Venezuela Seeks Puerto Rican Partnership

By DANICA COTO Associated Press Writer

© 2007 The Associated Press

SAN JUAN, Puerto Rico — The head of Puerto Rico's state-owned power company welcomed a Venezuelan delegation to the U.S. territory on Tuesday, downplaying verbal assaults by their leader who has called the American president the devil.

Jorge Rodriguez, the top official with the Electric Energy Authority, said tensions that Caracas might have with Washington did not carry over into discussions about trade and energy with the Caribbean island.

"That doesn't stop us from having a relationship" with Venezuela, Rodriguez said. "The meeting was very good, very fruitful."

Venezuela wants to strengthen economic and political ties with the self-governing, Spanish-speaking island, said Jorge Valero, the South American country's ambassador to the Organization of American States.

He said delegates promised to introduce Puerto Rican mayors to Venezuelan educational and health programs, inviting some to visit Venezuela to establish sister-city agreements.

Venezuelan leader Hugo Chavez has rallied opposition to U.S. policies throughout the hemisphere and frequently ridiculed President George W. Bush, calling him "the devil" in a speech last year at the United Nations.

Asked Monday if Puerto Rico's status as a U.S. commonwealth would dissuade increased cooperation, Valero said Chavez wants to begin a "new era" in diplomatic relations between Venezuela and the U.S. territory.

A message left Tuesday with a spokesman for the State Department, which has responsibility for the island's external affairs, was not immediately returned.

Democrazy in Puerto Rico

Soft Spot for the South Bronx

October 21, 2007
Soft Spot for the South Bronx
By ANNE BARNARD



Henry Lajara is mapping out where to install a rain barrel in his manicured South Bronx backyard, to show his neighbors how they can channel storm water to feed their gardens and keep runoff from flushing sewage into the Bronx River.

Lenard Ramsook, 20, glides down that river in a wooden boat, teaching local high school students how to row. He shows them the ospreys and leaping fish that share the estuary with concrete plants and expressway bridges, making the point that environmentalism is not just for the rich.

Across the South Bronx, residents are beginning cooperatives to create jobs and tend to their communities' social needs and physical health. One will recycle demolition debris. Another sells fruit and vegetables. A third will provide childcare for working families.

Behind all these projects is a man who has called President Bush "the devil," embraced Iran's firebrand leader as a fellow crusader against "the U.S. empire," and vowed to help the poor and disenfranchised everywhere, even - or, perhaps, especially - in the world's most powerful country.

That man, Hugo Chávez, the president of Venezuela , began his love affair with the Bronx during a visit in 2005. Since then, he and his socialist government have funneled millions of dollars of aid to the South Bronx, home to New York's poorest Congressional district, through Citgo Petroleum, the American subsidiary of Venezuela's state-owned oil company.


It is an unlikely flow of largess, from an oil-rich South American country where much of the population lives in poverty to one of the neediest pockets in the seat of American capitalism.
Citgo started its outreach in 2005 with a 40 percent discount on heating oil for poor households and expanded it in August to finance social and economic development. The company has committed to donating $3.6 million over the next three years to nine Bronx initiatives that would use the money to create jobs, foster community empowerment and clean up the urban environment.

The program has made Mr. Chávez the talk of the South Bronx .

"He came in here and took over - like a Spanish Napoleon!" Lucy Martinez said.

Ms. Martinez, 57, said Mr. Chávez has helped the needy residents she meets while working the front desk at Nos Quedamos, a nonprofit community development corporation. However, she knows, too, that his philanthropy has chafed some American politicians.

Patrice White-McGleese, 37, an employment counselor who saved $160 to $300 a month during the past two winters through the discounted oil program, said she knows why Mr. Chávez's actions have rankled.

"It's a sore point because it took what most people would consider a third world nation to help the U.S.," she said. "Which is kind of a slap in the face because we're supposed to be one of the superpowers; why can't we help our own?"

Some people in Caracas, the Venezuelan capital, have the same question for their own government, said Leopoldo López, mayor of the downtown district of Chacao and a leader of the Venezuelan opposition.

