Just Foreign Policy News
August 5, 2009
Mr. Mousavi’s Gas Embargo on Iran?
In serious contention for Dumbest Washington Consensus for September is the idea of cutting off Iran’s gas imports to pressure Iran to stop enriching uranium. A majority of Representatives and Senators have signed on to legislation that seeks to block Iran’s gas imports, a top legislative priority for the so-called "Israel Lobby." But it’s a stupid idea for many reasons, not least of which is that it would be an albatross around the necks of opposition politicians in Iran.
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1) The State Department responded to Republican criticism it has been too supportive of President Zelaya, Reuters reports. Reuters and Senator DeMint interpreted the State Department’s letter as softening or "walking back" U.S. support for Zelaya.
2) President Barack Obama and top U.S. military commanders are under pressure from influential senators and civilian advisers to double the size of Afghan security forces, Bloomberg reports.
3) "Crippling sanctions," covert actions, and threats of US or Israeli military attacks on Iran will have chilling consequences for the grass-roots civil rights movement inside Iran, argues Columbia’s Hamid Dabashi in a commentary for CNN. The only viable and legitimate way to make sure Iran does not develop a nuclear weapons program remains a multilateral approach through the IAEA. This approach must begin by fully recognizing the fact that pursuing a peaceful nuclear program is widely supported by the Iranian people, even by those who regard the election as invalid. There is no evidence that any major or even minor opposition leader has ever uttered a word that could possibly be interpreted as calling for or endorsing any sort of economic sanction against Iran, let alone "crippling sanctions."
4) Sen. Leahy rejected a State Department plan to issue a report this week affirming that Mexico is respecting human rights in its war against drug traffickers, delaying the release of millions of dollars in U.S. anti-narcotics assistance, the Washington Post reports.
5) Critics charge that the Obama Administration’s pledge to reform U.S. foreign aid is being undermined by its failure to put in place a new leader for USAID, the Washington Post reports. USAID’s full-time staff shrank by 40 percent over the past two decades. Meanwhile, aid budgets have been saddled with presidential directives, "buy America" provisions and congressional earmarks that raise the cost of aid and reduce its effectiveness. "In the USAID budget, every dollar has three purposes: help build an Air Force base, support the University of Mississippi, get some country to vote our way," said David Beckmann of Bread for the World. The development program, he said, "is a mess."
6) Elvin Santos, a leading candidate for Honduras’ presidency, distanced himself from the overthrow of President Zelaya, AP reports. "I will go to all corners of the country to explain that I was in no way a part of the events of June 28," Santos said.
7) Military officials in Honduras are worried about going to jail if democracy is restored, the New York Times reports. "In the end, there is a chance that the civilians will all kiss and make up, and the military is going to be held as the bad guys," said a high-ranking official in the defense ministry. "These guys are worried. They are worried about going to jail."
8) Writing for the Center for International Policy, former US Ambassador Robert White takes Secretary Clinton to task for permitting the coup regime in Honduras to impose conditions on the return of President Zelaya. He suggests that if the US fails to lead, Latin America will restore President Zelaya to office.
9) Secretary of State Clinton raised the possibility of banning some Kenyan officials from traveling to the US if the government does not move more quickly to prosecute those responsible for post-election ethnic violence in 2007 that left 1,300 people dead, the Washington Post reports. "We are going to use whatever tools we need to use to ensure that there is justice," a U.S. official said. "We raised the possibility of visa bans and implied there could be more."
10) Mexico’s economic slump, one of the worst in its history, has exposed the perils of a one-sided development strategy that ties the country’s fate to the whims of U.S. consumers, Reuters reports. The Mexican economy is set to shrink at least 6.5 percent this year, its most severe contraction since the Great Depression and one of the deepest in all of Latin America. Explosive growth has eluded Mexico despite NAFTA, even as Chile and Brazil, which are less dependent on exports to the US, have expanded rapidly. Mexico’s output growth over the last 10 years failed to surpass even the United States’ own subdued 1.8 percent rate.
