martes, 29 de abril de 2008

For Many, Control Of State-Run Pemex About National Pride

Washington Post Foreign Service 
Wednesday, April 30, 2008; Page A12

MEXICO CITY -- Mexico's giant state-run oil company was once a source of universal pride here. Ballads were sung in its honor, and the money gushed as much as the crude.

But the company -- Petróleos Mexicanos, or Pemex -- is not aging well, and it is fast eroding into a creaking, crippled behemoth that even its biggest defenders say must change to survive.

In a once-unthinkable move, President Felipe Calderón urged an overhaul of Pemex earlier this month, calling on the Mexican Congress to allow the company more freedom to sign contracts with foreign firms better equipped to build efficient refineries and conduct expensive deep-water drilling.

But the proposal -- being touted by its supporters as one of the most important economic reforms in recent Mexican history -- has drawn fierce resistance from a determined coalition of left-leaning opposition parties for whom outsider involvement in Pemex is anathema. They seized control of the Mexican congressional building for more than two weeks this month, with some members spending nights on the floor and leading rowdy protests during the day.

"This is the inheritance of my grandfather, this is our company, and we're not going to let them take it away from us," Congressman Alejandro Sánchez Camacho, of the opposition Democratic Revolutionary Party, or PRD, said in an interview.

The fight has major implications for the United States, which counts Mexico as one of its four largest foreign oil suppliers, along with Canada, Saudi Arabia and Venezuela. Here in Mexico, the titanic political battle could paralyze the government for months.

Mexico nationalized its oil industry in the late 1930s, seizing control of British and U.S. companies as part of a movement to bring large industries under state control. For decades, Mexicans bragged that their grandmothers had donated jewelry to help pay for the takeover.

The movement toward nationalization, though, has been steadily reversed. The government privatized its national telephone and railroad companies, and last it year sold off the state-run airline, Aeroméxico, at a price that Calderón's critics asserted was far too low.

Pemex has been untouched, in large part because of its extraordinary financial importance. Under the constitution, the company must turn over most of its revenue to the federal government, which relies on Pemex for 40 percent of its annual budget. After paying its huge tax obligation, Pemex must also pay salaries and pensions to members of the enormously powerful oil workers union.

The company has grown exponentially and generated more than $100 billion in revenue last year. But things have soured this year, with production dropping 8 percent and exports falling 12 percent in the first quarter compared with the comparable period a year earlier. At the Cantarell oil field in the Gulf of Campeche -- which was discovered in the 1970s and is frequently ranked as the second- or third-largest oil field in the world -- daily production has plummeted from 2 million barrels a day in recent years to 1.1 million.

The drop-off will almost surely accelerate in coming years, according to David Shields, an independent, Mexico City-based analyst and consultant. Calderón's energy officials have estimated that Mexico could run out of oil in nine years if major new fields are not found.

In the meantime, Pemex seems to be deteriorating fast. Its pipelines are in abominable condition, leaking profits daily, and its reserves are drying up. Pemex is by far Latin America's largest company -- and the 34th-biggest revenue-generating firm in the world. Despite the huge run-up in global oil prices, it is deep in debt.

Though Mexico is one of the world's top 10 oil producers, its refineries can't keep pace with domestic demand. The country actually has to import 40 percent of the gas it consumes, amounting to more than 300,000 barrels per day.

Reform plans have been percolating for months. According to sources not authorized to comment publicly, some in the Calderón administration pushed for a more ambitious proposal that would have allowed public sale of some shares in Pemex, an approach used by state-controlled oil firms inBrazil and Norway. But that would have required a national vote on a constitutional amendment; Calderón opted for a less audacious reform.

Still, his proposal has run into numerous roadblocks. In March, Interior Minister Juan Camilo Mouriño -- who was supposed to spearhead the reform effort -- was accused of steering government contracts to his oil baron father, dealing a setback to Calderón's proposal before it was even formally unveiled. Mouriño, who has denied wrongdoing, has resisted calls to resign.

Opponents have also held protests, with failed presidential candidate Andrés Manuel López Obrador calling thousands to Mexico City's downtown square, El Zocalo, in scenes reminiscent of the long fight over results of the 2006 election.

Meanwhile, the proposal has received a stony reception from independent analysts. Juan E. Pardinas, a Mexico City-based analyst, said in an interview that the measure "falls very short" of solving Pemex's problems.

Analysts say some of Pemex's greatest problems are related to the lack of flexibility it has with revenue. Rather than reinvest in technology that could boost production, the company is obligated to send much of its money to the government. The system has paralyzed Pemex managers, who fear their government overseers will criticize their every move and therefore are afraid to take even reasonable risks in exploring for new oil fields, Shields said.

"The Calderón bill doesn't solve any of the major problems that Pemex has," Shields said.

As a result, the proposal's supporters have had to spend almost as much time arguing that the measure is not a weak, watered-down initiative as they have arguing the perceived merits of the plan. "This is not 'reform-light,' " Congressman Alonso Lizaola de la Torre, of Calderón's National Action Party, or PAN, said in an interview.

The alternative being presented by the proposal's opponents centers on changing the way Pemex operates, rather than inviting foreign investors. Sánchez Camacho, the PRD lawmaker, said that his party is pushing for the federal government to invest more money in inexpensive searches for oil on land and in shallow waters, instead of focusing on pricier deep-water drilling. He and others in the PRD also are demanding that the federal government give a better accounting of the money it gets from Pemex. He alleges that millions are wasted, "gone down a black hole," each year.

Sánchez Camacho alleges that privatization proponents have purposely let Pemex deteriorate in order to convince Mexicans that the company is beyond hope as a national enterprise.

"They're trying to scare us," Sánchez Camacho said.

But it is the government that should be scared, he said.

"If they try to sneak this past us, we'll take the streets," Sánchez Camacho said. "This country will become ungovernable."

Citigroup to sell $3bn of shares

Citigroup has announced plans to sell $3bn (£1.5bn) worth of new shares to bolster its financial position.

The bank's latest fund-raising comes barely a week after it issued $6bn of preferred shares.

Since late 2007, Citigroup has raised more than $36bn in capital to fund its losses and write-downs from sub-prime mortgages and other debt.

It lost just under $15bn for the six months to the end of March, and its write-downs are second only to UBS.

"What's amazing is, as horrible as this sector is, however much everybody beats it down all the time, there seems to be an endless stream of people who are more than willing to throw money at these guys," said William Smith, chief executive of Smith Asset Management in New York.

Citigroup shares fell about 3% in after-hours trading.

