Geithner sees ‘durable’ signs of stability “Probably why I’m doing this (tour) is to make sure we keep working with governments around the world to continue to provide enough support to lift this global economy back to a sustained pattern of growth,” he told reporters.

And in other news:

• Foreclosures rise 15 percent in first half of 2009
• Rising unemployment accelerates foreclosure crisis
• Lawmakers frustrated with foreclosure aid programs.

Geithner’s rhetoric is like that of Alan Garcia, who keeps claiming Peru is on track for strong GDP growth and has an iron-clad, recession-proof economy. The numbers, souped up to begin with, show otherwise (courtesy IKN) :

Chile and Peru GDP

The root of the problem in the US, put simply, is that people bought houses they couldn’t afford. Without steep wage inflation, the foreclosure crisis and falling home prices may continue for some time (see Japan). For all the monetary easing (printing money) Geithner et al are doing, the only thing that achieves is to temporarily prop up the feeble balance sheets of overleveraged banks.

Tim Geithner and Alan Garcia both use optimistic rhetoric to appease the general public but sadly their policies serve rich old guys in suits before the general public.

• Controversial laws of the jungle may be revoked soon. (Spanish)
• Peruvian Prime Minister Yehude Simon indicated he may quit after calm is fully restored.

This does not mean all is well in the world of politics in Peru, it’s only words at this point. But it’s hope for a beginning to the end of Alan Garcia’s sell-out-Peru, money-at-all-cost policies.

• Violent repression of peaceful protests at Bagua.
• Blatantly racist government propaganda run on national TV in the aftermath.
• Suspension of opposition lawmakers for their support of the indigenous movement.
• Government shutdown of media channel sympathetic to the opposition. (IKN)
• Intimidation of the media and their families!

All this because of years of neglect (NY Times) of the indigenous people in Peru combined with Free Trade policies that have zoned 72% of the Peruvian Amazon for development and exploration (Duke University).

Alan Garcia cartoon, protest in Cusco

At the Corpus Christi celebrations in Cusco this week we saw this poster as one of many expressions of solidarity with the people of the Amazon. Unfortunately US and European media and governments have been largely quiet on the troubling developments in Peru. I’m convinced if the same kind of things took place in Ecuador, Venezuela or Bolivia – countries with left wing governments – there would be widespread media coverage and political condemnation.

People with different points of view may blame political opposition or foreign influence, but even if only 10% of the independent and eyewitness reports are true, the events at Bagua are still enough to demand Alan Garcia’s resignation.

It’s time to put ideologies aside and demand that Alan Garcia and his entire government resign!

I don’t mean to be insensitive to anyone who suffered from abuses under the Fujimori regime, but I have to disagree with the folks at CIP on this:

The Fujimori verdict and the “autor-mediato” principle give everyone in Peru who was complicit in the abuses of his regime a way to escape responsibility, and that is bad for Peru.

After the bloodbath in Bagua last week, you have to ask how the country is any better now than a decade ago, and how can a government that kills its own citizens and manipulates the media possibly have any credibility bringing their predecessors to justice?

Look, I love Peru but I’m not naive, there are a lot of issues. I worry that saying “justice has been done”, now that Fujimori is in jail, puts a false stamp of approval on the Peru of today. But the problems in Peru don’t begin or end with Alberto Fujimori or even Alan Garcia, just changing the puppet master at the top without changing the culture only gives us a false sense of improvement and a convenient excuse to escape accountability.

I’ve seen nothing but apathy here in Cusco around the Fujimori verdict, perhaps because many people remember how Peru was before Fujimori.

But frankly, the most effective action a US citizen can take is to write your elected representative and tell them no amount of free trade or money can ever be justification for bloodshed. Tell your reps that sections 16, 17 (labor) and 18 of the US-Peru Free Trade Agreement are nothing but pie-in-the-sky promises that have no validity outside the wealthy areas of Lima. The US ought to demand the FTA is frozen or revoked until the government of Peru gets a dose of social equity.

