it makes sense that Secretary Clinton would mention a FTA when diplomatic talks are going well, especially since the U.S. and Brazil already signed an Agreement on Trade and Economic Cooperation in March 2011.
But it immediately caught my attention for the same reason a headline on renewed talk of a U.S., Uruguay FTA caught my attention: As a Mercosur member state, Brazil is restricted from entering into bilateral trade agreements.
This leads to an important question: Is it really possible that Brazil and Uruguay would be willing to take on Mercosur restrictions to enter into FTAs with the U.S., or are U.S. foreign policymakers really just that uninformed about Mercosur?
Recent reports indicate that it was primarily Argentina that opposed the U.S., Uruguay FTA in 2006. Former President of Uruguay Julio Maria Sanguinetti recently addressed the situation, stating that “now we are prisoners of Mercosur and Argentina.”
Uruguay and Paraguay are at a clear disadvantage under current Mercosur trade restrictions. They’re smaller and more dependent on their larger Mercosur partners, Brazil and Argentina, which have increasingly come under criticism for protectionist policies.
In the end, this has the potential to be interesting. If anyone can succeed in negotiating reforms for the Mercosur trade restrictions, you’d think it’d be Brazil.
By the Numbers: ZERO: Number of times the phrase “War on Drugs” is used in the President's National Drug Control Strategy #DrugPolicyReform—
U.S. Drug Policy (@ONDCP) April 17, 2012
Over the past 20 years, the general trend in U.S. political attitudes toward the war on drugs has gradually shifted from an emphasis on supply-end eradication to reduction of demand on the home front. Even so, critics across the political spectrum have been waiting with bated breath for viable policy recommendations.
The fact that we’re discussing a strategy “for the 21st century” when we’re already twelve years in is indicative of just how frozen in time U.S. drug policy has been.
Perhaps the most compelling aspect of the new strategy is the push to move away from the false dichotomy of either prohibition, or legalization; the Obama Administration seeks a third way, based on three primary ideas:
1. addiction is a disease that can be treated;
2. people with substance use disorders can recover; and
3. innovative new criminal justice reforms can stop the revolving door of drug use, crime, incarceration, and rearrest.
These three ideas—notably referred to as “facts” in the document—are the driving force behind policy reform based on “innovative and evidence-based public health and safety approaches aimed at reducing drug use and its consequences.”
The Executive Summary lists seven core focus areas intended to achieve a balanced approach between public health and safety policy reform, complete with pie chart to illustrate the ONDCP’s priorities:
The timing on this one was interesting, given that the release of the 2012 strategy came only two days after leaders from throughout the Western Hemisphere failed to reach consensus on a regional drug policy during the Summit of the Americas.
However, this rejection of the false dichotomy actually seems to complement a suggestion made by Guatemalan President Otto Pérez Molina in an opinion piece for The Guardian, in which he called for the abandonment of ideology—whether prohibition or liberalization.
Molina reiterated that Guatemala will not fail to honor its commitments to the international fight against narcotrafficking, but he also asserted that his country is unwilling “to continue as dumb witnesses to a global self-deceit.” He left little room for confusion as he explained his position:
We cannot eradicate global drug markets, but we can certainly regulate them as we have done with alcohol and tobacco markets. Drug abuse, alcoholism and tobacco should be treated as public health problems, not criminal justice issues. Our children and grandchildren demand from us a more effective drug policy, not a more ideological response.
While the Obama Administration does not yet seem prepared to treat narcotics like alcohol and tobacco—limited legalization with clear limitations, and consequences—choosing to treat non-violent drug-related offenses as public health problems instead of criminal justice issues is what the 2012 strategy is all about.
What kind of security measures are necessary for a regional meeting that brings together 33 of the Heads of State and Government of the Americas?
According to El Universal (en español), General Ricardo Restrepo of the Colombian National Police announced recently that five anti-explosive robots will be on hand throughout the Summit of the Americas, to be held April 14-15 in Cartagena, Colombia.
The Canadian-manufactured digital and analog robots complete the team of anti-explosives experts. In fact, they will help ensure the safety of security forces just as much as the Heads of State.
