October 1, 2009        www.LatinEPR.com 

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LATIN AMERICA - NEWS BRIEFS

 

Media

 

Peru Recycles Computers

 

At least 85% of computers imported to Peru are reused, according to a recent study tracking computer recycling from the American Chemical Society, the Environmental Science and Technology Journal has reported.  The dismantling and recycling of computer components within developing nations is a strong concern for environmentalists, who fear that e-waste is dumped there as unusable junk or that it is improperly recycled, polluting the environment with toxic metals.  But this study, the most comprehensive ever done on the topic – challenges this notion.  Ramzy Kahhat, one of the leading researchers of this study, focused on his native Peru as the model, using a Peruvian government database that tracks importation of new and used computing equipment.  As it turns out, at least 85% of computers get a second life, being reused rather than directly recycled.  The US accounted for 76% of these used computers, sent to Peru from 2003-2007.  Researchers noted that they were uncertain whether the same held true for much larger countries like India and China.

 

Tourism

 

LatAm Airlines Beat Losses to Break Even in 2009

 

This past month, the International Air Transport Association forecasted that Latin American airlines, in contrast to those of other regions, would break even in 2009, while the industry as a global whole was projected to lose $11 billion (Associated Press).  According to the IATA, Latin American carriers will benefit from stronger economies and less consumer debt than North American counterparts, which are likely to lose almost double as much as previously anticipated ($2.6 billion instead of $1 billion).  European carriers seem the most hard-hit, expected to lose up to $3.8 billion. The IATA forecast for Latin America comes as promising news after the organization earlier projected a loss of $900 million in the region.  Latin America is also proving a boost for US carriers – American Airlines’ parent company AMR recently raised nearly $3 billion in cash and fresh financing to inject into its Miami hub, where continuous growth for the airline, primarily due to traffic to and from Latin America, is prompting the addition of 40 new departures next year.  According to figures quoted by the AP, American’s Latin American flights through Miami have outperformed the carrier’s other international routes during the recession.  American also accounts for 71% of MIA’s flights.

 

Brazil Hotels Get 3 Billion Investment

 

The Brazilian hotel industry is projected to receive an investment volume of between $3 billion and $3.2 billion over the next two years, the Tourism Ministry announced at the 2nd South American Hotel & Tourism Investment Converence this month in Rio de Janeiro (ANBA).  Laercio de Souza, a Ministry representative, informed that an increase in the country’s GDP in the second quarter – 1.9% up from the first quarter – had prompted the optimistic outlook.  It seems the hotel industry was already in a prime position for recovery, as higher rates driven by domestic tourists during the recent economic downturn had made up for a drop in foreign visitor numbers.  The Accor group also announced at the conference that the company was currently investing in 15 new projects in Brazil.  On the whole, of the total investment in the Brazilian hotel industry, 50% originates within Brazil itself.  No doubt, a good part of this surge is owed to the fact that Brazil is hosting the 2014 FIFA World Cup - currently investing billions in its infrastructure – and bidding for the 2016 Summer Olympics, which they did successfully as of this week.  According to World Cup organizers, visitors to Brazil could spend upwards of $3.6 billion during the month-long tournament. 

 

Buenos Aires Cruise Season Optimistic

 

The Buenos Aires Port is expecting 143 calls in the upcoming 2009/2010 cruise season, set to begin November 11, according to a recent report by MercoPress.  The latest estimates represent a significant jump from last year, which saw only 122 all last year.  Officials are also encouraged by the increase in Argentine cruise tourists, projected to total 75,000, compared to 50,000 in the 2008/09 season.  The domestic market is drawn to Brazil and the beaches, while foreign cruise tourists target destinations such as Patagonia, the Chilean Fjords, and Antarctica.  In fact, the first arrival to open the season will be the Antarctica-bound Hanseatic, from the German line Hapag-Lloyd.

 

Economy and Politics

 

Special Report:

 

The Latin American Arms Race – Brazil Joins In, Peru Speaks Out

 

“Arms race” is an alarming term which has flashed in the headlines of many articles reporting on recent military developments in Latin America.  For a region that has been relatively peaceful for decades – if not within individual countries, then at least along international borders – the trend being observed by media outlets of increasingly larger arms purchases over the last six months is unusual and worrying.  The question is: what has this region suddenly rattled and where is all this headed?

