• A version of this post ran on the author's blog, bloggingsbyboz.com. The views expressed are the author's own.
There are three reasons to remove Cuba from the list. The first two are talked about most: 1) Cuba doesn't fit the definition of a state sponsor of terrorism; 2) Removing Cuba from the list may be a step towards improving relations and accomplishing other US foreign policy objectives.
The third reason is just as important: Removing Cuba restores some credibility to the state-sponsors of terrorism list and US counter-terrorism policy.
It is hard for the US to credibly argue about which groups and countries should be sanctioned for supporting terrorism when we keep a country like Cuba on a terrorism list for politics unrelated to real counter-terrorism issues. The rest of the world takes US counter-terrorism policy less seriously because Cuba's inclusion shows the US plays politics with its own terrorism designations. Parts of the hemisphere take US warnings about Iranian influence less seriously because the US places Iran and Cuba on the same level when it comes to counter-terrorism issues. Having a misguided Cuba policy in the mix with those debates undermines the US position on issues related to Hezbollah, Iran, and Syria.
Keeping Cuba on the state sponsors of terrorism list harms US national security by distracting attention and resources from real threats and harming US credibility on counter-terrorism cooperation. Taking Cuba off the list isn't just the right and smart thing to do for US-Cuba policy; removing Cuba will contribute to better focused counter-terrorism efforts in the hemisphere and globally.
-- James Bosworth is a freelance writer and consultant who runs Bloggings by Boz.
• A version of this post ran on the author's blog, riorealblog.com. The views expressed are the author's own.
City officials usually announce the number of revelers just after Ash Wednesday, but [there were no results announced until Feb. 19]. A mere 900,000 tourists (up from 850,000 in 2012) were expected, 70,000 of whom were to arrive on cruise ships.
There were more military police, traffic coordinators and municipal guards in the streets, more porta-potties, and more trash receptacles than ever before. The city also, for the first time, put up protective fencing around monuments and decorative plantings on median strips.
Most of such organizing this year, including sponsorship negotiations, was carried out by Dream Factory, an events company that will also set up the Pope’s visit and accompanying activities this coming July. Dream Factory is run by Roberta Medina, daughter of the adman who invented the Rock in Rio festival, back in the 1980s. Two years ago, Dream Factory partnered with the Lausanne-based TSE international sports consultancy outfit.
Dream Factory seems to have thought of just about everything. But Brasília’s unplanned satellite cities came to mind, as dozens of poor families moved temporarily to the South Zone to supply the revelers, sleeping in tents or on cardboard on the beach, median strips, and city sidewalks. A municipal guard told RioRealblog that the city social development secretariat, responsible for those living on the street, wasn’t working during carnival– though O Dia newspaper reported that 93 people were in fact picked up.
The Rio metro, a state concession, ran 24 hours a day instead of closing at midnight, but was unable to handle peak traffic, shutting down station entrances and reportedly removing fire extinguishers from trains to prevent vandalism. Riding a bus any day in Rio is a percussive experience, but this can be terrifying during Carnival, with chanting costumed drunks beating on the bus body, jumping turnstiles, and threatening passengers.
And Comlurb, the city sanitation company, admitted that it sorely underestimated what people decided to discard – and thus, the number of needed trash collectors, which came to 1,070 men and women.
Urban sanitation was mentioned as a negative aspect of the Rio Carnival experience by one out of four tourists, in a survey of 1,200 carried out by the Consultoria em Turismo e Fundação Cesgranrio. Other complaints included hotel rates (38 percent) and taxis (18 percent). Notably, 75 percent of those interviewed were here for the first time. They were kept company by Kim Kardashian, Kanye West, and Will Smith; Harrison Ford and family showed up last weekend for the parade of champions and a visit to a pacified favela.
Rio enjoys a certain elasticity. Tourists grapple with ATM machines, are shocked by how few people speak English, get ripped off by taxi drivers, suffer abominable restaurant service, and cell phone hardships – and immediately make plans to move here. Actors Monica Bellucci and Vincent Cassel are just two of the most recent arrivals.
