Weekly Roundup: Argentina's Tax Dispute, Bolivia Gets Sea Access, and LatAm's Fuel Subsidies

Amid Dispute, Soy Tax Heads to Argentine Congress

After months of protests against new taxes on agricultural exports, a standoff between the government of Cristina Fernández de Kirchner and the country’s powerful farming sector grows increasingly tense. This week, Kirchner sent legislation supporting the soy tax to Congress for ratification. The president also responded to opponents’ demonstrations with a pro-government rally on Wednesday, causing bank closures and flight cancellations. While the roadblocks, which began in March, have hindered commercial trucking and led to food shortages in supermarkets, the tourism industry in Argentina has also suffered a steep drop in revenue and thousands of jobs in the industry are now in danger. A Houston Chronicle article covers growing pessimism about the president’s performance as well as the country’s economy, even as Argentina “is living its finest economic moment in decades.” 

Chile Allows Port Access to Bolivia

Chilean and Bolivian officials announced yesterday that the Iquique port, located in northern Chile, will grant free passage to Bolivia in a historic accord that could bring landlocked Bolivia an outlet on the Pacific. The accord also includes bilateral cooperation on information and defense issues.

LatAm Struggles between Fuel Subsidies and Inflation

At a time of high oil prices, Latin American governments try to offset fuel price increases through subsidies, putting stress on public finances, reports Richard Lapper for the Financial Times. Latin America EconoMonitor takes a look at the case of Colombia, which began eliminating subsidies in 2006, but pays state-owned Ecopetrol the difference between export and local prices. The government, as a result, has failed to benefit from rising fuel prices and while suffering from revaluation of the peso.

Runaway Inflation in Venezuela

Food prices have risen more than 47 percent in Venezuela in the last year, pushing the inflation rate up to 31.4 percent, El Universal reports. Last week, the government of President Hugo Chávez addressed concerns about inflation by reducing a financial transactions tax, but analyst say this will have limited benefits.

A new AS/COA analysis takes a closer look at inflation woes in Venezuela, as well as across the region.

Lula Praises Obama

Brazilian President Luiz Inácio Lula da Silva described the presumptive Democratic presidential candidate Barack Obama as a “revolution,” and “the biggest news in 100 years.” Lula also praised Obama for his positive approach towards Brazilian ethanol. Listen to a podcast of Lula’s interview on Gazeta Mercantil.

McCain Talks Brazil, Colombia

The presumptive Republican presidential candidate John McCain voiced support for Brazil’s entry into the UN Security Council and bashed the current administration for not adopting a sustainable energy policy. As the Latin Americanist blog reports, the McCain campaign has stepped up discussion about Latin America; the candidate plans to travel to Colombia next month, where he will likely voice support for the U.S.-Colombia free trade pact.

View a COA resource guide to the U.S.-Colomba free-trade agreement.

A Recipe to Improve U.S.-LatAm Relations

In an op-ed for the Indianapolis Star, Director of the Woodrow Wilson International Center Lee Hamilton recognizes Latin America as a strong commercial and economical ally for Washington and suggests that the United States should revamp its own domestic immigration policies, support Mexico’s fight against drug-trafficking, and approve free-trade agreements with Colombia and Panama.

Attention on Iowa Immigration Raids

In a recent analysis, the Migration Policy Institute profiles recent immigration raids at meatpacking plants in Iowa, where more than 300 undocumented immigrants were arrested and charged with federal criminal charges in May 2008. The article describes the raid as a mark of the federal government’s escalation of the fight against illegal immigration, in spite of criticism about the devastating effects on the children and families of the detainees.

Youth Employment Grows in Canada

A recent report by the Organization for Economic Co-Operation and Development (OECD) highlights the positive performance of the youth labor market in Canada. The unemployment rate decreased from 16 percent to 11 percent in 2007, helped by a flexible labor market and sustained economic growth. Lax employment legislation also encourages employers to hire young adults. However, Aboriginal youth and low achievers still have trouble finding jobs and face greater risk of being left behind, according to the OECD report

Evo Rails against EU Immigration Policy

In an op-ed for the Guardian, Bolivian President Evo Morales urges EU members to reject new immigration legislation that would punish undocumented immigrants with up to 18 months of jail time before deportation. Morales warned that, if the directive becomes law, “[W]e will not be morally able to deepen negotiations with the EU, and we reserve the right to legislate so European citizens have the same obligations for visas that Europe imposes on the Bolivians, according to the diplomatic principle of reciprocity.”

Panama City Growing Pains

A booming real estate industry, annual growth of 11 percent, and canal expansion have transformed Panama City into one of the busiest capitals in Central America. But the city’s rapid development is straining its inadequate infrastructure, according to an article in the Los Angeles Times.

At COA’s 38^th Annual Washington Conference at the Americas, Panamanian President Martín Torrijos described  the democratic process behind the Panama Canal’s expansion.

FARC’s Opportunity to Negotiate

After more than 40 years of armed struggle, the Revolutionary Armed Forces of Colombia have a new generation of leaders in power, which may open the door to negotiations and an end to the armed conflict, according to an analysis by Ana Carrigan’s analysis featured in OpenDemocracy.

U.S. Army Base in Peru?

Mercopress reports on preliminary talks between the U.S. Army and the Peruvian military to set up an air base in the Ayacucho region. The Peruvian government highlights the benefits for its 30,000 inhabitants, but local press reports have uncovered local suspicion with the proposal.

Protesters in Peru Clash with Police

Protesters in the southern city of Moquegua confronted police when they were summoned to break a roadblock at the biggest copper mine in Peru. The protesters demand a bigger share of the tax revenue collected by the government.

PR for Sugarcane Ethanol

At a time of rising concern about Amazonian deforestation, Brazil’s ethanol lobbying firm Unica organized a field trip with reporters in an effort to improve the perception of the industry across the Atlantic. The Wall Street Journal’s Environmental Capital blog takes a look at the public relations efforts to quell the fears of European officials that Brazilian ethanol damages the Amazon.

Uruguayan Lands in Foreign Hands

Chávez Profiled

The New Yorker’s Jon Lee Anderson joined Venezuelan President Hugo Chávez in several trips around the hemisphere at the time of the Andean crisis. He chronicles Chávez’s journeys from Caracas to Santo Domingo to Havana, in this intimate profile of the controversial leader

Latin America’s Agricultural Conundrum

World Bank’s Vice President for Latin America and the Caribbean Pamela Cox talks about the paradox faced across the region at a time of rising food prices; while Latin American countries command enormous potential to sell their agricultural products now that food prices have skyrocketed, some Central American nations that have been harmed by the crisis because of a lack of land and technology.

Read an AS/COA hemispheric update on the regional food supply crisis.