Tuesday, February 5, 2013

IMF Chastises Argentina Over Economic Data

On Friday, the board of the International Monetary Fund (IMF) voted to censure Argentina over its lack of transparent statistics on inflation and economic growth. The IMF’ s move was historic, making Argentina the first-ever nation to be censured by the international organization over its economic data.  And as many in the media have reported (Bloomberg, AP, Reuters), it puts Argentina on the path towards having its voting rights revoked or even losing its IMF membership.

But, as noted in January 18th’s post, this is unlikely. Being booted out of the IMF would take a toll on the country’s already-limited access to foreign capital, and there are signs that the Argentine government is working with fund officials to avoid this.

While President Cristina Fernandez blasted the IMF for the decision, saying the organization had lost credibility and was favoring policies prone to inducing economic crises, Economics Minister Hernan Lorenzino announced that the country would begin using a new inflation index. According to Lorenzino, the new index would be implemented in the fourth quarter of 2013, which is just before the September 28th deadline the IMF gave Argentina to take “remedial measures” to increase the accuracy of its data.

“Argentina, just as it agreed with the IMF to do, will keep working to improve its statistical procedures in accordance with good international standards,” Lorenzino told reporters at a press conference on Saturday.

In the meantime, Argentina continues to implement unorthodox policies to combat rising inflation. On Monday, the government announced a two-month price freeze on supermarket goods. According to the AP, this “applies to every product in all of the nation's largest supermarkets,” including large chains like Walmart, Carrefour and Jumbo.

The AP also claims that the government’s attempts to limit a major union pay rise to 20 percent (twice the official figure of 10 percent annual inflation), demonstrates “how little anyone believes the official index.” Independent analysts say inflation is closer to 25 percent, and the prices in a basic food basket that the government bases its inflation figures on have been proven to be unrealistically low.


News Briefs
  • Mexican Attorney General Jesus Murillo Karam announced yesterday that the explosion at PEMEX’s human resources building in Mexico City last Thursday was apparently caused by an accumulation of flammable gas in the basement. Animal Politico and the New York Times report that Murillo said investigators found no indicators that the blast could have been caused by an explosive device.
  • Reforma reports that the Mexican Senate’s Anti-Corruption Commission is expected to present the lower house of Congress with a bill today requesting that all the commissioners of the country’s highly-regarded public transparency agency, the Institute of Access to Information and Protection of Data (IFAI), be dismissed. While the agency has been accused of misusing funds, the move would pave the way for President Peña Nieto to name all seven new commissioners, which many in the country feel puts the IFAI’s independence is in jeopardy. UNAM researcher Pedro Salazar Ugarte has a thorough overview of the controversy in an op-ed for El Universal
  • The NYT has an investigative report which offers an in-depth look at the United States influence on Mexico’s security policy, detailing the back channels U.S. officials used to ensure that a general perceived as corrupt was not given control over the Mexican military. Before the U.S. presented reports that General Moises Garcia Ochoa had links to drug traffickers, he was widely believed to be next in line to become Minister of Defense.
  • The government of the Mexican state of Guerrero, where a large grassroots self-defense group known as the Union of Peoples and Organizations of the State of Guerrero (UPOEG) has detained some 50 people suspected of drug trafficking links since January, has created a commission tasked with hearing the demands of the group, El Universal reports.
  • Spain’s El Pais offers an interesting look at the byzantine side of Argentine politics, with an overview of the conflict brewing between Buenos Aires Governor Daniel Scioli and President Cristina Fernandez. While Scioli is a member of the president’s coalition, his popularity and willingness to challenge the party line have made him one of Fernandez’s biggest rivals.
  • Colombia’s second largest rebel group, the National Liberation Army (ELN), announced yesterday that it has kidnapped two German citizens in the north of Colombia, a development which is sure to complicate their efforts at gaining a seat at the negotiating table in Havana. The group is also believed to be holding six other civilians hostage.  Juan Manuel Santos in turn told reporters that the government “knows exactly where they are,” and called on the rebels to release them in order to avoid an armed rescue operation.
  • In an interview with La Tercera over the weekend, Chilean President Sebastian Piñera said that he would be willing to resolve his country’s century-border dispute by granting landlocked Bolivia maritime access via an autonomous enclave in the northern region of Arica. Bolivian President Evo Morales has expressed interest in the idea, and has requested a solid proposal from his Chilean counterpart. However, the territory is currently being contested by Peru in a case before the International Court of Justice, and Piñera cautioned that the offer might “lose validity” if the Court were to rule in Peru’s favor.
  • Two people were killed and five injured yesterday in a stabbing at a rally for Ecuadoran President Rafael Correa, who is running for another term in office in the upcoming February 17th elections. El Comercio reports that his campaign has been temporarily suspended in the wake of the incident.
  • The AP reports that the Venezuelan opposition is demanding answers from the government over why Iran's former central bank chief, Tahmasb Mazaheri, was detained by German customs officials over the weekend after trying to enter the European country with a check for 300 million Venezuelan bolivares. Mazaheri says the funds were part of a public housing grant given by the Venezuelan government to Iran, but opposition figures are accusing the government of facilitating money laundering.
  • Honduras Culture and Politics has the latest on the Honduran Congress’ attempts to weaken the judiciary in the country.  The blog highlights controversial legislation that lawmakers have passed recently, including a bill that effectively deprives citizens of the right to appeal the constitutionality of a law.
  • The Atlantic profiles the work of Venezuelan photojournalist Leo Ramirez, who has documented an emerging form of protest against inhumane prison conditions in the country: inmates sewing their mouths shut.
  • In a powerful op-ed for the New York Times, Kirsten Weld asks if former Guatemalan dictator Rios Montt will face punishment in proportion with his crimes, noting that his old age and political influence means that he will most likely be sentenced to house arrest if he is successfully convicted of genocide and crimes against humanity.