WEEKLY NEWS UPDATE ON THE AMERICAS ISSUE #267, MARCH 12, 1995 1. New Neoliberal Crisis Hits Brazil, Argentina, Mexico, US 2. Argentina: Ex-Navy Officer Admits "Death Flights" 3. Brazil News: Bus Drivers Strike, Prisoners Rebel, Police Kill 4. US and IMF Give Mexico More Shock Therapy 5. "Long Hot Summer" for Mexican Austerity Plan 6. Mexican Murder Cases: Coverups Within Coverups Subscriptions to the Electronic Edition of this Update are delivered directly to your e-mail box. To subscribe to the electronic edition, send your e-mail address with a check or money order for US $25 payable to Blythe Systems. Mail to: NY Transfer News Collective, 339 Lafayette Street, New York, NY 10012. Feel free to reproduce these updates or reprint any information from them, but please credit us, and send us a copy. We welcome your comments and ideas: send them via e-mail to nicanet@blythe.org * 1. NEW NEOLIBERAL CRISIS HITS BRAZIL, ARGENTINA, MEXICO, US On Mar. 6 the Brazilian government suddenly announced a de facto devaluation of the real of up to 12%. Just a month earlier Brazil had dismissed suggestions that it might need to devalue the currency, which was introduced last July as part of an anti- inflation plan created by current president Fernando Henrique Cardoso, a finance minister in the previous administration. The real will be allowed to trade in a range of between 86 and 90 centavos to the US dollar, and in May the band will be widened to between 86 and 98 centavos, allowing a maximum devaluation of 15%. Brazil has about $36 billion in reserves that can be used to prop up its currency. The de facto devaluation reflects concern over a growing trade deficit and the example of Mexico, which kept its peso at an artificially high level until it was forced to let the currency float on Dec. 21. The Mexican peso crisis caused a catastrophic flight of foreign capital from Mexico and most of Latin America. [Financial Times (UK) 3/7/95, 3/8/95; Wall Street Journal 3/7/95; Washington Post 3/9/95] After initially holding steady, the real began to fall rapidly on Mar. 9 and Brazil's central bank had to intervene 32 times in one day to prop it up. [WSJ 3/10/95] In an apparently unrelated move, on the same day President Cardoso reversed his earlier opposition to an increase in the monthly minimum wage from 70 to 100 reales [see Update #263]. [FT 3/10/95] The Mexican crisis also continues to put pressure on Argentine president Carlos Saul Menem, who is running for an unprecedented second term in the May 14 elections. On Mar. 7, Economy Minister Domingo Cavallo admitted for the first time that Argentina might experience a "mild recession" this year. [FT 3/8/95] On Mar. 9 he revealed that his government was asking the International Monetary Fund (IMF) for an immediate $2 billion loan--in addition to the $420 million loan Argentina was due to receive last September. Cavallo had passed up the smaller loan at the time, and as recently as two weeks ago he insisted that his country no longer needed IMF funding. [WSJ 3/10/95] Meanwhile, the Mexican peso plunged to unprecedented lows. The currency, which traded at about 3.5 to the dollar at the beginning of December, was down to 6.5 to the dollar on Mar. 6. The currency fell to almost 8 to the dollar on Mar. 8, although it recovered to end the week almost unchanged from the week before. The peso helped drag down the US dollar itself. At the low point of a four-day plunge, the dollar fell to a value of 89.2 Japanese yen and 1.3705 German marks on Mar. 7, the US currency's worst showing since World War Two. The dollar stabilized later in the day, but investors were shaken. The US government's ability to defend the dollar is compromised by President Bill Clinton's $20 billion Mexican bailout package, which has tied up more than half of the Treasury's Exchange Stabilization Fund (ESF). The US would probably have to respond to a long-term fall in the dollar by raising interest rates, slowing its own economy. [NYT 3/7/95, 3/8/94, 3/9/94, 3/10/94] Ironically, the US has been the main promoter of the so-called "neoliberal" policies determining the course of Latin America's troubled economies. 