Rising prices boost Shell and BP

bb.co.uk

Tuesday, 29 April 2008


Oil firms Royal Dutch Shell and BP have made better-than-expected first-quarter profits thanks to the rising price of oil, which is close to $120 a barrel.

Shell made profits of $7.8bn (£3.9bn) in the first three months of the year, up from $6.9bn a year ago.

And rival BP saw its profits rise 48% to $6.588bn (£3.31bn), from $4.4bn.

In January, Anglo-Dutch firm Shell reported annual profits of $27.56bn (£13.9bn) for 2007, a record for a UK-listed company.

BP shares closed up 5.96% in London, while Royal Dutch Shell 'A' shares rose 5.26%.

Price moves

The quarterly results come amid increasing concern at the cost of petrol on both sides of the Atlantic.

In the UK, average prices have now reached 109.8p a litre for unleaded petrol, equivalent to £4.99 a gallon (4.55 litres), according to the AA.

In the US, where fuel taxes are lower, the average price is now $3.60 (£1.80) for an American gallon (3.79 litres), according to the US Energy Department.

The results also follow a strike by oil workers at the Grangemouth refinery in Scotland, which had disrupted fuel supplies and halted much of the UK's North Sea oil production.

Some petrol stations in Scotland and northern England had introduced rationing or raised prices.

The price of oil prices has been rising steadily since January, when it broke through the $100-a-barrel mark.

This week the cartel of oil producing nations, Opec, warned that prices could reach $200 a barrel.

On Monday, US light, sweet crude hit a fresh record of $119.93 a barrel. Prices rose as traders eyed the disruption caused by the Grangemouth strike and supply problems in Nigeria following pipeline attacks.

However, the oil price slipped to $117.64 a barrel in Asian trade on Tuesday.

Difficult year

Shell chief executive Jeroen van der Veer said he would continue to grow the firm after a "good operating performance".

Shell shares are listed in the UK and the Netherlands, while the company's headquarters are in The Hague.

BP's strong figures come after 12 months of turmoil for the firm, which announced a fall in 2007's annual profits in February. At the time it also announced that it was to cut 5,000 jobs.

Other low points have included receiving a $50m fine for the 2005 Texas City refinery explosion in which 15 people died.

This was part of a larger $373m fine by the US Department of Justice for committing environmental crimes and fraud, and included a fine for price manipulation.

And in May last year, the company's boss, Lord Browne, resigned after lying to a court in an attempt to block stories about his private life.

'Oil scarcity'

For a litre of petrol costing 108 pence, approximately 33 pence goes to the oil company, 9 pence to the retailer, 50 pence fuel duty to the Chancellor of the Exchequer, and 16 pence VAT to the chancellor.

Simon Wardell, oil analyst at Global Insight, said the rising price of petrol was "predominantly down to high oil prices".

"Oil prices are high because of the weak dollar and because reserves are under pressure, there is a slim spare capacity margin - Opec does not have a great deal more oil to pump," he said.

"That scarcity is reflected in the high oil prices."

But he said that oil firms could not sit back and just watch the profits flow in.

"Oil firms have to think about the long-term investment, and what prices might be in the future."

The earnings results come ahead of other earnings data in coming weeks from industry figures including US giants Exxon Mobil and Chevron, UK gas firm BG Group and France's Total.


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lunes, 28 de abril de 2008

El Gobierno de Lula logra su mayor índice de aprobación desde 2003

El presidente brasileño logra un índice de aceptación del 69,3%
EFE - Brasilia - 29/04/2008
elpais.com

El Gobierno brasileño, que preside Luiz Inácio Lula da Silva, logró este mes un índice de aprobación del 57,5%, el más alto desde que el ex sindicalista asumió por primera vez el poder, en 2003, según una encuesta difundida ayer.

El apoyo de los brasileños al Ejecutivo de Lula aumentó cinco puntos porcentuales desde febrero pasado, agrega el sondeo, realizado por la empresa Sensus. Hasta ahora, el más alto índice de aceptación alcanzado por el Gobierno de Lula (56,6%) data de enero de 2003, cuando asumió la presidencia por vez primera.

Un 26,6% de los consultados consideró la actuación del Gabinete ministerial de “regular” y un 11,3%, de “negativa”, según la encuesta, encargada por la patronal Confederación Nacional de Transporte (CNT).

La imagen personal que los brasileños tienen de Lula logró un índice de aprobación del 69,3%, frente al 66,8% de febrero pasado. Según Sensus, un 26,1% “reprobó” a Lula como jefe del Estado.

El director de la CNT, Clésio Andrade, considera que la elevada popularidad de Lula y su Gobierno se deben fundamentalmente al sostenido crecimiento de la economía, a la generación de empleos y a los vastos programas sociales desarrollados desde 2003.

Agrega que los continuos viajes de Lula por el interior de Brasil para divulgar las obras de infraestructura que ha puesto en marcha su Gobierno han influido para mantener elevada su aprobación, sobre todo porque le permiten mantener contacto con los más pobres y hacer uso de su reconocido carisma.

La encuesta, según Sensus, tiene un margen de error de tres puntos porcentuales y fue realizada entre los pasados días 21 y 25 en 136 ciudades brasileñas, en las que fueron consultadas 2.000 personas.

Raúl Castro conmuta la pena de muerte a varios delincuentes comunes

El presidente cubano convoca el sexto congreso del Partido Comunista para el segundo semestre de 2009

AGENCIAS - La Habana - 29/04/2008
elpais.com

El presidente cubano, Raúl Castro, ha anunciado este lunes la conmutación de la pena de muerte a un grupo de delincuentes comunes, sin precisar el número de beneficiados, y que se estudiarán los casos de un salvadoreño y un guatemalteco acusados de atentados con bomba en 1997.

Castro, que ha realizado el anuncio en un discurso ante el plenario del comité central del Partido Comunista de Cuba, ha precisado que la medida "no significa que suprimamos la pena capital del Código Penal", y que "se ha adoptado esta decisión no por presiones sino por acto soberano, en consonancia con la conducta humanitaria y ética" del país. La condena de muerte será conmutada en unos casos por penas de 30 años y en otros por cadena perpetua.

En Cuba existe la pena de muerte, pero no se aplica desde 2003. "Esta situación se produce principalmente por la política aplicada desde el año 2000 de no ejecutar ninguna sanción de este tipo, que sólo fue interrumpida en abril de 2003 para frenar en seco la oleada de más de 30 intentos y planes de secuestro de aviones y barcos alentados por la política de EE UU", ha explicado el mandatario, refiriéndose a la ejecución de tres secuestradores cubanos que capturaron una pequeña embarcación de pasajeros en el puerto de La Habana, sin que entonces se produjeran heridos.