Each of the robots is equipped with an advanced technological system. The heaviest of the five weighs in at 200 kilos (~440 lbs), with capabilities that include shooting water up to 350 meters (over 380 yds) using a built-in water canon; night vision viewfinder; and five night vision cameras−all while being controlled from afar using a console.
Major Giovani Riaño Garzón, an explosive ordinance disposal expert, described some of the specific capabilities of the robot bomb squad:
…the robots allow us to not face an explosive charge personally and they do the actual work of deactivating the bomb. Furthermore, they have video cameras with audio equipment, a laser-shooting system, and we can shoot water or plugs of metal or rubber or other materials.
He went on to say that the power with which the water is shot from the canon is so strong that it can even break material as strong as steel.
Although the article only mentioned the robots’ origin as a side note, it seems to me that this Canadian technology is a great example of regional integration and collaboration. A few days ago, El Universal reported (en español) that a total of 32 police agencies representing 27 countries are sharing technology and working on security concerns leading up to the Summit.
These robots are only one element of a larger overarching security strategy based on incorporating advanced technology with more traditional security measures, such as mounted patrols.
In addition to the pictures in this post, the original article includes a video that shows the robots in action.
Last week, the Senate confirmed several nominations to key positions in the Obama Administration. Among those confirmed were Roberta S. Jacobson as assistant secretary for western hemisphere affairs, as well as ambassadors to Nicaragua, Panama, and Uruguay.
MercoPress ran a piece yesterday about Julissa Reynoso’s confirmation as US Ambassador to Uruguay. According to the running title, the Ambassador plans to make a US-Uruguay free trade agreement a priority:
The new US ambassador in Uruguay, confirmed this week by the US Senate, expects to hold contacts with Uruguayan authorities to promote and negotiate a free trade agreement.
This will be an uphill battle, at best.
While Ambassador Reynoso didn’t specifically mention a free trade agreement (FTA) in her statement before the Senate Committee on Foreign Relations, the topic did come up during the question and answer period.
The full video is available here, with talk of an FTA starting at around 4:16.
While the Ambassador mentioned that previous efforts to establish a US-Uruguay FTA failed due to a lack of support on both sides, the issue goes much deeper than that.
As a member of Mercosur, Uruguay is restricted in its ability to enter into bilateral FTAs. In a slightly different context, James Bosworth described some of the requirements placed on Mercosur members:
…Mercosur actually has rules with an economic impact. It’s not one of those nominal integration organizations in which a group of presidents hang out and talk once or twice per year and then is forgotten. Mercosur rules, though sometimes poorly enforced, have an impact on its members trade agreements, customs, tariffs, monetary policies and contractual law.
He goes on to state that it was actually Mercosur that prevented Uruguay from entering into a full FTA with the US a few years ago because of Mercosur’s restrictions on unilateral trade agreements.
Although Mercosur blocked the bilateral FTA, the US and Uruguay did ratify a Trade & Investment Framework Agreement (TIFA) in January 2007. The Dow Action Network Trade Glossary explains that a TIFA is essentially one step down from a FTA:
TIFA’s are non-binding agreements that establish regular interaction between governments on these topics and can “pave the way” for FTA commitments.
Under the Mercosur agreement, this is probably about as close as Uruguay will come to a FTA with the US, unless the Free Trade Area of the Americas somehow becomes a reality.
Argentina and Brazil have been criticized for promoting protectionist policies to the detriment of Uruguay and Paraguay, the two considerably smaller Mercosur nations. Uruguayan Vice President Danilo Astori went so far as to say in March that “Argentina completely ignores the Mercosur treaty and spirit.”
Despite growing disillusionment with Mercosur among the people of Uruguay, it’s unlikely that the country will leave Mercosur. In fact, President Jose Mujica has promised to “fight to the death” for the future of Mercosur.
In the end, Mercosur’s restrictions on bilateral trade agreements will present the greatest hurdle to establishing a full-blown FTA between the US and Uruguay.
Sometimes, exploring the past is the key to unlocking our ability to imagine the future. I’m reading a collection of speeches from Elihu Root’s unprecedented diplomatic tour of South America in 1906.
