South America On The Fed's Stimulus Plan: "Thanks For Nothing"

Waiting for the deluge of dollars
Waiting for the deluge of dollars
America Economia

SANTIAGO - The U.S. Federal Reserve’s recently announced stimulus package, designed to strengthen the American economy, offered a clear reminder of the huge gap that exists today between Mexico and the rest of Latin America.

While Mexico enthusiastically applauded the Fed’s decision to begin pumping $40 billion per month into the U.S. economy through the purchase of mortgage bonds, Brazil reacted to the news by preparing an arsenal of measures meant to keep its already pricey currency, the real, from appreciating further. The Fed announcement also set off alarm bells in Chile, Colombia, Peru and other South American countries.

The currency injection, which the Fed plans to keep up until 2015, is meant to stimulate U.S. internal demand, energize the industrial sector and, ultimately, create jobs. But the measures also have a corollary effect: they lower the value of the U.S. dollar vis-à-vis other currencies.

An increase in the price of the real could cause some serious damage to Brazil, whose economic growth rate has dropped to less than 3% annually, in large part because its currency has already appreciated beyond an advisable level. With its economy now almost as stagnant as that of the U.S., Brazil has been trying for the past several months to implement its own stimulus package. The Fed decision is forcing Brazil’s Central Bank to intervene even more.

Deluge of dollars

The Brazilian situation contrasts sharply with what is currently taking place in Mexico, which is growing at twice the rate of Brazil. The Mexican economy is tied tightly to the U.S economy. Its manufacturing sector supplies U.S. consumers with cars, televisions and hundreds of other products. Any stimulus measures meant to boost the U.S. economy, therefore, also promise to spur the Mexican economy.

Mexico, nevertheless, is the exception in Latin America. The region’s other countries see the possibility of local currencies continuing to rise against the dollar as a serious threat. The stronger a country’s local currency, the pricier its exports become, making exporting as a whole more difficult. Prior to the Fed announcement, Chile’s peso had already appreciated 10% this year. Colombia’s peso was up 8%, while the Peruvian sol rose 4%.

When the Fed launched its previous stimulus package, in effect from late 2010 until mid-2011, the deluge of dollars caused the Brazilian real to jump 12%. The Chilean and Mexican pesos each rose 8%.

Analysts and government officials in Chile and Colombia have already raised the possibility that their respective central banks will have to intervene by opening the money spout in their own countries, injecting a surge of pesos to keep local currencies from over-appreciating.

There are risks involved in doing that. For one thing, releasing money into the market tends to trigger inflation. But at the same time, it is absurd for Latin American countries to stick blindly to the mantra that a free-floating dollar is necessarily the best thing, especially when the world’s economic juggernaut is flooding the market, from now until 2015, to the tune of $40 billion a month.

It’s in everyone’s interest that the U.S. economy recover as quickly as possible. AméricaEconomía, for one, is pulling hard for that to happen. But the recovery must not come at the cost of hurting the economies of Latin America.

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How Thailand's Lèse-Majesté Law Is Used To Stifle All Protest

Once meant to protect the royal family, the century-old law has become a tool for the military-led government in Bangkok to stamp out all dissent. A new report outlines the abuses.

Pro-Democracy protest at The Criminal Court in Bangkok, Thailand

Laura Valentina Cortés Sierra

"We need to reform the institution of the monarchy in Thailand. It is the root of the problem." Those words, from Thai student activist Juthatip Sirikan, are a clear expression of the growing youth-led movement that is challenging the legitimacy of the government and demanding deep political changes in the Southeast Asian nation. Yet those very same words could also send Sirikan to jail.

Thailand's Criminal Code 'Lèse-Majesté' Article 112 imposes jail terms for defaming, insulting, or threatening the monarchy, with sentences of three to 15 years. This law has been present in Thai politics since 1908, though applied sparingly, only when direct verbal or written attacks against members of the royal family.

But after the May 2014 military coup d'état, Thailand experienced the first wave of lèse-majesté arrests, prosecutions, and detentions of at least 127 individuals arrested in a much wider interpretation of the law.

The recent report 'Second Wave: The Return of Lèse-Majesté in Thailand', documents how the Thai government has "used and abused Article 112 of the Criminal Code to target pro-democracy activists and protesters in relation to their online political expression and participation in peaceful pro-democracy demonstrations."

Criticism of any 'royal project'

The investigation shows 124 individuals, including at least eight minors, have been charged with lèse-majesté between November 2020 and August 2021. Nineteen of them served jail time. The new wave of charges is cited as a response to the rising pro-democracy protests across Thailand over the past year.

Juthatip Sirikan explains that the law is now being applied in such a broad way that people are not allowed to question government budgets and expenditure if they have any relationship with the royal family, which stifles criticism of the most basic government decision-making since there are an estimated 5,000 ongoing "royal" projects. "Article 112 of lèse-majesté could be the key (factor) in Thailand's political problems" the young activist argues.

In 2020 the Move Forward opposition party questioned royal spending paid by government departments, including nearly 3 billion baht (89,874,174 USD) from the Defense Ministry and Thai police for royal security, and 7 billion baht budgeted for royal development projects, as well as 38 planes and helicopters for the monarchy. Previously, on June 16, 2018, it was revealed that Thailand's Crown Property Bureau transferred its entire portfolio to the new King Maha Vajiralongkorn.

photo of graffiti of 112 crossed out on sidewalk

Protestors In Bangkok Call For Political Prisoner Release

Peerapon Boonyakiat/SOPA Images via ZUMA Wire

Freedom of speech at stake

"Article 112 shuts down all freedom of speech in this country", says Sirikan. "Even the political parties fear to touch the subject, so it blocks most things. This country cannot move anywhere if we still have this law."

The student activist herself was charged with lèse-majesté in September 2020, after simply citing a list of public documents that refer to royal family expenditure. Sirikan comes from a family that has faced the consequences of decades of political repression. Her grandfather, Tiang Sirikhan was a journalist and politician who openly protested against Thailand's involvement in World War II. He was accused of being a Communist and abducted in 1952. According to Sirikhan's family, he was killed by the state.

The new report was conducted by The International Federation for Human Rights (FIDH), Thai Lawyer for Human Rights (TLHR), and Internet Law Reform Dialogue (iLaw). It accuses Thai authorities of an increasingly broad interpretation of Article 112, to the point of "absurdity," including charges against people for criticizing the government's COVID-19 vaccine management, wearing crop tops, insulting the previous monarch, or quoting a United Nations statement about Article 112.

Juthatip Sirikan speaks in front of democracy monument.

Shift to social media

While in the past the Article was only used against people who spoke about the royals, it's now being used as an alibi for more general political repression — which has also spurred more open campaigning to abolish it. Sirikan recounts recent cases of police charging people for spreading paint near the picture of the king during a protest, or even just for having a picture of the king as phone wallpaper.

The more than a century-old law is now largely playing out online, where much of today's protest takes place in Thailand. Sirikan says people are willing to go further on social media to expose information such as how the king intervenes in politics and the monarchy's accumulation of wealth, information the mainstream media rarely reports on them.

Not surprisingly, however, social media is heavily monitored and the military is involved in Intelligence operations and cyber attacks against human rights defenders and critics of any kind. In October 2020, Twitter took down 926 accounts, linked to the army and the government, which promoted themselves and attacked political opposition, and this June, Google removed two Maps with pictures, names, and addresses, of more than 400 people who were accused of insulting the Thai monarchy. "They are trying to control the internet as well," Sirikan says. "They are trying to censor every content that they find a threat".

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