Finance flip flop follows

As if furious backpedaling on the FARC and the "Gestapo Law" wasn't enough, president Hugo Chávez has also just revoked a few of his most despised financial measures of the many that are strangling Venezuela's economy.

As of last night, restrictions on the conversion of currency have been lifted. That means that companies can access dollars to import much needed capital goods, although the limit has been set at $ 50,000.

Taxes on financial transactions would also be lifted, Chávez announced, claiming the country was making more than enough from oil. He also promised no more new taxes till the end of the year.

If you're thinking all of this sounds like the wriggling of a president afraid of losing another election, the you're probably right. Venezuela votes in crucial regional elections on November 23, which should explains some of back flipping at least.

In fact, Chávez is so cynical that the conversion restrictions have only been lifted temporarily until December 31 of this year. If companies are seen to be seeking to buy more than their fair share of dollars the decree will be revoked, the president promised.

Chávez: Why back FARC when you've got Hezbollah

Just as he was starting to polish up his reputation as a backer of terrorists, Húgo Chávez finds his leap from the frying pan has landed him in the raging inferno of Middle Eastern politics.

Venezuela is recruiting young men for combat training with Hezbollah, at least according to the journalist Patricia Poleo of the Venezuelan paper El Nuevo Pais.

According Ms Poleo, (who provides names but no real proof, nor does she name her source) Venezuelan vice-minister of the Interior Tarek El Ayssami, and other Venezuelans of Arab descent are seeking out young Muslim Venezuelans to train them in Lebanon and prepare them for asymmetrical warfare against the US.

There are also training camps in Venezuela, she writes, located in Monagas state, Maturin district. Miranda state, Los Teques, at a location called El Jari. Trujillo state, El Paramo. Falcon state, Churuguara, Sierra de San Luis. Yaracuy state, Yumare.

You can read the full translation of the article over on Fausta's Blog.

FARC flip flop for real?

Curious Chavez U-turn on Colombian guerrillas

Latam Watch

There was always an erratic side to Venezuelan president Hugo Chávez – his unpredictability is part of his undeniable charisma - but events over the past few days would suggest that far from whimsical, he has either become soberingly sensible or completely unhinged.

Chávez meets FARC commander Iván Marquez (left). Photo Diario del Horizonte.

On Saturday he announced he was withdrawing a decree to overhaul to the intelligence services. That decree, announced only days earlier by the same Chávez, would have turned Venezuela into a police state, allowing for the use of anonymous witnesses, secret evidence and blurring the distinction between external threats and political dissent.

Severely criticized and dubbed the “Gestapo Law” by Venezuela’s media, the crisp Bill for Intelligence Services and Counterintelligence was revoked by its instigator, who suddenly called it “indefensible.”

The most stunning U-turn, however, on the part of the Bolivarian came on Sunday, when he called on Colombia’s Revolutionary Armed Forces or FARC to free all its hostages “in exchange for nothing” and disband. AP reports described Chávez comments as “uncharacteristic” – baffling is more like it.

Only a few months ago, he was defending the FARC’s “political project” and systematically referring to the around 800 hostages the guerrillas are holding as “retained” or “political prisoners.” But on Sunday he called them simply “prisoners” and insisted, “an armed guerrilla movement is out of place in Latin America in this day and age.”

Yet, according to Colombian interpretation of the documents found on the now notorious computers of FARC commander Raul Reyes, Chávez was sponsoring this so-called out-of-date movement to the tune of 300 million dollars. What’s more, only this same – bizarre - weekend Colombia said it had captured a Venezuelan national guard officer carrying 40,000 AK-47 assault rifle cartridges believed to be intended for the leftist guerrillas. Caracas has confirmed that the man is a member of the armed forces but claims he was framed.

So what’s going on? Why this sudden about-face from a man who until recently was advocating for international recognition for the FARC as an irregular army.

First of all, both Chávez and the FARC have suffered more than a few blows in the past few months. The guerrilla famously lost three commanders in three weeks in March, although the death of Manuel Marulanda, the long time leader, wasn’t made public until a fortnight ago.

Apart from that desertions are constant, as the Colombian army has stepped up its persecution of the rebels. Besides, Reyes’ computers blew the lid on numerous FARC collaborators and supply lines.

As for Chávez, his popularity has been sliding ever since losing a referendum in December. Since then he has faced protests over new legislation and his crackdown on the media as well as more serious rumblings among the poor over inflation and food shortages. An important detail: 80 percent of Venezuelans disapprove of his dealings with the FARC.

Also not to be overlooked, Colombia and Venezuela are economically intertwined. Trade between the two is worth six billion dollars a year. Rumours that Colombia could cut off the supply of goods as basic as eggs or meat is enough to send Venezuelan consumers into hoarding mode and does little for Chavez popularity or for state-subsidized grocery stores.

It could be that reality is catching up with the former para-trooper and with the army of kidnappers he once sympathized with.

The Caracas Chronicles blog, which has been on Chavez’ case since 2002, suggested that the whole thing may well be an orchestrated attempt by both sides to deal with this reality. “Having Chávez publicly call on them to release all hostages and demobilize could save face on both sides: FARC could argue that, without
Venezuelan patronage, the "struggle" is not sustainable while Chávez could then take credit for demobilizing them” wrote chronicler Quico.

Another alternative, according to the blog, is that Chavez’ speech was purposely deceptive and that he secretely plans to continue bankrolling the insurgents. That view coincides with that of an ex-ally of the Venezuelan president, Rafael Simón Jiménez.

