El Ejemplo Peruano

La mañana del lunes 13 de Julio marcó un hito para las operaciones bursátiles del Perú. Por primera vez en la historia, el ministro de Economía de ese país Luis Carranza le dio el campanazo de apertura a la bolsa de Nueva York e introdujo formalmente un fondo especial donde se cotizarán 25 acciones diferentes de la Bolsa de Valores de Lima en Wall Street. Estas suenan como excelentes noticias para ese país, pero en realidad solo un reducido grupo de la población es el que se está bañando en agua rosada. Mientras tanto, por lo menos un tercio de los Peruanos no ven casi ni un centavo de las ganancias que generan esos grandes negocios.

El Perú ha demostrado en este último decenio un crecimiento económico envidiable en la región y sin importar lo precario de la economía mundial. En el 2008 logró que su Producto Interno Bruto creciera el 9.8 por ciento, de acuerdo al Instituto Nacional de Estadística e Informática (INEI). Con este impresionante resultado, Lima acumula casi ocho años de crecimiento positivo ininterrumpidos. En contraste, el INEI tambien reporta que el índice de pobreza solo disminuyó en un 3.1 por ciento para alcanzar un 36,2 por ciento en el 2008. Esto significa que la pujante actividad económica que vive el país y sus beneficios le llega a cuenta gotas a los mas pobres, que son aproximadamente 10.5 millones de una población que sobrepasa ya los 29 millones.

Por eso no es de sorprenderse los recientes disturbios en la zona Amazónica de Bagua. Cuando el gobierno del Presidente Peruano Alan García pretendió implementar unos decretos de reforma agraria que agilizaban la expropiación de tierras sin cultivar por mas de dos años y entregarlas a inversionistas privados, se le prendió un polvorín de marca mayor. Primero, el gobierno nunca consultó con los dueños de esas tierras que por herencia cultural siempre han sido las comunidades indígenas. Segundo, los niveles de pobreza en las zonas rurales del Perú sobrepasan el 64 por ciento y con el gobierno amenazando en quitarles sus tierras era de esperarse una respuesta tan violenta. El saldo de campesinos muertos sobrepasa los 30 y agentes de policía llegan a los 22. Por último, el conflicto desencadenó una crisis ministerial que cobró la curul del ahora ex Primer Ministro Yehude Simon, quien fue reemplazado por Javier Velásquez Quesquén y la derogación de los controversiales decretos. Así mismo, García vio desplomarse su ya débil popularidad al obtener solo un 21 por ciento de aprobación de su mandato en las últimas encuestas.

Además, el renacimiento de el grupo guerrillero Sendero Luminoso que ahora opera como un cartel cocainero en una extensa zona selvática al sur de ese país tambien tiene a muchos en vilo. Cabe recordar que después de la captura de su jefe máximo Abimael Guzmán en 1992 por el gobierno del ahora infame ex presidente Alberto Fujimori, el movimiento se vino a pique. Desde la cárcel, Guzmán propuso una desmovilización que no todos sus secuaces aceptaron. La mano dura de Fujimori alentada por las mejoras económicas que vivió el Perú al principio de los años noventa terminó por debilitar al grupo.

Programas de interdicción y fumigación fomentadas por los Estados Unidos a finales del siglo pasado en la región y políticas como la de seguridad democrática del Presidente Colombiano Álvaro Uribe a principios de esta década, hizo que muchos de los negocios con narcóticos de la guerrilla de las FARC, se trastearan mas al sur. Precisamente hacia las selvas del Perú (además de las selvas en Brasil y Ecuador) donde se encontraban los pocos elementos del Sendero Luminoso que nunca se desmovilizaron. Ahora el tráfico de coca le ha inyectado fondos y nueva vida a ese grupo. Es triste ver como la población campesina de esas regiones quedan de nuevo atrapada entre la espada y la pared, y a merced del fuego cruzado entre los forajidos y el ejército. Esta es una realidad tambien muy familiar para millones de campesinos Colombianos.

Algunas conclusiones prácticas para nuestros hermanos Peruanos, para el gobierno Colombiano, y porqué no, para el creciente sonajero de precandidatos presidenciales. No importa que tan bien le vaya al gobierno en sus metas macroeconómicas si ese manojo de cifras no se traducen en oportunidades tangibles de trabajo y bienestar para la gente pobre de campos y ciudades. Si no se comprometen recursos serios para programas de reinserción y desmovilización, es casi fijo que excombatientes y raspachines vuelven al monte a plantar coca y a alquilarse al mejor postor. Por último, y desafortunadamente, un campanazo en Wall Street todavía significa lo mismo para millones que todavía viven en la pobreza en muchos países Latinoamericanos: prácticamente nada.