11) Lawmakers voted to more than double Haiti’s minimum wage Tuesday night after long hours of debate and clashes between police and protesters, who complained they can’t feed and shelter their families on the current pay of about $1.75 a day, AP reports. The plan adopted fell short of the $5 wage demanded by the demonstrators, although it would more than double the minimum pay to about $3.75 a day. The raise also would include workers at factories producing clothes for export to the US, an idea that President Preval opposed. Former President Aristide was overthrown in 2004, in part after business owners angered by his approval of an increased minimum wage organized opposition against him.
1) U.S. appears to soften support for Honduras’s Zelaya
Susan Cornwell, Reuters, Wed Aug 5, 2009 2:52pm EDT
Washington – U.S. policy on Honduras’ political crisis is not aimed at supporting any particular individual, the State Department said in a new letter that implied softening support for ousted President Manuel Zelaya. The letter to Republican Senator Richard Lugar contained criticism of Zelaya, saying the left-leaning former leader had taken "provocative" actions ahead of his removal by the Honduran military on June 28.
The State Department also indicated severe U.S. economic sanctions were not being considered against the de facto government of Roberto Micheletti, which took over in Honduras after Zelaya removed from office.
"Our policy and strategy for engagement is not based on supporting any particular politician or individual. Rather, it is based on finding a resolution that best serves the Honduran people and their democratic aspirations," Richard Verma, the assistant secretary for legislative affairs, said in the letter.
"We have rejected calls for crippling economic sanctions and made clear that all states should seek to facilitate a solution without calls for violence and with respect for the principle of nonintervention," he said. The letter was dated Tuesday and obtained by Reuters on Wednesday. [Who is calling for "crippling economic sanctions"? President Zelaya has called for targeted sanctions on coup leaders, such has freezing coup leaders assets in the U.S. and suspending coup leaders’ U.S. visas – JFP.] […] Lugar, the ranking Republican on the Senate Foreign Relations Committee, had asked the government to explain its policy on the Honduran political crisis, warning that Senate confirmation may be delayed for a diplomatic nominee for Latin America without it. The letter appeared to be a response to this request.
Because of U.S. support for Zelaya, conservative Republican Senator Jim DeMint has threatened to delay a Senate vote on the nomination of Arturo Valenzuela to be assistant secretary of state for western hemisphere affairs.
DeMint welcomed the State Department letter but said the Obama administration had not gone far enough. "I’m glad to see the State Department is finally beginning to walk back its support for Manuel Zelaya and admit that his ‘provocative’ actions were responsible for his removal," he said through a spokesman. "These admissions are helpful, but what is necessary is for President Obama to end his support for Zelaya who broke the law and sought to become a Chavez-style dictator," DeMint said, referring to Venezuela’s socialist president Hugo Chavez, an ally of Zelaya.
2) Senators, Advisers Urge Obama To More Than Double Afghan Forces
Indira A.R. Lakshmanan, Bloomberg, Tue Aug 4, 4:34 pm ET
President Barack Obama and top U.S. military commanders are under pressure from influential senators and civilian advisers to double the size of Afghan security forces, a commitment that would cost billions of dollars.
In private letters and face-to-face meetings, these supporters of mounting a stronger effort against the Taliban seek to boost the Afghan National Army and police to at least 400,000 personnel from the current 175,000.
"Any further postponement" of a decision to support a surge in Afghan forces will hamper U.S. efforts to quell an insurgency in its eighth year, Senators Joseph Lieberman, chairman of the Homeland Security Committee, and Carl Levin, chairman of the Armed Services Committee, wrote to the White House in a July 21 letter provided to Bloomberg News.
General Stanley McChrystal, the new U.S. and NATO commander in Afghanistan, will recommend a speedier expansion of Afghan forces beyond current targets in an assessment he will give Defense Secretary Robert Gates and North Atlantic Treaty Organization Secretary General Anders Fogh Rasmussen by Aug. 14, according to a military official familiar with the review.
[…] In a meeting last week with Lieutenant General Douglas Lute, the deputy national security adviser who oversees Afghan policy at the White House, Levin said a substantial expansion of Afghan forces is essential and that he would support funding for that, according to Levin spokeswoman Tara Andringa.
3) Commentary: Huge risks in Iran sanctions
Hamid Dabashi, CNN, August 5, 2009
[Dabashi, author of "Iran: A People Interrupted," is Professor of Iranian Studies at Columbia.]