Meanwhile, longtime residents of areas where the blocos parade find little consolation in rubbing shoulders with the fancy newcomers, or in the news that police arrested more than 800 mijões, or pee-ers. For them, even one mijão is one too stinking many.
Informal recyclers – some of whom are the people who stay overnight on the beach – quickly pick up the aluminum cans and smash them for selling. But – note to Ambev – that still leaves the plastic wrapping and the cans .... plus all kinds of other trash.
By last Thursday, this totaled 400 tons. Multiply by three, and you get the weight of Rio’s Christ Redeemer statue. Another 170 tons were collected in the weekend prior to Carnival, and more is sure to have piled up last weekend, also part of the bloco calendar, when the Carnival parade of champions took place.
In the case of the estimated 500 bloco parades in different parts of the city every day of Carnival 2013, almost 30 percent more trash was collected than last year, when about five million people reveled in Rio (up from a mere 1.2 million in 2011). If per capita trash production remained the same from 2012, that means 6.5 million were thankful it didn’t rain last week – though a nice shower might have mitigated the heat – and the stench.
The cans are mostly beer empties, from the Ambev conglomerate that sponsored Rio’s street Carnival (and just bought Heinz, together with Warren Buffet)....
Trash cans on wheels, next year
The city says the street carnival sponsorship mechanism, which this year brought in $7.5 million, helps to pay for porta-potties and traffic coordinators, plus vendor licensing and uniforms. Riotur president Antonio Pedro Figueira de Mello says the city “saved” this amount, by having Ambev and other companies chip in.
But what they don’t seem to realize is that the more beer you sell, the more bathrooms you need, so the sponsorships can actually be said to add to the city’s costs. And these are likely to rise every year, as more and more people discover the city’s charms – as long as that elasticity keeps on stretching.
• A version of this post ran on the author's blog, centralamericanpolitics.blogspot.com. The views expressed are the author's own.
Guatemala's National Civil Police graduated 1,617 new agents last Friday. That brings the PNC's total to 25,383, almost 2,000 more than the country counted when Otto Perez Molina took office in January 2012. Perez wants to end 2013 with at least 30,000 officers and, from what I remember, wanted to increase the police by 10,000 during his four year term (33,500).
That's going to be tough especially if you actually want qualified people to fill the positions and the force continues to remove corrupt elements from its ranks. President Alvaro Colom added 6k or so officers during his four-year term but several thousand were also removed for corruption and other crimes during that time so it wasn't a net of 6k. We've had several arrests of police officers during Perez Molina's first year but no large-scale dismissals.
We often say that Guatemala needs more police and better-trained police. I still believe that's true.
Guatemala's police per capita of ~170 per 100,000, though, is still well below the UN recommendation of at least 222 per 100,000. The country will reach the recommended number, more or less, if they can get above 33,500 in 2015. It's not as if more police is a magic cure but I think that most of us would prefer police policing the streets rather than the military.
Approximately, 25 percent of this weekend's graduates (325) were women.
– Mike Allison is an associate professor in the Political Science Department and a member of the Latin American and Women's Studies Department at the University of Scranton in Pennsylvania. You can follow his Central American Politics blog here.
Red-letter weekend for Latin America's left as Correa wins reelection and Chávez returns home (+video)
The photos illustrating the biggest news in Latin America this weekend could not have differed more. One was of a vigorous and victorious Rafael Correa in Ecuador, winning a third term in office Sunday; the other was of Hugo Chávez, Venezuela’s ailing president, smiling but, weeks after surgery for cancer, still lying in a hospital bed.
As Latin America moves into 2013, with Mr. Chávez’s full recovery still an unknown, many have questioned who will take over the leftist helm in the region if Chávez indeed must step down. And while not nearly as endowed with natural resources as Venezuela’s Chávez, Mr. Correa’s name is always on the shortlist. His clear, third-term victory Sunday positions him even more for the job.
But, as if an indirect message to Correa, Chávez might not be ready for a handover: Just as Correa was enjoying the global spotlight, Chávez took it back. In a surprise move, he returned in the middle of the night back to Venezuela from Cuba where he’s been convalescing, unseen and unheard from for weeks.
