News of interest from Latin America by David Morris
Vol. 1, No. 6. Monday, October 8, 2007

Costa Rica: the deed is done

In a close vote, Costa Ricans have ratified the Dominican Republic – Central America Free Trade Agreement (DR-CAFTA). Results released the evening of the vote showed 60 percent of qualified voters participated in the October 7 referendum, 51.6 percent of them favoring ratification. The election, the first national referendum in the nation’s history, was held as a result of widespread popular opposition to DR-CAFTA, the other participating countries having approved it by votes of their legislatures.

Leaders of opposition groups have refused to concede, claiming proponents of the treaty enjoyed unfair advantages, particularly support from DR-CAFTA advocates in the United States, and citing reports of irregularities at polling places in some areas of the country. Eugenio Trejos, leader of the Movimiento Patriótico por el NO al TLC, and Ottón Solís of the Partido Acción Ciudadana, a strong opponent of the agreeement who lost the presidential election of 2006 by a narrow margin, have urged calm among their followers and have said they will demand a recount.

Days before the election, the White House contradicted arguments made by NO al TLC by declaring that the United States would not renegotiate DR-CAFTA if Costa Rican voters rejected it and that it could not be assumed that the Caribbean Basin Initiative (CBI) would be renewed after it expires in September, 2008. CBI, in effect since 1984, allows certain goods to be imported into the United States duty free from Caribbean and Central American countries. NO al TLC leaders charged that the administration of President Óscar Arias had urged the White House to issue the statement as a campaign ploy.

Opponents of the treaty pointed out that DR-CAFTA was ratified in the United States by Republican majorites in both houses but that the new Democratic majorities are less inclined to approve such treaties and would be likely to favor renegotiation. They cited current debates over trade agreements with Peru, Colombia, Panama and South Korea.

U.S. Senator Bernie Sanders and Congressman Michael Michaud stated after a recent trip to Costa Rica that DR-CAFTA could in fact be renegotiated and that CBI was not in any danger. And in an earlier letter to the Costa Rican ambassador, Senator Harry Reid and Congresswoman Nancy Pelosi denied that there was any connection between the outcome of the Costa Rican referendum and CBI.

A scandal erupted in 2003 when it was revealed that several members of the Costa Rican negotiating team working out the terms of the treaty in secret meetings with U.S. representatives were in the pay of the Costa Rica-United States Foundation, an organization the United States Agency for International Development had financed with some $900,000.

Asked whether Costa Rica should seek concessions from the United States on sensitive issues like workers’ rights, the environment and telecommunications, pro-treaty government officials said there was no need to do so. “It isn’t necessary,” said Education Minister Leonardo Garnier, “those questions have been cleared up and people have understood that they aren’t a problem.” Fernando Berrocal, the government’s head of security, said it is now up to President Arias to decide what topics should be brought up in talks with the United States.

Supporters of the NO al TLC effort have rallied in great numbers inside and outside Costa Rica. In a country with a population of four million, more than 100,000 gathered in San José on September 30 to oppose the agreement. A rally in Mexico City on October 5 brought a number of leading artists and intellectuals from several Latin American countries.

Several days before the vote, Eugenio Trejos of NO al TLC said that regardless of the outcome great changes had been made in Costa Rican society. “We are taking firm steps forward,” he said, “from representative democracy to participatory democracy and this is the beginning of a voyage with no turning back.”

(Sources: La Nación, Costa Rica; Prensa Libre, Costa Rica; Al Día, Costa Rica; El País, Costa Rica; La Jornada, Mexico; Prensa Latina, Cuba)

Dominican Republic: just saying no

Organizers of the second general strike in the Dominican Republic in three months are claiming a second success. Called by the Foro Social Alternativo (FSA), an umbrella group of unions, human rights groups, neighborhood organizations, campesinos and students, the 24-hour strike on October 2 closed most of the nation’s schools, including the Universidad Autónoma de Santo Domingo, and brought public transportation to a crawl. Many businesses closed and others saw a decline in sales.

The national police and the military were on duty throughout the country, armed with sidearms, rifles and M-60 machine guns mounted on jeeps. The air in some places was filled with teargas and smoke from burning tires. There were many reports of homemade bombs being detonated and one protestor was reportedly injured when a bomb he was carrying exploded in his hand. Fourteen injuries of demonstrators and police were reported, some from gunshots. There were no press accounts of the number of arrests, which appears to be large.

Several FSA leaders in different parts of the country were arrested in the days before the strike on minor charges, in one case for putting up posters announcing the event. Two days after the strike a court announced it was again taking up charges against several transport union members prominent in FSA over a bomb detonated during the earlier July 9 strike, charges that had been dismissed.