In a recent congressional hearing, House Foreign Affairs Committee Chairman Howard Berman called the Iran Refined Petroleum Sanctions Act "a sword of Damocles over the Iranians" that will soon come down if President Obama’s diplomatic overture did not show signs of success by the fall. That sword is no mere metaphor and might kill more than the president’s diplomatic overture.
[…] Of the six invited panelists at this hearing, three – Patrick Clawson of the Washington Institute for Near East Policy, Orde Kittrie of the Foundation for Defense of Democracies and Michael Rubin of the American Enterprise Institute – maintained that the United States should impose more severe economic sanctions on Iran.
Suzanne Maloney of the Brookings Institution and Karim Sadjadpour of the Carnegie Endowment for International Peace were counseling that Congress wait until "the dust has settled" over the current crisis before imposing such sanctions.
Abbas Milani of the Hoover Institution, however, upped the ante and said that the United States and other nations should impose multilateral "crippling sanctions" and not merely "half-baked" measures.
Although the paramount item on the agenda of the hearing was the Islamic Republic’s nuclear program, the key question of the current post-electoral crisis was obviously on everyone’s mind.
Sadjadpour informed the committee that "many members of the opposition and the population actually are starting to come around. Their views towards sanctions have changed. They’re not in a position to publicly articulate that right now. … They’re starting to see value in it," a view that Milani seconded. The Iran Refined Petroleum Sanctions Act would allow the president to take new measures against Iran by imposing sanctions on the export of gasoline to the country.
[…] As to what exactly was to come next, Rep. Dana Rohrabacher, R-California, told the panel, "we can do more than just sanctions," meaning advocating covert support for Iranian opposition forces "so that they will have the material well-being … to take on that government themselves."
From there, Rep. John Boozman, R-Arkansas, proceeded to argue that he would support Israeli bombing of Iran. Kittrie proposed that in that event, it would be better for the United States to carry out any military action because "we have the right capacity," although he described that as not a "good option."
From imposing "crippling sanctions" to initiating "covert operations," all the way down to military attack by Israel and/or the United States amounts to a familiar scenario that has a very simple and coded antecedent in modern Iranian political culture: the CIA-engineered coup d’état of 1953, for which President Obama apologized during his speech at Cairo University in June 2009.
Contrary to the vision and wisdom of the president, the political machinations of the U.S. Congress and the flawed advice offered by this group of panelists amount to a belligerent threat against the regime. That will exacerbate its self-righteous warring posture and have chilling consequences for the grass-roots civil rights movement inside Iran.
To avoid that dangerous route, we need to make a distinction between the nuclear ambitions of the Islamic Republic and the growing civil rights movement in Iran.
So far as the nuclear issue is concerned, the only viable and legitimate way to make sure the Islamic Republic does not develop a nuclear weapons program remains a multilateral approach through the International Atomic Energy Agency and geared toward a regional disarmament.
This approach must begin by fully recognizing the fact that pursuing a peaceful nuclear program is widely supported by the Iranian people, even by those who regard the election as invalid.
Any unilateral approach by the United States that categorically disregards this fact and overlooks the crucial question of regional nuclear disarmament is frightfully reminiscent of the lead-up to the Iraq war and is bound to fail.
So far as the emerging civil rights movement is concerned, there is absolutely not a shred of evidence that any major or even minor opposition leader – from Mir Hossein Moussavi to Mehdi Karrubi to Mohammad Khatami, or any of their related political organs or legitimate representatives – has ever uttered a word that could possibly be interpreted as calling for or endorsing any sort of economic sanction against Iran, let alone "crippling sanctions."
As in the Iraqi case, imposition of economic sanctions on Iran will have catastrophic humanitarian consequences, while it will even more enrich and empower such critical components of the security and military apparatus as the Pasdaran and the Basij.
4) Leahy Blocks Positive Report on Mexico’s Rights Record
Skepticism About Conclusions Delays U.S. Anti-Drug Aid
William Booth and Steve Fainaru, Washington Post, Wednesday, August 5, 2009
Mexico City – A key senator rejected a State Department plan to issue a report this week affirming that Mexico is respecting human rights in its war against drug traffickers, delaying the release of millions of dollars in U.S. anti-narcotics assistance, according to U.S. officials and congressional sources.