“We have arrived back in the Venezuelan fatherland. Thanks, my God! Thanks, my beloved people! Here we will continue the treatment," Chávez said on his Twitter account.
Correa the 'next Chávez?'
Correa won nearly 60 percent of the vote on Sunday, avoiding a runoff and making clear that no Ecuadorean leader can compete with the charismatic, former economist who was trained in the United States but has maintained a cold distance with the nation of his alma mater.
But he’s also emerging as a can't-beat leader of Latin America’s left, with a flair for the rhetoric that has resonated across the world's most unequal region. His win Sunday, he said in a victory speech, will deepen the "citizens' revolution,” a reference to the empowerment that left-leaning leaders have sought for the region’s poor, much of it via social programs funded by natural resources. “In this revolution the citizens are in charge, not capital," he said.
In a recent story by The Christian Science Monitor questioning who was poised to lead the left if Chávez steps down, Martín Alalu, a political analyst at the University of Buenos Aires, said he believed Correa was Chávez’s natural successor.
“He has Chávez's antagonistic, anti-American discourse, oil reserves, and a leadership style that promotes a plebiscitary democracy," Mr. Alalu told the Monitor's reporter in Buenos Aires, referring to the 2008 vote to reform Ecuador's Constitution.
And that regional leadership position is something that many agree Correa seeks. "Correa aspires to be that next mythical figure [of the left]," said Colette Capriles, a political analyst at the Simón Bolívar University in Caracas, in January.
But it might not be an attainable goal for now, and not just because of more limited resources. As long as Chávez is alive and in power, few if any can or would usurp his long-forged role as Latin America’s leftist voice.
On Sunday, just before dawn, euphoria spread across Caracas. Reuters reports that fireworks were set off and that government ministers celebrated on live television. “He’s back, he’s back,” one said of Chávez's return.
And Chávez joined in to celebrate. "I remain attached to Christ and trusting in my nurses and doctors," Chávez tweeted. "Onwards to victory forever! We will live and we will conquer!"
• David Smilde is the moderator of WOLA's blog: Venezuelan Politics and Human Rights. Rebecca Hanson is a contributor. The views expressed are the authors's own.
Moderator’s note: Over the coming weeks WOLA will be running a series of posts examining the different elements of the Chávez government’s efforts at citizen security reform.
Since 2009 the Chávez government has carried forward a comprehensive police reform that has created a new National Bolivarian Police (Policía Nacional Bolivariana, PNB), a new police university, and a new General Police Council (Consejo General de Policía, CGP) that oversees the reform’s implementation.
A sustained look at the Venezuelan police system began in 2006, after a high-profile kidnapping case that involved both active and retired officers from the former Metropolitan Police and ended in the death of three boys from a wealthy Caraqueño family as well as their chauffeur. The Ministry of Justice responded to calls for the elimination of the Metropolitan Police—calls that were by no means new—by organizing The National Commission for Police Reform (CONAREPOL).
The commission consisted of representatives from federal, state, and municipal governments across the political spectrum; a number of Venezuelan universities; and multiple civil society groups. Their final report was based on an impressive collection of data including a national consultation with around 57,000 citizens, over 1,500 police officers and directors, and a review of the institutional structure and budgets of numerous municipal and state police forces.
The CONAREPOL was killed in 2007 by newly named Minister of Interior and Justice Pedro Carreño as “right-wing” and its recommendations dismissed. However the effort at reform was revived in 2008 when Ramón Rodríguez Chacín replaced Mr. Carreño. Though not all of the commission’s recommendations were taken into account, the report produced by the commission informed the writing of both the 2008 Organic Law of the Police Service and of the National Police Body and the 2009 Statute of Police Functions (Ley del Estatuto de la Funcion Policial). The 2008 law created the National Police and was the first in Venezuelan history to provide uniform nationwide norms, rules, and regulations for police functions, services, control mechanisms, and supervision.
