May 13, 2008

Could another crash happen in Argentina?

The 2001-2002 economic crash in Argentina remains a landmark moment here, always in the back of people's minds, as in "Could it happen again?" and "Should I be getting ready for the next one?" It's understandable: Poverty hit more than half of the population, banks froze people's savings, the currency lost three-quarters of its value, the long list of horrors. It traumatized Argentines, like a natural disaster or war.

The economy's since recovered marvelously, with poverty about cut in half and the economy booming by near double-digit rates. But the crash's specter remains, and it's been looming larger in recent weeks. Due to a variety of factors, Argentines are becoming more skeptical about the future, and some are getting ready for the plunge.

Local media report that people are buying up dollars for fear that the peso could slide again and that the government will respond by freezing bank accounts, like it did in the bad old days. Government officials have denied any such measures are in the works, but people don't seem to be listening. The country's central bank recently had to inject $1 billion in dollars into the banking system to counter the bank rush.

Other evidence: In the capital of Buenos Aires, a poll by the Public Opinion Center of the University of Belgrano found that 69 percent of respondents believed another crash was "very probable," with 41 percent believing it could be triggered by inflation.

Which leads to the factors. First there's the protracted battle between President Cristina Fernández de Kirchner and the country's farming sector, the main economic engine here, over higher export taxes imposed on soybeans and sunflowers in March. Farmers have blocked roads and withheld production to protest the higher taxes, and as the conflict drags on, the risk to the economy grows.

Then, there's inflation, which the government says hovers around 8 percent annually but which economists estimate is as much as three times that number. And a more recent factor, the Argentine peso is weakening against the dollar, a decline that bucks the worldwide trend. This morning, the peso was trading at 3.18 to the dollar.

And then there's the global factors, the weakening U.S. economy and shaky prices for soybeans, wheat and other commodities Argentina exports.

Will it all add up? A snowball effect? Some aren't waiting around for the answer. They're getting ready now.

May 12, 2008

Finally, Sao Paulo gets a landmark

For a metropolis of its size and importance, 20 million-person São Paulo has remarkably few landmarks to give it some kind of international identity. Paris has the Eiffel Tower. Rio has the Sugar Loaf and the Christ statue. Even Buenos Aires offers visitors the obelisk at its urban heart.

And São Paulo? Most postcards here just show the city's urban chaos, the endless rows of identical high-rise buildings, the gray concrete as far as the eye can see and maybe architect Oscar Niemeyer's giant, curved Copan building the only jewel in the asphalt.

Well, that changed this weekend. The city inaugurated on Saturday its new Octavio Frias de Oliveira bridge, which crosses both the Pinheiros River and the city's main highway. It's the only bridge in the world linking two suspended platforms crossing over each over, all hung from a central tower standing about 450 feet tall.

While that just put you to sleep, what really impresses is the bridge's astounding design. The giant wishbone-shaped central tower acts like a loom for dozens of bright-yellow suspension cables, which are weaved together in a beautiful patchwork.

At night, colored lights shine along the wishbone and cables, showing off the bridge as the work of sculpture that it is.

By the way, one nerdy detail: The bridge is named after the founder of Brazil's biggest newspaper, Folha de São Paulo, but connects to Roberto Marinho Avenue, named after the founder of the Rio-based Globo TV, newspaper, magazine and movie empire. I wonder what the two, now-deceased rivals would have thought of that.

I've only seen photos and video of the new bridge but can't wait to check it out next time I'm in town. I have a feeling I won't be alone out there gawking and taking pictures. Imagine that, in endless, gray São Paulo! The sno-globes and overpriced shot glasses can't be far behind.

May 09, 2008

Brazilians are the greenest

When I take a cab in Rio de Janeiro, chances are it runs on sugar-cane ethanol, the cleanest, most efficient mass-produced biofuel in the world. When I turn on my computer, it's likely powered by hydroelectric energy coming from the giant Itaipu dam or others in the region. And even when it's the thick of winter here, around July, the temperature’s still a balmy 70 degrees, meaning I don't have to crank up the heater.

Life, especially city life, in Brazil resembles that of most countries. But according to the National Geographic Society and the polling firm GlobeScan in findings released this week, Brazilians, tied with Indians, live the greenest lifestyles of 14 major countries surveyed. Oh yeah, and guess who came in last? That's right, Americans.

Brazilians won the sustainable-consumption crown, National Geographic News says, because they typically live in smaller houses, use less air conditioning or heating and heat their water with tankless systems, which in many cases means precarious-looking electric shower heads that have naked wires sticking out of them.