Because of what happened, and Alan Garcia’s comments, there can be no other alternative: Alan Garcia must resign. If this kind of bloodshed had taken place in Bolivia or Venezuela, there would be international condemnation all the way from the White House. The accepted belief in the US and Europe that the government of Alan Garcia (30% approval rating) is somehow better than that of Evo Morales or Hugo Chavez (60% approval ratings) is perhaps understandable due to ideologies, but nevertheless completely false.

The macro-economic gains that Peru has enjoyed have not translated to improved quality of life for people in the provinces. The deep-rooted divisions between ethnic groups have only been amplified as the wealthy in Lima sell out the country’s natural resources with little or no benefit for indigenous people. And finally, all the so-called economic gains are extremely short-sighted. If the world economy experiences significant inflation for a few years – which is entirely possible – the large sums of foreign investment Alan Garcia and his cronies now rave about will seem like a pittance. But by then it will be too late, Peru’s vast natural resources will have been sold out. Future generations will work for pennies-on-the-dollar to pay for today’s windfall for a bunch of rich old guys in suits.

There are many great opportunities in Peru, the idea that bloodshed and selling out 72% of the Peruvian Amazon is somehow justifiable or necessary for progress is deplorable.

Another needless tragedy in a country that has fantastic human and natural resources.

There’s no justification for violence, and blame on both sides. Check out IKN for more insight on the developments leading up to this.

If the global events of the last year or so prove anything, it’s to be leary of rich old guys in suits. The money-at-all costs Peruvian government of Alan Garcia and APRA need to realize money is just a funny printed paper, making money in Lima is fruitless if it doesn’t improve the lives of all Peruvians.

UPDATE:

There are now 7 police and 22 indigenous civilians reported killed in the unrest in Bagua, in the Peruvian Amazon.

Pictures and reports of reporters possibly also killed at La Republica.

Protest in Bagua, Peruvian Amazon

More on the Bagua situation and how you can voice concern:

• Peruanista blog
• Servindi indigenous Peruvian news
• Facebook group

As they say in Belgium “Trop is Te Veel, and Te Veel is Trop”. Time for Alan Garcia to resign.

Since the US government has been printing up money as if it’s going out of style, the Chinese are worried that their dollar-denominated foreign investments (US Treasuries) may soon become, well, Monopoly money.

Peruvians should pay attention to these developments, as Peru recently signed a free-trade agreement (TLC) with China, giving China greater access to Peru’s natural resources as well as infrastructure projects. Look for the Chinese to continue investing in Peru (say, La Oroya).

Finally, unless Prez. Two Breakfasts (Alan Garcia) gets a dose of social equality really fast, don’t be surprised to see some Socialist ideology trickle into Peru along with Chinese investments.

I wrote a previous post about the positive perception US media has of Peruvian President Alan Garcia, and the typically negative perception of anything left-leaning.

Seems like people in Latin America don’t always agree.

From Reuters:

“Doe Run Peru has halted work at its sprawling La Oroya smelter after banks cut credit lines for the company.”

Also read my previous post about money and La Oroya. It remains to be seen if Alan Garcia’s pro-mining government will step in. Personally, I’m with Otto on this: Ira Rennert took the money and ran.

My first thoughts were something like “Madre de Dios… Ayude me pues!!!”. Now I have often said life in Peru has been great to me and there are a lot of wonderful opportunities here, but I find it disappointing that both the media and political / business establishment in Peru often view “progress” strictly in macro-economic terms, levels of foreign investment, nr of free trade agreements, etc.

The unfortunate reality is that the macro-economic gains Peru has made in the last 2 decades have not improved the quality of life of all Peruvians proportionately, hence Alan Garcia’s (and before him Toledo’s) low approval ratings. In addition, in light of the collapse in commodities prices I wrote about earlier, anyone who believes Peru won’t be affected by the global recession is dreaming.

The good news, I agree with Umair Haque that “this is no mere recession: it’s a tectonic global shift in savings, consumption, and investment”. There has never been a better time than now to tackle some of the issues that will improve the quality of life for all Peruvians, such as economy in the provinces, environmental protections, occupational safety, corporate culture, cost of home ownership, etc.

Finally, one of the accomplishments touted by Alan Garcia was the free trade agreement (TLC) between Peru and China signed at the APEC summit. Here’s a wildly speculative, yet extremely intriguing question about what will happen to La Oroya now that the Chinese are coming?