The Xenophile Historian

1959 to 2014

Part I

	One More Overview
	The Roller Coaster Ride of Economics
	The Abandonment of the Monroe Doctrine
	The Pink Tide
	The Changing Role of the Church
	Getting Along and Meaning It
	The Drug Trade
	Environmental Challenges
	Cuba: The Revolution Continues
	Venezuela's Democratic Interlude
	Brazil: The Death of the Middle Republic
	Weak Radicals and the Argentine Revolution
	Colombia: The National Front

Part II

	Che!
	Democracy Breaks Down in Chile
	Peru: The Revolution from Above
	Mexico: The PRI Corporate State
	Meet the Duvaliers
	Honduras Goes From Military to Civilian Rule
	Ecuador: From Yellow Gold to Black Gold
	Tupamaros and Tyrants
	The Somoza Dynasty, Act Two

Part III

	Paraguay: The Stronato
	Brazil: The Military Republic
	Bolivia: The Banzerato
	Red Star In the Caribbean
	The Perón Sequel and the "Dirty War"
	Panama: The Canal Becomes Truly Panamanian
	The Dominican Republic: The Balaguer Era
	The Guianas/Guyanas: South America’s Neglected Corner
	French Guiana
	Guyana
	Suriname

Part IV

	The Salvadoran Civil War
	Belize: A Nation Under Construction
	The Guatemalan Civil War
	The Southernmost War
	Among the Islands
	Bermuda, the Bahamas, and Dominica
	Grenada
	Jamaica
	St. Kitts & Nevis
	The Netherlands and French Antilles
	Colombia: Land of Drug Lords and Guerrillas
	The Pinochet Dictatorship
	Peru: The Disastrous 1980s

Part V

	The Switzerland of Central America
	Nicaragua: The Contra War
	Ecuador After the Juntas
	Chasing Noriega
	Argentina’s New Democracy
	Hugo's Night in the Museum
	Democracy Comes to Bolivia (at Last)
	Haiti: Beggar of the Americas
	Peru: The Fujimori Decade

Part VI

	Brazil: The New Republic
	Cuba's "Special Period"
	Chileans Put Their Past Behind Them
	Colombia’s Fifty-Year War
	Uruguay Veers from the Right to the Left
	Daniel Ortega Returns
	Ecuador: Dollarization and a Lurch to the Left
	The Chavez Administration, Both Comedy and Tragedy

Part VII

	Argentina: The New Millennium Crisis, and the Kirchner Partnership
	Guatemala Since the Peace Accords
	Can Paraguay Kick the Dictator Habit?
	Honduras: The Zelaya Affair
	Peru in the Twenty-First Century
	Bolivia: The Evo Morales Era
	The Mexican Drug War
	Puerto Rico: The Future 51st State?
	Conclusion
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By 2001 Argentina’s economy was on the brink of collapse. The minister of economy, Domingo Cavallo, achieved a moderately successful debt swap with bondholders and introduced across-the-board spending cuts, which included slashing state employee salaries and pensions. The middle class responded by emptying their bank accounts. Cavallo tried to keep the bank run from becoming an all-out panic by restricting withdrawals to $250 per week; the public called this action el corralito (the small corral or playpen). For the October 2001 midterm elections, 30 percent of the electorate protested by not voting, though they were required by law to vote, and 25 percent of those who went to go to the polls cast blank or defaced ballots. December saw riots that led to twenty-five deaths, prompting both Cavallo and de la Rúa to resign. Three acting presidents who were supposed to complete de la Rúa’s term resigned, too, so when Congress elected Eduardo Alberto Duhalde, a Peronista, in January 2002, he was the fifth president in two weeks.

Drastic action was called for. Duhalde devalued the peso by 29 percent, and abandoned the link between the peso and the dollar, to make Argentine exports more affordable. Then he defaulted on the foreign debt, which was now at $140 million; this was the biggest default in world history. His minister of economy, Roberto Lavagna, was more moderate than Cavallo, and he negotiated a take-it-or-leave-it deal with the IMF where Argentina would only pay the interest on its debts for the time being. Other measures regulated utility rates and allowed ordinary Argentinians to keep paying their bills even when the money was devalued.

The devaluation caused a boom in exports, and Argentina’s GDP grew by a spectacular rate of nearly 9% for 2003. Prices at home rose accordingly, but Duhalde felt his work was done, so in early 2003 he called for new elections. Former President Menem ran again, but another Peronista who was friendlier to Duhalde, Néstor Carlos Kirchner, won the election and became the next president.

Argentine voters never could be sure if they were getting a conservative or a liberal when they elected a Peronista; e.g., Menem was a conservative, and while Juan Perón himself was usually a liberal, he had swings to the right during his career. With the election of Néstor Kirchner, though, both the party and the country took a definite shift to the left. Kirchner showed his anti-capitalist leanings during the election when he promised not to be a "prisoner of the big corporations," and at one point he proposed turning the Peronista/Justicialist Party into a socialist party. Not well-known before the election, the people took an immediate liking to him, because he came into office without the usual hint of scandal that characterized Argentine politicians, and they affectionately called him "K."

Kirchner kept Roberto Lavagna as minister of the economy, and announced that his first priority would be social problems.⁽¹⁶⁴⁾ Risking a backlash from the military, he reorganized the leadership of the armed forces, and overturned the amnesty laws that protected officers from prosecution, for atrocities committed before 1983. In addition, he impeached two Supreme Court justices and forced another to resign, on charges of corruption. In foreign affairs he did not practice an anti-US policy, the way other leftist heads of state did, but made sure that Argentina’s actions helped other South American nations, rather than the United States.

By the end of his term in 2007, Kirchner was one of the most popular presidents Argentina ever had, with an approval rating of 60% in the polls. Instead of running for re-election, his wife, Cristina Fernández de Kirchner, ran for the top job, and won with a plurality (44% of the vote), becoming Argentina’s second woman president and the first elected one. Still, that did not mean Néstor was retiring from politics. As you might expect, he was Cristina’s closest advisor; because they worked together so well, the media called this administration a "presidential marriage." He also held two jobs, president of the Peronista Party, and the first secretary-general of UNASUR, the Union of South American Nations, until his death in 2010.

Keeping a transition in the family: here Néstor Kirchner gives the baton symbolizing the presidency to Cristina Fernández de Kirchner.

Guatemala Since the Peace Accords

Portillo’s job was hampered by the fact that the leader of his party was José Efraín Ríos Montt; critics claimed that Portillo was really just a front man, taking his orders from the former general and president. To prove Guatemala had changed, Portillo had to take state responsibility for past human rights cases, and prosecute the offenders. He got his chance with the Bishop Gerardi case (see footnote #86). Juan José Gerardi Conedera was a bishop who had long worked with Guatemala’s Maya tribes, and was the Catholic Church’s leading human rights activist in the country. In April 1998 he published the summary of testimonies and statements from thousands of witnesses, which concluded that the Guatemalan army was responsible for 80 percent of the atrocities committed during the civil war. Two days later Gerardi was bludgeoned to death in the garage of his church’s parish house. In 2001 three suspect officers were put on trial for the murder, convicted, and sentenced to thirty-years in jail. This was the first time Guatemala had tried military officers in a civil court.