The 2009 Statute created new instances of internal and external supervision of the police, which the CONAREPOL consultation had found to be severely lacking. While institutions like the Office of the Ombudsman (Defensoria del Pueblo) previously existed, the law created internal supervision bodies, such as the office of Supervision of Police Conduct (Oficinas de Control de Actuación Policial) and Response to Police Misconduct (Respuesta a las Desviaciones Policiales), which receive denunciations and implement strategies to prevent police misconduct. Police forces are now also required by law to give a public accounting (rendicion de cuentas) to communities within the first 60 days of each year and the PNB’s community police services are required to hold public accounting meetings at least three times a year.
The General Police Council, also created by the 2008 law and headed up by a mix of human rights activists and government and police representatives, is charged with implementing CONAREPOL’s recommendations and standardizing the ranks, uniforms, and training of all police forces in the country. In 2009 the CGP formally disbanded the Metropolitan Police, though it took until 2011 for them to be fully phased out. In 2009 the CGP created the National Police, which began pilot policing projects in metropolitan Caracas that year and has been expanding into new areas of the city for the past three years. The PNB currently has 14,478 officers and has spread to 8 states, with officers largely assigned to “prioritized” areas, or areas with high rates of crime. The CGP also raised and set uniform salaries for all police officers (salaries were doubled, with base pay moving from around $350 - $420 a month to around $745.) and standardized police ranks across municipal, state, and the (new) national police force.
As part of its efforts, the CGP produced a uniform set of training guides for officers that are available to the public online and cover topics like community policing, patrols and surveillance, and police equipment. The Council has also organized a number of media campaigns encouraging citizens to denounce police corruption, like the “Keep an Eye on Your Police” (Métele el Ojo a Tu Policia) campaign that relied on newspaper and television ads as well as youtube videos to encourage denunciations. Finally, the CGP has pushed for the organization of citizen oversight committees that were legislated in the 2009 Statute of Police Functions and are intended to provide external supervision over the police (see below).
In 2011, the police reform advanced with the creation of the Citizen Police Oversight Committees (Comites Ciudadanos de Control Policial, CCCPs). By the summer of 2012, 44 committees had been formed to monitor the PNB, while 22 committees monitored state police forces, and 21 oversaw municipal police forces. By the end of last year elections had been held to form 25 more groups, which are currently undergoing their “process of formation” (workshops and presentations that teach committee members about the reform, police protocol, and their role) before they actually begin performing their oversight functions.
The goal of the CGP is to have a CCCP attached to each municipal and state police force as well as operating in each federal entity where the PNB is deployed. The CCCPs are meant to oversee police functions, operations, administration, and resources. In meetings, this has translated into committee members discussing police officers’ failure to comply with laws and procedures; how to ensure that patrols are being deployed in high crime areas (compared to the often sporadic nature of patrolling in the country as individual officers, left unsupervised, are often allowed to decide where and when to patrol); and how to improve officers’ access to adequate resources and equipment.
In our next post we will look at one of the key pillars of the police reform: the new police university.
There appears to have been a security miracle in Ciudad Juarez, once one of the world's most violent cities. But while some applaud the city’s police chief, Julian Leyzaola, others fret about his near-systematic violation of human rights.
Leyzaola’s arrival in March 2011 coincided with a dramatic drop in crime and homicide levels; the homicide rate is now one-fifth of what it was in that month. In November, the city had 27 murders, its lowest monthly number in nearly three years.
The homicide rate, which reached an astounding 10 per day at one point, is down to about one per day. While this is still very high, the situation in Juarez now seems manageable.
Other crimes, such as extortion, kidnapping and car theft, have also dropped precipitously. Complaints of extortion are one-third of what they were 18 months ago. Kidnapping is reportedly at one-quarter of what it was at its peak. In early 2011, there were two months with 540 incidents of violent car theft; in December, 2012, there were 56.
Leyzaola, a retired lieutenant colonel, is all about confrontation. He has spent his tenure pushing police onto the streets, where they arrested anyone whom they saw as a threat. The numbers of arrests are as stunning as the crime statistics. In January 2011, the police arrested 1,462 people for suspected misdemeanors. In July 2012, that number was 13,568.
Many of those detained pay fines for violations such as failure to carry proper identification. Others lose a half-day’s work. The result, say critics of Leyzaola, is that people are turning against the municipal government’s security plan.