"Why is the government giving away money to the richest city in the world?" he asked.
Mr. López said Mr. Chávez should first tend to the needs of Venezuelans who lack shelter, sewage and drinking water.

He said Mr. Chávez was giving the money to the Bronx to win support around the world while distracting attention from his moves to crack down on the opposition at home.

So the program has made Bronx residents, who are trying to solve the most local of problems, party to a global dispute. They are caught between Mr. Chávez, who markets his populist platform as a counterweight to the worldwide influence of the United States, and the Bush administration, which contends that Mr. Chávez's stress on racial and economic equality masks a dictatorship-in-the-making.

Mr. Chávez began clashing with Venezuela's corporate leaders and the United States shortly after being elected in 1998. In 2002, military officers staged a coup to oust him. The Bush administration quickly recognized the new government. However, Mr. Chávez returned to office days later after a wave of street protests, and he accused the United States of aiding the coup.

He turned his attentions to the Bronx in the fall of 2005, when he visited South Bronx community organizers with Representative José E. Serrano, the Democrat who represents the district. Those meetings led to the discounted heating oil program.

By the winter of 2006-7, the program had doubled to deliver 100 million gallons to 1.2 million people from Alaska to Vermont. Citgo said it expected to supply 110 million gallons this winter.

Some recipients bridled in September 2006, when Mr. Chávez stepped up to a United Nations podium - one that President Bush had used the day before - and declared that he smelled traces of "the devil."



"It smells of sulfur still today," Mr. Chávez added.

Said Mr. Serrano: "Was it tacky? Yes." However, he said, Mr. Chávez was just being emotional.

Meanwhile, Citgo and Venezuelan officials made follow-up visits to the Bronx . During one of them, Mrs. White-McGleese said she wanted to thank Venezuelans for their generosity. Within weeks, in April 2006, she and 62 people who had received the discounted oil were on a plane to Caracas as Mr. Chávez's guests.

A band met them at the airport. They watched an African-Venezuelan dance performance. In addition, they visited Mr. Chávez at Miraflores Palace, the president's official residence. A few of the American guests - including Pamela Babb, a vice president of the Mount Hope Housing Company, a nonprofit group that provides low-income housing in the Bronx - appeared on Mr. Chávez's weekly television show.

"It was pomp and circumstance," said Ms. Babb, 47.

She said she remained suspicious of Mr. Chávez's efforts to expand his presidential powers. ("I question that," she said.) In addition, a Mount Hope tenant, Lenice Footman, noticed children playing in garbage on Caracas's streets and came away "grateful for what we have."

But many of them were impressed when a Philadelphia woman told Mr. Chávez of the lack of jobs and services in her neighborhood and the Venezuelan leader declared it was time to aid development in poor United States communities.

"And all these ministers started writing things down," Ms. Babb said. "It shows you what happens when a visionary person starts to do something. And I was there."

Ms. Babb said Citgo officials visit the Bronx more often than the other corporate donors she works with. They have asked community groups what kinds of grants they need, awarding one to Mount Hope for a childcare cooperative. In addition, they celebrated with the locals in Hunts Point Riverside Park over Venezuelan food - arepas and carne mechada - and Latin American music.

The Citgo donations are a tiny percentage of its annual budget. It does not have to disclose financial statements because it is not a publicly traded company. Citgo, which sold 25.1 billion gallons of petroleum products last year, estimates that last winter's oil program cost it $80 million, according to a Citgo document provided by Bernardo Alvarez Herrera, the Venezuelan ambassador to the United States.

That is about the same amount that Exxon Mobil - the largest publicly traded Oil Company, with roughly 10 times the revenue of Citgo - reported spending on philanthropy in the United States in 2006.



"We are not trying to impose," Mr. Alvarez said, "or to intervene in the politics here."

United States petroleum industry officials are not happy, however, with Citgo's program.
It is "designed to embarrass us," Larry Goldstein, the president of the Petroleum Industry Research Foundation, an industry-supported analysis group in New York, said when it was launched in 2005.