Elihu Root, then-Secretary of State, was a guest of honor at Third Conference of American Republics in Rio de Janeiro, Brazil. Here’s an excerpt from his remarks:
According to your program, no great and impressive single thing is to be done by you; no political questions are to be discussed; no controversies are to be settled; no judgment is to be passed upon the conduct of any state, but many subjects are to be considered which afford the possibility of removing barriers to intercourse; of ascertaining for the common benefit what advances have been made by each nation in knowledge, in experience, in enterprise, in the solution of difficult questions of government, and in ethical standards; of perfecting our knowledge of each other; and of doing away with the misconceptions, the misunderstandings, and the resultant prejudices that are such fruitful sources of controversy.
What if this were to be the agenda set for the 2013 Organization of American States (OAS) General Assembly?
On Feb. 1, during a regular meeting of the Permanent Council, OAS Secretary General José Miguel Insulza presented a proposal for a revised strategic vision. In response, Venezuela proposed a one-year break to “consider” the strategic vision.
In my blog post about the Venezuelan proposal, I suggested that while the proposed break should not be dismissed outright, there’s a pretty big risk that a complete break in action would do more harm than good.
It seems unlikely that this sabbatical will take place anyway, given that Guatemala has already offered to host the 2013 General Assembly. Even so, I can’t help but wonder if a break in routine would help the OAS refocus.
What if the one-year break were to be a break not from gathering for the annual General Assembly, but rather from regional diplomacy marred by ulterior motives?
What if the only thing on the agenda for the 2013 OAS General Assembly were to be the kind of discussions that remove barriers to collaboration, giving each member state a chance to brag about their own advancements “in knowledge, in experience, in enterprise, in the solution of difficult questions of government, and in ethical standards”, in an effort to “[do] away with the misconceptions, the misunderstandings, and the resultant prejudices that are such fruitful sources of controversy”?
What if it were to focus on the growth and innovation we’re seeing throughout Latin America, to promote regional collaboration through learning from each other’s successes?
This would be a lot easier said than done. It would require the delegations of each member state to set aside ego, political agendas, and old rivalries. For example:
• The US would have to back down on its strictly unilateral political exclusion of Cuba in regional dialogues.
• The ALBA nations would have to tone down the anti-US rhetoric.
• There would need to be a proverbial ceasefire on regional infighting, such as the maritime disputes between Peru/Bolivia and Chile.
It’s worth noting that some of these political agendas and old rivalries might be settled before the June 2013, either through the Summit of the Americas in April, this year’s General Assembly in June, or through the international court system.
Additionally, times are very different now than they were in 1906. The Latin American diplomats were honored that the US Secretary of State would grace them with his presence, and it’s quite possible that the summary of the 1906 summit provided by Secretary Root was a glorified oversimplification of reality anyway.
But in what’s being hailed as Latin America’s Decade, it’s important to take inventory of the advancements being made within the Hemisphere. For instance:
• Let Peru talk (in broad terms) about how they caught Comrade Artemio, dismantling one faction of a long-standing Maoist terrorist group.
• Let Brazil talk about lessons learned in uncovering and dealing with government corruption.
• Let Mexico talk about what changed between 1985 and 2012 to help them withstand a major earthquake, with a death toll difference of about 10,000 lives.
For this to work, it would be up to Secretary-General Insulza to keep everyone focused and to quickly resolve any conflicts that arose during the General Assembly.
Furthermore, the US would need to be willing to lead from the sidelines. With all the discussion of a Post-American World, the US needs to redefine its role within the developing world order before the rest of the world does.
In a blog post at Global Public Square, Fareed Zakaria suggests:
As the rest of the world rises, the United States has to transition from a dominant, hegemonic role to one in which the U.S. is a catalyst, a coordinator and an agenda setter.
An OAS General Assembly focused on advancements in Latin America could provide an opportunity for the US to adjust geopolitically without relinquishing influence.
Let the Permanent Council hammer out the details of the new strategic vision, to be officially released at the 2014 OAS General Assembly.
In a hemisphere drowning in what the AS/COA has termed “an alphabet soup of regional integration organizations”, what could be accomplished if there were just one regional summit focused not on policy-making, but on relationship-building?