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Puerto Ricans Appear to Endorse Statehood in Referendum

Article-Grid, Caribbean, Elections, Guest Posts, News Map, Nicholas Baldo, Politics News / By

Lost in the extensive coverage of the 2012 U.S. Election is the recurrent and important issue of Puerto Rico’s relationship to the U.S. On Tuesday, the Puerto Rican electorate appeared to endorse statehood in a two-part non-binding referendum. Fifty-four percent of voters prefer changing Puerto Rico’s status from the status quo, and 61 percent of voters supported statehood. “Sovereign free association” garnered 33 percent of the vote, and independence only five percent. Puerto Rico is currently an unincorporated organized territory of the U.S. with “commonwealth” standing, a status that brings with it a complicated set of rights and privileges.

The two-part nature of the referendum question means that the results may not be the ringing endorsement of statehood that backers of the proposal had hoped. Of the 54 percent favoring a change in status, many could have desired either independence or sovereign free association. Likewise, of the 61 percent of voters statehood as opposed to independence or sovereign free association, many might actually want to retain the status quo. . Overall, the results seem to be compatible with previous statehood referendums and likely do not reflect any profound change in public opinion.

The 2012 Puerto Rican status referendum’s wording has come under harsh criticism, even from supporters of statehood. Pedro Rosselló, the former Governor of Puerto Rico and a longtime backer of statehood, feels that the referendum’s wording will cause “an indefinition that, in the end, will bring more of the same: the continuous status quo.” Nevertheless, most pro-statehood politicians appear to accept the results.

The next move belongs to the U.S. government, though it remains unclear when that move will occur and what form it will take. If Tuesday’s referendum is taken as an endorsement of statehood, Congress will need to decide on whether to admit Puerto Rico as a state. President Barack Obama, as well as leaders of both political parties, have promised to support Puerto Rico’s self-determination, though with the results of the two-part referendum open to interpretation, it is not certain what either the President or Congress will do.

Puerto Rican Governor Luis Fortuna, a backer of statehood, supports both the referendum and the pro-statehood interpretation of its results. He has promised to hold a constitutional assembly in 2014 followed by plebiscite, the necessary next-steps for statehood. Unfortunately for statehood-proponents, Fortuna lost his bid for reelection to Alejandro Garcia Padilla, who favors the status quo.

Even if the current referendum goes nowhere, a firmer resolution to the question of Puerto Rico’s status appears likely within the few years. The United Nations Special Committee on Decolonization has asked several times since 2006 for the U.S. to “allow Puerto Ricans to fully exercise their inalienable right to self-determination and independence”. The U.S. government agrees, and has responded with a flurry of reports and investigations over the last few years. The report (pdf) published by the President’s 2011 Task Force on Puerto Rico’s Status argued for a two-stage referendum by which voters would first decide whether to remain part of the U.S., either as a state or remaining as a dependency. Then, if the independence option is turned down, a second vote would have the electorate chose between statehood and the status quo. Most likely a clear referendum like this one will be necessary for the U.S. government to act.

Rising Bihar Asks for “Special Category” Status

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The Indian state of Bihar has long been noted for its poverty, corruption, and lack of social progress, ranking last in most Indian developmental indicators. But Bihar now has one of India’s fastest growing economies, and its levels of corruption have recently plummeted. Less pronounced gains have also been made over much of northern India. As a result, the impoverished BIMARU region (BIhar, MAdhya Pradesh, Rajasthan, and Uttar Pradesh) is now considered to be defunct.*

Despite its recent gains, Bihar is still one of the poorest parts of India, with low levels of social development (as can be seen on the Urbanomics base map used here). Its popular Chief Minister, Nitish Kumar, trumpets Bihar’s recent gains, yet he insists that his state’s poverty makes it eligible for “special category” status, which would allow it to receive financial benefits from the central government. Kumar recently rallied his massed supporters by declaring that, “We are prepared for a longer battle ahead. We will now organise a rally in the national capital, sometime in March, to press for the acceptance of the special category status demand.” Kumar’s call has attracted widespread attention across India, in part because he would also like to see such “special category” status applied to other backward Indian states.

To qualify for the category, Indian states must fit several criteria based more on physical geography and culture than on poverty and lack of infrastructure. Rough topography, substantial tribal populations, and low population density are the key factors. Bihar, in contrast, is a densely populated lowland state with few tribal people. Kumar, however, waves away such obstacles, arguing that the problems of the uplands spill into the plains of Bihar: “Though Bihar is not a hill state, the river emanating from the mighty Himalayas is creating havoc in the state through flood every year…It is the responsibility of the Centre to talk to Nepal to find a solution to recurring floods. It has failed to fulfill its responsibility.”