Jiménez, a former speaker of the National Assembly, told the BBCMundo correspondent that he didn’t believe Chávez would end his “strategic alliance” with FARC. All that the Bolivarian was looking to do, he said, was “put on a respectable face (lavarse la cara) vis-a-vis the international community.”

Jimenez suggested that the FARC, after suffering severe military blows, was looking to reinvent itself a political movement and gain power through the ballot box.
However, that’s seems highly unlikely, at least for now. Not in the least because the last time the FARC tried a similar strategy, it cost them dearly. Literally thousands of members of the Union Patriotica party were culled by paramilitaries in the late 1980’s.

It’s undeniable though, that there’s something in the air. Chávez’ comments, be they an abrupt U-turn, a strategic withdrawal or even an insincere veil, have added to the momentum already underway since Raúl Reyes was slain on March 1.

Luis Eliado Pérez, a senator who was kidnapped by the FARC and maintains strange ties with his raptors, said yesterday he expects the guerrillas to announce the release of at least 4 hostages in the coming week. One of them, he claims, could be the French-Colombian Ingrid Betancourt, who is feared to be very ill. Let’s hope his assertions are correct and that this really is the beginning of the end.

Talking FARC to Kiwis

Here's the audio from my last chat with Kiwi FM in New Zealand. I need to find a less obtrusive media player than this one from Esnips. But to do that I need a server that will host my mp3 files for free. Any tips?

War? Statistically unlikely

Latin America is just no fun anymore. Last week around this time, war correspondents from London to New York and Rome were tossing flack jackets into suitcases and making last minute updates to their life insurance policies, about to embark on what surely promised to be career-enhancing clash of nations.


But no such luck. To everybody’s relief, especially for those living along both sides of Colombia’s borders were anxiety was most felt, an armed conflict has been averted.

The meeting of the Rio-group on Friday was a breath of fresh air after a week in which presidents Hugo Chávez of Venezuela and Rafael Correa of Ecuador exchanged barbs with their Colombian counterpart Alvaro Uribe. The row, as has been exhaustedly reported, was over Colombia’s bombing of a guerrilla-camp on Ecuadorian soil, followed by raid to collect the body of FARC commander Raul Reyes. Correa says Uribe lied about the nature of the attack. Uribe claims that both Correa and Chávez were cutting secret deals with the FARC.

What the meeting in Santo Domingo proves is that diplomacy among Latin American states does work, while boosting the regional and domestic status of those leaders who played peace brokers. The day was drawn out and at times got messy as Correa and Uribe both vehemently defended their points of view¬ (Chávez – behaving like a puppy dog after ordering 10 battalions to the border, showed his musical side and sang a Dominican folk tune). But despite the swaggering egos, a clear conclusion was reached, satisfactory to all parties, at least for the time being.

Uribe apologised and promised never to violate Ecuadorian soil again. Meanwhile an investigation will probe Correa’s alleged dealings with the FARC. The most important result of the summit, however, was the unanimous condemnation of the violation of sovereign states. Colombia resisted heavily, claiming that its citizens had a right to security over all other issues. But this was the Rio group and not an OAS meeting. The significant difference is that the US is only a member of the latter.

Last week the United States was the only country to back Uribe all the way. The US supported Colombia’s right to strike so-called terrorists outside its borders, as it has supported Israel’s right to do so in Lebanon and the Palestinian Occupied Territories and done so itself in Iraq and Afghanistan. On Friday, without the presence of its northern ally, Colombia was forced to accept the will of its neighbours.

A four-nation team took the lead in bringing about the negotiated truce. In the absence of Brazil’s Lula da Silva, Mexico’s president Felipe Calderón was the natural leader of that group. He has already shown himself a far more competent governor than his predecessor Vicente Fox. Internationally he has had less success – an absurdly low profile visit to the US last year without a single significant meeting was the absolute low point. After a cool headed display on Friday Mexico look forward to vying for regional leadership with Brazil.

The second member of that team was Argentina’s President Cristina Fernández. Mrs Kirchner, whose ties with Calderon are particularly close, stuck with the Mexican throughout pushing for a deal that would enshrine the sanctity of national sovereignty. After a disastrous state visit here in Argentina by an obscure and brutish African dictator last month, it was good to see an Argentine president making a difference for good in an international arena. Credit where credit is due. Ecuador’s Rafael Correa singled out Mrs. Kirchner’s intervention in the debate as a “tipping point”. She called on the delegates to condemn unilateralism while scolding “the boys” for their schoolyard rhetoric.

The other two to make a difference were Chile’s Michelle Bachelet and Brazilian Foreign Minister Celso Amorim, a classic product of Itamaraty, the temple to Brazilian diplomacy. Chile, historically at loggerheads with Bolivia and Peru, sees Ecuador as natural ally. But Bachelet didn’t leave nearly the footprint of her neighbour to the east.

Although there is still much to be learnt, for now at least things are back to normal. Venezuela and Colombia have announced the return of diplomatic ties. Ecuador has said it will take a while yet for the wounds to heal. Much must still be learnt from the extent of ties between Ecuador, Venezuela and the FARC.

Meanwhile though a war has been averted, and Latin America remains an exemplary exception in the world. Wars between nations are extremely scarce in the region. According to Princeton professor Miguel Centeno in Europe 62 percent of border disputes have ended in war, while in Latin America only 5 percent turned into armed conflict. Most of the borders between countries have hardly shifted since the days of the independence struggle.