 

Looking back, 2009 began on the military front as a tentative year for Latin America.  Venezuela and Colombia relations were on fragile footing after a 2008 summer of successful and not so successful FARC-related hostage crises.  Last November President Dmitry Medvedev of Russia – having emerged as a major arms supplier to the region over the past decade - followed at China’s heels by conducting the first Latin American tour of his tenure, with the object of further developing cooperation in military defense, among others.  Shifting policies in Cuba incited renewed calls for an end to the US embargo, and while Russia tested Havana’s climate and conducted maritime exercises in the Caribbean, the rest of Latin America waited expectantly to see how they figured into the plans of a brand new Washington administration.

 

Nine months out, the military exercises which seemed to some commentators a simple taste for nostalgia have now become, according to others, part of a Cold War Era-style stand-off with US/Russian interests heightening tensions between Colombia and Venezuela.  Readers will recall the controversial military agreement two months ago, which granted the US access to Colombian base camps for anti-drug operations, and in turn saw Venezuela react with a $2 billion arms purchase from Russia.  This was only accentuated by Venezuela’s implicated involvement in arming Colombian rebels with Swedish tanks purchased in the 1980s.  However, the Colombian-Venezuelan tensions cannot be accused of sparking other military purchases – rather they have brought acute attention to those that have been ongoing in the region since the end of last year.  A main player - growing powerhouse, Brazil. 

 

Brazil is currently finalizing an arms deal with France for submarines (some nuclear) and helicopters, which was created in December and could still include $7 billion in fighter jets from French defense company Rafale.  Now Brazilian Vice-President Jose Alencar has gone so far as publicly advocating his country’s possession of nuclear weapons, claiming they would detract aggressors and increase respectability (Mercopress).  Exactly where this perceived aggression might originate from Alencar does not specify.  As it stands, it isn’t easy to tell if political muscle flexing isn’t a little more of a true motivator behind acquiring such arms than actual security. Or how successfully Brazilian President Lula da Silva’s recent statements of Brazil as a peaceful nation downplayed the bellicose image all this spending - $4 billion more since 2008 - is creating, considering he appended the same statement with continued calls for protection.  Generously, however, Brazil does recognize the need of protection for its neighbors as much as for itself – according to AP, the country helped finance Venezuela’s recent $2 billion arms purchase. 

 

And it is exactly that move which serves to raise another question: does all this spending have any specific political target or is it a fashionable trend?  After all, it seems everyone is doing it. From dependable Chile, which according to the Miami Herald, recently bought 18 combat aircraft from the US and is in discussion to purchase additional long-range radars and cannons, to Bolivia, the region’s poorest country, which recently established a $100 million arms spending credit with Russia.  And even US President Obama is personally joining in the fray by lately courting Lula da Silva, so that the Brazilian leader might consider Boeing for his fighter jet purchase, instead of French and Swedish companies (Huffington Post).  All in all, total defense spending across Latin America and the Caribbean, according to the International Institute for Strategic Studies in London, has grown by 91% over the past five years.  These are incredible figures when one considers how much of this growth occurred during times of severe economic crisis, which forced many of the region’s underprivileged to slip into extreme poverty.

 

Precisely this is the social factor which has one lone Latin American voice ringing out in outraged protest.  Speaking at the 20th Pan American Child Congress, Peruvian President Alan Garcia urged the OAS this past week to call on governments to halt military spending sprees, insisting that they are directly affecting the welfare of poor children.  In fact, Garcia went so far as to call the arms deals an “absurdity” and even more pointedly, the “Herod of our times” (Xinhua), referring to the Biblical king who ordered the massacre of innocent children.  Earlier this past month, President Garcia also proposed a regional non-aggression pact, supported by 77% of the Peruvian people.  Chile, treating the proposal as a threat to its ongoing maritime dispute with Peru, currently in international arbitration, was quick to reject the pact.  Time will tell if President Gracia’s pact will find other supporters or fall on deaf ears.