Case Study: Victor Ramon Longoria Carrillo
One case illustrates the intensity and troubling nature of this policy. On February 17, 2012, the police arrived at the house of Victor Ramon Longoria Carrillo. Without a warrant, the police entered the house, shoved Victor into his room, covered his head with a sack, and beat him.
“Where are the guns?” they asked. “Who do you work for?”
Victor, his sister, his wife, and two of their neighbors later testified that the police eventually dragged Victor into a van and drove away, without telling the family where they were taking him. The family followed the police in their own car until a military caravan stopped them, and the police continued to the station, where Victor said the beatings continued.
The police – according to Leyzaola’s testimony to the Chihuahua State Human Rights Commission, which investigated the incident – were following a lead from three suspects who’d car-jacked an H2-version Hummer earlier that day (see full investigation - pdf, and El Diario's account).
The suspects said they’d stolen the car at the behest of their bosses, one of whom they identified as Victor. Two other alleged ringleaders were arrested along with Victor that same day. The men, the police said, had several AK-47s and munitions. One of them, they added, was alias “Kiko,” a local criminal leader.
However, the commission found serious discrepancies in Leyzaola and the police’s story. To begin with, Victor’s house is nowhere near where the other two suspected leaders were arrested. The commission said Victor was arrested in his house, as he, his sister, his wife and the two neighbors testified. The commission added that the police had committed an illegal search and seizure at that house, and asked the municipal government to sanction the officers.
‘Not Too Nice Yet’
The police do not hide their aggressive stance. Leyzaola did not agree to an interview. But others in the police who spoke to InSight Crime said there was no hidden agenda. In fact, the police flaunt their aggressive tactics, calling them the “attack” (“choque”) phase. They believe that it can help them revive morale, belief in the institution, and respect from the populace and criminals alike.
“The police cannot become too nice just yet,” one policeman, who was not authorized to speak on the record, told InSight Crime. “We are capturing killers. They don't think about human rights.”
Juarez’s mayor, Hector Murguia, has the same attitude, reportedly telling people that he’ll leave before anyone gets rid of Leyzaola.
The tricky debate of how to balance securing the city and protecting human rights often comes to a head at Juarez’s citizen-run security committee, known as the Mesa de Seguridad. The Mesa was formed after the brutal January 2010 massacre of 15 teens, who were mistaken by their killers for members of a rival gang.
After the attack, President Felipe Calderon visited the city and met with civic and business leaders. Together they formed a series of working groups, or mesas, among them the Security Working Group, or Mesa de Seguridad.
The members of the Mesa are not Juarez’s wealthiest. They are a mix of lawyers, doctors and businessmen. Some have security backgrounds. Most are citizens who decided to get involved as the security situation becomes dire for them, their relatives, their neighbors and their colleagues.
Now they find themselves on the front lines. The Mesa has become an important broker for security issues. Citizens who have a problem and do not trust the authorities will often call someone from the Mesa, who will call a trusted member of the security or law enforcement community, who will act on the tip. The result can be immediate, as illustrated by the drop in complaints about extortion.
To be sure, lowering extortion rates was at the center of the city’s security plan. Leyzaola did his part by passing out his personal phone number to shop owners in the city’s center. Those who called were surprised to get the lieutenant colonel himself on the phone.
After speaking to the shop owner, Leyzaola would give his officers a description of the suspect or suspects who had collected or threatened to collect the weekly quota, and the officers would pick them up. Leyzaola would then get the shop owner back on the telephone, while the officers would drive the suspects up and down the street. When the squad car passed the shop, the owner would tell Leyzaola whether those were the bagmen or not. That way, the shop owners did not have to put themselves at risk.
The municipal police is just one institution that has changed leaders. A new Chihuahua governor, Cesar Duarte, cleaned house at the state Attorney General’s Office, including replacing its head, Patricia Gonzalez. Gonzalez was linked in press accounts to the Juarez Cartel, for which her brother was assassinated by suspected members of the Sinaloa Cartel (see video in "How Juarez's Police, Politicians Picked Winners of Gang War").
The most cynical observers say security gains in the city have come about because the Sinaloa Cartel has become the dominant player in the area. This may be, in part, true. But it is also shortsighted and places too much emphasis on the criminals rather than government actors.