"It's not designed to help poor people," he said. "Chávez is astute, clever, with a major political agenda, largely to get under our skin, and he does that everywhere and anywhere he can."

On the ground, Citgo's money seems to come without strings - or even much branding.

At Rocking the Boat, the Bronx River education program, Mr. Ramsook, who left behind a fisherman's life when he moved to the Bronx from Trinidad, said he could not place Mr. Chávez's name. "It sounds familiar," he said. He was more enthusiastic about taking seniors from Bronx Guild High School on the water to learn the history of the river.

"There are no sharks, right?" asked Shawnisha Roebuck, 19, as she settled into the stern. On shore, an iron claw lifted metal scraps from one pile to another. However, on the river, gulls stalked the banks, and the movements of small fish made the water flicker. An osprey plunged to the water, but came up empty.

Citgo's $210,000, three-year grant has allowed the group to expand the high school program and hold free Saturday rowing lessons that have drawn 500 people since August.

A $230,000 grant is helping Youth Ministries for Peace and Justice build rain barrels, plant rooftop vegetation and reshape gutters to feed sidewalk trees. In addition, the South Bronx Food Co-operative will use its $49,000 to open a storefront to sell affordable produce.

Anna Vincenty of Nos Quedamos, who is working on a program to improve the diets of elderly residents, said she takes Mr. Chávez's good will, as if she does with all politicians, with a grain of salt.

"He says he wants to help people over here," she said. Yet her Venezuelan friends have told her "some of the people over there are afraid of him."

On the other hand, she said, in the United States, "one of the most generous countries in the whole world," pervasive inequality is on display.

But no matter what one thinks of Mr. Chávez, she said: "If your child is cold and hungry and someone offers to help, do you care if it's Moe or Larry or Curly? I don't think so."

Just Say ¡No! The folly of Puerto Rican statehood.

By Mark Hemingway

Excited by the prospect of adding two new senators and seven new representatives to Congress, all of them Democrats?

That’s exactly what will happen if Puerto Rico becomes the 51st state. A surprising number of Republican congressmen — and the White House — think it’s a good idea. What’s more, they want to make this happen against the wishes of the majority of Puerto Rican people.
Since Eisenhower conferred commonwealth status on the territory in 1952, the Puerto Rican people have voted four times to reject pursuing statehood, including once in 1993 and again in 1998.

But H.R. 900, a new bill working its way through the House (it’s scheduled for mark-up on Tuesday), would force another vote on the statehood issue in Puerto Rico. However, the way the bill is written, the referendum would be structured in such a way that it would stack the deck against Puerto Ricans who wish to vote to maintain their existing commonwealth status.
There are three factions in Puerto Rico, in order of popularity: those that favor maintaining the status quo commonwealth status, those that favor pursuing statehood, and those that favor independence. In recent decades, surveys have shown consistently that around half or just under half of Puerto Ricans prefer preserving the island’s current relationship with the United States. Support for statehood tops out at around 46 percent, with the remainder favoring independence.

In the 1993 plebiscite on the island, 48.6 percent of voters favored existing commonwealth status, while 46.3 favored statehood. A 1998 plebiscite on the matter had statehood grabbing an almost identical 46.5 percent of the vote.

Statehood lost these referendums despite some powerful political backing. In 1993, the party in favor of statehood had recently won an electoral landslide. A sizable majority in the island’s house, senate, and the governor were all in favor of statehood.

“So even though the statehood party had all this strength and all these resources, statehood lost,” according to Eduardo Bhatia Gautier, executive director of the Puerto Rico Federal Affairs Administration. Bhatia officially represents Puerto Rican Governor Aníbal Acevedo-Vilá in Washington, D.C.

Bhatia and Gov. Acevedo-Vilá do not support the statehood cause, and are upset by what they call the manipulative tactics used by pro-statehood forces.