2. ARGENTINA: EX-NAVY OFFICER ADMITS "DEATH FLIGHTS" On Mar. 7, some 200 to 300 people demonstrated quietly in front of the presidential palace in Buenos Aires to demand that the armed forces account for the thousands of people still missing from the military regime's "dirty war" (1976-1983). Estimates of the number of "disappeared" prisoners range from 9,000 to 30,000. The latest protest was prompted by the recent confession of a retired naval officer, former Lt. Cmdr. Adolfo Francisco Scilingo, who charges that the military sedated political prisoners and tossed them out of airplanes to die in the ocean. [Los Angeles Times 3/8/95] Scilingo's testimony marked the first time a military official has described these "death flights" openly. At the demonstration, human rights activist Emilio Mignone called the former officer's allegations undeniable, and said he had heard similar reports from hundreds of former political prisoners and from relatives of military personnel. In the late 1970s, Mignone added, numerous unidentifiable bodies washed up on the Atlantic shores of Argentina and neighboring Uruguay. "I have seen at least 30 corpses, or remains of corpses," said Mignone. After the protest, human rights leaders delivered a petition to the presidential palace, demanding that President Carlos Saul Menem order the armed forces to produce documents accounting for disappeared political prisoners. Mignone said he believes such documentation is on microfilm held by the army intelligence agency. [LAT 3/8/95] In an interview published Mar. 3 in the newspaper Pagina 12, Scilingo estimated that a total of 1,500 to 2,000 prisoners were killed during weekly naval flights in 1976 and 1977; he said he personally participated in two such flights in June and July 1977 during which about 30 people were killed. The prisoners were taken from the navy's School of Mechanics in Buenos Aires, the military's most notorious torture center. Scilingo said the orders came directly from top navy officers, who also joined some of the flights "to give moral support." According to Scilingo, a plane took off every Wednesday from Buenos Aires carrying 15 to 20 "subversives." The prisoners were told they were being transferred to southern Argentina; many were so weak from torture they had to be helped aboard the plane. Once in flight, the victims were injected with sedatives by a navy doctor, stripped, and their unconscious bodies "thrown out naked, one by one." [LAT 3/8/95; "JusticeRUs" 3/4/95, posted on email] After his first flight, Scilingo confessed to one of the military's Catholic chaplains. "He said it was a Christian death because they didn't suffer, because it wasn't traumatic, that they had to be eliminated, that war was war, and even that in the Bible the separation of the wheat from the chaff is foreseen," recalled Scilingo. Catholic Bishop Justo Laguna said that if members of the clergy condoned the death flights, "I sincerely ask forgiveness... it is necessary to recognize guilt, not of the church, which is holy, but of its members, who are not saints." [LAT 3/8/95] Scilingo, who retired from the Navy in 1986, said he is still haunted by the two flights he took part in and a torture session he witnessed. "I think about it and go mad," he said. "They ordered me to act outside the law and turned me into a criminal." Scilingo became the first Argentine officer to sue his superiors by issuing a writ against the navy's chief of staff for covering up "dirty war" crimes. [JusticeRUs 3/4/95] Navy chief Adm. Enrique Molina Pico has not denied the death flight allegations, but has said that Scilingo's statements are "reopening wounds. This is a step backward." [LAT 3/8/95] But President Menem dismissed Scilingo's allegations on Mar. 6. "The assertions by this individual were made without proof and are not reliable because they were made by a delinquent who was convicted several times for falsifying documents, fraud and car theft," said Menem. Scilingo has admitted he once bought a car without knowing it was stolen and was convicted on a minor fraud charge because he vouched for a person who later wrote a bad check of less than $100. [LAT 3/8/95] Acting on a decree signed by Menem, Scilingo's rank was stripped in February based on the August 1991 fraud conviction. [NY Newsday 3/8/95; Reuter 3/7/95] In Brazil, deputy Nilmario Miranda of the leftist Workers Party (PT) told the press he suspects that seven Brazilians who disappeared between 1976 and 1983 may have been thrown into the sea by the Argentine navy. Miranda, who is the president of a congressional commission investigating the disappearances of Brazilian