Dominique Strauss-Kahn officially resigned as managing director of the International Monetary Fund late Wednesday. The decision opens a bit of new space for the always interesting debate about who the next IMF chief should be. According to the New York Times, the early frontrunner to take over the position, traditionally given to a European (the World Bank’s head is historically from the US) is French finance minister and Strauss-Kahn ally, Christine Lagarde. The paper says former Turkish finance minister and longtime World Bank official Kermal Dervis could also be in the running.
Others are demanding the next head of the IMF be someone from the developing world, and unsurprisingly, it’s Brazil, along with South Africa, who has raised the issue most publicly. In an interview on Monday, former Brazilian foreign minister Celso Amorim said now was the time to end “the monopoly of Europe and the US” at the IMF and World Bank. Amorim, one of the architects of Brazil’s global rise, said such a decision would demonstrate that the Fund is “sensitive to global changes” and willing to make international organizations “more representative.” Another senior Brazilian official tells Reuters that selecting the next IMF head from Brazil or India would mark a significant shift. However, according to the report, the South American power is unlikely to actively push the matter given Europe’s historic “stranglehold” on the post. In fact, current Brazilian finance minister, Guido Mantega, suggested Tuesday that his first choice would be to see Strauss-Kahn retain his position at the Fund, calling the embattled Frenchman “one of the best IMF chiefs that we had in the past years.”
Another important South American economy, Chile, joined China in arguing the next IMF head should be selected based “on merit,” but neither put forward any specific names or countries, according to the Financial Times.
On Thursday, German Chancellor Angela Merkel became the first major European leader to indicate she would back a European candidate to replace Strauss-Kahn at the IMF. The head of Europe’s largest economy did say if she had specific candidate in mind but said acting quickly to replace the now former IMF chief was critical, given the current crisis in the eurozone.
Today’s bullet points:
· Continuing with economic news and analysis, former Chilean finance minister Andres Velasco has a thought-provoking new opinion, distributed by Project Syndicate, on growing worries that a major bust could follow the last decade of economic boom. He notes that because of improved macroeconomic management Latin America is not on the brink of another debt crisis –a la the mid 1980s – but says two notable similarities between South America’s current moment and the early 1980s or early 1990s are worth highlighting: record-high commodity prices and cheap international money. South America’s “terms of trade are higher and the relevant global interest rates lower than they have ever been,” Velasco writes, adding that these factors, more than any particular policies adopted in recent years, have fueled Latin American growth. The former finance minister says stark differences in growth between resource-poor Central America and resource-rich South America are evidence of this point. His conclusion: that South Ameican countries frist, rein in credit that is beginning to produce market bubbles in areas like housing and second, transition out of the sorts of expansionary fiscal policies that were widely seen as sheltering South American from economic crisis after 2008.
· In Uruguay, an historic vote will occur today in the country’s lower house, deciding whether or not to annul a 1986 amnesty law, the so-called “ley de caducidad.” AP has English language coverage this morning, focusing on how the effort has caused deep fissures within the ruling Frente Amplio coalition. While both opposition parties oppose annulling the law, on Wednesday, it was FA deputy Victor Semproni who said he would block the measure by refusing to vote with his party. More coverage from Uruguay’s La República which speaks with President José Mujica. While not actively supporting the measure, Mujica has said he will sign the bill nullifying the law, should it be approved by parliament. El País looks at a bit of the unrest over the measure within the country’s military. And the Uruguayan weekly Brecha talks with FA party chief, Jorge Brovetto about what some are calling the “worst crisis” within Frente Amplio since it assumed national power for the first time ever in 2005. In the US, meanwhile, the Washington Office on Latin America makes the case for why the 1986 impunity law – denounced by the Inter-American Court of Human Rights but twice upheld by Uruguayan voters– should be nullified.
