Click here for Full Issue of EIR Volume 6, Number 34, August 28, 1979

A 'high command' for latin energy

RecerfOy, two private agencies which on energy matters created an Inter-American Energy Development Bank front for the New York Council on Foreign Relations (Spanish acronym BIDE) with a seed-capital of $20 moved into the offices of the Organization of American million to be contributed by private investors, corpo­ States (OAS) and the Inter-American Development rations, and multilateral institutions: Bank. The result is likely to be a wave of proiests from The Westetn Hemisphere Energy Workshop is bare­ all parts of Latin America. ly a distinct body. It was creat�d by the New York­ The two agencies, the Forum of the Americas and based Council of the Americas, the. spook "consulting the Western Hemisphere Energy Workship seek a mo­ firm" of Panero Associates and the MITRE Corpora­ nopoly on energy-related dicision-making in Latin. tion. The Council of the Americas was created out of America, according to their spokesmen, and the new the New York Council on Foreign Relations. In turn, relationships established are admittedly directed at that it was an initiating force in the creation of the Forum goal. Both the OAS and IADB have significantchannels on the Americas. The Forum's ':Notables" then overlap of access to almost every government in Latin America. with various branches of the Council on the Americas, The moves were taken withouHlJe consent of mem­ the OAS bureaucracy and the IADB._ ber countries. At a July 30 Washington, D.C. meeting, The now-formal marriage of these various agencies Alejandro Orfila, the playboy Secretary-General of the touches upon the Anglo-American proposal for a OAS, unilaterally put the full resources of that organi­ "Hemispheric Strategic Reserve" covering all energy zation's bureaucracy at the disposal of the "Committee resources. For example, Mexico's massive oil reserves, of 15 Notables," executive body of the Forum of the which that country seeks to use for her own industrial Americas. In a concurrent Washington meeting, An­ development and as a precedent in oil-for-technology tonio Ortiz Mena, President of the Inter-American transfer to Third World countries generally, would Development Bank, made the IADB the official "co­ instead be at the disposal of "supra-national" forces sponsor and coordinator" of the activities of the West­ that would rather not see Mexico or any other nation ern Hemisphere Energy Workshop. undergo industrial revolutions. . Because both private agencies significantly overlap As Guillermo Zuburban-an IADB executive direc­ in personnel and enjoy a common source of control, tor and one of the principal matchmakers-put it, the the result of the "nestings" is a "hemispheric high Workshop. is moving with all· possible haste to command," as one Latin American watcher put it, with "preempt" approaches to energy programs "inconven­ the political and financial clout of the OAS and IADB ient to our proposaL" In part, this will be accomplished now behind whatever energy policies they would like to in the way described by Charles Zraket, Executive Vice­ impose on more official Latin government policymak- President of the MITRE Corporation. The IADB' is ers. . now going to translate and distribute all Workshop Indicative of the "high command" nature was the materials and "pick up the tab" for its propaganda presence of IADB's Ortiz Mena at the Forum of the . work, he says. "We hadn't realized the IADB would Americas meeting which saw the OAS Secretary-Gen­ move so fast.. ."But just as important, the full financial eral tum over OAS resources. leverage of the IADB will be behind Workshop and The Forum of the Americas was only established Forum energy proposals, with the threat of financial this past June in Brazil. It is representative of reaction­ cutoffs-and not. just in energy matters-as a potent ary oligarchist interests, whose purposes now focus on "stick." "getting the privat� s�tor m9re involved" in economic The combined agencies have devised proposals that policymaking in Latin America. The Forum looks address the full array of energy �esources and energy kindly on the economic policies of Chilean dictator technologies; but not one points to the actual economic Augusto Pinochet, for example. The "Committee of 15 development of the continent" They instead seek to Notables" leading the forum include the U.S.A.'s Wil­ blanket the energy field such that no coherent inde­ liam Simon, and C. Fred Bergsten of the Brookings pendent options are available to individual Latin Amer- Institution, the Council on Foreign Relations, and the ican governments. . Trilateral Commission, who is a current U.S. Treasury Thus, privately, hostile hands are being laid on the , Undersecretary. It also includes Mario Enrique Simon­ energy "choke point j of the Latin American economies.