The Times of India contends that Kumar’s approach is “arousing sub-nationalism” among the Bihari people, which it sees as a basically positive development, arguing that sub-nationalism can generate the social cohesion necessary for economic growth. Elsewhere in India, however, Bihari assertiveness is often regarded with contempt and suspicion, as are Biharis. As the Times of India reported in September of this year:

Bihar is on the receiving end once again in Mumbai. Biharis have been termed “infiltrators” — and to hear the words of a self-appointed guardian of Marathi sub-nationalism in Mumbai, the most cosmopolitan city in India, they might be run out of the state.

Bihar-bashing has become MNS chief Raj Thackeray’s favourite pastime in recent years. In the process of espousing a grotesque form of sub-national regional and linguistic fundamentalism, he has acquired a larger than life image such that the governance of the city appears to be ‘outsourced’ to him.

*It should also be noted that the geographical designation of BIMARU changed at the beginning of the new millennium when the new states of Jharkhand, Chhattisgarh, and Uttarakhand were hived off of Bihar, Madhya Pradesh, and Uttar Pradesh respectively.

** The designation of special category states on the map posted here is not definitive; I was not able to find a map showing the states so designated, and different textual sources place different states in the category. Some sources, for example, list Sikkim and Uttarakhand as well.

 

Separatism in French Polynesia

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As previously noted on GeoCurrents, the political entities that comprise the French Republic exhibit a multitude of different administrative designations with varying legal responsibilities. One such possession is French Polynesia, which was officially designated an “overseas country” in 2004, though legally its status is indistinguishable from that of France’s other overseas collectivities (see map at left). Overseas collectivities yield control of foreign affairs, monetary policy, and security to Paris while otherwise exercising legal autonomy. In recent years, increasing chaos and animosity have come to define the political landscape of French Polynesia. Elected officials are split over the question of greater autonomy or independence, and legislative coalitions often prove ephemeral.

French Polynesian President Oscar Temaru is at the center of the controversy. Temaru and his pro-independence party, Tavini Huiraatira (People’s Servant), have recently stepped up their separatist rhetoric. On October 8, Temaru reportedly removed the French flag and a portrait of the French President from French Polynesia’s assembly chamber. Pro-independence members of the assembly have also begun using a Tahitian name for the territory, “Maohi Nui”, rather than “French Polynesia”. According to Temaru’s main political opponents, the anti-independence Tahoera’a Huiraatira (Popular Rally), Temaru’s actions are illegal. They further charge that he is becoming more of a dictator than a president.

Opposition to French rule is colored by a history of controversial nuclear testing. Between 1966 and 1996, 193 nuclear tests were conducted in French Polynesia. At first, such tests enjoyed a measure of support, but overtime they became an environmental scandal. France’s final series of tests, conducted in 1995 and 1996 on the French Polynesian atoll of Moruroa, provoked worldwide controversy and condemnation in the South Pacific Forum. After the last 1996 test, France signed and ratified both the Comprehensive Nuclear Test-Ban Treaty and the Treaty of Rarotonga, which creates a nuclear weapon-free zone in the Pacific. In 2006, President Temaru renamed a prominent park in Papeete—the Place Chirac—the Place de 2 Juillet 1966. The new name references the date of the first nuclear test to take place in French Polynesia, and the park now hosts a memorial dedicated to all nuclear detonation sites around the Pacific.

French Polynesia’s independence movement faces several political and economic obstacles. Aside from tourism in Tahiti, French Polynesia’s economy has little to stand on, and depends on roughly a billion of dollars in annual subsidy from Metropolitan France to maintain its standard of living. Politically, conservative parties within French Polynesia that oppose independence consistently control about half of the government’s elected positions, including—at times—the presidency. Tahoera’a Huiraatira, founded by Gaston Flosse, is the largest such party and garners the support of most French settlers. The peculiar instability of French Polynesian politics further confounds the situation. The former Tahoera’a Huiraatira President, Gaston Tong Sang, fell to a contentious no-confidence vote in 2006, paving the way for President Temaru’s ascendancy and splitting the anti-independence Tahoera’a Huiraatira into two competing parties. Though independence is certainly one of the largest issues in French Polynesian politics, it would be a mistake to interpret each parliamentary election as something approaching a referendum on the subject.

Temaru and other independence-seekers within Tavini Huiraatira point with hope to recent comments made by French President Francois Hollande during a visit to Senegal. Hollande promised an end to “Françafrique”, a term used to refer to France’s special relationship with its former African colonies. Tavini Huiraatira’s hopes may be somewhat overstated, especially given that the demise of Francafrique is itself a nebulous notion. For the near future, French Polynesia will almost certainly continue on with the status quo, and there are currently no plans for a independence referendum, as is the case in New Caledonia. In the longer term, though, an independent French Polynesia appears to be quite possible, perhaps even likely.