 

As it stands, cash reserves left over from Latin America’s five year-long economic boom might still drive up the purchases.  According to some analysts, these reserves are the source of all this spending - free cash must be spent, and allocating funds for military spending is much quicker and straight-forwards than funding long-term social and infrastructure projects.  But many experts naturally fear the repercussions.  Governments like Venezuela can easily impress the importance of such purchases to distract from domestic woes.  And where is the ceiling of all this spending? Or the hope for transparency till then? 

 

One thing is for sure – whatever the benefits in security this surge in military spending is ostensibly providing – the region’s 200 million poor probably don’t feel any safer.  Stay tuned…

 

On a side note, this past month, Peru was astonished by reports that the Honduran coup regime police had used tear gas grenades from the Peruvian National Police – the government immediately launched an investigation, which concluded that the grenades were surplus grenades bought by the Honduran police through a Pennsylvania company, from whom the Peruvian National Police had once ordered products before canceling their contract in 2007.

 

South America Creates Bank Alternative to IMF

 

The leaders of seven South American nations signed an agreement this month to officially create the Bank of the South, a development bank expected to serve the region as an alternative to the IMF and the World Bank, the Associated Press has reported.  The starting capital will be $20 billion, although it is unclear exactly how much each country would contribute.  According to an announcement in May, when the initial start-up figure still stood at $7 billion, Argentina, Brazil, and Venezuela had pledged to contribute the bulk of the funds, with $2 billion each.  

 

Interestingly, the pact to form the Bank of the South was signed just as the G20 decided, during a recent meeting in Pittsburg, to shift the IMF voting structure to include more emerging nations.  The decision to increase voting power did not pass without stiff opposition from European G20 nations, however, proving that many involved in the IMF and the World Bank are not entirely prepared to embrace emerging nations.  Until that happens and emerging nations genuinely feel that institutions are acting in their best interest, explains an analyst for HIS Global Insight, breakaway projects like the Bank of the South will continue to arise.  Indeed, Hugo Chavez, who first proposed the developing bank project some ten years ago as a way of countering US influence, offered at the recent Africa-South America Summit in Venezuela to help create a joint “South-South Bank” to fund projects between the two regions. 

 

General Interest

 

Decriminalizing Drugs in Latin America

 

This past month, Mexico passed a controversial law that decriminalizes the possession of small amounts of drugs like marijuana, cocaine, and heroin, the New York Times reports.  The law, which was rejected in 2006, on account of US pressure, is designed to cut down on police corruption and shift the law enforcement focus away from users and on to bigger drug dealers and cartels.  But many anti-drug advocates in the US fear the effects of this new law on the ongoing drug war and have gone so far as to project the beginning of “drug tourism”.  Dr. Tony Payan, writing for the New York Times, does not expect the law to have an impact on drug violence, which he claims is created by the criminal element of the cartels and not the users. 

 

Following suit, Argentina this month also paved the way for decriminalization, with a federal court decision that ruled the 2006 arrest of five youths for possession of marijuana cigarettes as unconstitutional.  Brazil acted similarly in 2006, when it eliminated prison sentences for user in favor of community service.  Colombia decriminalized possession in the 1990s.  Earlier this year, a commission led by academics, journalists and former leaders from Colombia, Brazil, and Mexico went so far as to condemn the US “War on Drugs” a failure, as drug violence persists and drug use has not declined.  Instead it urged policies in line with European nations like the Netherlands, Switzerland, and Germany, where the emphasis is on treatment rather than incarceration.  For Latin America, where prisons are overcrowded and serve to introduce the young and the poor to organized crime, this may turn out to be a reasonable argument.

 

 

Uruguay Redefine Adoption Law for the 21st Century

 

In an unprecedented move for Latin America, Uruguay became the first country to allow gay and lesbian couples to adopt children (AFP).  Despite facing strong opposition from Catholic Church officials, the law was backed by President Tabare Vazquez, the first leftist leader in the country’s history.  Uruguay already allows gay and lesbian civil unions and opened access for homosexuals to military schools in may.  In fact, the country, heavily influenced by European immigration in the early 20th century, has a history of civil rights advances, which include being the first in South America to allow divorce in 1907, and give women the right to vote in 1932.  Abortion, however, remains as in most of the continent, illegal.