sen, Brazil's Economics Minister from 1974-79, and the 'v Chilean Pinochet regime's Finance Minister, Jose de A program against development Castro. Latin American nationalists are bound to raise an As its first order of business July 30, the "Notables" outcry as soon as the' new "nested" arrangements

44 Latin America EXECUTIVE INTELLIGENCE REVIEW August 28-September 3, 1979

© 1979 EIR News Service Inc. All Rights Reserved. Reproduction in whole or in part without permission strictly prohibited. become more widely known and understood. The OAS and IADB involvement is a product of executive fiat, and MITRE's Zraket admits that already the Workshop program is causing questions to be raised like: "What kind of Trojan Horse is this?" Who's who on Moreover, U.S. businessmen, promised the run of the continent for lucrative energy and minerals projects, the 'Committee of 15' have just as much to lose if they go along. The kind of "soft technology" approaches for which the Forum and Mario Garnero (Brazil): Garnero is a major figure in Workshop are noted would mean forfeit of crucial the campaign to put private enterprise in the lead of markets for U.S. high-technology goods. Since only the new hemispheric order. His entrepreneurial base is strong state-sector programs have been able to match his presidency of Brazilinvest, a multinational holding the will with the financial resources required to lead in­ company with hundreds of millions invested in Brazil. depth industrialization strategies, the "private sector Garnero is reportedly responsible for the "Commit-' crusade" behind the "hemispheric reserve" policy tee of IS" and Inter-American Energy Bank (BIDE) means scrapping industrial development. Jose Represas, conceptions. Garnero's intentions for this bank may be a member of the Forum's "Committee of Notables" judged by his conduct as private sector representative who heads the Inter-American Council for Trade and on Brazil's new National Energy Commission. Garnero Commerce, demands that "new private investments" demanded radical measures for reducing oil consump­ go solely to "those key sectors of the economy which tion, including converting the cement industry from oil absorb greatest labor," that is, use the least technology. to charcoal. Cement plant owner Ermirio de Moraes, The Forum and the Workshop both emphasize high­ however, pointed out that this would require burning ' cost synthetic or ,,soft" fuels, and oil and gas to a 41 acres of eucaliptus forests for each ton of cement. limited extent. Nuclear energy forms no part of their William Simon (U.S.A.): Simon made his name and current proposals. a small fortune as a Wall Street bond speculator for Salomon Bros. Under Richard Nixon Simon was put in The Mexican alternative charge of the Federal Energy Office, which he built into The example of Mexico proves conclusively that the a thousand-man bureaucracy. Simon became Treasury hemispheric "private sector" approach to energy policy Secretary from April, 1974 until Gerald Ford left office is indeed bad for business. Mexico, pouring revenues in 1977. Simon's tight money policies, insistence that from nationalized oil industry back into ambitious joint gold be removed from the international monetary sys­ public/private development projects, guided by the tem and his ganging up with the British against Japa­ National Industrial Development Plan, has the largest nese efforts to expand world trade prepared the way for growth rate on the continent-7.S percent this year­ the current international economic crisis. and provides the premier market for advanced sector While Tn,asury Secretary, Simon energetically pro­ capital goods in the Third World. moted Brazil as an ideal place for foreign investments, At the same time, Mexico's world energy develop­ leading to the establishment of Brazilinvest. Earlier this ment proposal, to be presented by President Jose Lopez year, Simon proposed that the United States adopt the Portillo to the U.N. Sept. 27, envisions 1) better world "Argentine Model" of fighting inflation through tight production and distribution arrangements, to avoid credit policies which the Argentines tab "industricide." manipulation by the oil multinationals and 2) new Argentina's inflation last year was 162 percent. financing and transfer of technology to ensure rapid C. Fred Bergsten (U.S.A.): Bergsten is a founding energy development in deficit Third World areas. It is member of the Trilateral Commission and a fellow of an approach diametrically opposite to that of the hem­ the Council on Foreign Relations. He was Henry Kis­ ispheric reserve "high command." singer's economic advisor on the National Security The coming fight against the hemispheric reserve Council, 1969-71. Then, as the dollar crisis hit, the approach will inevitably coalesce around the Mexican joined the Brookings Institution becoming.a spokesman alternative. Nor is the "high command" hiding. its for the IMF's "Special Drawing Rights" as a means of hostility to Mexico. Harry Geyelin of the Council of international trade and lending. Bergsten is considered the Americas, asked what he thought of Mexico's . an "expert" on Third World commodity cartels and he initiative, said "We must depoliticize arguments, and served as the Trilateral Commission's top strategist just listen to experts. .. Mexico seems to want to cast its agaist Third World debt moratoria. bread upon the waters. It all sounds very confused to As Michael Blumenthal's Assistant Secretary of the me ... . As for distribution idea, let me put it this way: Treasury for International Affairs, Bergsten has had What if the U.S. suddenly took all of Mexico's energy?" direct responsibility for implementing the CFR's "con­ -Tim Rush trolled disintegration" policy toward the world econo-