Local Elections Conclude in Bosnia and Herzegonvina

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Preliminary results are in for Bosnia and Herzegovina’s October 7th local elections. The elections went smoothly and without irregularities, but many fear that the results may fan the flames of ethno-nationalism and separatism in the fragile country’s political discourse. The big winner appears to be the Serb Democratic Party (SDS), which won 27 mayoral seats for a gain of 13 from the last such elections in 2008. The SDS’s gains come within Republika Srpska, one of two mostly independent political entities that together comprise Bosnia and Herzegovina (see map at right). Ethnic Serbs dominate Republika Srpska, whereas about three quarters of the inhabitants of its confusingly named counterpart—the Federation of Bosnia and Herzegovina—are Bosniaks (Bosnian Muslims) and Bosnian Croats.

The success of the SDS has understandably raised eyebrows. SDS members played a leading role in the initiation of the 1992-1995 Bosnian War, and have since been found guilty of numerous crimes against humanity in international courts related the indiscriminate killing of Bosniaks during the war. The SDS does not currently espouse violence, but it has positioned itself to the right of the relatively moderate Alliance of Independent Social Democrats (SNSD)—the party of Republika Srpska’s president, Milorad Dodik. The SNSD was the main loser in October 7th’s elections, losing 26 mayoral positions.

Local elections in Bosnia and Herzegovina are more closely associated with national politics than in most other countries. According to Bosnian political analysts, local issues like roads and schools were mostly ignored, as candidates tended to emphasize questions of sovereignty, such as whether and how Bosnia should be divided. According to university lecturer Dražen Pehar, the local media share some of the blame, as they “simply followed the election agenda as imposed by the parties and the candidates, rather than trying to steer it towards a proper set of issues.”

Bosnia and Herzegovina’s sharp ethnic and political division means that the country essentially experienced two different elections, one in Republika Srpska and another in the Federation of Bosnia and Herzegovina. In the latter, the political landscape will remain relatively stable, with the dominant Bosniak party, the Party of Democratic Action (SDA), winning 34 mayoral seats. The Croat Democratic Union, which represents the Federation’s Croat minority, won 14 seats.

The final results of the elections remain unclear in some municipalities, most notably Srebrenica. The then-majority Bosniak Srebrenica was the scene of a notorious mass-killing in 1995, where over 8,000 Bosniaks died at the hands of Republika Srpska troops and paramilitary organizations. The killings, along with the expulsion of 25,000-30,000 other Bosniaks, were ruled a genocide by The Hague in 2004. Since the end of the war, about 10,000 Bosniaks have returned to Srebrenica, where they now constitute a one-third minority. In the past, former Bosniak residents of Srebrenica driven from the city in the 1990s have been allowed to vote in local elections, electing Bosniak mayors and councilors. Beginning with the October 7th elections, that privilege no longer applied, prompting fears that Serb politicians will take power.

Serbs see the expiration of special voting rights for Bosniak ex-Srebrenica residents as a natural step towards normalcy. Their reasoning is that local elections require local expertise among voters. According to Srebrenica’s Serb SNSD mayoral candidate, Vesna Kocevic, “the citizens who live here should decide about Srebrenica and about what happens in the community.” SNSD politicians also tend to minimize the hardships of Srebrenica’s Bosniaks; Republika Srpska’s president recently claimed at a Srebrenica campaign event that “there was no genocide.”

Srebrenica’s Bosniak mayoral candidate, Camil Durakovic, sees the new political situation as a fulfillment of exactly what the perpetrators of the 1995 killings wanted. Srebrenica’s Bosniaks have responded by encouraging Bosniaks from around the country to register and vote in Srebrenica. The outcome of their efforts is not yet clear, but it appears that the election will be close. Republika Srpska may challenge the results.

In a more humorous yet perhaps ominous turn, a mayoral candidate in Bosnia and Herzegovina’s fourth-largest city—the majority Bosniak Zenica—was banned from the election in September for uploading pornographic videos to his official campaign website. According to the Boston Globe, mayoral candidate Mirad Hadziahmetovic  “said he uploaded porn clips after realizing that large numbers of people use the Web to peruse sexual content.”

Hyperinflation Strikes Iran

Article-Grid, Economics News, Guest Posts, News Map, Nicholas Baldo, Southwest Asia and North Africa / By

The world’s next hyperinflation episode appears to be underway in Iran, with potentially far-reaching political consequences. Officially, Iran pegs its currency—the rial—at 12,260 to the dollar. In early 2012, black market exchange rates began to diverge sharply from the 12,260 peg, eventually hovering at nearly double the official rate. Over the last month, the value of the rial has plunged further to about 35,500 rials to the dollar. With a monthly inflation rate now estimated at over sixty-nine percent, Iran has crossed into hyperinflation territory, defined as any monthly inflation rate in excess of fifty percent.

The declining value of the rial makes imported goods of all kinds more expensive, since they must be paid for in foreign currency. As international sanctions severely limit the availability of foreign currency, Iranians face skyrocketing prices. The situation is particularly troublesome since Iran needs to import much of the food and many of the manufactured goods consumed by its populace.