The State Department intended to send the favorable report on Mexico’s human rights record to Congress in advance of President Obama’s visit to Guadalajara for a summit of North American leaders this weekend, U.S. officials familiar with the report said.
That plan was scrapped after aides to Sen. Patrick J. Leahy (D-Vt.), chairman of the Senate Appropriations foreign operations subcommittee, told State Department officials that the findings contradicted reports of human rights violations in Mexico, including torture and forced disappearances, in connection with the drug war.
At stake is more than $100 million in U.S. aid under the Merida Initiative, a three-year, $1.4 billion counternarcotics package begun by President George W. Bush in 2007. The law requires Congress to withhold 15 percent of most of the funds until the secretary of state reports that Mexico has made progress on human rights.
"Those requirements have not been met, so it is premature to send the report to Congress," Leahy said in a statement. "We had good faith discussions with Mexican and U.S. officials in reaching these requirements in the law, and I hope we can continue in that spirit."
The State Department’s failure to push through the report is a setback for the U.S. and Mexican governments at a time when drug violence in Mexico continues to soar and President Felipe Calderón has come under growing pressure to revise his U.S.-backed anti-narcotics strategy, which relies heavily on the military to fight the cartels.
State Department officials said they are considering whether to rewrite the report before submitting it to Congress, probably after it reconvenes Sept. 7.
Mexico is likely to lose some of the money if it is not released by Sept. 30, U.S. officials said. U.S. aid under the Merida Initiative is used to buy helicopters and surveillance aircraft, train police, and improve intelligence-gathering in the fight against the drug cartels.
But congressional aides and human rights experts expressed doubt that the State Department would be able to make a compelling case that Mexico has made sufficient progress.
"In the area of prosecuting human rights abuses and ending the impunity, I don’t believe we have seen any real progress," said Maureen Meyer, who oversees Mexico for the Washington Office on Latin America, a human rights group that opposes release of the funds. "There is no sign that people are being held accountable. Every major human rights group has opposed releasing the money."
[…] Since Calderón launched his war against the cartels after taking office in December 2006, human rights complaints against the military have soared 600 percent, rising to 140 a month this year, according to government statistics. The National Human Rights Commission has issued reports on 26 cases involving the military since the beginning of Calderón’s term, and it found evidence of torture in 17 of the cases.
In April, Human Rights Watch issued a report highlighting 17 cases, including several from 2007 and 2008, involving what it said were military abuses of more than 70 victims. The alleged abuses include killings, torture, rapes and arbitrary detentions. According to that report, "not one of the military investigations into these crimes has led to a conviction for even a single soldier on human rights violations."
On July 9, The Washington Post reported that the Mexican army had carried out numerous acts of torture, forced disappearances and illegal raids in pursuit of traffickers, according to court documents, political leaders and human rights monitors in Mexico’s most conflicted regions.
With the State Department report imminent, many prominent human rights organizations in the United States and Mexico released advance statements saying that Mexico had failed to meet the Merida Initiative requirements and urging the U.S. government to withhold the money.
"Why is this so important? Because Mexico cannot win this fight against drug cartels without human rights protections. Human rights provisions are not a headache. They are absolutely critical to the success of the whole initiative," said José Miguel Vivanco, director of the Americas program at Human Rights Watch.
Carlos Cepeda, of the Miguel Agustín Pro Juarez Human Rights Center, said: "Mexico is not fulfilling the human rights requirements of the initiative and the government does not seem close to fulfilling them, and so of course it is a bad idea to release the funds. It would be a green light for further human rights abuses and for continued impunity for the military."
5) Leadership Vacancy Raises Fears About USAID’s Future
Mary Beth Sheridan, Washington Post, Wednesday, August 5, 2009
Nairobi – As Secretary of State Hillary Rodham Clinton begins a seven-country African trip with a visit to Kenya, the main U.S. foreign aid agency is in limbo, entering its seventh month without a permanent director despite pledges by the Obama administration to expand development assistance and improve its effectiveness in poor countries.