Other news was not so promising. In April 2003 the United States decertified Guatemala as an ally in the war on drugs, because it had failed to comply with the international antinarcotics commitments it had promised to follow a year earlier. There was also growing trouble with crime and corruption, plus the continued violent harassment and intimidation of human rights activists, judicial workers, journalists, and witnesses in human rights trials. And while the URNG guerrillas had disarmed when the civil war ended, as required by the peace accords, defense spending had increased until the army was larger than what the accords permitted. Despite the human rights trials, it often looked like Guatemala had not learned the lessons of recent history.

The November 2003 presidential election was won by another former Guatemala City mayor, Óscar José Rafael Berger Perdomo of the Grand National Alliance (GANA) Party; he received 54.1% of the vote in the runoff round. His opponent, Alvarado Colom Caballeros of the Nation Unity for Hope (UNE) Party, received 45.9% of the vote. José Efraín Ríos Montt also ran, though the constitution specifically banned former presidents from running if they had seized power in a coup (he did that in 1982, remember). Nevertheless, a court gave him permission to run; he finished in third place with 11% of the vote, and thus didn’t make it to the runoff. Óscar Berger was sworn in on January 14, 2004, and held office for exactly four years, until January 14, 2008.

Berger’s term was calm, compared to other recent administrations in Guatemalan history. The main events were Hurricane Stan, which caused floods that left least 1,500 dead in October 2005; and that Berger got United Nations help -- to enforce Guatemala’s laws, and to prosecute organized crime and drug trafficking. He was succeeded by Álvaro Colom Caballeros, who won a 52-47 victory in the 2007 election and became the first left-wing president since 1954. During his term, Colom’s priority was expanding social programs so that the people had more access to health, education and social security.

In 2009, Rodrigo Rosenberg Marzano, a forty-eight-year-old lawyer, attempted what may be the gutsiest frame-up of all time; he actually hired hit men to kill himself, and tried to get President Colom blamed for it! A few days before he was shot dead, Rosenberg recorded a video declaring that if he was murdered, the president of Guatemala would be one of those directly responsible. You can see the first half of the video below, courtesy of YouTube. As you might expect, the video went viral; the country was plunged into yet another crisis; politicians, members of the media and thousands of citizens called on the president to resign; and Rosenberg became a martyr. The government responded by denying everything, which of course the people didn’t believe. The editor of a major newspaper wrote that "The only thing missing now is for the president and his henchmen to say that it was Rodrigo himself who ... paid the assassins to murder him."

The candidate Colom defeated in 2007, Otto Fernando Pérez Molina, ran again in 2011, and was elected the second time. Pérez is center-right politically, so the country has seen a conservative swing under him; he has taken a hardline approach on violent crime, for instance. However, Pérez has also proposed legalizing drugs, because he believes the international war on drugs has been a failure. Finally, he has spent much of his term defending himself, because various organizations have accused him of taking part in acts of genocide and torture, while he was an army officer in the 1980s and 90s.

As with the rest of Central America, Guatemala appears to have gotten past the years of dictatorship, war and anarchy. Still, it has a long way to go. More than half the population is dreadfully poor, especially the Maya communities. When one recalls how the Maya once had the most impressive civilization in North America (see Chapter 1), the thought which comes to mind is "Oh, how far have they fallen!" In economic terms, Guatemala is not the poorest Latin American nation, but it is still near the bottom of the list. Guatemala is lagging in part because its civil war lasted so long; even El Salvador and Honduras began to get their acts together before Guatemala could. Now that the war is over, will Guatemala be able to win the peace that follows?

Can Paraguay Kick the Dictator Habit?

More important than that were the calls for reform, from both inside and outside Paraguay. Rodríguez abolished the death penalty and removed the repressive laws Stroessner had imposed during the constant state of siege he kept the country under. 340,000 acres of land, belonging to Stroessner and his friends but not used by them, were transferred to 19,000 poor families that did not own land previously. In May 1989 he allowed elections for both the presidency and Congress, in which everyone but the communists could field candidates; however, he still won with 74 percent of the vote. In 1992 a new constitution limited the president to one five-year term, and Rodríguez complied with it by stepping down after the next elections were held in 1993.

Rodríguez was succeeded by another member of the Colorado Party, Juan Carlos Wasmosy. Wasmosy’s election was seen as a sign that democracy had finally arrived; he was the first civilian president in thirty-nine years, observers called this the first election in Paraguayan history that was both free and fair, and he won with a plurality, not a majority (40 percent) -- unprecedented when you consider the grip the Colorados had on the country in the past. But no, the happy ending to the story would not come just yet. As president, Wasmosy promoted former supporters of Stroessner to government posts, and did not continue the reforms of Rodríguez, both unpopular moves. In 1996 he dismissed the commander of the army, General Lino Oviedo, and Oviedo threatened a coup. At that point, it looked like Paraguay was slipping back into its old habits, but widespread protests in the streets and from abroad persuaded Oviedo to back down. Thus, Wasmosy also became the first civilian president to serve for a full term.

Oviedo tried his luck again in the 1998 election, getting himself nominated as the next Colorado candidate for president. He did not get to campaign for long, though; the Supreme Court upheld charges against him having to do with the 1996 coup attempt, and sent Oviedo to jail. Oviedo’s running mate, Raúl Cubas Grau, became the new presidential candidate; he ran on a platform that promised little besides freeing Oviedo, and won. Sure enough, Cubas released Oviedo just days after taking office.

Cubas had a vice president, Dr. Luis Maria Argaña, who had been picked to balance the ticket; he led the anti-Oviedo faction in the Colorado Party. The Supreme Court declared the freeing of Oviedo unconstitutional, and the Chamber of Deputies began investigations that would probably lead to the impeachment of Cubas, meaning that Argaña was about to replace him as president. Instead, Argaña was ambushed and murdered by gunmen on March 23, 1999. Because Cubas and Oviedo were the prime suspects, the Chamber of Deputies voted to impeach Cubas, and riots against the government turned violent, resulting in eight deaths. Cubas resigned, and both he and Oviedo fled the country.⁽¹⁶⁶⁾ Luis Ángel González Macchi, the Senate president and a Cubas opponent, was sworn in as president for the remainder of the term.

Next came one more Colorado, an ex-journalist named Óscar Nicanor Duarte Frutos. He won the 2003 presidential election with 37 percent of the vote, the smallest percentage of any Colorado, and served until 2008, when he became senator for life.

The 2008 election was full of surprises. First, the Colorado Party nominated Blanca Ovelar, the Minister of education; this was the first time a woman ran as a candidate for a major Paraguayan office. Second, for the first time in sixty-one years, the voters rejected the Colarados and went for Fernando Armindo Lugo Méndez, a former bishop, a follower of Liberation Theology, and a champion of the poor. Lugo and his party, the Patriotic Alliance for Change, won by a 40-30 margin; it was the first time Paraguay saw a peaceful transfer of power from one party to another. The new president made three major promises: he would fight corruption, work on land reform, and renegotiate the Itaipu Dam treaty. To top it off, he refused to burden the people by being paid a salary.