Indeed, several security officials, who spoke to InSight Crime on condition their names or institutional affiliations were not revealed, said the various Mexican security and law enforcement bodies were working together better than ever. They added they were sharing more information with their US counterparts, who provided real-time intelligence, allowing Mexican authorities to arrest high-level suspects.
The Chihuahua and Juarez police are also restocking their ranks with new recruits and getting training from the United States. But the process is slow and illustrates just how fragile the security gains are. The Juarez police recently graduated its first class of recruits since Leyzaola’s arrival. Of the 3,000 applicants, 100 passed the battery of obligatory mental aptitude, psychological and polygraph tests. Of those, 81 made it through basic training.
– Steven Dudley is a director at Insight – Organized Crime in the Americas, which provides research, analysis, and investigation of the criminal world throughout the region. Find all of his research here.
*Research for this article was paid for, in part, by the Woodrow Wilson International Center for Scholars. The author’s assertions do not, in any way, reflect this institution’s positions on matters of security in Mexico or Ciudad Juarez.
Mexico’s government on Tuesday launched a comprehensive crime prevention plan aimed at strengthening communities hard-hit by the violence of an ongoing drug war.
The details of President Enrique Peña Nieto’s security strategy have been trickling out since he took office in December. Unlike former President Felipe Calderón’s government, which publicly announced troop deployments and paraded suspected criminals before television cameras, Peña Nieto has so far been quiet on the details of his security strategy.
And while the new administration hasn’t backed away from using the military to fight crime entirely – the controversial strategy favored by his predecessor – it promised a more multifaceted approach.
Yesterday's announcement of Mexico's new crime prevention program delivers on that promise. The program aims to target the roots of crime, including violence in the home and in schools. It also includes preventing addictions and detecting behavioral issues in young people early. To achieve these goals, the interior ministry will coordinate efforts across nine different federal agencies including health, education, economy, and social development, among others.
“We’re convinced that combat and punishment alone won’t resolve the problem,” Interior Minister Miguel Ángel Osorio Chong told local press.
More than six years into Mexico’s bloody battle against drug cartels, more than 65,000 people have been killed and tens of thousands remain missing. Prosperous cities like Ciudad Juárez and Monterrey have been crippled by drug-related homicides. While deaths in Ciudad Juárez have recently fallen, violence has climbed in other regions.
The government says the crime prevention strategy will focus on seven metropolitan areas in the states of Jalisco, Durango, Coahuila, and Nuevo Leon (where Monterrey is the capital), as well as two boroughs of Mexico City.
President Peña Nieto has emphasized that his security strategy will focus on reducing kidnapping, homicide, and extortion in Mexico – a departure from former President Calderón’s singular focus on nabbing cartel kingpins.
Peña Nieto hasn’t returned soldiers to their barracks, nor is there a timeline for when Mexico's troubled police forces may again take over crime-fighting responsibilities. And the violence hasn't dropped. Between Dec. 1 and Feb. 1, 1,758 people have been killed in drug violence – numbering close to 28 homicides per day.
Mr. Osorio Chong told the El Universal newspaper that it would be a mistake to expect, after years of deadly violence, that “anything will be resolved overnight,” saying “it’s an issue with deep roots.”
The Economist's most recent "Big Mac" index shows that the McDonald's trademark will run you just over $9 in Venezuela, whose capital city Caracas now also ranks among the top 10 most expensive in the world, according to the Economist's cost of living index. It's the only city in the Americas to land in the top 10, sandwiched between Paris and Geneva.
Of course, as the Economist points out, cost calculations in the birthplace of Venezuelan President Hugo Chavez's "Bolivarian Revolution" are inflated. They are made using the country's currency controls, which peg the dollar at about a quarter of its street value.
Changing money on the black market is technically a jailable offense, but anyone who's entered a Venezuelan airport knows finding a trader is as easy as hailing a cab.
This is good news for travelers seeking a quick trip to Angel Falls, or for locals with access to foreign currency that they can exchange. But for most Caraqueños the city is no bargain.
