Post-World Cup Regional Roundup

As always, you may listen to this podcast here.

For today’s show I would like to share with you a basket of developments around the region from Mexico to Argentina, starting north and working my way south.

We are into the second week after Mexico’s July 2 elections and still presidential candidate Andres Manuel Lopez Obrador contests the results. He trailed Mexican president-elect Felipe Calderon by one-half point in the first count of votes. Obredor has stated publicly that Mexicans will take to the streets unless he’s satisfied with a recount.

Today, the 12^th of July, Mexicans have already taken to the streets, focusing on Mexico City’s central square. It could be the beginning of a nation-wide protest. And still I wonder, why are Mexican politicians not paying closer attention to the power of organized crime there?

Further to the south, in Nicaragua, one presidential candidate has died, which is likely to hand votes to former president and Sandista leader, Daniel Ortega. If Ortega wins, expect Nicaragua to take a sharp turn from a pro-United States posture. Venezuelan president, Hugo Chavez has been sowing seeds of support in both Nicaragua and Mexico. As president of Nicaragua, Ortega would likely begin to close ties between the Central American country and Venezuela, starting with more oil.

Meanwhile, Colombia and Venezuela started construction on a gas pipeline between the two countries on the 9^th of July. This is the first segment of a gas pipeline Chavez would like to extend to Panama.

With a terminal for Venezuelan gas in Panama, Chavez would likely begin selling more to China and his Central American counterparts. China, by the way, has upped their crude oil purchases from Venezuela from 168,000 barrels a day to 300,000 – a 45 percent increase. Between now and 2012, PDVSA expects to increase output by two million barrels a day. There are indications that much of this oil would go to China, but the East coast of the United States remains Venezuela’s top destination of oil products.

In Bolivia, president Evo Morales has realized the limitations of his power. The results of the vote to elect members to Bolivia’s upcoming Constituent Assembly did not give Morales’ political party the majority needed to enshrine its ideology into Bolivia’s new constitution. Morales’ party, MAS, won some 53% percent of the vote, while Jorge Quiroga’s party, Podemos, won some 23%. This means Morales will need to negotiate with Quiroga to reach consensus. This fact stifles any opportunity Morales may think he has to enact sweeping change in Bolivia.

Next door in Brazil, we are coming close to elections, scheduled for October, 6. Brazilian president Luis Inacio da Silva, better known as simply Lula, still holds the lead in polls over Alckmin. In the latest poll released, on Tuesday, the 12^th of July, the race has tightened. Lula’s lead has slipped from 22.4 percentage points to 16.9 points. Still, if the election were held today, Lula would win with 44.1% percent of the vote, while his top competition, Geraldo Alckmin, Sao Paulo’s former governor, would take some 27.2 percent of the vote. Yet 50% of Brazilian voters are still undecided.

A factor that may hurt Alckmin in the future is the continued violence in his home state of Sao Paulo. When Alckmin began campaigning some months ago, he stood on two pillars – increased security and economic improvement. Under Alckmin, Sao Paulo saw both. He claims he can do the same for the nation. Yet as many of you probably know, Sao Paulo has had some trouble with prison riots, gang members attacking police stations, and cops retaliating with brutal force, sometimes excessive if you ask human rights advocates.

On the 11t^h of July, a third round of attacks, 38 in all, targeted police stations, buses, and empty banks. These attacks, organized by the First Capital Command, known as PCC in Portuguese continue to erode away at Alckmin’s security record. I have to wonder if that will translate to votes. If Lula wins what can he do to improve security in Sao Paulo? Not much.

As we’ve seen today, Lula has again offered federal help, but that help must be accepted by the governor of Sao Paulo. So far is hasn’t, and as long as the governor of Sao Paulo does not support the president, there will be a power struggle. The same is true for the state of Rio de Janeiro. I wonder if this is part of the reason why both of these states have a serious problem with organized crime.

In the Southern Cone, Argentina has seen a rise in crack use. It has doubled between 2001 and 2005. One dose of one gram costs one peso, or 32 cents. It’s hard to think of something that’s as cheap as 32 cents. You can’t even buy one can of coke for that amount anymore. The development that has led to this rise in crack use is cocaine cooking in Argentina. Argentine drug dealers years ago began to purchase coca paste from Bolivian connections so they could cook the cocaine in houses closer to the major market in Buenos Aires.

Cooking the cocaine yourself removes a handful of middle men. Past is less risky to transport, and once the cocaine is cooked, high purity levels ensure good sales. The side effect, of course, is also a constant supply of crack. To my knowledge, Argentine president Nestor Kirchner has not made a public statement concerning his country’s security challenges or rise in drug use.