Unfortunately, soon after Lugo was sworn in, four women accused him of fathering their children when he was a priest. Lugo recognized two of them, so his party turned against him. Moreover, he was too liberal for the professional politicians, especially former president Nicanor Duarte and former General Oviedo. They found the excuse they needed to act in June 2012 when about 150 landless farmers occupied land which they claimed had been taken from them, leading to a battle with the police that killed six policeman and eleven farmers. The two houses of the legislature, still controlled by the Colorados, impeached Lugo and removed him from office. Lugo was given less than twenty-four hours to prepare for his defense and only two hours to plead his case; naturally he and his supporters called it a "congressional coup." Most other Latin American countries did not approve of this move either, comparing it to the 2009 ouster of Manuel Zelaya in Honduras (see the next section); some did not recognize the elevation of Lugo’s vice president, Luis Federico Franco Gómez, to serve as president for the last fourteen months of the 2008-13 term.⁽¹⁶⁷⁾

Lugo did not try to get his job back, seeing that he did not have much of a chance of succeeding, and instead ran for a Senate seat in the 2013 elections. For the presidency, the Colorados nominated a businessman, Horacio Manuel Cartes Jara, and his victory marked only the second time in Paraguay’s history that power changed hands peacefully. So far the main goal of Cartes has been to promote free trade, and to act as a political counterweight, leaning to the right because all nearby countries have been leaning to the left in recent years. Currently it works like this is working; Paraguay’s economy grew by an astonishing 13.6 percent in 2013.

Since 1989 Paraguay has played the role of a recovering alcoholic or drug addict; in this case the addiction is for authoritarian government. Though the Colorado Party’s record of leadership has been dismal, it is now in charge again, so its latest challenge is to prove that it has turned over a new leaf. In the past, Paraguay avoided making progress because it was relatively inaccessible (the barriers to getting in could be political as well as physical), and it did not attract attention by producing glamorous celebrities, the way that Brazil, Argentina and even Uruguay did. We have also seen that Latin American governments do a better job of ruling democratically after a social revolution overturns the original oligarchy, but because the caudillos, from Francia to Stroessner, have been so repressive, Paraguay has not undergone a social revolution yet. So just as an addict can suffer a relapse, Paraguay’s progress can be seen as "two steps forward, one step back." At this writing, it has been twenty-five years since Stroessner's downfall, and it will take more time than that to completely undo the effects of nearly two centuries of misrule. The good news is that Paraguay has been moving in the right direction for the past quarter-century, leading to hope that in the twenty-first century, Paraguayans will finally put their awful past behind them (see the previous footnote).

On May 15, 2011, Google celebrated Paraguay’s bicentennial with this picture on the Google home page.

Honduras: The Zelaya Affair

Roberto Suazo Córdova, the first civilian president in nearly twenty years, faced a severe economic recession at the beginning of his term (1982-86). There were also threats from the Sandinistas now ruling Nicaragua, and the brutal civil war in El Salvador. Fortunately for Honduras, the Reagan administration was looking for a new ally in Central America to offset the Sandinistas, so the United States generously gave aid when asked for it. During the Suazo presidency, Honduras became a base to train and equip the Contras operating in Nicaragua, and host to the world’s largest Peace Corps mission.

The 1985 election was a peculiar one. Suazo’s party, the center-left Liberal Party, could not decide on who to nominate, so it ran four candidates, while the opposing conservative National Party ran one, Rafael Leonardo Callejas Romero. Together the Liberal candidates secured a majority of the votes, at 51.5%, so the Liberal with the most votes, José Simón Azcona del Hoyo, was declared the winner, though in reality only 27.5% voted for him. Azcona’s term (1986-90) saw a winding down of Central American hostilities. In 1984 the Honduran government had ordered the US to stop training Salvadoran troops within the country’s borders, and now revelations of the Iran-Contra scandal sparked anti-American demonstrations in Honduras. In November 1988, the Honduran government refused to sign a new military agreement with the US, and President Azcona announced that all Contras in Honduras would have to leave. Near the end of his term, Nicaragua held the election that replaced the Sandinistas with Violeta Chamorro, and the Contra War ended.

Honduran voters must have seen something fishy in how the 1985 election turned out, because when the defeated National Party candidate, Rafael Callejas, ran again in 1989, he got 52.3% of the votes, and thus became president from 1990 to 1994. His priority was economic reform, but the austerity measures he introduced provoked widespread alarm and protests. While some gains were made, like an end to gasoline shortages and the cancellation of $430 million owed to the US, during his last year in office, the budget deficit ballooned and the exchange rate got worse, not better. Thus, the voters returned to the Liberal Party in 1993, electing Carlos Roberto Reina Idiáquez as the next president (1994-98).

Reina promised a "moral revolution" for his term, and he actively prosecuted corruption and went after those who had committed human rights abuses in the 1980s. He also did well on the economic front, by increasing the Central Bank’s international reserves, reducing inflation to 12.8% a year, and holding down spending to bring the deficit under control.

The next president was Carlos Roberto Flores Facussé (1998-2002), who like Reina came from the Liberal Party. Flores just wanted to continue the reform program that Reina had started, but the main event of his term was Hurricane Mitch, which struck Central America in October 1998. Overall Mitch killed almost 19,000 people and caused $6 billion in damage across ten countries, making it the deadliest Atlantic hurricane in 200 years. Honduras was the hardest hit, suffering 14,600 of the casualties and $3 billion of the damages. Afterwards, Flores said the storm had erased 50 years of progress in Honduras.⁽¹⁶⁹⁾

Since four of the past five democratically elected presidents had been Liberals, the voters gave the National Party another chance, electing the National candidate, Ricardo Rodolfo Maduro Joest, to serve the 2002-2006 term. Maduro promised to fight crime, especially gang violence, and like his predecessors, strengthen the economy and fight corruption. No one could doubt his interest in gang violence, which had become a serious problem in recent years; Maduro’s son had been kidnapped and murdered in 1997. His get-tough response was a legislation package called Mano Dura (Hard Hand), which dramatically increased penalties for gang-related crimes, and broadened the definition of "illicit association." This succeeded in curbing gang violence, but opponents of the National Party have accused the government of doing it with "death squads" and prisoner abuse.

Maduro was succeeded in 2006 by José Manuel Zelaya Rosales, a cowboy hat-wearing rancher and the most radical Liberal elected so far. He talked about "citizen power" and promised to make the government more transparent and to combat drug trafficking. In 2008 he had Honduras join ALBA, the Latin American alliance Venezuela’s Hugo Chavez was setting up to oppose any US-inspired free trade zone in the region.⁽¹⁷⁰⁾

All this labelled Zelaya as one more leftist Latin American leader, of which we have seen quite a few in this chapter. However, he went too far in 2009, when he called for a constitutional referendum; if the referendum passed, a constitutional convention would have convened to write a new constitution. Many saw this as an attempt by Zelaya to stay in office beyond his term, so it sparked a constitutional crisis. The Supreme Court ordered Zelaya not to hold the referendum, and he responded by firing Romeo Vásquez Velásquez, the head of the Honduran armed forces, because he was also against the referendum. Zelaya then tried to hold it anyway, the military confiscated the ballots, and Zelaya went with a big group of supporters to the base where the ballots were taken, demanding, as the Commanding Officer of the Armed Forces, that the ballots be returned to him. Congress saw this as abuse of power and ordered his arrest; on June 28, 2009, the military removed Zelaya from office and deported him to Costa Rica. The vice president, Roberto Micheletti, served out the last seven months of Zelaya’s term.

