Friday, June 2, 2006 BOARD OF ADVISORS Featured Q&A With Our Board of Advisors Bernard Aronson Peter Hakim Managing Partner, President, US President George W. Bush development assistance, the US needs to re- ACON Investments LLC Inter-American caught some Bolivian officials think its bilateral aid and find ways to gar- Diego Arria Dialogue off guard last week when he ner more positive PR from it—as do the Director, Donna Hrinak lumped Bolivia in with Venezuela Venezuelans and Cubans. The US should Columbus Group Director for Corporate Q and expressed concern about an "erosion attempt to work with the Bolivians on their Genaro Arriagada and Govt. Affairs, of democracy" in the two countries, an recent submission of a $600 million project Kraft Foods Inc. Board Member, Banco apparent break from previous efforts to proposal to the MCC on infrastructural del Estado de Chile Jon Huenemann reach out to the government of Bolivian development in northern Bolivia—which Joyce Chang Principal, President Evo Morales. Has the US' could make significant improvements for International Global Head of approach toward Bolivia changed? Has the country, definitely eclipsing any of Emerging Markets Department, Research, J.P. Morgan Miller & Chevalier Washington written off Bolivia as having Venezuela's and Cuba's recent financial Chase & Co. James R. Jones fallen into the anti-US Chavez camp? commitments to Bolivia. With the illicit Adrian Cruz Co-chair, narcotics recertification process around the Founder and Senior Manatt Jones Guest Comment: Ivan Rebolledo: corner and the upcoming expiration of the Partner, Global Strategies LLC "US policy toward Bolivia has not ATPDEA, Bolivia will be looking more Crisis Simulations Nicolás Mariscal significantly changed since Evo closely at the US for its actions. Bolivia is International, LLC Chairman, Morales took office in January— not yet lost to Chavez, but the next few W. Bowman Cutter Grupo Marhnos A albeit President Bush's first time ever pub- months will be critical .... " Partner, Juan Felipe Munoz lic remarks on Bolivia were surprising. The Continued on page 4 E.M. Warburg President, State Department's attitude has been one Pincus The Otun Group of limited engagement with a 'wait and see' PHOTO OF THE DAY Rui da Costa Thomas F. approach. However, four months have now Managing Director, McLarty III Latin America & the President, passed, and President Morales has made Caribbean, Kissinger McLarty key decisions that clearly demonstrate to Hewlett-Packard Co. Associates the world the path he intends to take Dirk Donath Beatrice Rangel Bolivia on, which include nationalization Managing Director, President & CEO, of the hydrocarbons sector; a free trade Eton Park Capital AMLA Consulting agreement with Venezuela and Cuba; Management José Antonio Ríos reversing the capitalization (privatization) Jonathon Flott International President, process of the 1990s; land reform, etc. It is Senior Economist for Global Crossing Latin America, Africa time for the US to rethink its policy with Andrés Rozental and the Middle East, Bolivia, get clearly away from its narcotics- President, Chilean President Michelle Bachelet on General Motors centric bilateral relationship, and focus on Mexican Council on Thursday offered concessions to Wallace Gardner Foreign Relations other important issues in the areas of protesting high school students. See Vice President, health and education. Although it is Everett Santos story on page 2. Worldwide Sales, CEO, Emerging impossible for the US to ever be publicly Chubb & Son Photo: La Moneda. Markets praised in Bolivia for its impressive levels of Michael Gavin Partnership Head of Latin Roger Scher America Econ. Head of Latin Inside This Issue Research, UBS American George W. Grayson Sovereign Ratings, FEATURED Q&A: Has the US Written Off Bolivia Bolivia Awards El Mutun Iron Professor of Govt., Fitch Ratings as Having Fallen into the Chavez Camp? ...........1 Ore Contract to India's Jindall.............................2 The College of Tony Smith William & Mary Bachelet Offers Concessions to Azcarraga: Televisa Will not Join Senior Counsel, Protesting High School Students ........................2 with Saban to Acquire Univision .........................3 Schmeltzer, Aptaker & Shepard Lula Enjoys Wide Lead in Capitol Hill Watch: A Weekly Look at US Brazilian Presidential Poll.....................................2 Congressional Activity on Latin America...........3 Copyright © 2006, Inter-American Dialogue Page 1 of 4 Inter-AAmerican Dialogue’s Latin America Advisor Friday, June 2, 2006 NEWS BRIEFS Political News Governor Geraldo Alckmin. Including blank and null votes, Lula would garner 48 Statoil Hit with $1.5 Million percent of the votes versus 18-19 percent Back Tax Bill in Venezuela Bachelet Offers Concessions to for Alckmin. The poll of 2,002 people was Venezuela's Seniat tax agency on Protesting High School Students conducted May 28-31 and had a margin of Thursday demanded Norwegian oil error of plus or minus two percentage