Matters came to a head on Wednesday, when Iranian protesters concerned about the currency collapse clashed with police in Tehran’s Grand Bazaar. Police also took time to shut down several merchants engaging in currency exchange. The protests were notable given that the Grand Bazaar has traditionally been a focus of support for the current regime. On Thursday, the Bazaar remained closed, though it seems a few currency exchanges are once more in operation.

Though the crisis only took off in the last several days, it has been in the making for years. Whereas countries like Saudi Arabia have used oil revenues to amass huge reserves of foreign currency, Iran has spent most of its money on subsidies for individual consumption. Much of the currency it has managed to accumulate is now inaccessible due to sanctions relating to its nuclear program. Maintaining a low exchange rate for years has been possible due to high oil revenues, but falling oil exports have made Iran’s fiscal situation increasingly untenable. Oil exports are down fifty-five percent from last year.

So far the government’s response to the escalating crisis has not inspired hope. Some even blame the regime for allowing hyperinflation, as it reduces the budget deficit. Actions intended to forestall the situation, such as the closing of currency exchanges and capping interest rates, appear to have just led to more panic. Two weeks ago, the government attempted to calm currency traders by opening a “foreign exchange center” that would undercut black market rates. The failure of the exchange convinced many that Iran’s central bank is basically out of options.

In a meeting on Wednesday, President Mahmoud Ahmadinejad and members of the Iranian Parliament all seemed rather confused, and wasted no time in pointing fingers at each other. The speaker of the Iranian Parliament, Ali Larijani, blamed Ahmadinejad’s redistribution policies for “eighty percent” of the problem, while acknowledging a role for the sanctions. Ahmadinejad hinted that Parliament should share in the blame, and later ordered the Intelligence Ministry to investigate twenty-two individuals for causing “overwhelming turbulence” in Iran’s foreign currency market.

Outside Iran, and perhaps within, many hope that the current crisis will lead the country to reconsider its nuclear program. The final magnitude and consequences of the crisis have yet to be determined, but it will likely prove the largest challenge the government has faced in years, if not decades. On Wednesday, Supreme Leader Ayatollah Ali Khamenei vowed, in a somewhat ambiguous context, that Iran “will never surrender to pressure.” At the very least, the crisis promises to be a potentially crippling problem for President Ahmadinejad, who implied in his conversation with Larijani that he might resign sooner rather than later, or in his words, “say goodbye.”

Indo-Australian Plate Rent Asunder Beneath the Ocean

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In April 2012, two massive earthquakes hit northern Sumatra. The earthquakes—one of magnitude 8.2 and the other 8.6—were far in excess of what one would expect to encounter many miles from a tectonic plate boundary. Indeed, “strike-slip earthquakes”, where pieces of crust rub against each other laterally, had been completely unknown in the area before the two quakes. Now, researchers from the École Normale Supérieure in Paris argue that the quakes are a manifestation of a new fault line dividing the erstwhile Indo-Australian Plate (see U.S.G.S. map at left). According to the researchers, the infamous earthquakes that hit nearby Aceh in 2004 and Nias in 2005 played an important role in this development. Although the 2004-2005 events were typical earthquakes near a known subduction zone, they may have aided the “intraplate deformation” process sustained by April’s earthquakes. If born out, the research means that the number of major tectonic plates on the Earth’s surface has risen from twelve to thirteen.

The Indo-Australian Plate separation, even if it is still incomplete in some areas, is usually recognized as a forgone conclusion among geologists. During the 1970s, scientists discovered a six hundred mile zone of broken and disfigured crust along the floor of the Indian Ocean. This breakup zone has been in the making for between eight and ten million years. The “Indian Plate” has continued to move north, colliding with Eurasia as it has done for about 50 million years. The “Australian Plate”, meanwhile, has been moving away from the Indian Plate in the west, while crashing into it in the east and causing the pressure that has yielded the new Sumatran earthquakes. The basic dynamics of the situation have been recognized since a 1995 report by researchers from the Lamont-Doherty Earth Observatory at Columbia University.

The Indo-Australian Plate separation may seem like a mostly academic issue, but it promises to have major consequences for the new fault region, and perhaps the rest of the world as well. Parts of Sumatra and environs once thought to be relatively safe can expect more mega-quakes and tsunamis in the future. As New Scientist ominously puts it, “Things should become clearer as more earthquakes shake the region.” Moreover, according to researchers from the U.S.G.S., April’s earthquakes set off uncommonly large aftershocks all over the world. Before April, only one earthquake greater than magnitude 5.5 had been recorded as an aftershock more than 1,500 kilometers from the epicenter of the “mainshock” that caused it. During the six-day span after April’s magnitude 8.6 earthquake, the world experienced five times as many remote earthquakes greater than magnitude 5.5 as it normally does. In short, the new strike-slip fault dividing the Indian and Australian plates means business.