The military’s action did not go over well abroad. Zelaya claimed he had been deposed in a modern-day coup, the first in Honduras in more than thirty years. The United Nations, the OAS, and most countries agreed; they continued to recognize Zelaya as the rightful president, and denounced his removal as an assault on democracy. Still, it showed in more ways than one how much things had changed. The Honduran democracy had survived a whole generation, unheard of in the past. And unlike previous coups, the military had intervened not to take power for itself, but to stop the abuse of power by a civilian president. After the affair was over, democracy resumed in Honduras, having passed a test it would have failed in another time. Finally, the United States was one of the nations that took Zelaya’s side, because this happened during the ultra-liberal administration of Barack Obama. We saw that in the nineteenth and twentieth centuries, Washington usually backed right-wing politicians in Latin America; this was one of the few times that it backed a left-wing one.

We are almost up to the present, so only a few more words are needed to finish the Honduran narrative. Tired of Liberal excesses, the voters turned back to the National Party, and elected Porfirio Lobo Sosa ("Pepe Lobo") to be president from 2010 to 2014. Pepe Lobo devoted his administration to reconciliation, which included foreign recognition of his election, the reinstatement of Honduras in the OAS, the forming of a truth commission to investigate events around the removal of Zelaya, and the appointment of a human rights advisor and political opponents to the government. He was succeeded in 2014 by another candidate from the National Party, Juan Orlando Hernández Alvarado (also known by the initials JOH).

Peru in the Twenty-First Century

Still, Toledo inherited a difficult situation. The country was in an economic recession, he had to restore democracy after twenty years of terrorism and human rights violations, and because he lacked a majority in Congress, his effectiveness was limited. During his term in office he needed to make a number of cabinet changes, usually because of personal/family scandals. In May 2003 he declared a temporary state of emergency over twelve regions, to deal with strikes, roadblocks, and the last remnants of Shining Path guerrilla activity.

One of Toledo’s more positive achievements was the establishment of a Truth & Reconciliation Commission to investigate the murders, rapes and disappearances that the military and guerrillas had committed between 1980 and 2000. The Commission’s final report (in August 2003) announced that almost 70,000 had been killed or disappeared during those years; that death toll was more than twice what had been estimated previously. You can read about the Commission’s activities, including the final report, at http://www.cverdad.org.pe.

Finally, Toledo’s presidency saw an epilogue to the Fujimori era. In June 2001 the former president’s sidekick, Vladimiro Montesinos, was arrested in Venezuela, handed over to Peruvian authorities, thrown into a prison in Callao that he had designed while intelligence chief, and charged with multiple acts of corruption and human rights violations. Fujimori himself decided to return in 2005, so he could run for president in the 2006 election. Bad move; any smart criminal will tell you not to return to the scene of the crime! He was arrested after arriving in Santiago, Chile, and held until 2007, when he was extradited to Peru. In Lima he was first tried and convicted of ordering an illegal search during the last days of his government. Next, he was accused of stealing as much as $600 million from the government, and channeling the money to Montesinos. That trial dragged on for fifteen months (until April 2009), due to interruptions when the ex-president had health problems. During that time there was also testimony on two incidents involving the deaths of guerrilla suspects and others around them: a 1991 massacre of fifteen people, including an eight-year-old boy, at a Lima barbecue, and a 1992 raid at La Cantuta University that killed nine students and a professor. It was the first time in Latin American history that a democratically elected president was found guilty in his own country of human rights abuses.

Throughout their trials, Fujimori and Montesinos tried to put the blames on each other; Fujimori claimed he had no idea what Montesinos was really doing, while Montesinos said he was always following Fujimori’s orders.⁽¹⁷¹⁾ Both were convicted, and Montesinos was sentenced to twenty years in prison, while Fujimori was sentenced to twenty-five years. Because both of them are now senior citizens, it is likely they will remain locked up for the rest of their lives.

The 2006 election was a three-way race between former president Alan García (he knew that a winner never quits), a conservative candidate named Lourdes Celmira Rosario Flores Nano, and a populist candidate named Ollanta Moisés Humala Tasso. In the first round of voting, García barely edged past Flores (with a margin of half a percentage point), to win the second place spot, and in the runoff, he pulled it off again, beating Humala 53-47. Humala’s campaign was heavily financed by Venezuela’s Hugo Chavez, and that led to rumors that Humala would become another Fidel Castro or Chavez; as many as a third of Peruvian voters confessed that they saw García as the lesser of the two evils.

I guess you could say that because García’s his first term in office had been so awful, things just had to go better in his second term. And indeed they did; strong international demand for Peru’s mining and agricultural products meant good years for the economy (it grew by at least 7% each year). But that didn’t mean the situation was perfect. In 2008 the revelation of an audio tape containing a secret conversation between a government official and a lobbyist for foreign oil companies led to the resignation of the entire cabinet. East of the Andes, there was unrest because a law had been passed allowing foreign companies to exploit the oil, mineral and lumber resources of the Amazon basin. The Amazon tribes protested by blocking roads, and when the military was sent in to stop the protests, there was a battle near the town of Bagua that left twenty-two soldiers and thirty-three natives dead (2009). Congress revoked the law to cool off the situation.

In the 2011 election, Ollanta Humala ran again, and he beat Keiko Fujimori, Alberto Fujimori’s daughter, in the run-off round. He is Peru’s first left-wing head of state in forty years, since General Juan Velasco. But he is also quick to point out that he does not intend to make Peru a socialist/communist state, because the existing examples in Cuba and Venezuela are too radical for his tastes. Thus, on the one hand he promised to give poor Peruvians a bigger stake in the economy through moderate reform, while at the same time promising to respect investor rights, the rule of law and the constitution. In foreign policy he has proposed reuniting Peru and Bolivia into one state, because they had been united in the past under Incan and Spanish rule. Has Humala found the economic/political formula that will work for Peru? At the moment it looks like he has, but no human institution is perfect, and no human institution lasts forever. Other challenges will come to test the ancient land of the Incas in the future, and then we will know if the country has been transformed permanently into a better-managed, more prosperous land, or if it slips back into its old habits again.

Bolivia: The Evo Morales Era

From the mid-1980s onward, Morales was a top official in the union. After the 1990s began the union developed a political wing, and he used it to get elected to Congress in 1996; when former dictator Hugo Banzer was elected president a year later, Morales blasted him as "the worst politician in Bolivian history." Soon after that he took over a defunct but still registered party called the Movement for Socialism (MAS), and made it the left-wing party representing both coca growers and indigenous peoples. MAS led the protests in the Cochabamba Water War of 2000, and the Bolivian Gas War of 2003, so with a new reputation as the opposition party, MAS became a roaring success, winning more congressional and mayoral seats with each election. Eventually US officials like the ambassador saw Morales as a threat to the War on Drugs, and warned it would hurt US-Bolivian relations if he continued to enjoy success; that only seems to have made him more popular. Finally in the December 2005 presidential election, he won with 54% of the vote, an awesome landslide when one recalls how previous presidents were elected without getting even 25%.