August 2S·September 3, 1979 EXECUTIVE INTELLIGENCE REVIEW Latin America 45 my. Bergsten spent Christmas, 1977, in Lima explaining almost moribund operation has been swept up into h to the Peruvian Government t at Carter's "human Garnero's more dynamic "Committee of 15". rights" policy meant no further V.S. aid unless they Mario Vasquez Rana (Mexico): Spokesperson for capitulated to IMF "conditions." the Mexican business faction associated with tourism Bergsten boasts that 40 percent more Brazilian czar and former president Miguel Aleman. Vasquez manufacturers were allowed into the V .S. market this Raffa presides over the Mexican Olympic Committee yearas part of a deal he had made to give Brazil special and is helping the "Alemanista" mayor of Mexico city trade privileges in return for' Brazil ganging up with urge citizens to convert to bicycle transport.. London and Washington at the GATT talks against Daniel Oduber (Costa Rica): Oduber has run Costa Japan's export promotion policies. Rica's social democratic PLN party since 1970 and Bergsten is known as a free-wheeling Keynesian served as politically moderate president of Costa Rica "innovator." He will play a key role in formulating its from 1974-78. His proud wearing of the Grand Cross'pf policies and will use his power as the representative of the Order of Malta may explain his 'present inclusion the V.S. Government to ensure the Committee acts as . among the crusaders against state dirigism . a hemispheric tool of the Trilateral Commission and Luis M. Gotelli (Argentina): Gotelli is president of the CFR. the Argentine Entrepreneurs' Council, a "pressure Alejandro Orfila (Argentina): Secretary General of group" set up by local oligarchs to drum up support the Organization of American States (OAS) since 1975. for the immensely unpopular Friedmanite policies of Previously, he had served in the diplomatic corps of Finance Minister 'MartInez de Hoz. A CEA delegation Argentina and the Rockefeller family. met in New York in March 1978 with a delegation Orfila paid a long visit to China during the China­ from the Trilateral Commission headed by David Rock­ Vietnam conflict at the beginning of this year and came efeller, to seek the creation of an Argentine branch of back praising the Chinese economic model and rec­ the Trilateral Commission to "harmonize economic ommending that Latin America treat China as a more interests" of the two countres. lucrative export market than the socialist CMEA coun­ -Douglas Fletcher (Jamaica): Former Jamaican am� tries. bassador to the U.S. and intetnational lawyer, Fletch­ At Sao' Paulo, Orfila sought "a continental energy er's main activity is directing insurance, banking anti pact" to deal with the "oil crisis," by Brazilian-type mortgage companies' dirty-money laundering run from "gasohol" production in the sugar-producing areas of London. Fletcher represents the British Caribbean on the continent. the'''Committee of 15 ." Sergio de Castro (Chile): Pinochet's Finance Minis­ Richard Thompson (Canada): Chairman, Toronto ter since early 1977, has implemented Friedmanite "free Dominion Bank, one of the five Canadian "Dope, Inc." .trade" policies leading to massive unemployment and banks, which is engaged in financing Hong Kong- . industrial bankruptcies. , related drugs and laundering related funds. Jose Represas (Mexico): Since 1935, he has been Carlos Ferreyros (Peru): Ferreyros is President of· employed as public apologist for the predatory activities Banco de Credito, Peru's major private bank. Banco de in Latin America. of the Swiss-based Nestlc.Represas Credito served as the redoubt of the latifundist oligar­ would like to reproduce the "Chilean Model" in Mex­ chy whicb w as systematically displaced during the Ve- ico. He has endeavored to "mediate" the boycott by 1asco Revolution. It is now campaigning to dismantle Mexican labor against the brutal Pinoch'et regime and all the reforms of that period. proclaims "state capitalism" as the number one enemy Marcel Laniado (Ecuador): President of Banco del of democracy. Pacifico. Represas is the president of the Inter-American Armando de Armas (Venezuela): He runs the reac­ Trade and Production Council, the business side of the tionary de Armas press empire whose major recent "Alliance for Progress" and, effectively, the Latin activity has focused on inciting border conflicts with . American front of the Council of the Americas. This Colombia .