Clinton has backed the use of "smart power" – employing a full range of economic, military, political and development tools in U.S. foreign policy – but many aid experts are questioning whether the U.S. Agency for International Development could lose clout under her plans. While Clinton has championed additional personnel for USAID, aid groups worry that the once-autonomous agency could be swallowed up in the State Department, with long-term development goals losing out to short-term political aims.
"Both President Obama and Secretary Clinton have said how important development is. Increasingly, it’s a painful contrast between their rhetoric and the reality of having no leadership" at USAID, said Carol Lancaster, interim dean of the Walsh School of Foreign Service at Georgetown University, who served as deputy administrator of the aid agency under President Bill Clinton.
The Obama administration inherited a foreign aid system starved of civilian experts and burdened by a bewildering array of mandates. USAID’s full-time staff shrank by 40 percent over the past two decades, but the assistance it oversees doubled, to $13.2 billion in 2008. The agency has a skeleton crew of technical experts, with four engineers for the entire world, Clinton noted recently. Increasingly, USAID has become a conduit for money flowing to contractors, who have limited supervision from the agency.
As USAID has weakened, foreign assistance programs have proliferated across government agencies, especially the military, causing duplication and confusion. Meanwhile, aid budgets have been saddled with presidential directives, "buy America" provisions and congressional earmarks that raise the cost of aid and reduce its effectiveness, development specialists say.
"In the USAID budget, every dollar has three purposes: help build an Air Force base, support the University of Mississippi, get some country to vote our way," said the Rev. David Beckmann, president of the aid group Bread for the World, describing the plethora of political claims attached to aid. The development program, he said, "is a mess."
6) Cracks in local support for Zelaya expulsion
Alexandra Olson, Associated Press, Wednesday, August 5, 2009 4:30 PM
Tegucigalpa, Honduras – A leading candidate for Honduras’ presidency distanced himself Wednesday from the overthrow of Manuel Zelaya and said sending him abroad was a mistake, while clashes broke out between police and supporters of the ousted president.
The comments by Elvin Santos add to cracks in the once-solid backing among the country’s power structure for the June 28 removal of Zelaya, though officials so far have rejected international demands to let him return to the presidency.
"I will go to all corners of the country to explain that I was in no way a part of the events of June 28," Santos said on Channel 5’s "Face to Face" show. "The huge mistake was taking him (Zelaya) out of the country and leaving him defenseless," said Santos, whose Liberal Party includes both Zelaya and the man who replaced him, Roberto Micheletti.
Zelaya’s terms ends Jan. 27, and he is constitutionally barred from seeking re-election. Opponents say he was trying to abolish term limits when he repeatedly ignored court orders to drop plans for a referendum on changing the constitution, an initiative that led to his ouster. Zelaya denies that was his intention.
Even the generals who hustled Zelaya out of the country are now taking pains to defend their action with a televised appearance that suggests they fear being made scapegoats if the ousted leader returns due to overwhelming international pressure.
[…] The armed forces chief, Gen. Romeo Vasquez, even suggested the military would not stand in the way if Zelaya returns to power under a plan proposed by Costa Rican President Oscar Arias. "The military will respect whatever solution is reached under the mediation of President Oscar Arias," he said.
7) On TV, Honduran Generals Explain Their Role in Coup
Ginger Thompson, New York Times, August 5, 2009
Tegucigalpa, Honduras – For the past month, a steady drumbeat of government images on the airwaves and on front pages has tried to convey to Hondurans that this country has not experienced a military coup. On Tuesday, however, television viewers could have been forgiven for thinking that is exactly what had happened.
The five generals at the head of the Honduran armed forces made a rare appearance on national television to explain their role in the ouster in late June of President Manuel Zelaya, and to respond to charges that they acted in defense of the country’s elite.
In language that often veered into confessional, they repeated that they did not act to take sides in the political fight that had polarized the country, but out of obedience to the law. And they said they were confident that history would judge them as patriots for their actions.
The more they spoke, however, the more they showed how concerned they were that their image had been damaged by their actions, and the clearer it became that they continued to play a leading role in Honduran politics, nearly three decades since the end of military rule.
"They call us golpistas," said Gen. Romeo Vásquez Velásquez, the head of the armed forces, using the Spanish word to describe leaders of a coup. "If that’s what we were, we would have called a national emergency and detained all of those who are out there causing trouble."