Statehood supporters forced another referendum in 1998, only this time they used a new tactic. Voters were given four options for determining the island’s status with all four choices defined by pro-statehood forces. Naturally, this excluded altogether the choice of maintaining the status quo. Only by judicial requirement was a fifth option — “None of the above” — added. “None of the above” garnered over 50 percent of the vote, and the status quo was preserved. Even this vote didn’t stop statehood forces.

“The lesson for the statehood supporters in Puerto Rico was that statehood will never come requested by the people of Puerto Rico,” Bhatia tells National Review Online. “The statehood lobby got really involved in what I consider to be a shift in strategy. The strategy became if the people of Puerto Rico are not going to ask for statehood then why don’t we get Washington to limit the options of the people of Puerto Rico. That will force statehood on the people of Puerto Rico.”

And forcing statehood on the people of Puerto Rico seems to be exactly what H.R. 900 is designed to do. Instead of one up or down vote on Puerto Rican statehood, the bill’s “federally sanctioned self-determination process for the people of Puerto Rico” would require two votes.
The first vote would not be a straight up or down vote on statehood, as in the past. Instead, the vote would be a direct vote on the commonwealth status. The thinking is that statehood forces and independence supporters would both vote against the status quo. If the choice of the largest plurality (and nearly a majority) of citizens is not part of a three-way vote, but is pitted against the two other factions bundled together as one choice — it might be edged out at the ballot box.

“So what will happen on that first vote is that you will get 46 percent from the statehood, 5 percent from the independence side. You will get 51 percent. You knock off the table the plurality which is 49 percent [in favor of commonwealth],” Bhatia says.

This would then force a second vote — with the only remaining choices being statehood and independence. Given just these two options, statehood would likely win by a landslide.
But that’s not all. “The bill is so absurd that it says that if commonwealth loses there should be a vote every eight years,” Bhatia notes.

Aside from permanently upsetting the balance of power in the U.S. Congress (“I can guarantee that they will all be Democrats — that I can tell you right now,” Bhatia says), there are other potential problems with making Puerto Rico a full-fledged state.

For one thing, America would become officially bilingual overnight. “There hasn’t been a Spanish-speaking state,” Bhatia says. “There a lot of issues involved, and there is a lot of nationalism in Puerto Rico. There will be resistance. At a minimum it will be the same resistance Quebec has, and at a maximum it could be greater.”

The other problems are largely economic. The drive for congressional representation for Puerto Rico is largely based on getting federal revenue for Puerto Rico, which is likely to be a huge drain. “The reality is that close to 45 percent of the families in Puerto Rico or 1 million families live under the poverty level according to the U.S. census,” Bhatia observed. “So you have twice the poverty level of Mississippi, the poorest state in the union. Puerto Rico could become the greatest welfare state in the nation. ”

At the same time, statehood would deprive Puerto Rico of its comparative economic advantage.

“There’s not a single economist anywhere in the world that says what Puerto Rico needs to create jobs and get people out of poverty is more federal taxes. Puerto Rico can attract business that are going offshore because it has a different tax structure than the United States — companies in Puerto Rico that create jobs do not have to pay federal taxes,” Bhatia says. “Puerto Rico’s economic model depends a lot on making sure that the tax regime of the United States doesn’t apply.”

Yet despite these obvious problems, Puerto Rican statehood enjoys a great deal of Republican support. In December 2005, working with Puerto Rico’s non-voting congressional representative and statehood supporter Luis Fortuño, the Bush Administration produced “The White House Task Force Report on Puerto Rico.” In recommending Congress set another new voting procedure for the island, task force member and deputy assistant Attorney General Kevin Marshall, said that the voters “had not spoken clearly” about Puerto Rico’s status in previous referendums — despite four votes with the same result.

In February 2006, the “Task Force Report on Puerto Rico” was roundly condemned in a New York Times op-ed by none other than Jeane Kirkpatrick, the former ambassador to the United Nations. Kirkpatrick declared the report was “on a path to stir up problems where none existed.”

Fortuño has continued his efforts toward statehood by helping introduce H.R. 900 in April and lobbying hard for the bill since then. Fortuño is aligned with the GOP in Congress, and 55 of the bill’s 129 co-sponsors are Republican.