The breaking of a tectonic plate is a difficult process to fully comprehend. The Indian Plate is one of the thinnest plates on Earth, but still represents roughly 100 vertical kilometers of rock. The plate’s relatively slender profile is likely the result of melting due to the same massive lava plume that broke up Gondwanaland 90 million years ago and more recently created the Kerguelen microcontinent.

The Indian and Australian Plates were not always joined at the hip; researchers think they only fused about 43 million years ago with the cooling and solidification of former spread regions. In light of their independent histories and the rather awkward-looking shape of the Indo-Australian plate, perhaps the longtime union of the Indian and Australian plates—rather than their separation—is what requires more explanation. It is quite rare for changes taking place on a geologic timescale to manifest themselves clearly during a matter of days and months, but it appears that the present is indeed such a time.

Bavarian Separatism and the Franconian Issue

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Bavarian separatism, a long-standing if still rather minor political movement, is finally getting some attention in the global media, thanks to the recent publication of Bayern kann es auch allein (or Bavaria Can Also Go It Alone), a book described by Canada’s Maclean’s as a “191-page polemic covering a range of standard Bavarian complaints about the present German (and European) political order and a paean to the benefits and glories that await an unfettered Free State of Bavaria.” Framing the issue in Canadian terms, the Maclean’s article notes that Bavaria is a bit like a combination of Quebec and Alberta: culturally distinctive from the rest of the country (like Quebec), and also more prosperous and more conservative (like Alberta). The New York Times claims that “Bavarians, who have an independent streak akin to Texans in the United States, can handle marching orders ‘from Berlin or Brussels, but both together is too much…’” (quoting a local source).

The separatist Bavaria Party (Bayernpartei, BP), however, rarely gets as much as one percent of the vote in local elections in recent decades, although in the 1950s it occasionally scored in the double-digits and in 1949 it received over 20 percent of the vote in the Bundestag election. But the European economic crisis, coupled with the large fiscal equalization payments that Bavaria makes to other regions of Germany, could result in a certain resurgence.

The separatist movement, however, faces a distinct challenge in the fact that not all of Bavaria is culturally Bavarian. The Bavarian dialect (which many linguists regard as a separate language) is mostly limited to Altbayern, or Old Bavaria, composed of the Regierungsbezirks (“government districts”) of Upper Bavaria, Lower Bavaria, and Upper Palatinate. In the Napoleonic period, several historically and culturally non-Bavarian districts were appended to the state. These include the three Franconian districts, where the East Franconian dialect is found, and Bavarian Swabia, whose residents traditionally speak a variety of Alemannic German. Few residents of these areas have much use for Bavarian nationalism (or sub-nationalism) in any of its guises.

The actual geographical situation, however, is rather more complicated. As it turns, a few small areas in both Bavarian Franconia and Swabia do belong to Altbayern, as does the Austrian region of Innviertel.

Honduras Moving Ahead with Private Cities

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To most development economists, the key to economic success lies in the creation of good institutions, be they schools, corruption-free agencies, or the like. In 2010, the New York University Business School economist Paul Romer made quite a splash in the field by arguing that in countries where good institutions are lacking, new “charter cities” should be built and run by outside entities under their own laws as semi-sovereign entities. Institutions in the charter cities would be designed for success from day one. Romer could point to the historical success stories of Hong Kong, Macao, and Singapore, but most of his peers regarded the idea as, if not horrible in principle, as a curiosity that would never actually see the light of day.

On September 4, Romer’s theory gained a huge vote of confidence by the government of Honduras, which signed a memorandum of understanding with a group of investors led by Michael Strong, a U.S. libertarian educator. Strong and his associates will be allowed to develop one of Honduras’s new “Regiones Especiales de Desarrollo” (REDs), or “special development regions.” REDs will have their own judicial systems, their own police, their own tax structure, and even the ability to negotiate trade internationally.

Romer himself has been heavily involved in the effort to make REDs a reality in Honduras. President Porfirio Lobo’s economic advisers quickly took note of Romer’s charter cities idea, and in 2011 they invited Romer to Honduras to make his case. Romer spoke with Lobo, who was already sold on the idea, and addressed the Honduran Congress on behalf of a constitutional amendment allowing the creation of REDs. The amendment passed soon after, granting President Lobo the power to negotiate the development of three such regions. A specific site for the first RED has not yet been chosen, though the Caribbean coastal area near Puerto Castilla (pictured above) appears to be the front-runner. Romer, along with several others, has also been appointed to a “Transparency Commission” charged with “oversee[ing] the integrity of governance in the REDs.” The commission, however, remains unofficial pending a Supreme Court decision. In an open letter to President Lobo explaining the group’s legal limbo, Romer and his colleagues state that “we, as individuals, continue to believe strongly in the vision behind the Honduran RED initiative, and we stand ready to be of service when the impediments to the full establishment of the institutional framework of the REDs have been resolved.”