Yet troubles have mounted for the military since troops detained Zelaya and loaded him onto a plane leaving the country five weeks ago. He was detained on charges that he was trying to change the Constitution in order to extend his time in power.
Military officials have been feeling increasingly isolated, as those who support Zelaya accuse them of being traitors and those who support the de facto regime, led by Roberto Micheletti, distance themselves from the decision to expel the president.
"In the end, there is a chance that the civilians will all kiss and make up, and the military is going to be held as the bad guys," said a high-ranking official in the defense ministry, speaking on the condition of anonymity because of the delicacy of the military’s position. "These guys are worried. They are worried about going to jail."
[…] The program on which they appeared, "Face to Face," was broadcast as international pressure continued to mount on the de facto government of Roberto Micheletti to allow Zelaya to return to power. The latest criticism came from Felipe Calderón, the president of Mexico, which Zelaya visited Tuesday.
During the visit, Zelaya said he was prepared to sign a proposed agreement forged after two rounds of negotiations mediated by President Óscar Arias of Costa Rica. The agreement would let Zelaya return to the presidency, but with significantly limited powers.
Micheletti, however, with staunch backing from this country’s business leaders, its religious community and its two major political parties, has refused to accept Arias’s plan, saying that the only way he would allow Zelaya back into the country was to face charges.
[…] As if taking a page from a cold war playbook, Gen. Miguel Ángel Garcia Padget said the military had disrupted Chávez’s plans to spread socialism across the region. "Central America was not the objective of this communism disguised as democracy," he said. "This socialism, communism, Chávismo, we could call it, was headed to the heart of the United States."
8) A Lack of Resolve
Robert E. White, Center for International Policy, July 31, 2009
[White is former US ambassador to El Salvador.]
President Mel Zelaya is right to refuse to be delivered back to his presidential chair, trussed and bound like a capon, an impotent symbol of a democratic facade.
If Secretary of State Clinton permits the coup regime to impose conditions on the return of the constitutional president, then she damages, perhaps irreparably, the Organization of Americas States (OAS), and breaks faith with Oscar Arias who thought he had her unequivocal backing.
For the United States to placate those who encouraged the coup, to guarantee that no price will be paid by those who broke the constitutional order, to impose insulting conditions on an elected president as a price for his return, is to connive with those who have degraded democracy in Honduras for the last 25 years.
The United States has a great opportunity. By speaking unambiguously, by acting decisively, by joining with the other nations of the hemisphere in restoring constitutional government, a great victory will have been achieved for the Obama doctrine of a Partnership of the Americas.
Mel was undoubtedly an erratic and inept president. In fact, Honduras has had a succession of hapless presidents who were tolerated because they never tried to put into effect any serious reforms. Unlike the others, Zelaya tried to bring to Honduras some measure of economic democracy. He failed, in part because of his own weaknesses, but the limited success he did achieve brought down on him the wrath of those to whom Honduras is not a nation to be uplifted, but a money machine to be exploited.
If the United States and the OAS cannot do the job, I have no doubt that President Hugo Chavez will put together a coalition to restore the rightful president. If we won’t lead, others will.
There is a precedent for this. In 1948, the sitting president of Costa Rica with the support of the oligarchy and the military decided to annul the election results and stay in office. The United States did nothing. Pepe Figueres led a volunteer force, supported with military contingents from Guatemala, Cuba, and the Caribbean Legion. This combined force defeated the Costa Rican Army and Figueres restored the constitutional order. Out of that intervention came the abolition of the military, taxes for the rich, New Deal-type reforms for the country, and the finest democracy in Latin America.
9) Clinton Urges Kenyan Government to Investigate 2007 Killings
Mary Beth Sheridan and Stephanie McCrummen, Washington Post, Wednesday, August 5, 2009 5:00 PM
Nairobi, Aug. 5 – Secretary of State Hillary Rodham Clinton began a major trip to Africa on Wednesday by publicly urging Kenya, a strategic U.S. ally, to move faster to resolve tensions lingering from a disputed 2007 election that precipitated the country’s worst crisis since independence.