NRO contacted the offices of several of the Republican co-sponsors to ask them why they supported the bill. No one offered an explanation for their support of the legislation.
Bhatia thinks Republican support amounts to an electoral gambit. “I think somehow they got the wrong message — that by supporting statehood for Puerto Rico they’re going to get the blessing of Hispanics or Puerto Rican Hispanics and that is absolutely wrong,” he says. “There are about 500,000 Puerto Ricans who have moved into Florida over the last 12 years. They have a right to vote and they have not actively participated in the last two elections for whatever reason, and I think [Republicans] are trying to court them.”

An October 2004 poll conducted in central Florida by Puerto Rico’s El Nuevo Dia newspaper shows the views of mainland Puerto Ricans don’t differ significantly from their island counterparts. According to the poll, 48 percent of Puerto Ricans in central Florida support commonwealth status, 42 percent support statehood and 5 percent support independence.

In the meantime, opponents of statehood are offering up an alternative to help settle the question once again. Sponsored by Rep. Nydia Velázquez, a Puerto Rican Democrat representing New York, H.R. 1230 would call a constitutional convention in the territory to address statehood. Currently, the bill only has 48 co-sponsors.

The governor of Puerto Rico obviously favors this approach. “We’re happy to hold that convention,” Bhatia says. “Everybody should agree on the process and then come with one voice to the Congress.”

— Mark Hemingway is an NRO staff reporter.

— Mark Hemingway is a writer in Washington, D.C.

Women gaining power in Latin America

Posted on Sat, Oct. 20, 2007

BY JACK CHANG

Defying Latin America's longtime reputation as a bastion of machismo, women in South America are winning political power at an unprecedented rate and taking top positions in higher education and even, albeit more slowly, in business.

The election last year of Michelle Bachelet to Chile's presidency and the all-but-certain victory of Cristina Fernández de Kirchner in Argentina's presidential balloting Oct. 28 are the most visible examples of the trend.

South American women also are leading important social movements and are earning, studying and speaking out more than ever. For the first time, women are forcing their traditionally male-dominated societies to confront such issues as domestic violence and reproductive health.

''I think there's been a general change,'' said Elena Highton, who in 2004 became Argentina's first female Supreme Court judge appointed by a democratically elected government. She promptly headed a commission on domestic violence.

''This is the time of the woman, and people want to try something new,'' Highton said. ``Women are seen as more believable, more honest, more direct. And in this world dominated by men, we've seen lots of failures.''

It's a fundamental shift in a region long ruled almost exclusively by men, where the influence of women was relegated to the home or, in public life, to supporting roles for powerful spouses.

Such perceptions changed for good, many say, with Bachelet's election last year in one of the most socially conservative countries in the hemisphere. A single mother and an atheist with no family member already in power, Bachelet, 56, won support from male and female Chileans in her historic election.

Public opinion polls in neighboring Argentina show similar widespread support for Kirchner, a longtime politician and current senator who's expected to win the contest to succeed her husband, Néstor, in this country's top job.

Women are considered possible successors to the top spot elsewhere in South America.

In Paraguay, former education minister Blanca Ovelar is a top candidate to represent the long-ruling Colorado Party in next April's presidential race. In Brazil, presidential chief of staff Dilma Rousseff has emerged as a possible front-runner for the presidency in 2010. They follow women who were elected president in Central America in the 1990s, Violeta Barrios de Chamorro in Nicaragua and Mireya Moscoso Rodríguez in Panama.

The emergence of what's been called a ''feminine bloc'' in the Western Hemisphere's Southern Cone is yet more evidence of the historic changes that have opened doors for millions of women.

Latin American women also have taken charge in more humble circumstances. Soledad Puebla, 54, runs a bustling daycare center in the slums of Santiago, Chile's capital. She's also the activist heart of her neighborhood and a confidante of legislators in Bachelet's government.

Puebla grew up desperately poor on the city's periphery and worked for years as a nanny before she joined a local Lutheran church and became a community organizer. She eventually was appointed the church's regional coordinator, which sent her around the world.