Drug Cartels Move Beyond Borders AS/COA Online 12/19/08

A vigil in Mexico for drug war victims. (AP Images)

Two years after Mexican President Felipe Calderón declared war on the country’s drug cartels, the bloodletting continues to spread. Despite impressive arrests and narcotics seizures, the murder rate doubled in 2008 over the previous year. Moreover, the gangs’ tentacles reach into the highest levels of government down to local police forces. But the drug war’s impact has also been felt well beyond Mexico, with links extending across the Americas, into Europe, and as far as Australia.

Out of fear of the drug war’s overflow, Guatemala plans to deploy several hundred soldiers along its border with Mexico during the next few weeks. In September, Guatemalan President Álvaro Colom accused the cartels of high-level infiltration after it came to light that his office had been bugged. Analyst Sam Logan at ISN Security Watch describes Guatemala as the “release valve” for the cartels, given its low altitude and proximity to paved roads in Mexico. Logan also points out that, in South America, Peru saw ties develop between Mexican drug cartels and the Maoist Shining Path guerillas. Recent attacks on the Peruvian army in which 15 soldiers and two civilians died were blamed on ex-guerrillas hired by Mexican drug traffickers to “secure their trade routes out of the mountains.” According to a UN report, coca cultivation increased in Peru, Colombia, and Bolivia by 16 percent since 2001.

The connections appear to reach even further south; Argentina has become a drug trade hub, fueling the U.S. methamphetamine and European cocaine demands. Latin American Thought blog’s Eliot Brockner reports on the recent seizure of 1,000 kilos of cocaine at Buenos Aires’ port. The fact that Mexican drug cartels “can use Argentina as an entry (ephedrine/pseudoephedrine) and exit (cocaine) point suggests there is a fairly well-coordinated smuggling ring capable of transporting large quantities of illicit merchandise across South America,” he writes.

The cartels’ links reach beyond the Americas. A Stratfor analysis covers Mexican connections with Italy’s ‘Ndrangheta organized criminal clan, allowing for drugs to be shipped from Colombia through Mexico to the United States and on to Italy. From there, the drugs could be distributed to the European market. Earlier this month, a cocaine bust involving the arrest of three Mexican nationals by Australia’s federal police uncovered that country’s local link to that Mexico’s cartel.

The 2009 National Threat Assessment published by the National Drug Intelligence Center identifies Mexican drug-trafficking organizations as “the greatest organized crime threat to the United States.” With an eye to the problem, the United States released $197 million to Mexico at the beginning of December—the first of a $400 million package to fight organized crime through the Mérida Initiative.

As the crisis grows, so do the calls for solutions. Harvard International Review’s Jason Larkin suggests that, in the absence of decriminalization or results from increased militarization, negotiation with cartels stands as an option, “just as the U.S. has considered negotiating with the Taliban.” In a lengthy article, OpenDemocracy.net writes that “legalization may become the most effective weapon in the arsenal aimed at organized crime…it seems now is the perfect time to give it a try,” after a thorough analysis of the crisis. A Semana op-ed compares the tragedy facing Mexico to the one in Colombia’s recent history. It recommends that Latin American governments come together to coordinate efforts to halt the bloodshed, which could help affect change internationally. A Cox News Service article looks to similar organized crime circles of the past, ranging from Chicago during Prohibition to Italy’s Mafia, and suggests that peace may come through legalization or by fragmentation of the cartels.

El Universal features a multimedia page that tracks the ongoing violence and keeps a complete tally of the war’s victims in Mexico. Read an AS/COA analysis on how gun smuggling from the United States into Mexico fuels the war.

En español.

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Predicting U.S.-Brazil Ethanol Policy AS/COA Online 11/10/08

Byline shared with Carin Zissis.

An ethanol plant. Some firms have felt the crunch of rising production costs and lower prices. (AP Images)

With a new U.S. administration on the horizon, questions arise over opportunities for cooperation between Washington and Latin American countries in the field of biofuels. In particular, how will an Obama presidency affect collaboration and negotiations between the United States and Brazil in the field of ethanol?

