LATIN AMERICA: Mexico Arrests Drug Kingpin; Brazil’s Navy; Brazil-Indonesia Chill; Colombia Stops Chinese Ship; Chinese Investment [UPDATE]

UPDATES WITH new stories on Brazil, Chinese investment in Latin America (in italics)

Nabbed: Zetas Cartel Chief.

Omar Trevino-Morales
(Mexican Drug Cartels Wiki)

Mexican police and soldiers on Wednesday (March 4) captured the man widely considered to be the most important remaining leader of the brutal Zetas drug cartel.

The Associated Press reports that Omar Trevino Morales – alias Z-42 – was arrested – without a shot fired – in a pre-dawn raid in a wealthy suburb of the northern Mexican city of Monterrey. Morales is the younger brother of Miguel Angel Trevino Morales – described as the most bloodthirsty leader of Mexico’s most violent drug gang, the Zetas. The gang  originally was formed by deserters from an elite army unit who provided security for another narcotics ring, the Gulf Cartel, based along the Texas border.

The elder Trevino Morales was captured in 2013. Nearly a year earlier, Mexican marines killed the Zetas’ other leader, Herberto Lazcano, known as “El Lazca.”

It was the second high-profile capture of a drug lord in the last week, Reuters reported (via the Voice of America). Servando Gomez, leader of the Knights Templar drug gang, that operates in Michoacan state. The back-to-back arrests lend a boost to President Enrique Pena Nieto’s efforts to battle organized crime. A wave of violence, spurred by battles between authorities and drug gangs — and in-fighting among the gangs themselves — has claimed more than 100,000 lives in Mexico since 2007.
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Brazil’s Naval Maneuvers.

The Brazilian Navy is in the midst of its biggest operation ever — including 250 vessels, 10 aircraft and 15,000 service members — to police the country’s lakes, rivers and 5,250 miles (8,500 kilometers) of Atlantic coastline.

Operation Amazonia Azul (Blue Amazonia) reflects the strategic importance Brzil’s leaders have placed on enforcing jurisdiction over the country’s territorial waters, according to EFE, the Spanish language news service. Brazil is South America’s largest country in area and population (and fifth worldwide in both categories).

The Brazilian Navy is deploying ships and aircraft in Operation Blue Amazonia.
(U.S.Navy photo)

Blue Amazonia is he second operation of its kind in a year, a naval spokesman told EFE, adding that it is the largest to date and includes all Brazil’s naval resources.

Brazil’s national defense strategy focuses on protection of its natural resources — both the fresh water supplies of Amazon River basin and massive undersea oil reserves. In addition to helping the navy prepare for its role as defender of Brazil’s oil reserves off the Atlantic coast, the exercise serves as a test run of security measures for the 2016 Olympic Games to be held in Rio.

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Brazil-Indonesia Spat.

Diplomatic relations are strained between Brazil and potential arms customer Indonesia after the world’s most populous Muslim country, executed six convicts, including a Brazilian citizen, for drug trafficking in January.

Since then, Brazil has withdrawn its ambassador to Indonesia (as has the Netherlands, which also saw one of its citizens executed). A second Brazilian national remains on death row in Indonesia.

But Brazil’s defense minister say the tension between the two countries will soon be overcome and are unlikely to affect their potential weapon purchase deal. Defense Minister Jacques Wagner said Tuesday (March 3) that there is no “crisis” between the two nations. Wagner added that the momentary strain in the relationship will not influence Indonesia’s purchase of rocket launchers and 16 fighter jets from Brazil, according to China’s state-run news agency, Xinhua.

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China Boat Seized

Colombia map by CIA World Factbook

Columbia authorities have detained the captain of a Chinese cargo ship bound for Cuba when investigators discovered a shipment of explosives and other arms on board.

The ship was stopped over the weekend in the Caribbean port of Cartegena, officials said Wednesday (March 4). About 100 tons of gunpowder, almost three million detonators and some 3,000 artillery shells were found on board the Da Dan Xia, but the ship’s manifest said it was carrying grain products, the BBC reported.

Wu Hong, the ship’s captain. Would be charged with weapons trafficking, the Colombian attorney general’s office said. The Chinese foreign ministry said the captain had no violated any international rules. A ministry spokeswoman said China was “communicating with the parties on this matter.” No immediate comment from Cuban authorities.

The incident comes nearly two years after a North Korean ship was detained in Panama for illegally transporting war material from Cuba to North Korea through the Panama Canal.

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China’s Latin American Play.

China is fast overtaking the United States as a lender and investor in Latin America.

Chinese banks increased investments in Latin America by 71 percent last year, to $22 billion, and the country plans to double its trade volume with the Central and South American region over the next decade. This comes as U.S. power in the Americas is starting to erode. U.S. cash is actually fleeing the region as investors see better deals at home or elsewhere, according to CNN Money.

“What we’re looking at is not simply an economic play. It’s an economic play that also has political and strategic undertones,” Ilan Berman, vice president of the American Foreign Policy Council in Washington tells the CNN website. Outside of economic ties, Berman points out that China has helped fund Argentina’s nuclear power plant, launched Bolivia’s first satellite and is rumored to be helping Venezuela start its own drone program.

According to estimates published by the China-Latin America Finance Database, Chinese loans exceed the combined worth of those by the World Bank and the Inter-American Development Bank, the BBC reported.

But as China’s economic boom slows, the effects are being felt in countries around the world that have seen their economies rise on commodity sales to China.  Latin America delivered iron ore and copper to build Chinese office and apartment buildings, oil to fuel trucks and cars as well as soybeans and meat to feed a growing middle class. China’s share of Latin American exports grew tenfold between 2000 and 2013, according to The Financialist website.

Latin America has enjoyed an economic boom supplying commodities like copper to China.
(Wikipedia)

But as the world’s second-largest economy shifts away from manufacturing and exports and toward domestic consumption, it has helped pull the bottom out from under what was effectively a decade-long commodities supercycle. The spot price of iron ore sits at just over half what it was a year ago at $68 a ton (down from $128) while copper spot prices have plummeted from above $3.20 a pound to $2.68, reported The Financialist — a digital magazine sponsored by Credit Suisse.

As Nouriel Roubini, Chairman of Roubini Global Economics said at Credit Suisse’s recent Latin American Investment Conference in Sao Paulo, “Most of the economies in Latin America were not ready to adjust to this change in commodity prices.” GDP growth in Latin America has fallen steadily, from 6.3 in 2010 to 1.2 percent in 2014. The World Bank’s statistical models predict that if Chinese GDP growth drops 1 percentage point over the course of two years, Latin American output would shrink by 0.6 percentage point as a result, the website reported.