Morales got off to a good start as president; the IMF announced it would forgive the debts of eighteen nations, including US $2 billion on what Bolivia owed. Then in May 2006 he nationalized the natural gas fields, thus keeping his biggest campaign promise.⁽¹⁷²⁾ At the same time he sharply increased taxes on fossil fuel industries, so the amount of revenue brought in from oil and gas jumped from $173 million in 2002, to $1.3 billion in 2006. In July 2006 a National Constituent Assembly was elected to draft a new constitution; it went into effect in February 2009. And with help from Cuba and Venezuela, Bolivia launched crash programs to get rid of illiteracy, improve the quality of health care, and teach Indian languages (either Quechua, Aymara or Guarani) to everybody working for the government. Finally, Morales raised the minimum wage by 50% and carried out agrarian reform. At the end of his first year in office there was no budget deficit, the first time that had happened since the 1970s. No wonder Morales easily rode out a recall vote initiated by the country’s eastern departments in 2008 (they feared he was becoming an Aymara racist and a left-wing dictator), and won by another landslide when he was up for re-election in 2009 (64.2% of the vote this time).

In foreign policy, Morales proved to be a good imitator of Fidel Castro and Hugo Chavez; he also couldn’t resist irritating the United States. He eagerly took part in international organizations that did not have the US as a member, like the Bolivarian Alliance and UNASUR. On trips abroad he proclaimed US President Bush a terrorist and called for moving the UN headquarters to another country.⁽¹⁷³⁾ US-Bolivian relations hit a low point in 2008 when Morales accused the US ambassador of "conspiring against democracy" and encouraging civil unrest; Washington and La Paz subsequently expelled each other’s ambassadors. There was a recovery in relations after Barack Obama became US president, since Obama is a leftist as well, but only slightly; Morales saw Obama as too tolerant of US imperialism and called Obama a war criminal, for bombing Libya in 2011.

Sometimes it can be tricky to describe what Morales really believes, because he isn’t a hardcore Marxist, though he tends to use fierce leftist, anti-imperialist rhetoric that Marxists agree with. For example, he has called capitalism "the worst enemy of humanity," but he does not call for the overthrow of capitalism in a violent revolution; what’s more, he seems to think capitalism is OK, provided it is part of a mixed economy and the people who practice it are not part of an oppressive elite. Apparently he knows that textbook Marxism cannot be applied to Bolivia, because it predicts that a socialist revolution will be led by the "industrial proletariat," but even today, most Bolivians are peasants and miners, not workers in industry. Individuals in the Bolivian government have called his ideology "Evoism," "Evismo," and "Evonomics," meaning it draws ideas from several sources and can be modified to meet new challenges. Where Morales is consistent is that he has always opposed the old political class, whom he believes have mistreated "the people" for centuries, and his ultimate goal is to give Bolivia a more communitarian society.

Like some other popular leaders who made major changes in national policy, Morales faced more opposition in his second term than he did in the first. When the government announced a 5% hike in the minimum wage in 2010, the main trade union, the Bolivian Workers’ Central, declared this wasn’t enough to cover the rising cost of living, and called a general strike; the government in turn called the protesters pawns of the right, instead of giving them the greater raise they wanted. There were also widespread protests in 2010 over the government’s decision to cut gasoline and diesel subsidies, causing price increases in those fuels for gasoline and diesel fuel; in this case, Morales restored the subsidies, after saying he had kept his promise to "listen to the people." A 2011 plan to build a highway through the Amazon Basin was protested by the tribes living there, because they saw it as a threat to their lands. Morales’ first response was to call them American lackeys, but later agreed to hold a referendum on the issue. Finally there was an incident in August 2011 where the police attacked peaceful protesters. This got international attention; Morales denied ordering the police to use violence, and issued a public apology, but still the affair hurt his image, both at home and abroad.

Currently Morales is expected to win the 2015 presidential election, and he has said he plans to retire when his third term ends in 2020. By then, he will definitely be the longest-lasting head of state in Bolivian history; heck, at this date, only Andrés de Santa Cruz has been in office longer (1829-39). You may not like Evo Morales, but you have to admit that he has given Bolivia more influence than any other leader has done. Being landlocked, poor and not densely populated, Bolivia, like Paraguay, has often not gotten much attention in the past. And Morales is devoted to empowering the country’s underprivileged indigenous majority, so we could be seeing a new kind of social revolution in progress.

The Mexican Drug War

The next president, Felipe Calderón Hinojosa, also came from the PAN. His election in 2006 was controversial in a way that may remind readers of the 2000 presidential election in the United States. When the votes were in, Calderón was ahead of the Democratic Revolution Party (PRD) candidate, Andrés Manuel López Obrador, by an extremely narrow margin: 233,831 votes, or 0.56%. López Obrador had been ahead in the polls during the campaign, so he contested the results and his supporters protested for several weeks. However, no evidence of fraud was found, so Calderón was declared the winner. What the cross-examination of the electoral process did show was that Mexico’s democracy had matured to a level comparable to that of democracies in North America and Western Europe. Mexicans no longer needed to wage a decade-long war to change their leaders, as had been the case in the nineteenth and early twentieth centuries.

Officially the drug war in Mexico began during the Calderón presidency, because as soon as he took office, he ordered 6,500 troops to make a massive raid on the drug smugglers in the state of Michoacán. Throughout the twentieth century, there had been Mexicans who made a profit delivering items that were illegal north of the border. During the prohibition era, the commodity was liquor; more recently it was people (i.e., illegal immigrants). Illegal drugs were usually in the mix somewhere, but usually they were locally produced substances like opiates and marijuana, and they weren’t pushed on a large scale until a former Federal Police agent, Miguel Ángel Félix Gallardo, founded the Guadalajara Cartel in 1980. Soon he gained control over all drug trafficking across the US-Mexican border, and through a partnership with Colombia’s Medellín cartel, he brought cocaine to North American addicts, too.

At the end of the 1980s, the Mexican "Godfather" divided up the cartel by territory to make it harder for the authorities to crush it. Cartel activity at the Tijuana-San Diego border crossing went to one family, the smuggling at the Ciudad Juarez-El Paso crossing went to another family, the activity at the Matamoros-Brownsville crossing went to a third, and so on. This defensive strategy not only worked, it allowed the new cartels to grow much faster than they would have if they had stayed together. The downfall of the Colombian cartels in the 1990s also helped, because they no longer had competition when it came to getting drugs into the United States. However, the end of their unity also eventually led to rivalries, and then to turf wars between the drug thugs.

A map of the cartel territories, from a few years back.