In his latest Miami Herald column, Andres Oppenheimer suggests President-elect Barack shrink U.S. dependence on Middle Eastern oil by working with Brazil, Central America, and the Caribbean to produce sugar-based ethanol, which is both cheaper and better for the environment than the corn-based ethanol produced in the United States. During campaign season, the Obama-Biden ticket proposed working with leaders from across the hemisphere on a new “Energy Partnership for the Americas” to support of clean energy. Obama also voiced support for deepening relations with Brazil through developing markets for biofuels and promotion of “green” technology. The future president has praised Brazil, where more than 70 percent of cars are flex fuel, for providing a model for taking steps toward energy independence.

Yet Obama’s praise for the Brazilian biofuels industry may translate to supporting ethanol subsidies in the United States rather than reducing a tariff on Brazilian ethanol. Bloomberg reports that Obama will likely continue the current administration’s policies of subsidizing the industry, including tax credits.The cost of ethanol production has grown while more supplies of the fuel spell price drops. Less than a week before the November 4 election, VeraSun Energy, the biggest U.S. ethanol producer, filed for bankruptcy protection, according to the Financial Times.

In the past, Obama supported a 54 cent per gallon tariff on imports of sugar-based ethanol and voted for the Farm Bill, which maintains the tariff for two more years. The tariff has been a source of consternation for Brazil, which stands as the world’s biggest sugar-based ethanol producer. A New York Times article examines Obama’s ethanol policy on the campaign trail.

But in a May appearance on “Meet the Press,” Obama acknowledged that rising food prices could spur a policy change, saying, “[I]f it turns out that we’ve got to make changes in our ethanol policy to help people get something to eat, then that’s got to be the step we take.” Moreover, opportunities exist for cooperation with Latin American countries that would sidestep the tariff. By making use of its locations and a recently signed free-trade agreement with the United States, Peru stands poised to expand sugarcane-based ethanol production. AmericaEconomia reports that millions in investments from U.S., Brazilian, and domestic companies in northern Peru could lead to a production boost to supply the U.S. market, given that the FTA allows Peruvian products to enter the United States duty-free starting in 2009.

Meanwhile, Brazil’s ethanol industry could see short-term losses as a result of the credit crunch and related shrinking investments. Still, new deals are cropping up, such as a proposal by Archer Daniels Midland to invest $500 million over seven years in new sugar mills and boosting crop production in Brazil. Addressing a conference at the Organization of American States last month, former Brazilian Agriculture Minister and Co-Chairman of the Inter-American Ethanol Commission Roberto Rodriguez highlighted Brazil’s goal to increase the amount of sugarcane used in producing ethanol to 51 percent from the current level of 41 percent, offering growth and job opportunities.

In the Fall 2008 issue of Americas Quarterly, both Bolivian opposition leader President Jorge Quiroga and Gerdau Board Chair Jorge Gerdau Johannpeter suggest the next U.S. president should deepen ties with Brazil. Visit the new AQ website.

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Peru’s García Fosters Consensus AS/COA Online 10/17/08

President Alan García and the new Prime Minister Yehude Simon. (AP Images)

Peruvian President Alan García governs at a time of dramatic highs and lows. According to the latest figures, Peru’s economy grew 8.9 percent in August capping off 86 consecutive months of economic expansion. On the other hand, news of a corruption scandal recently rocked his administration when leaked audio recordings provided evidence that high-level officials had solicited bribes from a Norwegian oil company in exchange for concessions. On October 10, García’s entire cabinet resigned and the Peruvian Congress ordered an investigation into oil concessions that took place since García took office in 2006. In the wake of the corruption scandal, the president’s popularity level reached a low of 19 percent.

Still, García has been credited for reacting swiftly to overcome concerns about his administration. He reappointed the defense, finance, justice, trade, and education ministers. Moreover, he chose Yehude Simon, the popular left-leaning regional governor of Lambayeque, to serve as Peru’s new prime minister. The Financial Times described the selection of Simon as an opportunity to “ help García’s administration communicate with Peru’s disenchanted leftwing parties and unions.” An editorial in El Comercio lauds García’s fast intervention and also commends the new prime minister for his ability to build consensus, a skill that could help the García’s administration get a boost in approval ratings.

Despite strong economic indicators in recent years, the president faces slumping support as opponents charge the country’s new wealth has not closed its social inequality gap. Roughly 39 percent of Peru’s population lives in poverty. The Economist points out that the lack of confidence in the president and his political party, the Alianza Popular Revolucionaria Americana (APRA), brings back “memories of his disastrous first stint in power in the 1980s,” when García governed from 1985 to 1990. But the purging of the president’s cabinet could be seen as a new commitment to stamping out corruption. In one of his first acts since taking office, Simon—a political prisoner during the Fujimori regime and known for transparency—proposed an anti-corruption plan that García will likely approve.