The strikes are two events in a continuing series of protests throughout the country against the social and economic policies of President Leonel Fernández and his government. Specific demands are for salary increases for public and private employees, a lowering of prices for basic foodstuffs, reduction of fuel costs, transportation subsidies, improvements in public water and electric power supplies and improvements in the schools. The national police report there has been an unusually large number of demonstrations since Fernández took office three years ago, 585 of them in 2006 alone. It was in January of 2006 that the Dominican Republic – Central America Free Trade Agreement (DR-CAFTA) with the United States took effect in the country.

As part of the implementing legislation required by DR-CAFTA, the Fernández government made up for the loss of some 823 million U.S. dollars in income from tarriffs on goods imported from the U.S. by raising taxes and cutting back on social services and public utilities. Food and fuel prices rose, schools deteriorated, drinking water and electric power supplies became sporadic.

A number of protests took place in the week before the strike: students, teachers and parents in several parts of the country marched to demand that repairs be made to delapidated school buildings and chairs be supplied for students who had been forced to stand or sit on the floor during classes; residents of one town demonstrated to demand that water mains be repaired after they had been forced to live without running water for more than a week; university students in Santo Domingo demanded transportation subsidies for themselves and for the elderly and the disabled; and drivers of taxis and busses in the capital demonstrated for changes in fuel tax laws.

While making no mention of the strike, the president of the senate speculated in a television interview on the very day it was taking place that the government might take up the question of changing the fuel tax laws. And the next day the secretary of education announced the release of some four million pesos, about 120,000 U.S. dollars, to complete the construction of two schools.

The day after the strike Fernández’s campaign manager declared that the strike had been a complete failure, providing a lesson in defeat for Miguel Vargas Maldonado of the Partido Revolucionario Dominicano, slated to be Fernández’s opponent in the 2008 presidential elections. Vargas had stated earlier that Fernández himself was the prime mover behind the strike because he had ignored the needs of the Dominican people. Meanwhile, most of the Dominican people, particularly FSA activists and their supporters, seem to reject electoral politics altogether and to have no confidence in any of the political parties.

(Sources: Diario Libre, Dominican Republic; Listín Diario, Dominican Republic; El Nacional, Dominican Republic; Hoy, Dominican Republic; IRC Americas, U.S.)

Ecuador: a fair share

A change in the way oil profits are distributed in Ecuador will result in millions of dollars more for the government and millions less for the corporations contracted to drill the wells and pump the oil. President Rafael Correa decreed on October 5 that 99 percent of the excess profits from the sale of crude oil, that is, the profits exceeding what would be earned at the world oil prices in effect when the contracts were signed, will now go to the government, leaving one percent for the companies. The government and the companies had been splitting the excess profits equally. The change will result in an increase of some 700 million U.S. dollars a year for the government, around ten percent of the federal budget.

Ecuador is the fifth largest producer of oil in South America, pumping an average of 536,000 barrels a day in 2006. The state-owned Petroecuador accounts for about 46 percent of the total. Oil is the country’s principal export and before the change was the source of about 35 percent of government revenue.

Labor unions, human rights groups and indigenous peoples welcome the change but others call it confiscation. Former Minister of Mining and Energy Fernando Santos Alvite said the decree violates international treaties and Ecuadorian law and would mean the death of the country’s petroleum industry.

“What confiscation are they talking about?” Correa asked. “The oil is ours.” Under the Ecuadorian constitution, the surface of the land can be owned by individuals or companies but the minerals beneath the surface, including the oil, belong to the people. For years, Correa declared, “certain oil companies have shown profits of 200 percent and 300 percent and some of them haven’t even paid any taxes.” Government officials say the new way of distributing the money in no way violates the terms of its contracts with the companies.

Brazilian Minister of Foreign Affairs César Amorín said his country is prepared to accept the new terms, their primary interest being to remain in the country. The Brazilian government oil company Petrobras extracts about 32,000 barrels of Ecuadorian crude oil a day. The Spanish company Repsol-YPF said the change would make an insignificant difference in the company’s profits.

Petroleum has been the cause of considerable political turmoil for Ecuador in recent years. President Lucio Gutiérrez was forced out of office in April, 2005, largely as a result of the fury of indigenous groups in the eastern Amazonian forests where the oil fields lie. Gutiérrez’s neoliberal policies had meant huge profits for foreign oil companies and continuing poverty for the indigenous people as well as dislocation and great environmental harm to their lands.

When they expire, the current contracts are likely to be replaced by service contracts for fixed fees instead of a percentage of the profits.

The Venezuelan government is currently supplying rigs to drill two new oil wells, to be operated by Petroecuador, in the Sacha oil fields in the Amazonian region of Ecuador.

(Sources: El Mercurio, Ecuador; La Hora, Ecuador; Prensa Latina, Cuba)


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