Clinton went further in a meeting with Kenyan leaders, urging them to sack the attorney general and the police chief, who have been accused of ignoring dozens of illegal killings carried out by police death squads, according to a senior U.S. official who spoke on the condition of anonymity because the meeting was private. She also raised the possibility of banning some Kenyan officials from traveling to the United States if the government does not move more quickly to prosecute those responsible for post-election ethnic violence that left 1,300 people dead. The organizers are widely believed to include senior officials and cabinet ministers, many of whom have family members in the United States.
"We are going to use whatever tools we need to use to ensure that there is justice," the official said. "We raised the possibility of visa bans and implied there could be more."
10) Mexico recession shows downside of close U.S. links
Pedro Nicolaci da Costa, Reuters, Tue Aug 4, 2009 11:45am EDT
Mexico City – Mexico’s economic slump, one of the worst in its history, has exposed the perils of a one-sided development strategy that ties the country’s fate to the whims of U.S. consumers.
When the going was good, Mexico’s closeness to the United States had its benefits, even if it never yielded the blockbuster growth promised by proponents of open trade.
Yet the U.S. recession has left Mexico in a state of disarray. The Mexican economy is set to shrink at least 6.5 percent this year, its most severe contraction since the Great Depression and one of the deepest in all of Latin America.
The weakness can be traced not only to Mexico’s dependence on its northern neighbor, but also on a failure to make the sort of investments in education and infrastructure required for broad-based economic progress.
"Having the U.S. as a single market was a mistake," said Rogelio Ramirez de la O, economist and head of the Mexico-based research firm Ecanal. "But even worse was not properly pursuing an industrial strategy."
That, de la O said, would have meant taking a more cautious approach to trade agreements, such as the North American Free Trade Agreement, or NAFTA, and channeling more resources into value-added manufacturing, which would in turn might have nurtured a greater emphasis on high-skilled labor.
This could still be accomplished, he argued, by seizing the opportunity afforded by the crisis to renegotiate some of NAFTA’s terms, particularly with regards to agriculture. "That would give us a great deal of relief," said de la O.
[…] Mexico’s U.S.-centric economic strategy was cemented in 1994, when NAFTA came into effect. Yet while the commercial agreement created a number of factory jobs across the north of the country, it failed to bring the sort of expansionary burst commensurate with an emerging powerhouse.
Indeed, explosive growth has eluded Mexico despite NAFTA, even as Chile and Brazil, which are less dependent on exports to the United States, have expanded rapidly. Mexico’s output growth over the last 10 years failed to surpass even the United States’ own subdued 1.8 percent rate.
11) Haiti lawmakers OK minimum wage hike after clashes
Jonathan M. Katz, Associated Press, Tuesday, August 4, 2009 11:00 PM
Port-Au-Prince, Haiti – Lawmakers voted to more than double Haiti’s minimum wage Tuesday night after long hours of debate and clashes between police and protesters, who complained they can’t feed and shelter their families on the current pay of about $1.75 a day.
The plan adopted fell short of the $5 wage demanded by the demonstrators, although it would more than double the minimum pay to about $3.75 a day.
The raise also would include workers at factories producing clothes for export, an idea that President Rene Preval opposed. After refusing to publish into law a plan passed by Parliament in May to nearly triple the minimum wage, Preval proposed giving the garment factory workers an increase to about $3.
Given the lateness of Parliament’s 55-6 vote to adopt the new raise, there was no immediate reaction from the president or from the protesters.
Earlier in the day, police fired tear gas at some 2,000 protesters who gathered outside Parliament to demand a big increase in the minimum wage. As legislators prepared to meet on the issue, some of the protesters threw rocks at police and began ripping down flags of U.N. member countries near the building.
[…] Many of the protesters were minimum-wage factory workers, such as Banel Jeune, a 29-year-old father who sews sleeves on shirts. "Seventy gourdes, that doesn’t do anything for me," he said, referring to his current minimum wage. "I can’t feed my kids, and I can’t send them to school."
[…] Former President Jean-Bertrand Aristide was overthrown in 2004, in part after business owners angered by his approval of an increased minimum wage organized opposition against him.
[…] Still, some development experts argue that a pay increase would hurt plans for fighting Haiti’s widespread unemployment by creating more jobs in the factories that produce clothing for export to the United States.
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