Officially this has been called an asymmetric war, because the equipment and tactics of the two sides are radically different. Don’t underestimate the fighting ability of the cartels, though. With all the drug money they have, they can afford whatever weaponry they want.⁽¹⁷⁵⁾ Besides assault rifles, the cartels have grenade launchers, body armor, Kevlar helmets, and improvised explosive devices (IEDs). They also practice psychological warfare, by posting videos of executions online, tossing body parts into places where they are sure to be seen (like crowded nightclubs), and putting up banners announcing demands or warnings. Thus, you can compare the cartel members with the terrorists in a war zone like Iraq. In many communities the cartels are stronger and better equipped than the government, and there they will act like a government, enforcing their own laws and collecting their own taxes. As Calderón put it in 2010, the cartels seek "to replace the government" and "are trying to impose a monopoly by force of arms, and are even trying to impose their own laws."

At the time of this writing, the Mexican drug cartels have become the largest supplier of cocaine and marijuana to the United States, and a major producer of heroin, ecstacy and methamphetamine; they have also made Mexico a significant money-laundering center. The Mexican government is currently conducting the largest illicit-crop eradication program in the world, while the United States tries to cut the demand for narcotics within its borders, in the hope that hitting the drug dealers in the wallet will hurt them more than brute force alone. It is possible the US and Mexican governments will win in the end, the way the government prevailed in Colombia, but those on the side of law & order have a long way to go.

One other critical issue in US-Mexican relations is illegal immigration. We noted in footnote #32 that more than ten percent of Mexicans live in the United States; Los Angeles is the world’s second largest city populated by Mexicans. Most of them are in the southwestern states, as you might expect; along the border, Yankee and Mexican cultures have merged to form a culture you can call Norteño or Tex-Mex. In the other US states they have formed significant communities (e.g., there is a Mexican community in the Kentucky city that the author calls home). The issue is that a lot of them came into the United States without following the rules. What’s more, the United States and Mexico have not cooperated on this issue, the way they have on fighting the drug trade. On the contrary, at times it has seemed that the Mexican government has encouraged illegal immigration, because giving the surplus population the means to go away eases demographic, economic and political pressures in Mexico itself. Mexicans working north of the border send as much as $20 billion back to their relatives annually, making this Mexico’s third largest source of foreign cash. In 2005 there was a news story about Mexico publishing a pamphlet in comic book form called Guide for the Mexican Migrant, which told how to survive in the northern Mexican desert; it was seen as a manual on how to cross the border illegally (you can read an English translation of the text here).

Mexico lost Texas to the United States in the nineteenth century because Mexicans were not willing to settle there, but now with Mexicans pouring in, especially in Texas and California, fears have been raised about the trend going the other way. For example, a few conservative bloggers like John Hawkins and Michelle Malkin have referred to illegal immigrants as reconquistadors. Indeed, Latino racist groups like MEChA and La Voz de Aztlan talk about taking back the southwestern United States, which they see as their ancestral homeland (see Chapter 1). At immigration rallies they fly the Mexican flag instead of American flags and say things like, "With all due respect, Los Angeles is ours." Make no mistake about it; illegal immigrants may not wear uniforms or carry weapons, but in today’s world they can act like an occupying army, too (e.g., Morocco sent unarmed civilians into the Western Sahara in 1975, calling it the "Green March"). I wrote more about this subject in my North American history.⁽¹⁷⁶⁾

The presidential election of 2012 wasn’t as close as the election of 2006, but it was also contested. The vote counts were as follows:

• Enrique Peña Nieto (PRI) = 38.19%
• Andrés Manuel López Obrador (PRD) = 32.42%
• Josefina Vázquez Mota (PAN) = 26.05%
• Others = 3.34%

Enrique Peña Nieto was a forty-five-year-old, progressive, successful governor of the state of Mexico; he also got attention by being the husband of Angelica Rivera, a famous telenovela (Mexican soap opera) star. With him, the Institutional Revolutionary Party is back in the saddle. During the second half of the twentieth century, it seemed that the PRI was only interested in gathering power and keeping it forever. Now it has an ideology; it is steering a centrist course, offering itself as the moderate alternative to the conservative PAN and the liberal PRD. Peña Nieto won for two reasons: the PAN had failed to effectively promote its philosophy during the twelve years it ruled, and he convinced the voters that he represented a new face for the party that had become a political dinosaur. As he said in his victory speech, "Mexicans have given our party a new chance. I am the PRI that’s coming." We will see during his term if the PRI has reformed itself in other ways as well. One thing you can be sure about is that because all Latin American leaders are under more scrutiny than they used to be, the "PRI that’s coming" will have a much harder time getting away with corruption, and gathering the kind of power that the party once had.

Puerto Rico: The Future 51^st State?

When the question came up on whether Puerto Rico should become a US state or an independent nation, the island did neither. We saw in the previous chapter the halfway status they went with in 1952, a form of autonomy called the "Commonwealth" or "Free Associated State." The architect of the Commonwealth, Luis Muñoz Marín (1898-1980), was the most popular politician on the island, and it shows in the fact that he was elected governor four times in a row, allowing him to hold that job from 1949 to 1965.

For all that he had done, Muñoz Marín was awarded the Presidential Medal of Freedom by US President John F. Kennedy in 1963. By then, however, there was a growing sentiment in his party, the Popular Democratic Party (PPD), that four terms as governor was enough (the president only got two terms, after all!). He agreed to retire, and recommended that his secretary of state, Roberto Sanchez Vilella, run for governor next; of course Sanchez was elected.

The independence movement on Puerto Rico stopped being a major political force after the death of Pedro Albizu Campos, the leader of the Nationalist Party, in 1965. That did not settle the question of the island’s status, though. In 1967 the Partido Estadistas Unidos (United Statehooders Party) was founded by Luis A. Ferré, to lead the campaign to become the 51^st state in the United States. 1967 also saw the Legislative Assembly test the popularity of the different proposals by announcing a plebiscite. The voters cast their ballots as follows:

• Commonwealth = 60%
• Statehood = 39%
• Independence = 1%

Before the 1968 election, Luis Ferré reorganized the United Statehooders Party, renaming it the New Progressive Party (NPP). On the other side of the political aisle, the PPD split between two candidates, Governor Sanchez and Luis Negrón López. This lack of unity caused the PPD to lose for the first time, and Ferré became the first pro-statehood governor, under the slogan "Esto tiene que cambiar" ("This must change").

Since Puerto Rico began electing its governors, all have come from either the PPD or the NPP, and in the 1970s those two parties started associating themselves with the two major parties of the United States. The New Progressive Party allied itself with the Republicans, so the Popular Democratic Party in turn began working with the Democrats. So far this has been a minor development; Puerto Rico’s only involvement in mainland politics is to send an observer to Congress and some delegates to the presidential conventions. However, if statehood ever comes, this means the NPP and PPD will probably be absorbed into the Republicans and Democrats respectively.

Ferré served for one term (1969-73). His successor, Rafael Hernández Colón of the PPD, was the island’s youngest elected governor, being only thirty-six years old at the beginning of his term. Colón was in turn followed by another NPP governor, Carlos Romero Barceló, who unlike his immediate predecessors held the office for two terms (1977-85). After Barceló was finished, Colón was elected again, and this time he showed he had learned the job, for he did well enough to get re-elected in 1988, meaning he served three terms altogether (1973-77 and 1985-93).