Speaking tearfully in her cramped office, she seemed astonished by her latest accomplishment -- earning a college degree in social work, something that was unimaginable to the poorly educated grandparents who raised her.

''When I grew up, we didn't even have a mattress to sleep on,'' Puebla said. ``So this is what I tell people now: When you want to rise as a woman and value your life, you can. But you have to be true to what you think and fulfill the agreement you make with yourself.''

Latin American women still trail men in key measures of social well-being, according to the World Economic Forum, which ranks gender equality in 116 countries based on education, health and economic and political participation. Of Latin American countries, Costa Rica ranked the highest, 31st of 116 countries, and Bolivia, the lowest, at 88th.

But women are steadily catching up, United Nations statistics show. In many instances, the gaps are closing much faster than they are in the United States.

WAGES ON RISE

For example, the average wage of urban Latin American women has grown from 70 percent of men's in 1990 to 90 percent this year, and they're expected to reach parity by 2015, U.N. figures show. For comparison, U.S. women earned 77 percent of what men earned working full-time, year-round jobs in 2006.

In the business world, women make up as much as 35 percent of the managers in private companies, also a dramatic increase from just a decade ago, according to the International Labor Organization. However, they still account for only 10 percent of company presidents and vice presidents, according to a seven-country survey by the U.S.-based think tank Inter-American Dialogue.

Women have made some of their biggest advances in politics, where thousands of women are reaching public office, many for the first time.

About a quarter of all Latin American local council members are women, more than double the percentage from a decade ago.

Women also make up more than a quarter of the Cabinet ministers in the region and more than a fifth of lower-chamber national legislators in Costa Rica, Argentina, Peru, Guyana, Suriname, Ecuador, Honduras and Mexico, double the regional rate in 1990. By comparison, only 16 percent of the U.S. Congress is female.

In the eyes of Ana María Romero de Campero, who was Bolivia's top human rights official, women are riding the same democratic wave that's empowered other marginalized groups, such as indigenous people and the poor working class.

It's no coincidence, she said, that women are making gains at the same time that her country elected its first indigenous president, Evo Morales, or neighboring Brazil chose Luiz Inácio Lula da Silva, a former factory worker, as its president. Both leaders were the first presidents in their countries not to come from white, privileged backgrounds.

''This democratic process is raising the question of the rights of different people,'' Romero de Campero said. 'And people are asking, `Do women have the rights of equality along with human rights?' ''

Fourteen countries in Latin America have passed quota laws requiring that as many as 40 percent of the candidates for political posts be women. Similar laws require that women fill a minimum number of union leadership posts and even executive-branch positions.

That has produced dramatic results in countries such as Argentina, the first in the region to implement quotas. Women now make up 35 percent of the lower house and 43 percent of the Senate. Only nine countries claim higher percentages of female lower-house legislators, and two of those are in Latin America -- Costa Rica and Cuba. The other seven are Rwanda, Sweden, Finland, Norway, Denmark, the Netherlands and Spain.

''We women in the Congress have managed to be respected, but the road here was a long road, and there were many acts of discrimination along the way,'' said Argentine Sen. Silvia Ester Gallego, who helped lead the push in 1991 to pass the quota laws.

But the shift isn't just a political one, said Lidia Casas Becerra, a law professor and women's rights activist in Chile. Traditional notions about gender roles are changing, and women, as well as men, are taking on new responsibilities.

One sign of the change: The big hit on Chilean television this year was a soap opera called Papi Ricky about the misadventures of a widowed young man raising his daughter alone.

''This is still a very machista country, and it's hard to make that cultural transformation, but Bachelet was a beginning,'' Casas Becerra said. ``Chileans are, in fact, much more liberal now than their political elite.''

NEGATIVE SIDE

Not everybody sees the changes as a step in the right direction.

Argentine community leader Mónica Carranza said the breakdown of the traditional, male-headed household is to blame for the abandonment of thousands of women and children on the poor outskirts of Buenos Aires, where she runs a network of shelters and a soup kitchen.

