Archive for the ‘The International Context’ Category
The Peruvian Central Bank in the Eye of a Storm
Fabiola Bazo
January 26, 2006
The Peruvian Central Bank (Banco Central de Reserva, BCR) and members of its board have been in the eye of a storm this last week. The BCR has intervened aggressively in the currency exchange market to reduce volatility. The BCR sold dollar reserves in what some analysts have called a preventive measure to stop “a sudden attack to the nuevo sol.” On January 12, Kurt Burneo, President of the National Bank and member of the Board of the BCR, argued that banks and Pension funds (AFPs) were speculating to generate fear among the general public. As a response, the BCR bought nuevos soles to avoid a currency collapse. The scale of the intervention was unprecedented.
On January 17, critics of the BCR –including the Instituto Peruano de Economía (IPE), business groups, pension funds, and banks– answered back stating that the central bank was using volatility as an excuse to intervene, generating an artificially peaceful environment for investors, when the nominal policy of the central bank is to let the currency float. Aggressive intervention by the BCR, acording to critics, indirectly benefits presidential hopeful Ollanta Humala. In this view, the BCR should have let the Peruvian currency fall, thereby demonstrating the potentially negative impact on the economy if Ollanta Humala is elected. Burneo has stated the BCR will take legal action against those who have criticized the measures taken by the central bank to maintain economic stability and reduce the electoral noise.
What is striking about this episode is the lobbying by a range of economic agents seeking to influence monetary policy and politicize the decisions of the central bank.
Lloyd Axworthy in Lima to Prepare OAS Electoral Observation Mission
Maxwell A. Cameron
January 25, 2006
Lloyd Axworthy is in Lima preparing the groundwork for an electoral observation mission of the Organization of American States (OAS). He is meeting with President Alejandro Toledo, Chancellor Oscar Maurtua, and election officials from the JNE, ONPE, and Reniec, among others. Axworthy is the former Canadian minister of foreign affairs who led a high-level mission to Peru in the aftermath of the problematic elections of 2000. His involvement as an observer of the 2006 elections has symbolic importance because of the key role that he, in conjunction with former Secretary General Cesar Gaviria and the OAS, played in contributing to the transition to democracy in 2000.
The choice of Axworthy to head the mission suggests the possibility that the OAS, now under the leadership of Secretary General José Miguel Insulza, will create an election observation process that that, in addition to ensuring that votes are counted accurately, focuses attention on the agenda for reinforcing democracy that came out of the involvement of the international community in the 2000 election. Unlike in 2000, when the elections failed to meet internationally accepted standards of freedom and fairness, however, the elections this year are likely to be beset by more technical problems. This will be the first election in which members of the armed forces can vote, for example, and the participation of soldiers will create logistical issues. There is also a proposal for electronic voting in Callao, which Cecilia Valenzuela has sharply criticized in the television program Ventana Indiscreta. Finally, 250,000 voters are disenfranchized because they do not have birth certificates and over a million more voters, many of them elderly, cannot vote because they do not have a National Identity Document. The total size of the electorate is 16.5 million.
José Antonio García Belaunde on Michelle Bachelet and Evo Morales
The Bachelet Effect
Source: Carlin, La Republica, January 17, 2006
Hugo Chavez calls Lourdes Flores “Candidate of the Oligarchy”
Hugo Chavez and Evo Morales Eulogize Ollanta Humala
Ollanta Humala was eulogized by the president of Venezuela, Hugo Chavez, during his short visit to that country. At a press conference in Caracas, President Chavez saluted Humala and called him a “Quixote.” Chavez was referring to the uprising led by Humala and a group of soldiers in October 2000. Humala’s trip to Venezuela coincided with the official visit of the newly elected president of Bolivia, Evo Morales. Humala attended the official ceremonies involving Morales and Chavez held in the Miraflores Palace in Caracas. President Morales also saluted Humala, saying that he is convinced popular movements will triumph in the upcoming elections in Peru. Humala was in Venezuela at the invitation of Chavez’s Fifth Republic Movement (MVR). For his part, Humala emphasized the importance of the processes of change that have occurred in Venezuela and Argentina, and are now being initiated in Bolivia. He described the “new face of Latin America” as “nationalist, indigenista, and leftist.”
Source: Correo, January 4, 2006
Could Drug Money Finance Political Campaigns in Peru?
According to El Comercio, it seems likely…
Indymedia Views on Ollanta Humala
The Evo Effect
Source: LaUltima.com
The victory of Evo Morales in Bolivia has produced diverse reactions in Peru. Does the victory of the cocalero candidate in Bolivia augur well for Ollanta Humala?
For some, Morales is quite different from Humala. Bolivia has a powerful indigenous movement, and Morales has been struggling for power for years.
Others argue that Morales’ victory is being used to scare the middle class with the prospect that Humala represents the same sort of radical change in Peru.
Still others argue that the Morales victory could cut both ways, depending on whether his ascent to power produces positive or negative effects in Bolivia over the next few months.
Visit Altiplano Politico. There is a posting on Bolivia Electoral.
Interview with Pedro Pablo Kuczynski
Interesting El Comercio interview with Peruvian Premier Pedro Pablo Kuczynski. According to the Premier, and former Economy and Finance Minister, if Ollanta Humala wins next year’s general elections, he will not be able to replicate Hugo Chavez’ model given that Peru does not have Venezuela’s oil reserves. The Premier also argues the international community may not welcome Humala’s nationalistic policies.
Touché Lourdes: Venezuela denies links with Humala
In a press conference in Caracas, the Vice President of Venezuela, José Vicente Rangel, denied that President Hugo Chavez has links with Ollanta Humala. Lourdes Flores made this claim during her recent visit to Washington, D.C.
Rangel suggested that perhaps Flores has links with the government of the United States, since the policy of the United States is “to create confusion.”
Expert explains Japanese view of Fujimori
Yves Tiberghien is a political scientist at The University of British Columbia, currently enjoying a postdoctoral fellowship at Harvard University. As an exceptionally knowledgeable observer of Japanese politics, we asked him to explain why the Japanese public and political leadership seems to have such a positive view of Fujimori.
A Christmas Surprise
The Secretary General of “Si Cumple”, the electoral machine connected to Alberto Fujimori, has announced that the former president will return to Peru in December 2005.