Castro ha adelantado que el Tribunal Supremo cubano tiene pendiente tramitar los recursos de apelación de tres acusados, "que serán analizados próximamente", y ha mencionado a un salvadoreño y a un guatemalteco acusados por actos terroristas con bombas contra hoteles en 1997. Los salvadoreños Raúl Ernesto Cruz León y Otto René Rodríguez Llerena están condenados a muerte desde 1999 por esos atentados, pero Castro ha hablado sólo de un ciudadano de ese país. El tercer caso es el del cubano-americano Humberto Real Suárez, condenado en 1996 por el asesinato, dos años antes, de Arcelio Rodríguez, funcionario del Partido Comunista.

Congreso

En la misma reunión, el presidente cubano también ha convocado para el segundo semestre de 2009 el VI Congreso del Partido Comunista de Cuba (PCC), que debía haberse celebrado en 2002, con el objetivo de fijar las líneas políticas y económicas del país. El último congreso fue en 1997 y, según los estatutos, deben convocarse cada cinco años.

"El Buró Político considera necesario llevar a cabo el VI Congreso del Partido", y "valoramos proponerle a este pleno realizarlo a finales del segundo semestre del año próximo", ha informado el dirigente, que ha anunciado, además, el nombramiento del vicepresidente José Ramón Fernández como responsable de los ministerios de Educación y Educación Superior.

En su discurso, Raúl Castro se ha referido también, de forma indirecta, al candidato republicano a la presidencia de Estados Unidos, John McCain, al afirmar que si "la extrema derecha" triunfa en las elecciones de noviembre, el clima mundial de inestabilidad y violencia podría incrementarse directamente contra la isla.

Where Every Meal Is a Sacrifice

Mauritania, and much of Africa, relies on imported food. As trade breaks down, destitute people face tough choices.
By Anthony Faiola
Washington Post Staff Writer 
Monday, April 28, 2008; Page A01

NOUAKCHOTT, Mauritania Even before he took a butcher knife to the she-goat's throat, Likbir Ould Mohamed Mahmoud knew it would only make things worse.

The goat was a living bounty in this parched city on the Sahara's edge, providing the sweet milk that filled his family's stomachs at breakfast time. But as soaring food prices worldwide have hit the poorest nations of Africa the hardest, he has been forced to join many of his neighbors in slaughtering or selling off one of their only sources of wealth -- their livestock.

By sacrificing the she-goat last month, the 39-year-old day laborer and goatherd traded the family's morning milk for dinner meat. It lasted a few days. With the family unable to afford skyrocketing prices for basic foods, he said, his two young children now cry in the morning from hunger. One recent morning, he could take it no more. He took the goat's kid -- one of the last two animals in his flock -- to the squalid livestock market here in the hopes of selling it to buy food. "Everything -- the wheat, rice, sugar and animal feeds -- is higher priced than I have ever seen them before," he said. "What will we do? Soon we will have nothing left to sell."

Like most of the world's poorest nations, Mauritania is caught in a global food trap, producing only 30 percent of what its people eat and importing most of the rest. As prices skyrocket, those who can least afford it are squeezed the most as the world confronts the worst bout of food inflation since the Soviet grain crisis of the 1970s.

Strong global demand and limited supplies are key factors driving up prices, but perhaps just as important is a massive disruption in the free flow of global trade. In recent months, food-producing countries from Argentina to Kazakhstan have begun to slam shut their doors to protect domestic access to the food they grow.

Agriculturally challenged countries are left out in the cold. Mahmoud, whose family dwells just beyond the dunes in a desert shantytown here, earns roughly $1.50 a day to support his family of four. His wages have not risen. But over the past six months, the cost of the imported wheat his wife uses to make a chewy local bread has soared 67 percent, cooking oil is up 117 percent and rice 25 percent. Though those are the staples of life here, Mauritania, with only 0.2 percent of its land arable, produces scant amounts.

That is partly because there are fewer and fewer farmers. In a nation girdled by the encroaching Sahara, the slums of Nouakchott, the capital, are swelled with former tillers of soil who abandoned hard lives growing subsistence crops amid years of drought. City life was comparatively better, but in recent months as food prices have risen, those already living on the smallest of margins have despaired.

"I don't know how I will feed my family," Mahmoud said. "We just can't afford it."

Crisis Torments Africa

The U.N. World Food Program has flagged 30 nations confronting mounting food insecurity this year as a direct result of market forces; 22 of them are in Africa. As prices climb, Mauritania, Burkina Faso, Cameroon, Senegal and other net food importers have been racked by civil unrest. Hunger is spiking in parts of the continent in patterns similar to past bouts of drought, floods or civil strife. In Mauritania -- a nation of 3 million straddling Arab and black Africa -- the number of people not getting enough food is up this year by 30 percent in rural areas despite a relatively good annual harvest, according to the WFP. A food emergency has been declared in broad sections of the country, with the food program rushing to roll out feeding stations.

U.N. experts, World Bank officials and aid groups fear it marks the onset of the worst food crisis in the region in decades; officials are calling for $755 million in fresh emergency food assistance from rich countries. Aid groups are already falling behind in their efforts to provide food across the continent, leaving even the poorest communities increasingly dependent on the market.

"This is the new face of hunger," said Josette Sheeran, WFP executive director.

Globalization was supposed to eliminate this kind of recurring disaster. With economists radiating confidence about the new efficiencies of the global market, the need for food self-sufficiency seemed almost archaic. In that new reality, global markets would provide the long-term cornucopia that the arid earth here could not, and at reasonable prices.

But it turned out that globalization did not really work for food. Countries, especially rich ones, felt compelled to continue protecting their farmers and their domestic food supply even as they pushed for trade liberalization for manufactured goods. It distorted the market, which didn't adjust as global demand surged and production flagged.

Not foreseeing that scenario, Mauritania's government abandoned long-standing policies of fixed food prices in the 1990s. But it also gave up on large-scale efforts to boost agricultural production, shifting resources to iron ore mining and other industries.

The last big agricultural push here -- an internationally backed effort to grow irrigated crops in the country's south -- failed more than 15 years ago, officials say, because money went to businessmen rather than farmers. They lacked the motivation and know-how required for large-scale cultivation. "The fields have been abandoned since then and are sitting there with weeds in disrepair," said Ahmeda Quld Mohamed Ahmed with the U.N. Food and Agricultural Organization office in Mauritania. "It wasn't really a national priority."