''For me, the man had his home, his family, his children, and the man was the strong machine, and the woman took care of her children and her man, and now everything has been turned around,'' Carranza said. ``I think the changes have been lamentable.''

Others see it differently.

'Things have changed a lot since our parents' generation,'' said Rodrigo Delgado, 31, who was picking up his son from a Santiago daycare center while his wife worked. ``There are more women working now because that's what we need to do to survive. And at home, we share the responsibilities.''

---

© 2007 Miami Herald Media Company. All Rights Reserved.
http://www.miamiherald.com

Bank of the South, championed by Venezuela, begins to take form

RIO DE JANEIRO: The idea from Hugo Chávez, the Venezuelan president, of creating a Bank of the South to finance regional development projects is moving forward, aided by the tacit approval of Brazil, which has South America's largest economy.

But doubts persist about the need for such a bank, which many economists and analysts continue to see as a political move by Chávez to try to spread his influence and carry out his crusade against Washington-based multilateral institutions like the World Bank and the Inter-American Development Bank.

Seven South American countries are expected to inaugurate the new bank at a ceremony on Nov. 3 in Caracas, Venezuela's capital, where it will be based. At a meeting here last week the countries - Argentina, Brazil, Bolivia, Ecuador, Paraguay, Uruguay and Venezuela - agreed to create an institution with up to $7 billion in initial capital, paving the way for the bank to begin operating as early as 2008.

An eighth country, Colombia, said last week that it wanted to be included as well. Its president, Álvaro Uribe, said that his country would join as long as the new bank was an "expression of solidarity and brotherhood," and not a rejection of the international lending institutions.

The Bank of the South will be designed to promote investment in infrastructure and could help stimulate greater regional trade and integration. Chávez sees it as an alternative financing institution to the World Bank, the Inter-American Development Bank and the International Monetary Fund, all of which have significant Washington involvement.

"The idea is to rely on a development agency for us, led by us," Rodrigo Cabezas, the Venezuelan finance minister, said last week.

The bank's formation comes at a time when South America is awash in development money, both public and private, and when most of its economies have raised their credit ratings to levels that make the cost of borrowing cheaper than during the past two decades.

That is one reason that Chile, which has the continent's best credit rating, has not signed onto the project.

"The macroeconomic picture in Latin America is as good as it has ever been," Luis Alberto Moreno, the president of the Inter-American Development Bank, said. Still, he said, "there is plenty of room for everybody. The challenges of development in Latin America are very big."

Brazil has sent mixed messages about its support for the institution. It declined to give its support until clarifying that the bank's role would be limited to aiding investment in the region, and would not create an emergency fund to bail out countries in economic crisis as the IMF does, which Chávez had set as an initial goal.

"Brazil has shown less interest because it has the greatest credit capacity," said Guido Mantega, the country's finance minister. But, he said, "we continue to support the project because it will benefit our commercial partners and Brazilian businesses."

Several issues remain unresolved about how the Bank of the South would function, including how much capital each country would commit, what its lending conditions would be and whether the members would have equal voting rights.

Mantega, Brazil's finance minister, said it was still unclear whether Brazil and Venezuela would enter the bank with higher capital levels. Brazil appeared to make a major concession recently, however, when Mantega said that each country would have voting rights in the bank's administrative council.

Meanwhile, development banks already based in the region, like the Corporación Andina de Fomento in Caracas, are waiting to see how an institution more closely aligned with Chávez's political objectives will compete in granting loans.

The new bank could struggle to be competitive with the Inter-American Development Bank, especially, which has investment-grade status in the international markets due to the participation of the United States and other developed nations, and thus obtains resources at relatively low cost.

None of the future partners of the Bank of the South borrow on terms readily available to rich, industrialized nations.

Simon Romero contributed reporting from Caracas.

Plan Mexico and the Billion Dollar Drug Deal

A Bonanza for Boeing
By LAURA CARLSEN

U .S. drug czar John Walters heaped praise on Mexico's drug war this week, to prepare the ground for a billion-dollar counter-narcotics aid package expected to be announced within days.