In an article for RGE’s Latin America EconoMonitor, Walter Molano defines Peru as “one of the most resilient economies in Latin America, and the star of the emerging markets class.” He highlights the fact that the commodities boom allowed Peru’s Central Bank to accumulate hefty international reserves, lower its foreign debt tab, and create leeway to mitigate the effects of the world’s financial slowdown. Peru plans to issue a $600 million international bond sale at a time when credit markets are frozen and wary investors have been withdrawing from emerging markets. The newly reappointed Finance Minister Luis Valdivieso commented on the decision by saying, “those of us who are confident in our economic performance don’t have to see multilateral or emergency financing as the only option.”

At the same time that Peru’s government faced a cabinet shuffle, a terrorist threat reemerged. An October 10 attack on an army convoy by members of the Shining Path claimed the lives of 19 people. Days later, an ambush in the coca-growing region of Vizcatan resulted in two more deaths in another attack linked to the Maoist group. The movement, once 10,000 strong, has remained largely dormant since authorities captured leader Abimael Guzman in 1992. Some posit that drug money has fueled the group’s resurgence but that the group only commands 600 rebels.

Read an article by COA’s Eric Farnsworth about how Peru, with García at the helm, has emerged as both an important regional player and plays a growing role in Asia-Pacific economic relations, demonstrated by the fact that it plays host to the APEC leaders summit in November.

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Economic Revival in Peru AS/COA Online 07/18/08

President Alan Garcia and new Finance Minister Valdivieso at the latter’s swearing-in ceremony in Lima on July 14. (AP Images)

Over the past couple of weeks, the already strained American economy has been plagued by bad financial news. After heavyweight investment bank Bear Stearns needed a rescue from bankruptcy, giant mortgage lenders Fannie Mae and Freddie Mac also required a bailout from a federal government struggling to handle an economy not officially in “recession,” but “sluggish,” to say the least.

In contrast, several emerging economies in Latin America have thus far shown signs of remaining insulated from the U.S. credit crunch and a weak dollar market. Peru serves as a prime example, posting impressive growth results. As reported by the Instituto Nacional de Estadística e Informática, GDP growth in May 2008 rose (PDF) to 7.3 percent, resulting in 83 consecutive months of growth. In the last 12 months, the growth rate hit 9.37 percent, boosted by strong performance in the construction, mining, and agriculture sectors. In another indication of growing confidence in the country’s economy, when comparing May 2008 statistics with May 2007, the number of Peruvians returning (PDF) from abroad increased by 4.3 percent while the portion emigrating decreased by half a percentage point.

Following in the footsteps of Fitch ratings, Standard & Poor’s raised Peru’s credit rating to investment grade on July 14, making the country even more attractive for investors. Meanwhile, Luis Valdivieso, a former International Monetary Fund official, was sworn in as Peru’s new finance minister to replace Luis Carranza, who resigned (Carranza will remain close to the government as a presidential adviser). Valdivieso has emphasized goals that include more equal wealth distribution and taming growing inflation. Investment bankers, who perceive him as likely to uphold his predecessor’s tight fiscal policies, approve of the new minister.

To complement Peru’s gain in financial momentum, other reports signal that more growth is on the way. Peruvian exports to the European Union (EU) grew 21 percent in the first five months of 2008, totaling more than two billion dollars worth of trade. The news comes as Peru continues to be part of free trade agreement (FTA) negotiations with the EU as a member of the Andean Community—composed of Bolivia, Colombia, Ecuador, and Peru. Yet talks have stalled since the EU recently approved a controversial new immigration directive.

But Peru faces other challenges beyond the blocked FTA with the EU. In the country’s southern regions, recent protests led by disgruntled miners highlight the wealth disparity between the rural and urban populations. The Financial Times reports that 39 percent of the total population lives below the poverty line, with residents of rural areas accounting for a disproportionate amount of the Peruvians living in poverty. Protesting miners demand better wage controls on rising prices, and a more equal distribution of mining company revenue.

In an op-ed for Poder magazine, COA’s Eric Farnsworth examines how Peru has seized the moment to improve its global standing. Speaking at COA’s annual Washington Conference in 2008, Carranza stressed poverty reduction as a key to Peru’s sustained growth. Read an AS/COA’s hemispheric update on Peru’s economic growth.

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