firm Statoil pay $1.6 million in back Chilean President Michelle Bachelet on points. Alckmin, of the Brazilian Social taxes stemming from 2002, accord- Thursday offered several concessions Democratic Party, or PSDB, faces an uphill ing to Reuters. Statoil is the latest aimed at ending nationwide protests by battle in unseating Lula, whose popularity high school students fed up with what was battered by a series of scandals involv- foreign oil company to be hit with a they say is a lack of resources and equality ing his Workers' Party over the past year, bill for back taxes after the govern- in public secondary education, the but who is currently riding Brazil's recent ment launched a review of foreign Associated Press reported. Bachelet said positive economic performance. On oil companies' past tax payments the government would address the Wednesday, the government reported that last year. protesting students' demands, including the economy expanded 1.4 percent in the reduced transportation fares, repairs to first quarter of this year from the previous Chavez Calls Carlos the buildings, and their central demand, a fed- quarter, and 3.4 percent from the first Jackal a "Good Friend" eral takeover to reduce inequality between quarter of 2005. Venezuelan President Hugo Chavez on Thursday referred to notorious Venezuelan-born terrorist Ilich Ramirez Sanchez, known as "Carlos “ The state will be the guarantor of a the Jackal," as a "good friend," the quality education for all Chileans. Associated Press reported. Chavez ” made the remark at a meeting of – Michelle Bachelet OPEC members states in Caracas. Ramirez, who has admitted to lead- ing a 1975 attack that killed three rich and poor schools. "The state will be people at the OPEC headquarters in the guarantor of a quality education for all Economic News Vienna, Austria, is serving a life sen- Chileans," Bachelet said. The president tence in France for the 1975 mur- said she would send a bill to Congress to ders of two French investigators and reform Chile's education law, which gives Bolivia Awards El Mutun Iron a Lebanese man. municipalities responsibility for public Ore Contract to India's Jindall schools. The law was issued by ex-dictator Bolivian Doctors Stage One-Day Augusto Pinochet one day before he left The Bolivian government on Thursday Strike to Protest Cuban Doctors power in 1990. The protests have posed awarded a contract to India's Jindall Steel Bolivian doctors staged a one-day the biggest challenge yet to Bachelet's and Power to develop El Mutun, believed strike on Thursday to protest the three-month-old government. On to be the world's biggest iron deposit, state Tuesday, at least a dozen people were news service ABI reported. Jindall is presence of Cuban doctors sent by injured and more than 700 arrested during expected to invest $2.3-2.5 billion over the Fidel Castro to give free medical street clashes between protesters and next eight years to develop the site, which treatment, Reuters reported. "We police in Santiago. is located in eastern Bolivia near the think the health of the Bolivian peo- Brazilian border. It would be the biggest ple should be managed by Lula Enjoys Wide Lead in investment in a single project in Bolivian Bolivians," Fernando Arandia, presi- Brazilian Presidential Poll history, according to Reuters. Bolivia's dent of the Bolivian Medical minister of planning and development, College, was quoted as saying. Some Brazilian President Luiz Inacio Lula da Carlos Villegas, said development of El 600 Cuban doctors are working in Silva would easily win re-election if the Mutun, which holds some 40 billion tons Bolivia, mainly in eye clinics and vote were held today, according to an of iron ore, marked the creation of a steel rural areas without government- Ibope poll published on Thursday. The industry in Bolivia and would help the funded health-care facilities, accord- poll, commissioned by local media giant South American nation diversify its econ- Globo, found that not including blank omy away from a dependence on the pro- ing to Reuters. and null ballots, Lula would receive 63 duction and export of raw materials. percent of the votes versus 25 percent for Villegas credited the government of his closest rival, former Sao Paulo state President Evo Morales of bringing the Copyright © 2006, Inter-American Dialogue Page 2 of 4 Inter-AAmerican Dialogue’s Latin America Advisor Friday, June 2, 2006 project to fruition after decades of delays. "The El Mutun project was dormant for Capitol Hill Watch more than 50 years," the minister was quoted as saying by ABI in the eastern city A weekly look at US congressional activity on Latin America of Santa Cruz. "Many governments have gone by that said they had a national Immigration Reform Unlikely to Pass Before November Elections, Kolbe Says vision, and the project continued dor- Any passage of immigration reforms in the US Congress will almost certainly be mant. Now a government has arrived delayed until after the November mid-term elections, Rep.