It has become one now, with the new, democratically elected government that came to power last year seeking to avoid a repeat of November food riots that led to one death and the burning and looting of storefronts. The government is pressing a major new irrigation program in the south with the ambitious goal of doubling agricultural production by year's end. "This is the government's number one priority," said Prime Minister Zeine Ould Zeidane.

Mauritania knows it must bear more of its own food burden. All around, food-producing countries are barring the doors to foreign trade. Argentina raised soybean and sunflower export taxes to as much as 44 percent. Russia has quadrupled wheat-export taxes to 40 percent. Kazakhstan, one of the world's biggest wheat exporters, halted foreign sales altogether. Rice prices shot to a record high after Indonesia stopped its farmers from selling the grain abroad.

At the same time, import-dependent countries that can afford the higher prices are hoarding. Wealthy Singapore is stockpiling rice. Malaysia is creating a new government agency to stockpile foodstuffs. Many countries, including Mauritania, have dropped long-standing import taxes to facilitate trade and lower prices at home. But with global supplies running short, the measures have had limited effect in controlling prices here. Importers in Mauritania, for instance, say they have roughly a 45-day supply of key commodities such as wheat.

"Everyone is out there protecting their own right now," said Joachim von Braun, director general of the District-based International Food Policy Research Institute. "And that isn't the way globalization is meant to work."

Rich Nations Grab Fish

The global competition for food is hitting Mauritania in other ways as well. That can be plainly seen on the Atlantic shores of Nouakchott, where another increasingly scarce food commodity is hauled onto sandy beaches daily in traditional wooden boats: fish.

The catch here has fallen sharply in recent years. Officials concede it is because Mauritania finds itself in a catch-22. Thirty percent of the national budget comes from selling industrial-scale fishing licenses, mostly to European ships, that now harvest the rich waters off Mauritania's coast. While that has given the government a desperately needed source of hard currency, it has also meant less fish in local nets.

Even the best parts of the local haul end up in Europe or Japan, as exporters greet fishermen on the sands just before sunset, bartering for the top-quality fish. The catch is rapidly packed in ice for shipping to London, Paris, New York and Tokyo as local fishmongers, out-priced, look on.

"We see our best-quality fish leaving the country right in front of our eyes every day," said Mame Kato Diop, 36, wrapped in flowing indigo and yellow robes as she and other fishmongers waited for the exporters to finish their deals. They would later buy what was left for resale in town. "They leave us with sardines as they eat juicy fish. We stand no chance against the hunger of richer countries."

Grouper, she said, used to be a staple of traditional cooking, but it has largely disappeared from local tables. Even the poor quality fish that remain have gone up in price, fishmongers here say, by about 40 percent over the past five years.

An Early Exodus of Men

In the distant, rural southeast where mud-hut villages dot the sands and the sun cooks the air to 118 degrees at noon, the World Food Program has declared a food emergency. In open-air markets here, the price of sorghum -- the major regional staple used to make starchy porridge spiced with tree sap -- has jumped more than 20 percent in six months, a sharp rise in a region where more than 60 percent of the people earn less than a $1 a day. It has happened as neighboring Mali, blessed with slightly higher precipitation and crop yields and fearing its own budding food crisis, has halted grain exports to Mauritania. Wheat, being hoarded in cities, has all but disappeared from many local markets here. Merchants from Senegal and Mali have come over the border to buy up whatever wheat is left, because it is still less expensive here than in their home countries.

Though subsistence farmers in the area have long cultivated the arid earth for sorghum, it has never yielded enough for their families. To earn money to buy more, the men of these parts leave annually in search of temporary work to prepare for the late-spring lean season, before the rains come.

The annual migration is occurring months earlier this year as food prices soar. In Bouta, a destitute village of 70 families near the Mali border, all the able-bodied men left in search of work months ago, leaving behind a hamlet of women, old men and children.

Like most women in Bouta, Metouna Mint Mohmaud, 29, does not know where her husband is, only that he has gone with the other men in search of manual labor in towns many days' walk from here. There is no phone -- no electricity -- to keep in contact. But she does know, and WFP officials have confirmed, that her 11-month-old twin girls have grown severely malnourished in recent months. Food, she said, has been a struggle as long as she can remember, but her eyes quickened with anxiety as she talked about the village's recent problems.

Sorghum seeds, many of which come from Mali or are imported from other countries, have doubled in price in the four months since the men left. The village women fret about how to buy them, even with the sums their men may eventually bring back. "How will we eat this year?" she said, rocking one of her languid twins in her lap. "We cannot afford the seeds to plant."

Already, the $3 a week she earns from weaving the golden lapels used in traditional bubu robes has dropped. "We can't sell them -- everyone is spending their money on the more expensive food," she said. "I don't have a plan; I don't know what to do."

Food prices are wreaking havoc even in those towns fortunate enough to receive food aid. In Maghleg, a village some 30 miles east of Bouta, the WFP food bank that sells grains below market price is half-empty. The system works by having local food managers use the proceeds from food-aid sales to restock coffers for the future. But as prices for most grains have doubled or more over the past six months, the money from current sales is not enough to replenish sold stocks. It has left more people dependent on the local market a full day's walk from town.

So far, however, it is the erosion of livelihoods that have experts most concerned here. They fear it may accelerate into a far broader crisis that could approximate the large-scale African famines of the 1980s.

"For many people, the sources of income are drying up just as food prices are increasing," said Gian Carlo Cirri, the WFP's Mauritania country director. "We are very, very worried about what may happen next."

'What's the Lowest You Can Go?'

One of the most disturbing warning signs that the situation is turning critical here is a sharp increase in the sale of livestock, especially by poor farmers and shantytown dwellers. The market has not yet adjusted: The surge in supplies is bringing down the price of livestock, though meat prices remain high. It has put people like Likbir Ould Mohamed Mahmoud in dire straits.

"Who will buy my goat?" he called in Nouakchott's trash-strewn Marobe Haywane livestock market, cradling the baying kid in his arms. He stepped over the ground -- a mix of desert sand and slaughtered goat parts -- addressing a crowd filled with far more sellers than buyers. "Please, won't you look at it?"

It is his last goat; his family of four has sold or eaten the five others in the past year as food prices have spiked. The family will be left with one lamb when this is gone, if the kid sells.

A prospective buyer in emerald-green robes shows interest. Mahmoud engages him.

"Let me sell you this goat."

"How much? What's the lowest you can go?"

"Gimme [$25], at least."

"It is a very small goat."

"Yes, it is. I raised it in my house. But it is also very nice."

