Friday, January 18, 2013

IMF Moves Closer to Sanctioning Argentina Over Economics Data

The International Monetary Fund is moving closer to censuring Argentina for its inaccurate economic statistics, which could take a major toll on economic growth in the country. On Thursday, IMF Director Christine Lagarde said that the body would hold a board meeting on February 1st to decide whether to sanction Argentina, potentially revoking its voting rights or even its IMF membership.
 

It may not get that far, however, as there are indications that Argentina cooperating with the IMF despite the tension. The AFP reports that in the same press conference, Lagarde said that the IMF had a team of experts in Argentina working on an assessment of the country’s financial sector with the permission of authorities.

In the past Argentine President Cristina Fernandez has dismissed the IMF’s threats, denying that official statistics on inflation are artificially low and portraying the conflict as an attack on Argentina’s sovereignty. The government’s statistics agency puts inflation at around 10 percent, although independent analysts say that the annual rise in prices is closer to 25 percent.
 

The Associated Press has an interesting analysis of the prices of goods in a basic food basket that the agency partially bases its inflation figures on, noting that it is all but impossible to live on the 6 pesos (US $1.20) a day that the government says is the minimum an individual needs to survive. As the AP points out, a single can of soda costs at least 8 pesos in Buenos Aires. Yet despite complaints from consumers about rising prices of basic food staples, the logic behind the government’s methodology has yet to be fully revealed.


News Briefs

  • The New York Times reports on a conflict brewing in Venezuela over the executive order naming former Vice President Elias Jaua as the new foreign minister. While it bears President Hugo Chavez’s signature, the opposition is seizing upon the fact that the decree also says it was submitted in Caracas, which suggests that the president (who is still being treated in Havana) did not actually sign it. Of course, if the order had been explicitly listed as promulgated in Havana, it may have caused even more uproar among the anti-Chavez camp, which is accusing the administration of running the country from Cuba. Meanwhile, the AP analyzes the role that the armed forces may play in a future power transition in Venezuela.
  • Panama's ambassador to the Organization of American States (OAS), Guillermo Cochez, said yesterday that the government of Ricardo Martinelli had fired him in response to unauthorized statements he made before the OAS about the political situation in Venezuela, according to La Estrella. The ambassador sparked a minor conflict on Wednesday when he criticized the OAS’s silence on Chavez’s delayed inauguration. Despite being relieved of his duty, Cochez told reporters that he does not regret his remarks.
  • InSight Crime features a piece by Mexican security analyst Alejandro Hope, who argues that although President Enrique Peña Nieto has cast his security policies as a break from those of his predecessor’s, much of what he has enacted lately differs little from ex-president Felipe Calderon’s security strategy. And if the high-profile violence like the current wave of killings in the Mexico City area continues, Peña Nieto may find that the high expectations he gave the Mexican public will end up hurting him.
  • The LA Times World News Now blog highlights a recent public speaking gaffe committed by Peña Nieto, which his critics have held up as proof that he is not intellectually suited for the job. In a speech this week at the presidential palace, the president rather comically referred to Mexico’s Federal Institute of Access to Information and Data Protection as the “Institute for Information and of Access to … of Information, and of Access to Public Opinion, of all the Information Available for the Citizenry from the Government.” Video clips of the incident have been taken down on YouTube and other video hosting platforms, prompting some to accuse the government of censorship.
  • The AP reports that the United States is beefing up a training program for Mexican anti-drug agents which will be run out of US Northern Command in Colorado. The program will be based on counterinsurgency tactics, and will be overseen by a US army general. This announcement fits with President Enrique Peña Nieto’s stated desire to create a paramilitary police force specially designed to take on drug cartels in dangerous areas. 
  • Even as Bolivia celebrates its recent victory in securing UN recognition of the legality of traditional coca leaf consumption in the country, La Razon reports that President Evo Morales has vowed to intensify eradication of unlicensed, illicit coca crops.
  • Colombian President Juan Manuel Santos has announced that he will spearhead an international campaign in the United Nations to call for increased gun control and measures to limit arms trafficking, El Tiempo reports. The president says he will begin his push by seeking consensus among Latin American countries in the upcoming Community of Latin American and Caribbean States (CELAC) Summit in Chile on January 26th-27th.
  • Colombia’s El Mal Pensante magazine looks to the legacy of peace talks with guerrillas in El Salvador and Guatemala for lessons on what works and what the government should avoid in its negotiations with FARC rebels.
  • The Guardian profiles the conflict between the indigenous residents of Ecuador’s Sani Isla in and the state-run oil company, Petroamazonas. While the Kichwa tribe has been assembling an arsenal of guns, machetes and blowpipes to defend their land from the oil company’s incursion, Petroamazonas has postponed oil exploration in the area for unclear reasons.
  • This week’s issue of the Economist includes an overview of Bolivia’s nationalized utilities services, which have seen mixed success since being taken over by the state, Brazil’s slowing GDP growth and the difficulties that Argentina is facing after nationalizing gas and oil firm YPF.