The one legal hurdle remaining to the RED system is the Honduran Supreme Court, which may yet rule the entire enterprise unconstitutional. What the Supreme Court will rule—and when that ruling will come—remain anyone’s guess. In the mean time, many Hondurans have reacted to the RED concept with skepticism and anger. Critics worry that REDs will use their legal status to implement lax environmental and labor regulations, becoming in effect 21st Century banana republics. Concern also arises over the possible loss of Honduran sovereignty. Even indigenous rights’ groups have entered the debate. According to The Guardian, the president of the Fraternal Black Organization of Honduras claims that the Puerto Castilla site proposed for Michael Strong’s RED “would threaten the continuity of the Garifuna people and culture.”

Project backers, government officials, and proponents tend to dismiss “banana republic” concerns, promising higher wages and affordable housing. Even without Supreme Court approval, Strong’s group plans to begin $15 million worth of construction work shortly. According to the government, construction will create 5,000 jobs in the next six months and 200,000 before work is finished. Eventually, Strong imagines the new city as a thriving free trade zone along the lines of Dubai, and believes that it will rank among “the most important transformations in the world.” Regardless of what one thinks of the idea’s merits, the prospect of a new development  theory, a somewhat corrupt central government, libertarian investors from the United States, and thousands of Hondurans people from diverse backgrounds setting out to create a new kind of semi-sovereign entity promises to be a fascinating process to observe.

Argentina’s Mounting Economic Troubles

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Economic pressures and uncertainties are again mounting in Argentina. Moody’s recently downgraded the country’s credit rating, and on September 24 the International Monetary Fund threatened it with sanctions if it does not produce “acceptable” economic data by December. The Argentine government has been accused for the past year of manipulating its economic reports to hide its true rate of inflation. According to its most recent report, annual inflation is running at about 10 percent, whereas independent sources peg it closer to 24 percent. Economic growth in Argentina has slowed down greatly this year, although the central government still expects it to come in at a respectable 3.4 percent for the calendar year. Outside observers, however, doubt that the figure will be reached. Optimists note that Argentina’s trade surplus is strong and growing rapidly, but their opponents counter that this trend stems largely from the government’s restrictions on imports, which have angered key trading partners.

As a result of Argentina’s economic difficulties, the value of its peso has been dropping against other currencies. As Bloomberg reported at the end of August, “In Argentina’s unregulated exchange market, in which investors buy assets locally in pesos and sell them abroad for dollars, the peso has slid 27 percent this year to 6.5247 per dollar.” As a result of the peso slide, Colombia is now reporting that it has surpassed Argentina to become the second largest economy in South America in terms of nominal GDP.

Despite the looming financial problems, Argentine president Cristina Fernández de Kirchner remains unbowed. She notes that the country’s economy boomed after it ignored conventional thinking and defaulted on its bonds after its last economic crisis roughly a decade ago. Argentine prosperity, she contends, demands a degree of autonomy from the global economic system. As she recently argued, “the rich countries don’t want partners or friends; they just want employees and subordinates. And we’re not going to be anybody’s employees or subordinates. We are a free country, with dignity and national pride.”

In a recent Seeking Alpha post, Ulysses de la Torre paints a truly dire picture of the Argentine economy. The following assertions are plucked out of his column verbatim. To the extent that they are true, an impending collapse seems possible:

It is now almost impossible to buy dollars… This difficulty in obtaining foreign exchange has resulted in a de-facto travel ban… Neither domestic nor foreign tourists are traveling south, the former because they are too poor, the latter because it is too expensive at the official exchange rate, spelling economic disaster for the tourism sector… There is a one month waiting list to buy non-domestic light bulbs, which are smuggled in from Chile. Bizarrely, they are cheaper now than previously, when they could be legally imported… Smuggling a laptop into the country could earn enough to just about cover the cost of a flight to the United States… Credit from banks at interest rates considered reasonable by any conventional standard does not exist… The real estate market has effectively ceased functioning since no one is selling and no one buying… Social unrest, protests and crime are all increasing, and there are waiting lists of up to one month to buy burglar alarms. Violent crime is also increasing, which is otherwise relatively unheard of in the provinces.. Power cuts are becoming extremely common and coping with the upcoming summer will become more difficult.

 

Catalan Secession Looming?

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Fear are mounting that Spain will face a new secession crisis after the government of Catalonia called for a snap election on November 25, which is widely seen as a referendum on enhanced autonomy if not outright independence. The move came shortly after the Madrid government rejected Catalonia’s demand for greater autonomy on taxation issues. Desire for political separation is growing in the region, as evidenced by massive (600,000+) pro-independence demonstrations in Barcelona earlier this month. Catalonia is Spain’s most indebted region, and one of its wealthiest ones as well, and most Catalans believe that they pay a disproportionate share of taxes.

The Spanish constitution bans outright votes on secession, and it is unclear in any event if most Catalans want full independence or merely enhanced autonomy. The central government, however, is taking the current challenge very seriously. According to blogger Tyler Durden, “the Spanish Military Association (SMA) has warned Monday that those who cooperate or allow ‘fracture’ of Spain should ‘respond with all the utmost rigor’ in the courts in the field of military courts by the ‘serious charge high treason.’”