No sale. As has happened throughout the day, the buyer will not pay what had been the going rate here for months, not when so many other goats are for sale. Mahmoud considered what to do, resigning himself to asking for an advance from his part-time job as a goatherd for a businessman in the market. "I cannot sell it too cheaply," he said of the kid goat. "It would not be right for my family."

The family is already in debt at the local market, a debt that has grown to $20 in recent months. He has no idea how he will pay it back. He prays, he said, that the market owner will keep lending to him. "How else will we eat? The prices are too high." Though life is hard here, he, like others in the shantytown, say going back to their lives of trying to coax food from the arid earth in the country would be worse. He is here to stay, he said.

"Of course I don't want to go back to the village," he said. "There, you can die of hunger without realizing it. You don't even see food. Here at least you can see it, even though you can't get it. It kind of gives you hope. You can see it in a car passing by. That makes me happy."

Washingtonpost.com staff writer Travis Fox and Washington Post staff researcher Richard Drezen contributed to this report.


Cousin of Colombian President Arrested in Death Squad Probe

Mario Uribe Seized After Failed Bid for Political Asylum at Costa Rican Embassy
Washington Post Foreign Service 
Wednesday, April 23, 2008; Page A12

BOGOTA, Colombia, April 22 -- Authorities on Tuesday arrested former senator Mario Uribe, a cousin and close ally of PresidentÁlvaro Uribe, for alleged ties to death squads in a widening inquiry that has implicated nearly a quarter of Colombia's Congress.

The arrest of the former senator, who built a formidable political movement that helped his cousin win the presidency in 2002, comes during an institutional crisis that has tarnished a country closely allied with the United States.

As the result of investigations that began in 2006, 32 members of Congress have been arrested and about 30 others are being formally investigated for ties to paramilitary groups that killed thousands of civilians, infiltrated state institutions and trafficked cocaine to the United States. Preliminary investigations have begun against dozens of others, including the president of Congress, Nancy Patricia Gutiérrez, who was implicated last week.

With the legitimacy of Congress at rock bottom, lawmakers have been locked in a series of heated debates over how to reform the 268-member body and punish those parties whose members have been linked to paramilitary groups.

"What we've seen happen is a de facto alliance between powerful economic interests and narco-traffickers, and the motives were to co-opt institutions and convert Colombia itself into a criminal enterprise," said Sen. Gustavo Petro, who has publicly denounced ties between his colleagues and paramilitary members. "Congress is one of the institutions that's been co-opted."

In the case of Mario Uribe's party, Democratic Colombia, five of six members who held seats in Congress have been accused of collaborating with paramilitary groups, with one member, Sen. Álvaro Garcia, charged with helping to organize a massacre.

Uribe, who is accused of meeting with a notorious commander named Salvatore Mancuso to plan land grabs, fled to the Costa Rican Embassy in Bogota on Tuesday and applied for political asylum. He was rejected hours later, with San Jose calling the petition "inappropriate" because of the outstanding warrant.

Uribe was arrested as he left the embassy, but not before police and protesters jostled outside the compound, located in a residential neighborhood.

"The Mario Uribe situation is very delicate for the president," said Elisabeth Ungar, a political scholar at the University of the Andes in Bogota who directs Visible Congress, a group monitoring the legislature. "He's his cousin, and he's done politics with him all his life. He's the closest person to the president who's ever fallen."

The latest developments are expected to further complicate Colombia's efforts to win support in Washington for a free-trade agreement, which has been blocked by Democrats concerned about rights abuses here and opposition to trade deals in their home districts.

The inquiry into ties between paramilitary groups and politicians has not directly damaged President Uribe, even after Petro, the senator, charged in a hearing last April that death squads met at an Uribe family ranch in the 1980s to plot murders. The government strenuously denied the allegations, and Uribe's approval rating recently reached 84 percent as a result of the government's battlefield successes against the country's guerrilla movement, the Revolutionary Armed Forces of Colombia, or FARC.

Still, the simmering scandal has indirectly hurt Colombia's president, the Bush administration's closest ally in Latin America and the beneficiary of billions of dollars in American military aid. Recently jailed allies include Carlos García, president of the pro-Uribe U Party, and Sen. Rubén Quintero, who was Uribe's private secretary when he was governor of Antioquia state in the late 1990s.

Uribe's allies are eager to see him serve a third four-year term, even though that is prohibited by the constitution. In 2005, the Constitutional Court approved an amendment that allowed him a single re-election in 2006. Many analysts here believe it is impractical for a tarnished Congress to try to amend the constitution or find other ways to spearhead another reelection effort.

"There's no possibility in a Congress with so much illegitimacy," said Claudia López, who co-authored "Parapolitics," a book about links between lawmakers and paramilitary commanders.

The legislature's image was further damaged Sunday after the Channel One news station aired an interview with a former congresswoman, Yidis Medina, who said the Uribe administration offered to provide jobs for her allies in return for her vote in favor of the 2004 constitutional amendment that permitted Uribe to run for reelection in 2006. That vote proved essential to the amendment's passage. Government officials denied Medina's accusations, but the attorney general's office has opened an investigation.

Lawmakers are now considering a reform package that would, among other things, take away seats in Congress from parties whose members are convicted of crimes. Pro-government parties are also considering the possibility of naming a commission of "notables" to propose reforms and creating a special tribunal to judge lawmakers.

López, an analyst who writes a column about politics in the El Tiempo newspaper, said Colombians are particularly incensed that tainted parties have not lost seats, even as their members sit in jail awaiting trials.

"These congressmen who are going to jail are being replaced in Congress, as if they're out sick," she said.

A more reasonable solution, she and Ungar said, would be to "freeze" their seats, with the party losing it permanently if the lawmaker is convicted.

Most of the politicians implicated in the scandal have had close ties to Uribe, and many of them supported the constitutional change that permitted him to run for reelection. Still, the "para-politics" scandal has touched politicians from nearly every party, including the opposition Liberal Party, which has more members linked to the paramilitary groups than any other.

After a preliminary investigation was opened against Gutiérrez, the president of Congress, Uribe called for prudence and "objectivity" among investigators in the Supreme Court, which in Colombia spearheads investigations of wrongdoing by lawmakers. Carlos Holguín, the interior and justice minister, expressed concern that the court was permanently damaging Congress and jailing lawmakers without hearing their side of the story.

"We have reservations over the elements being considered in opening investigations and taking away people's liberties," Holguín told El Tiempo on Sunday.