In 1976 the local economy got a boost because Section 936 was added to the US Internal Revenue Tax Code, which declared that American companies operating in Puerto Rico do not have to pay taxes on their profits. Soon 100,000 Puerto Ricans belonged to families employed by Section 936 companies. However, Congress repealed Section 936 twenty years later, in 1996. For Puerto Ricans, the good news was that companies open in Puerto Rico would keep their tax breaks for ten more years, and when Section 30A was created to replace Section 936, it kept the tax break, too.⁽¹⁷⁷⁾

The status question never went away; it always remained a favorite topic of conversation among Puerto Ricans. It showed when the NPP candidate, Pedro Roselló, was elected governor in 1992, and in 1996 he was re-elected with 51.8% of the vote, making him the only pro-statehood governor (so far) to win by a majority. In 1991 Puerto Ricans voted to reject an amendment that would have "reviewed" their commonwealth status; basically, this would have been a repeat of the 1967 plebiscite. They did hold two more plebiscites after that, though, in 1993 and 1998. Both times the voters chose to leave the system the way it is, though the margin of votes between the commonwealth and statehood choices was much closer than it had been the first time.

While Puerto Rico’s future remained in question, some of its residents looked for other ways to express themselves. In 1991 Spanish was declared the only official language of the island. Today some Puerto Ricans still speak only Spanish, but it wasn’t a practical move in a country where English is the official language everywhere else, so the very first law passed in 1993 declared both English and Spanish official languages. There was also the question of citizenship. Puerto Rican citizenship had been legal in the early days of US rule, from 1900 to 1917, but after that everyone was simply granted US citizenship at birth. Then in 1996 the US government, in a measure giving more autonomy to the island, recognized Puerto Rican citizenship again.

One person who benefited from Washington’s change of heart was Juan Mari Bras (1927-2010), who founded the modern Puerto Rican Socialist Party in 1971 (don’t confuse it with the socialist party that existed early in the twentieth century). In 1994 Bras had renounced his US citizenship and taken Puerto Rican citizenship in its place, before a consular agent in the US Embassy in Venezuela. So far he has been the only person in recent history who held Puerto Rican citizenship and no other. Currently any US citizen can have Puerto Rican citizenship after living on the island for at least a year.

After that, though, politics had to take a temporary back seat to nature. Being in the path of north Atlantic hurricanes, Puerto Rico gets hit by them often enough, but Hurricane George was uncommonly bad. On September 21, 1998, George struck with 120 MPH winds, killing seven and leaving virtually the entire island without electricity (99.5%) and fresh water (77%). Overall damage was estimated at $2 billion, and US President Clinton quickly declared Puerto Rico and the U.S. Virgin Islands disaster areas, making them eligible for federal recovery aid.

As the turn of the millennium arrived, the status question shifted from Puerto Rico to the small island of Vieques, located between Puerto Rico and the Virgin Islands. During World War II the US Navy purchased two thirds of Vieques for a base, the Roosevelt Roads Naval Station, and after the war it used the area for gunnery and bombing practice, the way it used the Hawaiian island of Kahoolawe in the Pacific. The proverbial stuff hit the fan in April 1999, when two Marine jets missed their targets; the bombs killed a civilian security guard and injured four others. The locals had not protested the weapons testing since the mid-1970s, and then it was because they lost the jobs they had previously, like sugar cane growing. Now Vieques became a cause célèbre, as various groups and famous individuals came to the island, joining local protesters, blocking further military exercises with their presence, and last but not least, getting international attention. Eventually the pressure caused by the protests worked; some Navy bombing exercises occurred in 2000 and 2001, but they were an on-and-off affair, using nonexplosive ordinance. Then President George W. Bush ordered a stop to the exercises altogether; the Navy withdrew from Vieques in May 2003, the part of the naval base on the island became a National Wildlife refuge, and the part of the base on Puerto Rico itself became a civilian airport. However, there are still plenty of unexploded bombs and shells in the Vieques refuge; they are likely to remain dangerous for decades, and it is estimated it will cost millions to clean them up (see Falklands footnote #95 for a possible reason why no one is in a hurry to remove the ammunition).

Since 2000 there have been four governors, each serving one term. Sila M. Calderón is the first woman governor in Puerto Rican history, while for the rest we’ll just list their names, dates of their terms and party affiliation:

At this time, Puerto Rico remains not a nation, but not completely part of the United States, either. This state of limbo also shows financially; while Puerto Rico is one of the richer islands of the Caribbean, the residents are poorer than the residents of any US state. With the pro-independence party polling in single digits at every election, and the economy dependent on the United States, independence is not an option. Therefore Puerto Rico won’t go away, but we have seen by now that the course it takes will be chosen by Congress. As Richard Thornburgh, the US Attorney General under George H. W. Bush, explained the situation: "The Congress of the United States holds full powers over Puerto Rico, a relationship that Puerto Ricans are incapable of altering." So if you’re wondering when Puerto Rico will become a state, it won’t happen through plebiscites; it will happen when Congress lets it join the Union.

Conclusion

All nations in the region have been independent long enough to develop their own characteristics. Customs and dialects vary, and the racial composition changes as one travels from one nation to another. A white Argentinian or Uruguayan, for instance, may tend to think of mestizo Paraguayans as being inferior to himself, and a black Haitian or Jamaican probably doesn’t see himself having much in common with a Maya Indian from Guatemala. But when Latin Americans meet outside of Latin America, then they realize there’s something about them which makes them different from everybody else.

One common characteristic is an optimistic attitude that history is moving in their favor. Generally they feel that history is finished with European civilization, while their best days have just begun. This "El Dorado" outlook comes from the sixteenth century, when their European ancestors were exploring and conquering everywhere, usually hopeful that they were about to find whatever they were looking for. In those days, poor Spaniards and Portuguese would go to the New World in the service of God and country, and acquire a fortune in the process, so when they returned to Europe they felt much better about themselves than they had when they left. One lowly serviceman who let success go to his head was St. Teresa of Avila’s brother; he spent thirty-four years overseas, came back to Spain very rich, and told people to call him Don, though he had not been granted a title of nobility. This embarrassed the humble St. Teresa considerably.⁽¹⁸⁰⁾

When today’s Latin Americans rediscovered the ancient civilizations that even older ancestors of theirs built, their opinion did not change much; now they might say that because they were great once, they can be great again. And because the United States often acts these days like it is past its peak, I wouldn’t be surprised if Latin Americans feel the age of US domination is over as well.

Another characteristic of Latin Americans is a willingness to not play by the rules. This came from a common problem in the colonial era; the colonial authority would issue orders or laws inappropriate for the situation at hand. With communication times between the Old and New World stretched out by weeks, it usually wasn’t practical to ask the rulers if they really meant what they said. So even when they were loyal to the Crown, people in the colonies would break laws that got in the way, especially in cases where a project could not be completed if the laws/orders were followed to the letter. One of the best examples of that is how the Spanish colonies bought contraband from non-Spanish shipping, when legal merchants could not supply the products they needed. These habits did not change after independence. Usually there remained a visible difference between the law and real life, just as the Spanish-speaking nations could have both parliamentary elections and caudillos. Meanwhile, Brazilians practiced both tolerance and exploitation to survive in the jungle.

