by the El Reportero’s news services
Hugo Chávez
On Dec. 14, the national assembly approved in a first debate a new Ley Habilitante (Enabling Law), granting President Hugo Chávez presidential legislative decree powers for a year. Chávez formally requested the new Enabling Law under the pretext of addressing the country’s extensive flood emergency. However, he was clear that the decree powers will extend beyond emergency measures (to deal with the floods), to the economy and also to the social and political arena. The plaint assembly, which is stacked with ‘Chavistas’, is set to approve this bumper Christmas gift for the president today (15 December), before heading into recess.
Is Peru’s stability at risk?
Peru’s long-term political stability is at risk as social and political pressures mount in the run up to the general election on 11 April 2011. Macro-economically speaking, Peru goes from strength to strength: real annual GDP growth is set for around 8.6% in 2010.
However, the political hijacking of social conflict and protests, which often erupts into violence, may increase in the run-up to the elections. It is not just the elections that act as a catalyst for political instability. The recently published findings of the Latin American Opinion Project (Lapop)’s regional citizens’ survey paint a grim (and worrying) picture for Peru. One in which disillusionment and dissatisfaction with democracy, the current political system and its institutions are bubbling away below the surface ready to erupt at any time. Similar conclusions can be drawn from the latest Latinobarómetro survey published on 3 December.
Political agenda flooded in Venezuela
Only a few months ago Venezuela’s President Hugo Chávez was praying for rain. Now he is praying for it to stop. Venezuela has spent much of the year suffering from a serious drought, causing widespread power shortages. Heavy rains over the course of the last three weeks have caused extensive flooding and landslides.
The government was slow to react but Chávez is now in full swing, blaming capitalism for the harsh meteorological extremes that have afflicted the country, and requisitioning hotels for the homeless. The national assembly, meanwhile, has been inundated with government bills to change the national power structure before opposition legislators take their seats in January and deprive the ruling Partido Socialista Unido de Venezuela (PSUV) of an all-important two-thirds majority.
Mexico IMF request `positive’ for peso, cuts need for reserves
Mexico’s request for a larger credit line from the International Monetary Fund should be a “positive” for the peso and may reduce the need to add more foreign reserves, according to RBC Capital Markets.
The request for a $73 billion flexible credit line for two years should be approved, Eduardo Suárez, an analyst at RBC, wrote in a note to clients. The original line ends in April.
“The increase in the size of the flexible credit line means Mexico could reduce its target foreign exchange reserve level (whatever that is), which would be supportive for the peso,” Suarez wrote.
Mexico yesterday requested a renewal of the $47 billion credit line that it secured from the Washington-based IMF last year. Colombia and Poland were the only other nations that set up precautionary arrangements with the IMF under its flexible credit line in 2009. The program is reserved for countries that pursue economic policies considered to be strong by the IMF.
Mexico has been buying dollars since March, pushing reserves to a record $111 billion last week, after the peso fell to an all-time low against the U.S. currency and the economy contracted 6.5 percent last year, the worst recession since the 1930s. The economy may grow 5 percent this year, Finance Ministry Ernesto Cordero said yesterday.