Grupo Televisa's spat with Univision to unfold in court

The producer of sensational Spanish-language telenovelas alleges deceit and seeks to sever ties with its longtime partner.
By Meg James, Los Angeles Times Staff Writer 
April 28, 2008
Some of the best Spanish-language television dramas delve into the ambitions and rancorous relationships within powerful Latino families.

Instead of playing each night on TV screens, though, this tale of a tumultuous 16-year marriage, fraught with allegations of treachery and bad faith, will begin to unfold this week in a federal courtroom in Los Angeles.

Grupo Televisa -- the Mexico City-based entertainment conglomerate that is the world's preeminent producer of sensational Spanish-language soap operas, ortelenovelas -- claims in a suit filed three years ago that it has been cheated out of more than $100 million in royalties by its partner, Univision Communications Inc.

The trial is set to begin Tuesday, pitting Televisa's 40-year-old media scion Emilio Azcarraga Jean against Univision's new owners, led by Los Angeles billionaire Haim Saban, the company's chairman. Televisa is demanding that it be allowed to sever all ties with Univision, which has become the dominant Spanish-language broadcaster in the U.S. largely because it can run Televisa's popular programming. 

"It comes down to who needs who more," said Julio Rumbaut, a Miami-based media consultant. "Televisa has a unique product that they just keep cranking out, and it works well on the West Coast, the East Coast and in Puerto Rico." 

Last year, advertising generated by Televisa programming represented $538 million of Univision's overall $2.1 billion in net revenue. Univision paid Televisa license fees of approximately $145 million.

In court filings, Televisa alleges that Univision managers tried to conceal financial figures to frustrate Televisa executives and auditors as they tried to trace the money trail. Their behavior was so egregious, Televisa contends, that Televisa should be allowed to end its long-term programming agreement, which obligates the company to provide Univision with its wildly popular soap operas through December 2017.

If the agreement were terminated, Televisa could demand much higher fees for its shows. It could perhaps use its leverage to regain an ownership stake in Univision. Azcarraga's late grandfather helped launch Univision 47 years ago, with the purchase of a TV station in San Antonio. 

Televisa also could end its involvement with Univision entirely and sell its programs to its smaller rival, NBC Universal's Telemundo or hook up with another partner to form a broadcast network. Televisa's goal has long been to gain a bigger piece of the lucrative U.S. media market. 

Any of those outcomes would leave Univision's new owners in the lurch. 

A year ago, a group of private investors, including Saban, acquired Univision in a highly leveraged $13.7-billion deal that took the company private and saddled it with $10 billion of debt.

"If Televisa were to stop providing us programming for any reason, it could be difficult to develop or acquire replacement programming of comparable quality whether on similar terms or at all," Univision wrote last month in a regulatory filing. That, the company warned, "would have a material adverse effect on our results."

The trial, which could span four weeks, is expected to include as witnesses Azcarraga, the chief executive of Televisa, key executives from both sides and videotaped testimony of Univision's 77-year-old former CEO, billionaire A. Jerrold Perenchio, the architect of the long-term programming agreement. 

"We are confident that the facts are on our side and that Univision will prevail at trial once we present our case," Univision said in a statement. The company has paid, under protest, about $20 million to Televisa to settle some of the disputed claims.

Univision, in its court filings, rejects the claims outlined in Televisa's original 2005 lawsuit and an amended 2006 complaint, which leveled the more serious allegations of deception and material breach.

"What started out as a vanilla claim for damages has evolved into a claim of coverup, bad faith and conduct unbecoming a partner," said Marshall Grossman, Televisa's lead attorney.

The trial is expected to explore the origins of the 1992 programming agreement. That deal came about when Perenchio teamed up with Azcarraga's late father, Emilio Azcarraga Milmo, and a Venezuelan media magnate to buy Univision from Hallmark Cards Inc.

The three partners paid $550 million for Univision, each chipping in $33 million of their own money. With Perenchio at the helm and an abundant supply of the steamy Televisa telenovelas, Univision became a juggernaut. The shows appeal to Mexican immigrants and Mexican Americans who make up an estimated two-thirds of the U.S. Latino population. 

Azcarraga took over Televisa a month before his father died in 1997. He was just 29. Within a few years, Azcarraga's relations with Perenchio had soured. The young mogul has long felt that Perenchio took advantage of his father with the 25-year programming agreement, and that Univision has not adequately compensated Televisa for its popular shows.

Tensions heightened in 2005 when Perenchio installed his longtime lieutenant, Ray Rodriguez, as president of Univision without conducting a formal search. Azcarraga resigned from Univision's board. The lawsuit was filed a few months later. 

In 2006, Perenchio decided to sell Univision. Televisa figured that the time had finally come for it to gain control of the company that it helped build.

But Televisa was outbid by Saban Capital Group and four private equity firms: Texas Pacific Group, Providence Equity Partners, Madison Dearborn Partners and Thomas H. Lee Partners. 

Perenchio, Televisa and Venezuela's Venevision each cashed out with $1.3 billion when the deal closed last year.

Televisa declined an invitation by Univision's new owners to roll over its investment in Univision and remain an equity partner. Televisa gambled on the lawsuit instead.

"It's very difficult to predict a divorce between Televisa and Univision because they need each other," said Manny Gonzalez, managing director of advertising firm Hill Holliday Hispanic. "Clearly Univision's strong ratings come from Televisa's programming, and Televisa needs Univision for the revenue. . . . They are caught in a pickle." 

meg.james@latimes.com

New Mexico governor looks to Venezuela's Chavez for help on American hostages

From the Associated Press 
11:36 AM PDT, April 26, 2008
CARACAS, VENEZUELA -- New Mexico Gov. Bill Richardson turned to Venezuelan President Hugo Chavez today for help in pressing for the release of three Americans held hostage by Colombian rebels.

Chavez said ahead of a meeting with the Democratic governor that he hopes to be able to help, but is not sure what he can do.

"He's coming with the mission of trying to help in the rescue of those three Americans who are in the hands of the FARC," Chavez said in a speech, referring to the leftist Revolutionary Armed Forces of Colombia.

"I don't know if I'm going to be able to continue helping," Chavez said. "I'm going to listen to him, to see how we could -- I don't know -- help."

Richardson, who was scheduled to meet with Chavez at the presidential palace, said after arriving on Friday night that he would discuss ways to advance a proposed swap of hostages for imprisoned guerrillas.

"I think President Chavez can help and can play a role in this issue," Richardson said.

The governor, who has previously served as a diplomatic troubleshooter to help free Americans in other countries, said he visited Venezuela at the request of hostages' families.

Three U.S. defense contractors -- Marc Gonsalves, Thomas Howes and Keith Stansell -- have been held by the FARC since their plane went down in rebel-held jungles in February 2003.