For these reasons, Latin Americans may be attracted by the physical achievements of non-Latin American nations, but they also feel they have a more mature approach in dealing with human relations. They might point out, for instance, that every Latin American nation except Cuba and Brazil freed its slaves before the United States did, and accomplished it without a bloody civil war. Thus, it is safe to say that in a future world where Latin Americans play a major role, the human element in society will always be considered first and foremost. On that note, I will end this work by quoting a paragraph that was written more than half a century ago, but is still as relevant as ever:

"The world will hardly look to the Latin American for leadership in democracy, in organization, in business, in science, in rigid moral values. On the other hand, Latin America has something to contribute to an industrialize and mechanistic world concerning the value of the individual, the place of friendship, the use of leisure, the art of conversation, the attractions of the individual [life], the equality of races, the juridical basis of international life, the place of suffering and contemplation, the value of the impractical, the importance of people over things and rules."⁽¹⁸¹⁾

If you haven't visited Latin America yet, there has never been a better time to book your tickets!

165. The strangest problem to come out of the Argentine economy is a coin shortage. Sometime around 2005, the people of Buenos Aires realized that inflation had reduced the face value of their coins until the coins were worth less than the metal used to make them. A one-peso coin might contain two pesos worth of copper, for instance -- and it could be traded for more than two pesos in paper money. At that point, coins disappeared from circulation, until it became commonplace for shops to have signs saying "NO HAY MONEDAS" ("we don’t have change").

Commerce nearly broke down as a result. Large businesses would not sell anything if they did not have change; small shops would give the customer pieces of candy and other nick-knacks when the coins ran out; banks refused to give their customers more than a few coins at a time, even when threatened with fines if they didn’t. The government announced that people must be hoarding the coins and melting them down, but it never caught any perpetrator doing those things, so the actual cause of the shortage is a mystery. And no, minting more coins did not fix the problem; more than 500 million new coins were minted in 2008, and the shortage only got worse. The busses of Buenos Aires were hit particularly hard, because bus drivers did not want to accept paper money for bus fares; they would sell coins to passengers for several times their equivalent in bills. A government plan to put an electronic card payment system on the busses was announced, but deploying it was delayed for years, like so many other services promised in Third World countries. The most recent news story I read on the coin shortage was written in 2010, so I don’t know if the shortage is over yet.

166. Cubas and Oviedo returned separately to Paraguay after the twenty-first century began. In 2004 gunmen kidnaped and killed Cecilia, the daughter of Cubas, though he paid an $800,000 ransom for her release. Oviedo was imprisoned, released on parole for good behavior, ran unsuccessfully in the 2008 election, and died in a helicopter crash in 2013.

167. Paraguay’s membership in Merosur was suspended in mid-2012 because of the impeachment of Lugo. Then the leftist leaders of Argentina, Brazil and Uruguay tried to get the OAS to punish Paraguay, too. Hugo Saguier, Paraguay’s ambassador to the OAS, struck back by telling them, "If you want to form a new Triple Alliance, go ahead." Of course this was a reference to the terrible war that all four countries fought in the 1860s (see Chapter 4). For the Brazilians this really hurt, and Brazil’s ambassador called the remark "unnecessary and gratuitous." After fair elections were held in Paraguay in 2013, the presidents of Argentina, Brazil, Uruguay and Venezuela said they would allow Paraguay to rejoin Mercosur, but because Paraguay has a conservative-leaning government (unlike those other four nations), it refused to get back in until July 2014, when Venezuela’s term holding Mercosur’s rotating presidency ended.

168. There was a communist militia, the Cinchoneros Popular Liberation Movement, which committed kidnappings and bombings, but the Honduran army quietly waged a campaign that kept the lid on them. Unfortunately this included a CIA-backed campaign of extrajudicial killings by CIA-trained units, like the notorious Battalion 316, which has been accused of kidnapping, torturing, and killing at least 184 Honduran students, professors, journalists, human rights activists and others in the 1980s.

169. On the political front, Flores managed to eliminate the commander in chief position in the armed forces, and signed a law that formally established civilian control over the military. We noted in Chapter 5 that coups were commonplace in Honduras because the military had more power than it should have in a democracy; now Flores neatly got rid of that threat.

170. Honduras left ALBA again after Zelaya had been removed from office.

171. Both are likely stories (sarcasm intended).

172. The largest foreign owner was Petrobras, the Brazilian oil company. Seizing their assets caused rough relations for a while with another leftist leader, Brazilian President Lula da Silva.

173. Good, let it go. I’m not saying this because I agree with Evo Morales. I have my own reasons for wanting the UN out of the US (and vice-versa).

174. In 1983 I took a vacation in El Paso, TX, and one day while there, I crossed the Rio Grande to see Ciudad Juarez. Back then, a lot of Gringos living near the border routinely crossed it to shop on the Mexican side, taking advantage of lower prices. Nowadays I don’t recommend people do what I did, because the drug war has given Ciudad Juarez the highest per capita murder rate in the world.

175. The United States Drug Enforcement Administration and local police forces got together in 2007 and staged a raid in Mexico City that found $205.6 million US dollars in cash. This is more than the annual income of some island nations. The Marshall Islands, for example, reported a gross domestic product of US $149 million for the same year. And it makes you wonder how much money the feds didn’t find; estimates on how much the cartels make from the drug trade every year range from $13.6 billion to $49.4 billion.

176. In the latest development (as of 2014), tens of thousands of Central American children, mostly from El Salvador, Guatemala and Honduras, are sneaking into the US without their parents. They enter Mexico through its southern border, and somehow get themselves transported across the country so they can cross the other border. The Obama administration is trying to figure out how to send them back, and how to treat them in the meantime, because not all of them are orphans or political refugees. At the same time, an opinion poll taken in Mexico showed that 34 percent of Mexicans would rather live in the United States, so don’t expect the immigration flood, both legal and illegal, to stop anytime soon!

177. In 2006 Puerto Rico’s tax code was amended to establish a 7 percent sales tax. Of that amount, 5.5% goes to the San Juan government, and 1.5% goes to the municipalities; the governor is also permitted to raise the tax another 1%, if 7% is not enough to prevent budget deficits (and knowing how modern governments grow, it’s only a matter of time before that 1% is needed).

178. Except for the Cubans in Miami, Hispanic-Americans tend to vote Democratic. Ted Cruz, the energetic freshman Republican senator from Texas, is a special case!

179. I don’t know of any science fiction writers predicting a day when the world will be dominated by Brazil, Mexico, or any other Latin American nation. In his future history stories, H. Beam Piper often made reference to places in South America (e.g., he might mention a spaceship named the City of Montevideo), because he believed personally that if there ever is a nuclear war, the nations of the southern hemisphere won’t be targets, and thus will come through it in better shape than North America, Europe and Asia.

180. Ureña, Pedro Henriquez, Literary Currents in Hispanic America, Harvard University Press, 1949, pg. 35.

181. Samuel Guy Inman, quoted by Lewis Hanke, South America, New York, Von Nostrand, 1959, pg. 10.

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