The latest statistics purported to show that the street price of cocaine has doubled in some cities and that purity has decreased, indicating restricted supply. According to Walters, the United States and Mexico are winning the drug war, and " the real challenge is to continue it."

Walters presented a preview of the highly secretive document that will set out terms for the multi-year package. According to press reports, the plan includes objectives in the areas of gathering and sharing intelligence, interdiction at ports of entry, aerial monitoring and intervention, investigation and legal processing, measures against money laundering, and cooperation with Mexico.

If that sounds vague it's because it is. Almost no details have been released about the deal. So far, the public has only been told that the money will be for intelligence equipment, wiretapping, and military and police training programs.

Buzzwords-like fumigation, arms, and foreign agents-have been left out of public statements, although they will most likely not be left out of the package itself.

Fumigations have been a social and environmental disaster and proved ineffective in Colombia, leading to dead rivers, devastated lands, and contributing to the displacement of hundreds of thousands of villagers. Opening up the flow of U.S. arms is a sticky subject between the two nations. The Mexican government has protested uncontrolled illegal arms shipments from the United States to Mexico, and the suggestion of more weapons feeds Mexican civil society's fears of militarization. These fears have heightened dramatically with the active participation of the Mexican army in the drug war under Calderon's administration.

Both Mexican and U.S. officials have gone to great lengths to explain that the Mexican counter-narcotics plan will not be a repeat of the disgraced Plan Colombia. While ignoring the overall failure of that plan, they have emphasized that Plan Mexico will not include U.S. troops in Mexico. Concern in Mexico on this point has run so high that Minister of Foreign Relations Patricia Espinosa has repeatedly made public statements denying that U.S. troop presence forms part of the new package.

While it is unlikely that U.S. troops will be sent into Mexico due to political sensitivities, troop presence is a relatively minor part of the problem with the Plan Colombia model (recall that even Plan Colombia maintained a tight cap on direct military presence). Greater U.S. presence in Mexico will occur, at U.S. taxpayers' expense and to Mexican citizens' chagrin. DEA agents have already requested offices in two more Mexican cities and it is very unlikely that all the proposed training will take place in the United States.

But the real threat to Mexico lies in the fact that the plan proposes that the U.S. government be the funder and co-designer of a cornerstone of the nation's national security strategy. Already it claims to be working with Mexico to build a central command to coordinate the work of internal agencies and facilitate binational coordination.

It's no coincidence that the new plan concentrates on measures in Mexico, despite the obvious fact that the U.S. market drives the drug trade and illegal drugs couldn't make it to the streets there unless organized crime and the complicity of government agents existed in the United States as well.

But it's better business to attempt to remove the speck from your neighbor's eye than the log from your own. Although Mexico's drug problem is far more than a speck (the General Accounting Office recently reported that it accounts for as much as a $23 billion-dollar a year business), the new deal will offer up lucrative contracts to U.S. military and intelligence equipment firms, long-term maintenance and training contracts, and related services. In a recent Washington Post article, Misha Glenny cites a GAO report on Plan Colombia that finds that 70% of the money allotted never leaves the United States.

The billion-dollar drug deal may be a bonanza for Boeing, but the pay-off to the U.S. taxpayers who have to foot the bill is much less obvious.

Despite Walters' claims, a tremendous amount of evidence exists to show the consistent failure of the supply-side model of drug war that relies primarily on military and police enforcement measures. When that model goes international, it becomes even more problematic, feeding conflict as it starves social investment.

This policy approach would seem to warrant at the very least a cautious attitude toward applying it in other countries-especially one as geographically and economically close as Mexico. A more sensible approach would involve creation of mechanisms of cooperation and intelligence sharing with each nation responsible for its own security policies and focused on the problem within its own territory and among its own populace.

Laura Carlsen (lcarlsen(a)ciponline.org) is director of the Americas Policy Program in Mexico City where she has been a writer and political analyst for two decades.