India to Send Tank Brigades to the China Border

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India’s military recently announced that it would deploy two tank brigades to guard the country’s border with China, one to be stationed in Ladakh (in northeastern Kashmir), and the other in the north Sikkim Plateau. As Business Standard reports, “Such formations, equipped with main battle tanks and BMP-II infantry combat vehicles, are traditionally used for striking into enemy territory.” The report also notes that India’s decision was based on the fact that “China’s People’s Liberation Army … has deployed armoured and motorised formations in both their military regions across the Line of Actual Control, as the de facto Sino-Indian border is called.” It goes on to claim that if China attacks and grabs a section of Indian territory, India will now be able to launch a counter-offense to take over a different piece of Chinese territory. As this is the 50th anniversary year of the Sino-Indian War of 1962, which cost India the Himalayan territory of Aksai Chin, Indian military officials are keen to argue that their country’s territorial integrity will never again be violated in such a manner.

Despite such talk and actions, the Indian government, like that of China, hopes to avoid any actual conflict. As a result, the two countries are “planning to set up hotlines between army commanders in-charge of their respective border areas along Jammu and Kashmir and Northeastern states in the next three to four months,” as reported in the Economic Times. Meanwhile, economic ties between the two Asian giants continue to grow. As reported by NDTV, “India and China have entered into a five-year economic cooperation plan to strengthen the trade relationship between the two countries. Trade between China and India is expected to reach USD 100 billion by 2015…”

Map Source: Paksoldiers

 

El Monte’s “Gangnam Style” Embarrassment

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City slogans are almost always upbeat, but the positive messages that they are meant to convey are sometimes contradicted by the policies enacted by their own city governments. Such is the case in regard to the southern California town of El Monte (population 113,000), which advertises itself with the motto: “Welcome to Friendly El Monte.” Lately El Monte has been anything but friendly to its own employees. In a case that is getting international attention, the city fired 13 lifeguards and a swimming pool manager for making an innocent spoof video of the global YouTube sensation “Gangnam Style” in the municipal pool, despite the fact that they did so on their own time, using their own resources. Officials claim that their behavior “violated prohibitions on the use of city property and didn’t meet employee conduct standards.” An international petition campaign is now urging the city government to rethink its decision. The resulting publicity has certainly given attention to the spoof: “Lifeguard Style’ has been viewed more 1.5 million times on YouTube.

Gangnam Style, by South Korean hip-hop artist Psy (Park Jae-sang), mocks the social pretentiousness found in Seoul’s Gangnam District. Gangnam is not only the most exclusive neighborhood in South Korea, but perhaps in the entire world, noted for its conspicuous consumption. Psy’s satire, noted for a dance move that he himself describes as “cheesy,” has certainly hit a nerve, with more that 221 million hits on YouTube, and more than a million comments.

Self-Rule and Environmental Crisis in Ogoniland

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In recent months, relations between the Ogoni people of Rivers State in southeastern Nigeria and the government have come under intense pressure (map at left from the UN). On August 2nd, a group of Ogoni led by Goodluck Diigbo of the pro-autonomy Movement for the Survival of the Ogoni People (MOSOP) declared their sovereignty in internal affairs while stopping short of secession. According to allAfrica.com, the declaration asserted “political control of Ogoni affairs by Ogoni people, control and use of Ogoni economic resources for Ogoni development, adequate and direct representation as of right for Ogoni people in all Nigerian national institutions, and the right to protect the Ogoni environment and ecology from further degradation.” The governor of Rivers State attacked the declaration as “treasonous”, maintaining that Diigbo and his followers do not represent the wishes of most Ogonis. In the intervening months, confusion has reigned, with the government trying to ignore the issue and keep it from escalating, while different groups of Ogonis make different demands.

Suspicion has plagued the relationship between Nigeria and the Ogoni since the early 1990s, when the MOSOP’s creation of an “Ogoni Bill of Rights”, the outbreak of a protest movement, and several assassination attempts targeting Diigbo helped create a crisis situation. In 1993, MOSOP and the Ogoni took on Shell Oil, demanding billions of dollars and a stop to pollution in the area. After a Shell employee was beaten, the company withdrew from the region, prompting Nigeria to take heavy-handed measures to quell the resistance, resulting in around forty deaths. Ogoni antipathy to the national government intensified in 1995, when the military government of Sani Abacha hanged the noted Ogoni activist, novelist, and television producer Ken Saro-Wiwa.