I would add the factors I mentioned above, the widespread use of ethanol (about half of vehicle fuel used here is ethanol) and heavy dependence on hydroelectricity (it generates more than 80 percent of energy supplies). And the fact is Brazil is still a largely poor country, which means people have less money to buy all that stuff that eats up resources.

The finding was backed up by another study released yesterday by a Brazilian government research institute, which found sugar cane-based biofuels last year made up Brazil's second most-used energy source. Petroleum products still made up the biggest part, at 36.7 percent of the matrix, but ethanol beat out hydroelectric sources for second at 16 percent.

In all, renewable energy made up 46.4 percent of Brazil's energy matrix.

What can Americans learn from the Brazilian example? Well, if Americans want to be resource-sustainable, Brazilians would say their northern neighbors need to cut a 54 cent-per-gallon tariff on foreign ethanol that blocks most Brazilian biofuels from entering.

But even with Brazilian ethanol in the U.S. mix, the fact is Americans need to overhaul their entire way of living if they want to stop being the world's biggest resource hogs. Driving hours to and from work every day in SUVs, cranking the air-conditioning even in the fall, all that stuff we take for granted contributes to the problem.

But I wouldn't hold my breath. While Americans regularly bemoan our resource-hungry ways, we're still not ready to change them. Brazilians, on the other hand, continue to be the greenest.

May 08, 2008

Chilean volcano eruption felt far away

This image taken by a NASA satellite Saturday gives you a sense of how far ash from Chile's Chaitén Volcano is spreading.

All the way across the Southern Cone to Argentina's Atlantic coast, covering a swatch of the continent. And the cloud has grown even bigger since this photo was taken.

On Thursday, Argentine media reported that the ash had reached the capital of Buenos Aires, which is by my count more than 1,000 miles away from the volcano. The city isn't even in this picture; it's situated way above the frame to the right. somewhere over this blog entry's headline. Airplane flights in much of Argentine Patagonia have been suspended because of the ash cloud.

Closer to the volcano, six miles away, the town of Chaitén has been entirely evacuated. What residents will return home to, however, is in question: Scientists speculate the region may not be inhabitable for years to come, as the thick ash turns soils in the whole region infertile.

And if the volcano blows, the town may be buried by ash indefinitely.

May 07, 2008

Two stories change in Brazil, two men seemingly off the hook

It was a day of legal turnarounds yesterday in Brazil as key witnesses in two high-profile cases suddenly changed their testimony, effectively letting off the hook two men many had believed were guilty.

First, there was the sordid case of Brazilian soccer star Ronaldo, who was found in a Rio de Janeiro motel room April 28 with three transvestite prostitutes.

The prostitutes said they had done drugs and had sex with Ronaldo but that the soccer star had refused to pay them afterward. Ronaldo denied doing anything illicit with the prostitutes and said he had ended the transaction after finding out they were men. Ronaldo also said the prostitutes tried to extort him for tens of thousands of dollars to not talk to the press.

Ronaldo's already been the butt of many jokes here, given the Brazilian national team's poor performance in the 2006 World Cup, the player's supposed weight problems and his declining performance on the field. This scandal has been the peak of the player's problems, having dominated the headlines over the past week and culminated in an interview Ronaldo gave to Fantastico, the country's main TV news magazine show, in which he denied everything once again.

On Tuesday, Ronaldo got his break. Two of the prostitutes suddenly changed their stories and said Ronaldo didn't have sex or do drugs with them as they had said before. They also said they made up the accusations because Ronaldo had refused to pay them after he learned they were transvestites.

Of course, after the story spent days on the front pages of newspapers, the latest twist has hardly been reported here. It appeared in a tiny article today on page 17 of Rio's main newspaper O Globo. It seems setting the record straight is less sexy than letting the bombs fly.

Another turnaround, however, was the top headline, that of ranch owner Vitalmiro Bastos de Moura, who had been convicted last year for ordering the murder of U.S. nun Dorothy Stang in 2005, supposedly for her environmental activism in the Amazon.

The change came after the admitted gunman in the murder, Rayfran das Neves Sales, said Moura in fact had not given him the weapon he had used to kill the nun as he had testified before. That convinced a jury in the northern Brazilian city of Belem to acquit Moura last night, and he was immediately freed. The prosecutor has five days to appeal the decision.

Two new stories, two men seemingly exonerated. Not that anyone here believes any of it.

May 06, 2008

Fleeing the Chaiten Volcano in Chile

Residents of Futaleufu, Chile, wear masks protecting themselves from ash spewing from the nearby Chaitén Volcano. Photo: AP

Nicolas La Penna first started feeling the earthquakes Thursday around the southern Chilean town of Chaitén, where he lives with his wife and two children. Ash was spewing from a nearby volcano, although he wasn't sure exactly where it was coming from.