· The LA Times reports on the arrest in Guatemala, mentioned yesterday, of former kaibil special-forces operative, Hugo Alvaro Gomez Vasquez, alleged to have taken part in the early Sunday massacre of 27 ranch workers in El Petén. President Alvaro Colom called Gomez “one of the principal leaders” of the Zetas operating in Guatemala. Mike Allison, who has been following the massacre closely, has more good analysis today, particularly regarding the need keep the Petén massacre in context, rather than jumping too quickly to the conclusion that any single incident is evidence of Guatemala becoming a failed or narco state.
· From Guatemala’s past, an investigation by the government into US syphilis experiments conducted on Guatemalans during the 1940s has revealed that some 1300 individuals were infected with sexually-transmitted diseases without their consent. The formal results of the investigation will be released in Guatemala this week. AP reports.
· Colombian foreign minister Maria Emma Holguín confirmed this week that Honduras was on the close to being re-admitted to the OAS after joint mediation by her country and Venezuela. Holguín said she “is almost sure” Honduras will be at the OAS’s General Assembly in San Salvador in early June. Meanwhile, an adviser to exiled former president Mel Zelaya said again this week that the former president could return to Honduras later this month, highlighting the weekend of May 27 specifically. El Tiempo, with EFE reports.
· While charges against Zelaya have been set aside, at least for now, the president of the Honduran Supreme Court, Jorge Rivera Avilés, says possible charges against ex-officials in the Zelaya government remain active and could be pursued. La Tribuna reports. Honduras Culture and Politics, meanwhile, looks at an announcement this week from the official Honduran Truth Commission, headed by former Guatemalan vice president, Eduardo Stein. Stein has decided to push back once again the date when the commission will make its investigation into the 2009 coup official. HE says the commission’s goal is to not impact Honduras’s possible return to the OAS.
· El Faro reports that Salvadoran attorney general Romeo Barahona says he is investigating the “Cartel de Texis,” a significant drug trafficking operation allegedly controlled by prominent Salvadoran businessman, José Adán Salazar Umaña. El Faro broke the story earlier this week with a major investigative report.
· A Miami judge has granted asylum to Chavez political opponent Eligio Cedeño, arrested and imprisoned for 34 months for violating Venezuelan currency regulations. The Wall Street Journal says the move is “likely to further erode relations between Washington and Caracas.”
· In Venezuela, the body of newspaper columnist Wilfred Ivan Ojeda was found Tuesday in the town of La Victoria. Authorities say Ojeda died after being shot in the head. In addition to being a columnist, Ojeda was also a prominent Chavez critic with the Democratic Action party. AP reports.
· In Colombia, the Attorney General’s office has formally charged former DAS spy chief María del Pilar Hurtado, and ex-secretary general of the presidency, Bernardo Moreno, for overseeing illegal wiretapping against journalists, judges, and figures opposed to then-president Alvaro Uribe. Hurtado is currently in exile in Panama. BBC Mundo reports.
· Democratic congressmen are voicing new concerns about a US FTA with Colombia after an assassination attempt on Colombian labor lawyer, Hernán Darío. Rep. George Miller (D-MA) and Rep. Jim McGovern (D-MA), say the attempt on Darío’s life raises issues about the Colombian government's ability to guarantee labor rights. Darío, the lead attorney defending a group of sugarcane workers who went on strike in 2008, remains in critical condition after being shot five times in the city of Cali. The Hill reports.
· Colombia’s El Spectador with details on Colombia’s Victim’s Law, over which debate in the Senate looks to be wrapping up this week.
· Colombia Reports says the country’s Supreme Court ruled Wednesday that files from the Raul Reyes laptops are inadmissible as evidence in court as the material was illegally obtained. The ruling came in the case of former socialist congressman Wilson Borja, who had been charged with collaborating with the FARC. As quoted by Colombia Reports, the Colombian high court also questioned the “validity of the content” on the computers, saying the data “cannot be verified as the alleged emails [used in the Borja case] were copied into Word documents without indication of sender or receiver.”
· AP reports that 400 of the 513 migrants discovered in two truck trailers in Chiapas this week have already been repatriated to their native country of Guatemala. The remaining 113 are either minors or are from other countries, including El Salvador, Ecuador, India, Nepal, China, the Dominican Republic and Honduras.