Environmental damage due to petroleum exploitation has remained a huge stumbling block in negotiationsbetween Ogoni activists and the government. According to a UN report, roughly 1,000 square kilometers of Ogoniland are contaminated by oil, and clean drinking water is nearly impossible to find.  Ogonis can’t help but be exposed to petroleum toxins through a number of channels. The same report outlines cleanup strategies, but emphasizes that any such efforts would take decades and cost billions. The Ogoni obviously bear the brunt of local environmental damage, but they see few of the benefits, most of which accrue to Nigeria’s central government and Shell Oil. As seen in the August declaration of autonomy, the Ogoni want to keep oil royalties for themselves and to force Shell to either extract oil in a more responsible way or leave.  The Nigerian government, however, has a clear economic incentive to maintain the status quo.

The Ogoni do not necessarily agree about what kind of future they want for their region. Some favor complete independence, though most see that as unrealistic and undesirable. Others, such as senator Magnus Abe, would like to see the creation of a new “Bori State”, ahomeland for the Ogoni and several other ethnic groups. According to Abe, “State creation has been a major tool for enhancing a sense of belonging and promoting development by groups that feel marginalized. It is an important means of strengthening federalism, though; economic viability should also be an important criterion.” A pro-unity faction led by an ad-hoc group of politicians, community leaders, and scholars has also emerged, claiming that the “Ogoni remains committed to the unity of the Nigerian state and that we are with Nigeria, which is contrary to recent media report on Ogoni.” The group’s conciliatory stance is aimed at creating a stable situation that would allow environmental cleanup to proceed. Meanwhile, MOSOP seems to be following up on its claims to Ogoni autonomy, ordering a Mexican firm recruited by the River State government to aid banana producers to stay out of Ogoniland. Which of these groups, if any, will emerge as the dominant voice of Ogoniland, and what the government will do about it, remain open questions.

The Advantages of Darkness in Northern Chile

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In early October, the Noche Zero conference in the Atacama region of northern Chile will bring together lighting designers, urban planners, government officials, and astronomers concerned about the effects of “light pollution” and the resulting disappearance of stars from the night sky. As the event’s website frame the issue:

FUTURE: ZERO LIGHT POLLUTION. TO GET BACK THE CLEAR SKY NIGHTS FOR OUR CITIES AND LANDSCAPES. NOCHE ZERO WILL BE AN INSPIRATIONAL EVENT ABOUT THE ROLE OF DARKNESS IN THE MODERN CITIES, LIGHTING DESIGN AND LIFE. IT WILL COVER WIDE RANGE OF ASPECTS OF DARKNESS, FOR ASTRONOMICAL, ECOLOGICAL AND MEDICAL REASONS ALSO FOR CULTURE, HERITAGE, VISUAL COMFORT AND THE PRIVILEGE OF NATURE.

The Noche Zero conference will be held in the Atacama Desert for good reason. As the driest place on Earth, the sparsely populated region has the world’s clearest skies. As a result, it is the site of some of the largest and most expensive telescope arrays. The European Southern Observatory’s Very Large Telescope (VLT) may have the least imaginative name of any major scientific facility, but it is widely regarded as “the most productive ground-based facility for astronomy.” Equally important are the radio telescopes of the Atacama Large Millimetre Array (ALMA), a joint program of the EU, the United States, Canada, several East Asian countries, and the Republic of Chile. Although it will not be completed until 2013, ALMA is already allowing astronomers to make impressive findings. A recent report notes their discovery of glycolaldehyde, “a sugar compound described as essential to the existence of life,” in the gas cloud surrounding a star somewhat similar to the sun located some 400 light years from Earth.

 

From Drought to Floods in South Asia

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The all-important summer monsoon of South Asia has given weather and climate forecasters, as well as news reporters, a wild ride this year. In late June, Reuters hopefully reported that India’s crucial monsoon rains were “expected to be average in 2012, … helping to allay concern over farm output triggered by sparse rainfall in the last few weeks.” Such concerns, however, only deepened, and by late July, news sources were reporting that “with drought conditions prevailing in most parts of India, Monsoon 2012 is set to be the worst in the last 65 years.”  Heavy rains, however, reached many areas by late August; although some crops were already damaged, Reuters reported that “the [rain] revival has given the government a breathing space and allowed it to postpone a drought summit meeting to next week.” Slow on the uptake, The New York Times warned its readers on September 9 that the drought had brought much of India to the brink of disaster. At roughly the same time, precipitation intensified. On September 17, heavy rains resulted in 13 deaths in the state of Uttar Pradesh. All in all, India’s 2012 monsoon precipitation looks like it will be just slightly below average in most areas.

While recent late-monsoon downpours have bought much-needed moisture to northern India, their effects have not been so positive in much of neighboring Pakistan. According to a September 14 article in the Express Tribune, “flash floods triggered by torrential rains have rendered around one million people in Balochistan homeless over the past week, without any relief in sight.” A few days later, the same paper announced that the Pakistani government was largely ignoring the crisis in Balochistan and focusing its attention instead on neighboring Sindh, also hard hit by flooding. Resource-rich but restive Balochistan, critics contend, is often slighted by the Islamabad government.

(Look here for the precipitation map posted above)