That night, lightning flashed in the ash, due to the electric static created by the intense amounts of material coming out of the volcano. Between the ash, the lightning, the sulfuric smell and the earthquakes, La Penna decided it was time to leave.

The Chaitén Volcano was erupting, only six miles from town. If it blew, there'd be no time to respond, and if lava from the volcano headed toward town, it'd be there within 20 minutes.

La Penna got his family aboard a ferry the next morning and then went back to close up his house and the tour agency he runs. This native of Vermont has lived in Chaitén for over a decade, and I met him in March 2006 when I was there doing a story on a nearby park founded by U.S. environmentalist Douglas Tompkins.

By chance, a larger ship full of cargo and tourists was passing by as the town of 7,000 people was being evacuated. The authorities ordered the ship to stop at Chaitén to help evacuate, and it transported La Penna, his family and hundreds of others out of the area Friday afternoon. As they left, La Penna looked back in awe at the column of ash stretching 12 miles into the sky right over his little town.

Today, the volcano has let loose a second, larger series of eruptions, and the Chilean government has ordered a total, mandatory evacuation of Chaitén. Local media report the ash has drifted all the way across the Andes and South America to the Atlantic coast of Argentina, with the possibility of reaching the Argentine capital of Buenos Aires thousands of miles away.

The chance of a massive eruption is growing, and La Penna says he and his neighbors could lose everything. The last eruption there 9,000 years ago created a crater about two miles across. La Penna and his family are waiting out the eruption with friends and relatives hundreds of miles away in the town of Concepción. And that, he said, is what's most important. He and his family are safe.

May 05, 2008

What's legal and illegal in Bolivia?

A Bolivian police officer points a tear-gas cannister launcher at an anti-autonomy protester yesterday in Santa Cruz, Bolivia. Photo: Boris Heger/MCT

As yesterday's chaotic day of voting in Santa Cruz, Bolivia, showed, trying to figure out who's on the right side of the law in this politically divided country is tricky business.

Leaders of Santa Cruz province, Bolivia's richest and second most-populous, organized a referendum that, if approved, would declare the province autonomous from the country's central government.

That means enjoying powers equivalent to a U.S. state such as forming state police and electing a state legislature and governor as well as winning some other powers no U.S. state has, such as the ability to negotiate foreign treaties. According to exit polls, the referendum passed overwhelmingly yesterday. Read my story about the vote here.

President Evo Morales has called the referendum illegal and unconstitutional because the country's electoral court didn't schedule the vote and because it conflicts with current law, which doesn't allow such autonomies, and with a draft constitution he wants to make law that emphasizes autonomy for this country's many indigenous communities.

For their part, Santa Cruz leaders say they're within the law because the province's voters approved a July 2006 referendum granting such provincial autonomies although the referendum was rejected nationally. Morales says the province is still outside the law because of that national rejection, which means individual provinces can't pursue autonomy on their own.

The lines were blurred even further yesterday when anti-autonomy activists, many of them Morales supporters, rampaged in several towns in Santa Cruz province and on the outskirts of the city of the same name, destroying ballot boxes and attacking suspected pro-autonomy voters.

The protesters said they were within the law because they were obstructing an illegal vote, even if that meant physically attacking people on their way to vote. Morales congratulated the protesters Sunday night, saying they were protecting the country's sovereignty.

Santa Cruz leaders, or course, called the protests and attacks illegal attempts to obstruct a democratic process.

And if the exit polls are confirmed and the referendum passes, Bolivians will be pitched into the mother of all legal limbos, as its richest province possibly implements an autonomy statute that the the central government says is illegal.

If this happened in the United States, let's say if Missouri unilaterally declared itself autonomous from Washington, D.C., federal troops would be sent in pretty quickly to restore order. Morales, on the other hand, refused to send troops for fear of causing bloodshed but instead dispatched his activists to block the vote.

Although U.S. readers may find this all hard to fathom, it doesn't faze people in Bolivia, where protester roadblocks and invasions of government offices are tolerated and are in fact considered simply part of the political dialogue. The rule of law is notoriously absent in much of the country, and acting outside the law is normal and even expected.

So I guess when you constantly live on the legal edge, those are the rules or lack of rules you play with. The problem is when there are no rules, everyone's making up their own and calling it law.

May 02, 2008

Brazil's 'Watermelon Girl' takes world by storm

First, there was Rio de Janeiro funk music, a spin-off of 1980s Miami Bass hip-hop known for its super-sexually graphic lyrics and criminal point-of-view narratives. The music is the soundtrack of Rio's slums and has been slowly winning acceptance in the mainstream, even being featured on children's TV shows, albeit with cleaned-up lyrics.