The FARC has proposed to exchange high-value hostages for imprisoned members of the group, but the guerrillas and Colombia's U.S.-allied government have long been deadlocked over the terms.

Richardson, a former U.N. ambassador and energy secretary under former President Bill Clinton, has previously negotiated the release of Americans in North Korea, Iraq and Sudan.

"I've participated in this type of hostage exchanges in the past in other countries, but I'm here to emphasize the importance of the hostages, especially the three American hostages, but naturally I'm very conscious that there are Colombians, there is a Frenchwoman," Richardson said, referring to French-Colombian politician Ingrid Betancourt.

Richardson visited Colombia last month and met with the country's president, Alvaro Uribe. The leftist rebels have unilaterally freed six hostages to Chavez's socialist government this year.

Zimbabwe opposition unites


Two factions reach a deal that will give them a majority in parliament, and some ruling party members are said to have switched allegiance. Presidential election results are again delayed.
By Robyn Dixon, Los Angeles Times Staff Writer 
6:33 PM PDT, April 28, 2008
JOHANNESBURG, SOUTH AFRICA -- The two factions of Zimbabwe's divided opposition Movement for Democratic Change have reached a deal to cooperate in parliament and claimed Monday that some ruling party lawmakers had defected, steps that give them a solid parliamentary majority.

The MDC factions together control 109 seats in the 210-member parliament following March 29 elections. An independent lawmaker, Jonathon Moyo, said Monday that he also might side with the opposition in the new parliament.

One senior opposition source who spoke on condition of anonymity told The Times that 20 lawmakers from the long-ruling ZANU-PF party also had defected to the opposition camp, further boosting its majority. However, under Zimbabwean law, anyone crossing the floor to join another party must face a by-election to keep the seat.

The MDC deal followed an announcement Saturday that a recount involving 23 parliamentary seats had left results unchanged in 18 races, deflating the ruling party's hopes of regaining a majority.

Results of last month's presidential balloting still had not been announced, amid signs of possible divisions within the country's power structure. On Monday, the Zimbabwe Electoral Commission reversed an earlier announcement that the presidential election results could be expected by today, saying there would be a further delay for purposes of "verification."

Many ruling party members have given up hope of victory should the results, as widely expected, force a second round of balloting between President Robert Mugabe and challenger Morgan Tsvangirai of the MDC, sources in the party told The Times. Most now see their best hope as a government of national unity, said the sources, who requested anonymity.

The failure of the two MDC factions to unite before the elections cost Tsvangirai's followers an outright majority in the parliament. His wing won 99 of the 210 seats. The smaller MDC group took 10 seats while backing a ruling party defector, Simba Makoni, in the presidential race.

Asked Monday why the factions did not unite before the election, Tsvangirai said it would have been "inappropriate."

"We couldn't agree," he said. "Now we have agreed."

Tsvangirai insisted Monday that Mugabe should step down because of the parliamentary majority held by the MDC factions.

"In a parliamentary democracy, the majority rule," Tsvangirai said. "He [Mugabe] should concede that he cannot be president."

In fact, under Zimbabwe's constitution it is the winner of the presidential contest, not the party that wins the parliamentary majority, who has the right to form a government.

The constitution calls for a second round of voting in a presidential election if no candidate wins 50% plus one, and independent tallies suggest that Tsvangirai failed to reach that goal. But he has ruled out participating in a second round unless international observers are present.

International pressure is mounting for Mugabe to step aside, with diplomats arguing that it is too difficult to hold a second round because of the wave of postelection violence targeting opposition activists.

The United Nations plans to discuss the crisis today. Tsvangirai called on the world body to send an envoy to Zimbabwe to investigate the postelection violence.

Moyo, the independent lawmaker, who once was Mugabe's right-hand man and retains close ties to the ruling party, said the MDC could have won outright had it united before the elections.

Nonetheless, he said, ZANU-PF's failure to pick up seats in the recount had demoralized the ruling party.

"I think there's a sense that these guys are so beleaguered, they've dug themselves a hole they don't know how to get out of," he said. "They have lost all hope."


Mystery surrounds Tijuana drug shootings

Newspapers are full of unattributed accounts of who was involved and who was killed. Mexican officials remain tight-lipped.
By Héctor Tobar, Los Angeles Times Staff Writer 
April 28, 2008
MEXICO CITY -- On Sunday, following one of the bloodiest days in Tijuana's history, authorities held no news conferences. The death toll in the gangland-style shootings early Saturday between rival drug traffickers increased to 15 from 13, after two men died of their injuries. But not even the names of the dead were released.

Instead, speculation, rumor and scattered news leaks filled the information vacuum after yet another battle in Mexico's drug wars.

And there were only tentative answers to the larger questions that worry many here: Is this violence between drug dealers a sign that the Mexican government is winning the wars? Or is it just another symptom of a country slipping deeper into an abyss of lawlessness?

Official silence is common in Mexico, where thousands have been killed in drug-related violence since President Felipe Calderon took office in December 2006. But many analysts believe that Calderon's decision to send thousands of army troops to Baja California, Veracruz, Michoacan and other states to crack down on the drug trade is reaping a type of dividend.

The government's efforts have disrupted agreements between trafficking organizations and corrupt officials, setting off turf wars among weakened organizations, analysts and government officials say. 

"We wouldn't see so much bloodshed if the Mexican government were more complicit with these [criminal] organizations and just letting them have their way," said David Shirk, director of the Trans-Border Institute at the University of San Diego. 

At the same time, the Tijuana shootout was just one of several seen in border communities in recent years. And unless officials decide to reveal more about who was involved and what happened, the true meaning of the bloodshed is likely to remain a mystery.

On Sunday morning Tijuana residents awoke to a rogue's gallery of criminal names in their newspapers. 

"According to reliable sources," reported, the shootout was between rivals within the Arellano Felix gang.

Or maybe not. The national daily El Universal reported that the so-called Sinaloa cartel was to blame.

Several newspapers reported that among the dead was "Crutches," a.k.a. Luis Alfonso Velarde, a reputed local drug lord with a handful of YouTubevideo tributes to his name.

Another, even bigger "cartel" operative nicknamed "Mr. Three Letters" might be dead too, along with "La Perra," reported El Sol de Tijuana. And they may all have been ambushed by another cartel leader known as "El Cholo."

But no one was willing to confirm any of that on the record.

Official silence, many here argue, helps feed the culture of corruption. It is a widely recognized truth that drug traffickers operate in Baja California and elsewhere with the protection of some public officials.

