LADB Blog Discusses Argentina Pushing Back
August 29, 2014
As Argentina's President Cristina Fernández de Kirchner battles against a recent court decision in New York that ruled in favor of Argentine bond owners, called 'vulture funds', the populist South American leader is also filing suit against RR Donnelley, a printing company that recently closed up shop in Buenos Aires and laid off hundreds. The large printing company cited struggles amidst the difficult national economic situation, due in large part to Argentina's defaulting on its debt for the second time since the new millennium. President Fernández de Kirchner is utilizing an anti-terrorism law to threaten RR Donnelley with criminal charges for attempting to further derail the national economy and incite fear in international markets.
Fernández de Kirchner's threat against the printing company could appear as desperate, backing the position of those who favor the New York decisionand view Fernández de Kirchner's anger as nothing more than a mechanism to draw popularity by standing against the unpopular US government.
Despite favorable responses from the IMF and international media that criticized the heavy-handed New York court decision, which set Argentina's default in motion by affirming the claims of vulture funds that held-out during a debt restructuring plan under the presidency of Nestor Kirchner (Fernández de Kirchner's husband) almost a decade ago, the US Supreme Court upheld the New York decision, thus calling into question the economic spending policies of Kirchner's administration. Andrés Gaudín addresses the controversy in Argentina in this week's issue of NotiSur.
High public spending has been known to cause problems for the national economies of countries ruled by populist leaders, often more concerned with pleasing the masses and maintaining their power than financial minutia such as inflation rates. In fact, the populist president of Ecuador, Rafael Correa, has set in motion a group of laws that not only allow him to stay in power indefinitely, but also begin a move away from Ecuadoran dollarization. President Correa has framed this strategy as a way to protect the Ecuadoran people from the control of banks and bankers. Luis Ángel Saavedra discusses the Correa government's new currency policy in this week's issue of NotiSur. However, the new financial code is set up in a way that will allow Correa to more readily increase spending and 'print' electronic money. This would create a system of parallel currencies, similar to the convertibility plan under which Argentina has operated since its first default in 2002.
Between Kirchner and Correa, two leaders heavily influenced by South American populists during the second half of the twentieth century, there is a grand attempt evident to stand up against the US and other global powers. Whether or not these positions are motivated by populism, the 'vulture funds', in Argentina's case, and the dependence on the US dollar in Ecuador's, underline the legitimate struggle of Latin American nations (and other post-colonial, periphery economies for that matter) to overcome what economist Ellen Brown calls "colonization by bankruptcy".
Also in LADB this week....
Update on Unaccompanied Minors: We've written about the children from Central America from the perspective of Mexico and El Salvador. George Rodríguez gives us a regional perspective as well as a point of view from Honduras.
Praise for Dominican Republic's Immigration Policy: The Dominican government's decision to move toward a resolution of its immigration conflict (primarily with neighboring Haiti) has earned the praise of a couple of important international figures, Herman Van Rompuy, president of the European Council and UN Secretary-General Ban Ki-Moon, Read more from Crosby Girón.
A New Corruption-Free Police Unit in Mexico? On Aug. 22, President Enrique Peña Nieto swore in a 5,000-member gendarmerie, an elite federal police force that the administration is touting as a "new model" of corruption-free law enforcement. The new unit, known as the Gendarmería Nacional, will function as a type of SWAT team that will be deployed to specific areas of conflict. Security analysts are skeptical that the new unit will make much of a difference. "The gendarmerie is an aspirin to fight a cancer," Ernesto López Portillo, founder of the Instituto para la Seguridad y la Democracia (Insyde). Read more from Carlos Navarro.
Too Many Deputies and Senators in Mexico? The governing Partido Revolucionario Institucional (PRI) has proposed a public referendum on a proposal to reduce the size of the Chamber of Deputies and Senate in Mexico. Supporters of this plan agree that Congress has become too big and costly to operate, so a reduction in the number of members of the Chamber of Deputies and Senate is warranted. Critics suggest, however, that the PRI's proposal to reduce the number of at-large seats in each chamber is undemocratic because it would make it difficult for small parties to gain representation in Congress and perhaps give too much power to the party with the majority of seats. Carlos Navarro tells us whether this initiative will prosper.
The Latin America Data Base (LADB) is one of the longest running premier news and educational services on Latin America. Established in 1986 as a unit of the Latin American and Iberian Institute at the University of New Mexico (UNM), LADB has had an internet presence since 1996. LADB features three weekly electronic publications: NotiCen, NotiSur, and SourceMex, and a fully searchable archive of over 28,000 articles that provide timely information and historical perspective on a variety of Latin American issues. LADB is a subscription service made available at no cost to the UNM community. For more information, contact firstname.lastname@example.org.