46 Latin America EXECUTIVE INTELLIGENCE REVIEW August 28-September 3, 1979' for U.S. investors by the Overseas Private Investment Corporation. Since that is a U.S. government institu-' tion, looked on as synonymous with the marines in Latin America, the IADB insurance idea is an effort to give such back-up a 'multilateral' appearance. Committee and "Soft" technologies workshop programs The relatively small OAS energy program is being built around the so-called "renewable resources" which both The 'Committee of 15 Notables' of the Forum on the the Forum and the Workshop clearly prefer. "The Americas and the Western Hemisphere Energy Work­ emphasis is entirely here," reports the director of the shop are the "idea men" and the political "fixers"in the OAS's Science and Technology Regional Development Latin American energy-grab strategy. As Zraket of Program, Phactuel Rego. Current projects include Mitre Corporation, one of the Workshop sponsors, put R&D in "solar power" and "biomass." A much larger it: "We can concentrate on studies ...If there is any biomass (gasohol) project is run out of the OAS's Social action on our ideas, that will go through the bank"­ and. Economic Division, designed to spread Brazil's the Inter-American Development Bank. A spokesman gasohol technology to the Dominican Republic. said the same of the "Committee of IS": "It's not basically action-oriented; its individuals go out" to act Hydro-electric, transmission grids- through other institutions-which now feature the Or­ This is the IADB's forte, with substantial World Bank ganization of American States. involvement as wei!. Of $8 billion in IADB lending The 'Committee of 15' and Workshop have come earmarked for the next four years, $2 billion is hydroe­ up with the following energy "ideas" which they are lectric and electrical transmission systems. now pressing in programmatic form: Nuclear Gas and oil This has had no emphasis in Forum or Wor.kshop The "Committee of IS" approved the creation of an proposals. An ostensible nuclear advocate, Pedro San­ Inter-American Energy Development Bank (BIDE) to juan, was invited to make a presentation to the ioICom­ concentrate on fossil-fuel projects. The initial $20 mil­ mittee of IS" in Washington. However, Sanjuan is from lion seed money will be set up through a mix of the new Hemispheric Center of the American Enterprise individual and institutional investors on the model of. Institute. The American Enterprise ·Institute is a front­ the Rockefeller ADELA program or Chase Interna­ group of the Mont Pelerin Society, which is the intel­ tional Investor Service, sources say. "The "Committee" ligence arm of Count Otto von Hapsburg's Pan-Euro­ deputized Ma rcel Laniado of Ecuador's Bank of the pean Union, which opposes industrial development on Pacific principle. Sanjuan's advocacy of nuclear power, there­ to prepare a feasibility -study on stimulating capital flow into "risk contracts" for exploratory oil­ fore, is more than suspicious, and OAS sources report drilling. The study is "expected very soon." that he is now preparing a feasibility study for "conti­ Also aimed at fossil fuel development is a proposed nental energy integration" with an emphasis on nuclear " Inter-American Energy and Minerals Fund. This $1 sources within a strict framework of multilateral "non- billion IADB" project would provide insurance and proliferation"-which will be clearly unacceptable to guarantees to energy and minerals investors in case of most of the region's present governments. Sanjuan will expropriation, currency inconvertibility, war or revo­ also hold a series of "pro-nuclear" conferences in the lution. These are the standard categories for the almost Caribbean (Miami Nov. 28-29) and in Spain and Ar­ three-quarters of a billion in insurance written yearly gentina in 1980.

August 28-September 3, 1979 EXECUTIVE INTELLIGENCE REVIEW Latin America 47

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