political prisoners, said he will try to reopen the commission's investigations. "Drowning political prisoners was a way to not leave any traces," he noted. Miranda explained that in 1993, while investigating in Buenos Aires, he was able to obtain the names of seven Brazilians who disappeared in Argentina. Among them was musician Francisco Cerqueira, a drummer in the group Vinicius de Morais y Toquinho, and reportedly not a political militant. [El Diario-La Prensa 3/8/95 from AP] 3. BRAZIL NEWS: BUS DRIVERS STRIKE, PRISONERS REBEL, POLICE KILL Nearly 5,000 bus drivers in the city of Rio de Janeiro began an open-ended strike at midnight on Mar. 8, demanding a 62% salary increase, new work rules and a health plan. Municipal authorities are supporting the bus owners' offer of a 37% raise, and announced that they will demand that the strikers be fired. [Diario Las Americas 3/11/95 from EFE]... In Franco da Rocha prison in Sao Paulo state, nine inmates held 60 hostages for more than 24 hours before finally agreeing to be transferred to other prisons. The leaders of the rebellion, who were supported by 250 of the prison's 1,750 inmates, were demanding heavy weapons, ammunition and vehicles to flee the prison, and had threatened to blow up the prison and set fire to 30 of the 45 hostages. [La Jornada 3/5/95 from EFE, AP, AFP]... On Mar. 4, Brazilian television broadcast video footage of a state police action in Rio de Janeiro. Police agents captured a fleeing robbery suspect and removed a gun hidden in his pants leg; Christian Moura Mesquita was unarmed and lying still on the ground, completely overpowered by police, when several officers dragged him behind a van and one of them shot him three times in the back, killing him. Twelve police agents were ordered arrested in connection with the murder, which probably would have gone unremarked if not captured on film in broad daylight at a busy shopping center. [LJ 3/5/95 from EFE, AP, AFP; El Diario-La Prensa 3/6/95 from AP, 3/8/95 from AP] 4. US AND IMF GIVE MEXICO MORE SHOCK THERAPY After several weeks' delay, on Mar. 9 Mexican finance secretary Guillermo Ortiz Martinez finally announced his government's new economic plan. The package aims at generating a 4.4% budget surplus this year through drastic cutbacks in social programs and equally drastic increases in taxes and in charges from state enterprises. Infrastructure programs will be eliminated as government projects are cut by 9.8%. The value-added tax (VAT) (which is similar to US sales taxes) will jump from 10% to 15%; there will be an immediate 20% increase in electricity prices and a 35% gasoline price hike, with both going up another 0.8% each month for the rest of the year. The peso will continue to float against the US dollar, and the plan anticipates a 42% inflation rate for the year. (In its first response to the current economic crisis, which began on Dec. 20, the government projected a rate of 19%.) As a compensation for Mexico's poor, the minimum wage (about $2 a day) will go up 10% on Apr. 1; the government also promises 500,000 temporary jobs through a rural road-building project. [New York Times 3/10/95, 3/12/95; Wall Street Journal 3/10/95; Independent (UK) 3/11/95] The program--a classic "shock therapy" program of the sort frequently prescribed by the International Monetary Fund (IMF)-- is expected to force the country into a severe recession. [Independent 3/11/95] Government officials say that at least 500,000 people will be laid off over the next two months; 250,000 lost their jobs in the first two months of the year. [NYT 3/12/95] [This comes on top of an unemployment rate that was already at least 23% for urban workers during the last six years, well before the current crisis, according to figures from the central bank (Banco Nacional de Mexico). [La Jornada (Mexico) 3/5/95]] Since 1987 all major economic plans have been presented in the form of a "pact" between the government, the unions and business leaders; the major unions and business associations are dominated by the ruling Institutional Revolutionary Party (PRI) [see Update #244]. But Mexican president Ernesto Zedillo Ponce de Leon failed to get labor and management's endorsement for the new plan. US officials, however, "reviewed" the plan and their "suggestions were incorporated into it," according to the New York Times. [NYT 3/10/95] The British Independent writes: "The fact that an [IMF] team had been in Mexico for several days, apparently guiding policy, and that the US ambassador, James Jones, had preempted Mr. Ortiz a day earlier by heralding the measures, brought further criticism that President...Zedillo had become a prisoner of the US administration and the world financial community." [Independent 3/11/95] 5. "LONG HOT SUMMER" FOR MEXICAN AUSTERITY PLAN The "tough" new economic plan is going to produce "a long, hot summer," an unnamed Mexican "senior official" told the Wall Street Journal. Even a large part of the Mexican business sector is stirred up. On Mar. 8, the day before the plan was announced, hundreds of business people staged protests in major cities and took over the city hall in Monterrey, in the northern state of Nuevo Leon. [WSJ 3/10/95] El Barzon, a large organization composed mostly of middle-income farmers from northern Mexico, was already planning to occupy at least 1,000 bank offices and branches on Mar. 16-17 to demand a moratorium on debts for small and medium producers. [LJ 3/5/95] A major concern for the government will be whether the PRI- affiliated Mexican Workers Confederation (CTM) can control the sort of rank-and-file militancy shown in last month's wildcat strike at the RCA-Thomson maquiladora [see Update #265]. Pedro Castillo Medellin, secretary general of the Electrical Workers Union (SME), recently charged that the series of pacts since 1987 has simply subjected workers to "temporary" sacrifices which turned out to be permanent. His words came as part of a forum on "Unionism During the Crisis" sponsored by the SME, the Revolutionary Workers Federation (COR), the National Union of Education Workers (SNTE) and the Authentic Workers Front (FAT), an independent labor organizing group headed by Bertha Lujan. [LJ 3/5/95] The government is trying to contain unrest by banning street demonstrations in Mexico City. [Washington Post 3/11/95] Despite the ban, more than 50,000 demonstrators marched to the Zocalo, the capital's main plaza, on Mar. 8 to observe International Women's Day and to welcome Amado Avendano Figueroa. Avendano, who heads a "transitional government in rebellion" in the southern state of Chiapas, led a caravan of indigenous people to the capital; the caravan left Chiapas on Feb. 20 and took a 1,100 km course through Tabasco, Veracruz, and Puebla states. The rebel governor announced that the caravan would camp out in the Zocalo until the Zedillo administration recognizes him as the legal governor of Chiapas governor; the protesters also demand recognition for indigenous rights and for the rights of the rebel Zapatista National Liberation Army (EZLN) as a political and belligerent force. Back in Chiapas, 4,000 indigenous people marched the same day in San Cristobal de las Casas in support of local bishop Samuel Ruiz Garcia, who has served as mediator in talks between the government and the EZLN. [El Diario-La Prensa (NY) 3/9/95 from AP and AFP, 3/10/95 from EFE; Reuter 3/8/95] The explosive situation in Chiapas is another threat to the government's ability to impose austerity measures. Despite various attempts at renewing peace talks, the Mexican military continues to occupy most towns and villages, while the rebels and many of their civilian supporters are still hiding in the Lacandona rain forest under conditions of extreme hardship. Encouraged in part by the presence of neutral observers from non- governmental organizations (NGOs), some EZLN sympathizers have returned to the villages they fled when the army's offensive began on Feb. 9. On Mar. 2 many of the 800 residents of El Prado went home. They found that the army had burned two houses to the ground, and had destroyed all personal property in the other homes. The chickens were slaughtered, the other livestock had been let loose, medicine was looted from the clinic, farm tools were systematically destroyed; the soldiers had broken the hoses for the village water supply and the community's electric cables. [Fray Bartolome de las Casas Human Rights Center Information Bulletin 3/3/95; LJ 3/4/95, translation by National Commission for Democracy in Mexico, USA (NCDM)] The US political elite clearly wants the unrest in Chiapas to end quickly. New York Times columnist Thomas Friedman praised Zedillo for "making Mexico more open, democratic and less corrupt than ever before." Among Zedillo's "impressive series