Besides overpriced hamburgers, Venezuela has one of the world's highest inflation rates, which many economists blame on the "protectionist" policies of President Chávez. Analysts calculate that the average costs for a three-child family have jumped 19 percent over the past year. And on Friday, Venezuela devalued its currency by a third, which could potentially push up inflation even higher.
There are certainly some deals to be had though, even beyond cheap gas. For budget shoppers, for example, price controls and subsidies allow for low prices for many basic consumer goods.
But that's only when they are available. Sporadic shortages are also a part of life in Caracas and when store shelves are empty, it's common to see scarce goods being flipped for four times their worth on the streets.
Chávez has blamed the opposition for hoarding and speculating, causing shortages and price distortions. Critics of the Chávez administration say the problems stem from the government's failure to provide local businesses with enough foreign currency to meet import demands. Foreign goods are crucial to feeding the population, and when businesses can't get the dollars, they turn to the same black market used by locals and travelers, driving up costs.
Finger pointing aside, one thing is clear: Whether or not Caracas is the most expensive city in the Americas largely depends on which type of currency you're carrying.
• A version of this post ran on the author's blog, bloggingsbyboz.com. The views expressed are the author's own.
Argentina's answer to the inflation problem: freeze prices.
As BBC and Clarin report, the government has struck a voluntold agreement with the major supermarkets and appliance stores to freeze prices through April 1. Gas prices may be next, though with YPF now nationalized, the government will face some circular harsh effects from that decision.
Price freezes are the sledgehammer of economic policy tools. Yes, it will stop inflation in its tracks by holding still the very prices that inflation measurements are supposed to track. However, the policy will also lead to shortages and even more black market activity. Combined with Argentina's heavy currency controls, imports are going to become even harder to obtain. And what happens on April 1? Price freezes are often a quagmire because governments jump into them without exit strategies.
A buildup of gas in the basement provoked the explosion that ripped through four floors of Mexico’s state-owned oil company, killing 37 people and injuring more than 100.
That’s the latest assessment of the cause of last Thursday’s tragedy at the 52-story tower housing the corporate offices of Petroleos Mexicanos, or Pemex, according to Attorney General Jesus Murillo Karam. A spark caused by maintenance workers ignited the gas, the source of which is not yet known, he said.
The explosion comes as Mexico gears up for a heated battle over the fate of Pemex, created when President Lázaro Cárdenas expropriated foreign oil companies and nationalized the industry in 1938. The company remains a powerful symbol of sovereignty, despite also possessing a reputation for corruption and graft.
President Enrique Peña Nieto wants to open the troubled company to private investment. Pemex suffers from multiple problems. It is saddled with an antiquated bureaucracy and declining production, has little flexibility to invest in its installations, and lacks the advanced technology needed to access hard-to-reach oil. The company’s dubious safety record will also likely be central to the debate.
“The image of a Pemex which is weak and in internal chaos, institutionally falling apart and physically falling apart – that aids those who are advocating radical change in the way Pemex is owned and operated,” says John Ackerman, a visiting scholar at American University in Washington, D.C., and editor-in-chief of the Mexican Law Review.
That said, he adds, “If people believe it’s a ploy to create the image of a weak Pemex, this could create a counter flow of opinion that would make it more difficult to make changes.”
Mexicans remain divided on the issue, although opinions are shifting. As recently as 2008, 76 percent of respondents in a survey by researcher center CIDE opposed privatization, according to Duncan Wood, director of the Woodrow Wilson International Center’s Mexico Institute.
“More recently opinion polls have suggested there has been a significant softening of those attitudes,” Mr. Wood says. “What all this really depends on is how ambitious the government wants to be.”
Speaking to the media Tuesday night, Mr. Murillo Karam, the attorney general, described the blast as “diffuse, slow, horizontal and perfectly defined,” characteristic of a gas explosion. He dismissed the possibility of a targeted attack, including a bomb.
Mexican media had been clamoring for an explanation after more than four days without information regarding possible causes. The information vacuum opened the door to speculation and sparked frustration with the government’s lack of transparency.
Among the issues that remain unresolved: Who, if anyone, is responsible. Murillo Karam indicated that investigations were ongoing.