Venezuelan President Hugo Chávez announced a devaluation of the Venezuelan bolívar late Friday night, a move which the New York Times says “reflects the financial stress faced by his government since the price of oil, the country’s top export commodity, fell from its peak as a result of the global financial crisis.” The decision came as the Venezuelan economy shrunk by 2.9% in 2009 and in the publicly televised cabinet meeting Friday, at which the devaluation was announced, Mr. Chavez said the currency devaluation had one simple objective: “revitalizing the productive economy.” The new measures also set up two different exchange rates—one for imported items that include goods such as cars and construction materials and another for essential items like basic food goods and hospital equipment. Some Venezuelan economists say the devaluation and multiple exchange rates will now make certain exports more competitive on the world market while also increasing the profits Venezuela reaps from oil sales so as to bolster Mr. Chavez’s social spending agenda. But the move also is likely to send inflation rising higher by making imports more expensive. And while most economists say the devaluation will not trigger any sort of imminent economic crisis, the Wall Street Journal adds that Friday’s announcement has created some panic with “Venezuelans scurrying to spend cash they feared could soon be worthless.” The country already registered an inflation rate of 25% in 2009.
Also, the BBC has a recent report on the upcoming debut of the sucre—the newly minted currency to be used for international exchanges among ALBA countries. The first exchange using the new money is said to be a Venezuelan sale of rice to Cuba. The exact date of the sale is not yet known, however.
Currency has also become the topic of much debate in Argentina where tensions between President Cristina Kirchner and Central Banker, Martin Redrado, remain high over whether or not to use foreign currency reserves in order to pay off the country’s rising international debt. Over the weekend, reports the New York Times once again, an Argentine judge ruled in favor of Mr. Redrado’s position, blocking Ms. Kirchner’s decision to spend the reserves without congressional consultation. The judge also reinstated Redrado who had been fired by decree last Thursday. The Kirchner government has since then appealed the decision and so the institutional crisis continues. The Times analysis of the situation is as follows:
“The standoff between the president and her central bank has shaken Argentina’s financial markets, and opposition politicians have charged that the government is seeking to undermine the bank’s autonomy. It has also highlighted what critics call Mrs. Kirchner’s tendency to try to govern by decree, and her willingness to seize seemingly autonomous funds to try to maintain populist economic policies and increase her flagging popularity, political analysts said.”
Congress is out of session until March but VP Julio Cobos—himself no ally of his boss, Ms. Kirchner—has called for legislators to return early for an emergency session. No word back, however, if Congress will come back or not. More on the situation by Matt Moffett at the Wall Street Journal, including a quote from a recent opinion in the Argentine daily, La Nación, which describes the current situation as “a little Honduras”: a place where two individuals are claiming to be president. And Mary Anastasia O’Grady’s Monday opinion is on the matter as well, complete with more Honduras comparisons (For O’Grady, Kirchner is Zelaya and Redrado plays Micheletti her “savior of democratic institutions”).
In other news over the weekend,
· News from Honduras this weekend begins with the detentions and forced removal of numerous Honduran campesinos in Bajo Aguan. A round-up of various reports on the incident at Mercury Rising while unconfirmed Friday reports from Honduran rights group, COFADEH, say 600 families were violently removed from two farming cooperatives with 40 detained, 15 wounded, and three potential deaths. Honduras Coup 2009 highlights the Honduran government’s financial woes after new reports indicate that, without international aid, the government will be bankrupt and unable to pay of its debt just over two weeks after Pepe Lobo assumes the presidency. And while the Honduran Congress takes up the issue of amnesty today, the Washington D.C.-based Center for Economic and Policy Research has released a statement saying “the international community should offer no support for planned amnesty for the perpetrators of the Honduran coup,” calling the proposal an attempt to “whitewash the coup.”
· From Guatemala, reports that two arrest orders have been made in the killing of lawyer Rodrigo Rosenberg last year. Two brothers, both pharmaceutical executives, were ordered to be detained by a Guatemalan judge. Sources say the men are Francisco and Jose Valdez Paiz. Both are said to be abroad currently. Three suspects accused of participating in the murder say they were hired by the men who claimed Rosenberg had extorted money in connection with the sale of some vehicles.
· The New York Times reports on energy policy in Bolivia, particularly criticisms of so-called “energy nationalism.” The Inter-Press Service, meanwhile, says Evo Morales has forged an important alliance with the Bolivian middle class.
· And the Times, on-line, also has a terrific short video on the recent visit of Cuban musician Carlos Varela to Washington. The visit, sponsored by the Center for Democracy in the Americas, is part of ongoing efforts involving numerous organizations pushing for a significant change in U.S. Cuba policy.
· In the LA Times, news of a new spike drug-related violence in Tijuana, dimming hopes that gains had been made in the struggle against drug gangs in 2009. Some 14 individuals were killed last week and at least five others were kidnapped in the Mexican border city.
· Finally, in opinions this weekend, CEPR’s Mark Weisbrot argues in The Guardian that recent “media wars” in Latin America are fueled by “heavily monopolised, often politically partisan, right-wing” media groups “opposed to the progressive economic and social reforms that electorates voted for.” He writes:
“Until there is a more democratic media structure in Latin America, there will inevitably be conflicts between progressive governments and right-wing media outlets. It is of course possible that governments will abuse their regulatory authority over the media. So far, however, it has been overwhelmingly the other way around: major media outlets have abused their power and control over the means of communication in ways that undermine democracy.”
Andres Oppenheimer writes in the Miami Herald on the recent election of José Mujica in Uruguay, after chatting with members of Uruguay’s traditional parties at former president Julio Sanguinetti’s birthday party. His conclusion: Mujica will end up being part of what he calls the “responsible Left” in the region.
Alvaro Vargas Llosa has announced his support for drug decriminalization in a weekend piece in Peru’s El Comercio.
And at the Huffington Post, Collin Laverty of the Center for Democracy in the Americas, assesses Obama’s Latin America policy after one year. Again, it’s more about continuity than change.
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