of political reforms" is the fact that "he has suppressed the guerrilla insurgency in Chiapas." Zedillo's people are "'nice guys,'" Friedman writes, who "need our help, and I think they deserve it." [NYT 3/12/95] 6. MEXICAN MURDER CASES: COVERUPS WITHIN COVERUPS On Mar. 4 former Mexican president Carlos Salinas de Gortari abruptly ended a brief hunger strike he started on Mar. 3. Attorney General Antonio Lozano Gracia had met Salinas' demand for a statement saying that the former president had in no way hindered the investigation into the March 1994 assassination of PRI presidential candidate Luis Donaldo Colosio Murrieta. Meanwhile, Salinas' brother Raul remains in the Almoloya maximum security prison on charges of masterminding the September 1994 assassination of PRI general secretary Jose Francisco Ruiz Massieu. Mar. 4 was the 66th anniversary of the ruling party's founding; a Mexico City comic strip suggested that the PRI should designate the Almoloya "an exclusive vacation center for its most conspicuous and hyperactive members." [LJ 3/5/95] On Mar. 6 the Mexican government formally requested the extradition of Mario Ruiz Massieu from the US, where he has been held since Mar. 3, when US Customs arrested him at Newark International Airport on charges of failing to declare $28,000 of the $46,000 he was carrying as he and his family tried to board a plane to Madrid. [WP 3/7/95] Officials of both governments said that the FBI had been following Ruiz Massieu "in a discreet manner" from the moment he entered the US through Houston on Mar. 2. [LJ 3/5/95] The Mexican government charges that Ruiz Massieu intimidated witnesses in an effort to cover up Raul Salinas' role in the murder of the PRI general secretary, Mario's own brother. Mario, who was the assistant attorney general in charge of drug investigations, also headed the probe into his brother's assassination. On Mar. 7 the Mexican government charged that between March and November of last year the assistant attorney general deposited as much as $8 million dollars in a Texas bank. On Mar. 8 the Mexican government suggested that Ruiz Massieu had taken millions in payoffs from the Gulf drug cartel. [WP 3/7/95, 3/8/95, 3/9/95; NYT 3/8/95] Ruiz Massieu quit the assassination probe on Nov. 23, saying that his brother's killing was linked to the Colosio murder and that his investigation had been blocked by PRI officials, including former PRI president Ignacio Pichardo Pagaza (now secretary of energy, mines and industry in Zedillo's cabinet) and PRI general secretary Maria de los Angeles Uriegas (now PRI president). His book on his brother's killing, I Accuse, had gone on sale at the end of February. Porfirio Munoz Ledo, president of the center- left opposition (PRD), has suggested that Attorney General Lozano, a member of the conservative National Action Party (PAN), is targeting Ruiz Massieu "out of spite." [Los Angeles Times 3/8/95] Others suggest another coverup: Lozano denies emphatically that there is any connection between the Colosio and the Ruiz Massieu assassination. [LJ 3/5/95] Ruiz Massieu allegedly deposited the $8 million in cartel payoffs in the Texas Commerce Bank in Houston through a subordinate, Jorge Stergios. No charges have been pressed against Stergios, who is said to own a mansion with a private lake in Houston; he is officially a fugitive. [LAT 3/10/95] The Texas Commerce Bank (a subsidiary of Chemical Bank) has connections with Carlos Hank Rhon, son of Salinas' agriculture secretary, Carlos Hank Gonzalez. Last November Ruiz Massieu said that Hank Gonzalez--one of the 24 Mexicans who became billionaires under the Salinas administration--may have helped block his investigation. [ED-LP 3/10/95 from AFP] In what officials called a highly unusual move, on Mar. 9 US attorney general publicly announced that Gulf Cartel head Juan Garcia Abrego had been placed on the Most Wanted List of the US Federal Bureau of Investigation (FBI). Reno denied that the announcement had anything to do with the Ruiz Massieu case. [LAT 3/9/95; ED-LP 3/10/95 from Notimex] Some people believe information is a valuable commodity that must be hoarded, protected and given out only at a price. At the Weekly News Update on the Americas, we believe that free access to full and accurate information is a basic right that everyone should insist on and defend. 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