Now, the music has evolved a step farther, or maybe lower, into a concoction known simply as "Creu," which is a kind of play on the word for "raw" in Portuguese. And this dance craze is pretty raw; its whole point is celebrating the female behind. Period. And that's been enough to drive countless parties in Rio, where playing creu sends the crowds into a frenzy.

The spokeswoman for the new craze is a dancer named Andressa do Creu, who's also known as Watermelon Girl, which basically explains everything. Her act involves dancing to the tinny creu beat while waving around her particularly ample behind. That's been enough to get her on countless magazine covers, and as she announces in this talk show clip, booked on tours all over Brazil and in Europe.

It's been well-documented, the Brazilian male fetish for the female behind, and this craze makes no bones about it. I, for one, hope the fad passes soon. I'm getting pretty tired of hearing that particularly lurid way the singer of the song raps the word "Creeeuuu," stretching the syllable out like some horny teenager. Living in Rio, you can't help but hear this stuff all over the streets.

Between the dengue and creu, these aren't the brightest of times in the wonderful city.

May 01, 2008

Another Argentine witness disappears but is soon found

The twists and turns of Argentina's human rights trials continued this week when a key witness against officials of the country's former military government disappeared Tuesday night, only to reappear last night, tired and seemingly beaten up, local media reports indicated.

Juan Evaristo Puthod heads a local center in the town of Zárate, Argentina, dedicated to the memory of abuses committed during the country's 1976-1983 military government, in which thousands of people were disappeared.

Puthod himself was kidnapped and detained for various years during the dictatorship but survived to testify against several of his former captors. He was last seen Tuesday night while leaving the memorial he helps run, prompting President Cristina Fernández de Kirchner to say Wednesday she was "very worried" about the case.

Puthod's disappearance was only the latest in a long string of mysterious deaths and disappearances that have plagued the trials, which began after the country's Supreme Court nullified in 2005 amnesties for dictatorship-era officials.

First, witness and dictatorship-era prisoner Jorge Julio López vanished in September 2006 after testifying in the first trial prompted by the Supreme Court decision. He has never reappeared. Three months later, another witness Luis Angel Gerez also disappeared but turned up days later after then-President Nestor Kirchner demanded his release on national television.

Then, there was last December's poisoning death of former Coast Guard officer Héctor Febres just days before he was to hear his verdict on various human rights charges. None of the cases have been solved.

Puthod reappeared last night, however, about 20 blocks from his house in Zárate and was whisked away for medical and other examinations. Human rights activists say former and current police and military officials are behind the kidnappings and at least one death. Police investigators say their investigations continue.

In any case, it appears Argentina's violent history also continues...

April 30, 2008

Dollar falls farthest in Latin America

Everyone knows the U.S. dollar is plummeting all around the globe, sparking speculation of the possible end of the currency's dominance. Everyone from Brazilian supermodel Giselle Bundchen to central banks are switching to other currencies such as the euro, and in some cases, to Latin American monies.

Yes, you read right. Currencies such as Brazil's, which were worthless just two decades ago, have become the new standard. U.S. investor Warren Buffett, for example, has bet heavily on the Brazilian real and won millions.

That's because the dollar's drop have been more dramatic in many Latin American countries than most anywhere else, reflecting the new strength of many of these countries' economies, which are based on exporting commodities such as soybeans and iron. Prices for such commodities are skyrocketing, and dollars are pouring into the region.

Brazil has seen the biggest gain against the dollar, with the real notching an 18 percent rise over the past year, giving it the highest rate of appreciation than that of any other major currency in the world. Believe me, we foreigners are feeling it here, and some of my colleagues are contemplating going home because of the rising cost of living.

Eating out in Rio de Janeiro now costs about 30 reais per person, which is about $18. That's what I paid back in Oakland for a simple dinner.  A newspaper costs about $1.20, a subway ride costs $1.50 and a soda about the same.

I remember trading more than 3.5 reais to the dollar when I came here in 2002 and going home with bags full of cheap buys. Today, the real is trading at 1.69 to the dollar, and no one is going home anymore with deals.

Following close behind is the Peruvian sol and the Chilean peso, which have risen by about 14 percent over the past year, and the currencies of Paraguay, Uruguay and pretty much every country, except for Venezuela. All this has panicked exporters who still depend on a strong dollar to stay competitive, but high commodity prices have helped ease the blow.

The big exception to this picture is the Argentine peso, which actually lost about 3 percent of its value against the dollar over the past year. That's by design, with the Argentine government keeping the peso cheap to encourage exports and visitors.

The big question now is how low can the dollar go. Brazilian newspapers were speculating today the dollar could soon fall to 1.6 reais to the dollar, which would be the lowest mark in about a decade. And the follow-up question is will the dollar ever bounce bank.