On Tuesday, Gen. Sergio Aponte Polito, the commander of troops in the Baja region, took the extraordinary step of writing an open letter to a local newspaper that identified several law enforcement officials he alleged were linked to organized crime.

The letter's implicit argument was that officials who protect organized crime are likely to escape prosecution thanks to the culture of secrecy that surrounds law enforcement here.

"Isn't this corruption?" the general asked. "What a disgrace for the society of Baja California!"

Calderon's government has worked hard to clean up law enforcement. His top police official, Genaro Garcia Luna, has purged the Federal Investigative Agency of corrupt cops. Soldiers have temporarily disarmed police in Tijuana and other cities, and several reputed drug bosses have been extradited to the United States.

Yet the widespread violence shows few signs of abating. An estimated 2,500 people were killed in drug-related violence last year, officials say. So far this year, more than 850 people have been killed, according to tallies by news agencies.

The objective measures by which U.S. officials determine the strength of the drug trafficking business also offer a mixed bag.
The supply of cocaine declined in several U.S. cities during the first half of 2007, according to the U.S. National Drug Threat Assessment, a multi-agency report on the problem.

The drop in availability was probably a combined result of several large seizures of cocaine shipments en route to the United States, Mexico's anti-drug efforts, and warfare among rival Mexican traffickers, the report says.

By late 2007, supply "appeared to be returning to normal" in some U.S. markets, the report says. At the same time, the amount of cash smuggled in bulk from the United States to Mexico continued to increase, a sign that traffickers' revenues are still healthy.

"Mexican drug-trafficking organizations are the dominant distributors of wholesale quantities of cocaine in the United States, and no other group is positioned to challenge them in the near term," the assessment says.

Privately, top Mexican officials say that a decisive victory over the so-called drug cartels is impossible as long as demand for cocaine, methamphetamines and other drugs remains high in the United States. 

The more realistic goal, one senior official said recently, is to keep the drug traffickers from dominating civic life in the regions where they are most powerful, including border cities such as Nuevo Laredo and Tijuana.

Although Calderon's efforts have reduced drug-related slayings in central Mexico, problems have "ballooned" along the border areas of Tijuana and Chihuahua state in part from narcotics traffickers moving their activities northward, Shirk said.

Shirk also said that the number of federal troops dispatched to Baja Norte and Chihuahua appeared to be lower, both per capita and in absolute terms, than those dispatched to Michoacan and other states where killings have diminished in recent months. 

He said he was surprised to encounter only one checkpoint during a trip he took Friday to Tijuana, Ensenada and back via Tecate.

"Having troop inspection points plays a really important function of making the city less navigable," he said. "You can't just kill somebody and escape back to their lair."

hector.tobar@latimes.com

Times staff writers Reed Johnson in Mexico City and Richard Marosi in Tijuana contributed to this report.


Draining the basin that's Mexico City


The metropolis, situated in a giant natural bowl, suffers flooding and backup with every rainy season. A $1.3-billion government effort aims to clear the problems.
By Ken Ellingwood, Los Angeles Times Staff Writer 
April 28, 2008

MEXICO CITY -- The enormous expanse of concrete and asphalt known as Mexico City was once a lake. And each year, starting about this time, it seems hell-bent on becoming one again. 

The rainy season, which begins in earnest soon, offers an annual reminder to the 20 million residents of the metropolitan area that they inhabit a big tub with no natural drain.

Flooding is common, swamping highways and sidewalks. In low-lying neighborhoods, residents are so accustomed to seeing a fetid sea of sewage rise in the streets that they have built miniature dikes in front of their homes.

"We say, 'When is it going to reach us?' " said Rafael Palomares, 72, who during heavy rains retreats with his wife to the second floor above their candy shop in the flood-ridden Iztapalapa neighborhood.

Since the days of the Aztecs, inhabitants have labored to manage the waters of the basin cradling modern-day Mexico City. Now they're trying again, with a much-touted, $1.3-billiongovernment effort to revamp the massive but overwhelmed sewer system.

"Either we do something, or we're going to be flooded," said Ramon Aguirre, who heads the Mexico City agency that manages water and sewage.

The project involves a series of newly installed pump stations, a planned new 30-mile drainage tunnel, and repairs to parts of the 7,400-mile system of aging pipes and tunnels that carries rainwater and human waste from the city. 

Officials say the fix-up -- their first good peek inside the city's main duct in 15 years -- will ease flooding by clearing blockages, patching leaks and increasing the overall capacity to drain sewage and rainwater.

Flooding might seem implausible in a landlocked city perched 7,500 feet above sea level and without major rivers. But Mexico City, ringed by mountains, lies in a basin that collects rain like a giant saucer. 

Worse, the city is sinking, in some places by more than a foot a year, because it draws so much of the underlying groundwater to quench the thirst of an ever-growing population. 

The Aztecs who lived here among a chain of ancient lakes chose to go with the flow, so to speak. They built a water-based society, centered on an island capital, and moved by canoe and barge along a network of canals.

The Spanish conquerors who arrived in 1519 were astounded by the vision of stone buildings rising from the shining waters. "Indeed, some of our soldiers asked whether it was not all a dream," one wrote.

The Spaniards, though, remade the landscape by filling canals to create streets and European-style plazas and later dug a huge trench to dry the valley.

Mexican governments developed the system of ducts and passages, including the century-old Grand Canal, which now can carry 2.4 million gallons a minute. 

But that is significantly less than when the tunnel system was completed in 1975, even though the population has doubled. The Grand Canal, once the main sewage line, has been hobbled due to sinking. As a result, authorities have been forced to rely on a separate drainage tunnel, known as the Emisor Central, to carry the extra waste.

That tunnel, which Aguirre calls "the most important pipe in the country," has been damaged by overwork and corrosive gases that have eaten at its rounded walls, 20 feet in diameter.

In Iztapalapa, where spring heralds months of waterlogged dread, residents have heard the government's promises that drier times are coming.

Few are buying it. 

Alicia Garcia, a 63-year-old retired schoolteacher, fumed as she showed a visitor how sewage, black and stinking, has invaded her family's home over the years: pouring over the window sill, surging through the grated front door, bubbling up bathroom drains.

The family has ripped up carpets, repainted walls and built a 3-foot wall where the gated entrance used to be to keep the foul waters at bay. "And the government did nothing," Garcia said.

Down the street, Yolanda Toriz recalled a flood two years ago that ruined the wood supply at the furniture shop where she works.

But Toriz, 43, chose a philosophical tack on the problem of water.

"We have to learn to survive," she said, "above it and under it."