www.thedialogue.
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BOARD OF ADVISORS
Diego Arria
Director,
Columbus Group
Genaro Arriagada
Board Member, Banco
del Estado de Chile
Joyce Chang
Global Head of
Emerging Markets
Research, JPMorgan
Chase & Co.
W. Bowman Cutter
Former Partner,
E.M. Warburg
Pincus
Alejandro Delgado
Economist for Latin
America, Africa, the
Middle East & Mexico,
General Motors
Dirk Donath
Managing Director,
Eton Park Capital
Management
Jane Eddy
Managing Director,
Corporate & Govt.
Ratings Group,
Standard & Poor's
Marlene Fernández
Former Bolivian
Congresswoman
and Ambassador
Jason Hafemeister
Vice President,
Allen F. Johnson &
Associates
Peter Hakim
President Emeritus,
Inter-American
Dialogue
Donna Hrinak
Senior Director of Latin
America Government
Affairs, PepsiCo
Copyright © 2010, Inter-American Dialogue
Monday, May 10, 2010
FEATURED Q&A
Is Social Media a Fixture or Fad in Latin American Politics?
Jon Huenemann
Venezuelan President Hugo
Q
Principal, What we are seeing in Venezuela confirms
International Chávez last week launched a social media's mainstream significance.
Department, Twitter account, with one close While in several cases 'underdog' groups
Miller & Chevalier
ally saying the president's fol- have successfully used social media to
James R. Jones lowers planned to 'take over by assault' increase cause awareness or voice dissent,
Co-chair, social media sites like Twitter and mainstream parties and governments are
Manatt Jones
Facebook, which have been employed now realizing that they must also treat
Global Strategies LLC
more actively by Chávez opponents. What social media as an important political
John Maisto role do you see social media sites like channel. An increasing number of today's
Director, these playing in Latin America's political youth are growing up 'online.' They are
US Education Finance
scene in the coming years? Will they familiar and comfortable with social media
Group
become a fixture, or are they merely a interactions from an early age, and there-
Nicolás Mariscal passing fad? How important are these fore will be more likely to become involved
Chairman, technologies to engaging Latin America's Continued on page 2
Grupo Marhnos
youth in the political process?
Thomas F.
McLarty III Alberto Arebalos, director of
A
President,
McLarty Associates corporate communications and
public affairs for Latin America
Carlos Paz-Soldan at Google: "In recent years, we've
Partner,
seen social media usage and influence
DTB Associates, LLP
exploding, to the extent that it can no
Beatrice Rangel longer be dismissed in any sphere. More
Director, than 72 percent of Latin American Internet
AMLA Consulting LLC
users are connected to at least one social
José Antonio Ríos network, and people are spending more
Chief Executive Officer, and more time interacting and accessing
Chinchilla Sworn in as Costa
Vadium Technology Inc.
content of all kinds via social media sites. Rica's First Female President
Andrés Rozental Politically, we've already seen in Colombia,
President, the United States and elsewhere that social Laura Chinchilla, 51, was inaugurated
Rozental & Asociados media has a widespread and powerful Saturday as Costa Rica's first female
and Senior Fellow,
Brookings Institution impact that cannot be ignored. Present president. Among Chinchilla's first offi-
indications are that social media is a grow- cial acts was a decree prohibiting new
Everett Santos ing trend, not a passing fad; individual sites gold mining projects in the Central
President,
may burst onto the scene and later wane in American country. See story on page 2.
DALEC LLC
popularity, but they are replaced by newer Photo: Chinchilla Campaign.
Shelly Shetty or more innovative social media sites.
Senior Director, Latin
American Sovereign
Ratings, Fitch Inc. Inside This Issue
FEATURED Q&A: Is Social Media a ING Seeking 15 Percent Sales
Fixture or Fad in Latin American Politics? .........1 Growth in Latin America .......................................3
Chinchilla Inaugurated as Costa Bancolombia Posts $169 Million
Rica's First Female President...............................2 Net Profit for First Quarter....................................3
Chávez Opponent Sentenced to Subscriber Notice: A Conversation
Nearly Eight Years in Prison .................................3 With the Mayor of Lima.........................................3
Page 1 of 4
 Inter-American Dialogue’s Latin America Advisor
NEWS BRIEFS
Mexico Extradites Former
Governor to U.S. on Drug Charges
Mexico has extradited a former gov-
ernor of Quintana Roo state to the
United States to face drug charges,
the Associated Press reported
Sunday. Mario Villanueva, who was
governor from 1993 to 1999, stands
charged in federal court with help-
ing the Juárez drug cartel smuggle
Colombian cocaine to the United
States. Villanueva served six years in
a Mexican prison after being con-
victed of money laundering. He was
released in 2007 and rearrested on
the U.S. extradition request.
Venezuela's Chávez Says Soaring
Inflation Politically Motivated
Venezuelan President Hugo Chávez
on Saturday accused the private sec-
tor and opposition forces of con-
spiring to raise prices for political
gains ahead of legislative elections in
September. "I have no doubts there's
a high speculative and political com-
ponent," Chávez said at a cabinet
meeting, state news agency ABN
reported. Prices rose 5.2 percent in
April, the highest monthly increase
in years, bringing the 12-month
inflation to 30 percent, Dow Jones
reported.
Moody's: Mexican Telco Axtel on
Review for Possible Downgrade
Moody's Investors Service said
Friday it was considering downgrad-
ing the corporate debt rating of
Mexican telecom Axtel from "Baa3"
due to the company's poor first-
quarter results. The ratings agency
said Axtel's earnings report showed
"weaknesses in its businesses,
including traditionally positive seg-
ments such as data services and
integrated telecom services." It
added that Axtel should increase its
income and EBITDA to finance cap-
ital expenditures internally.
Copyright © 2010, Inter-American Dialogue
Political News
Chinchilla Inaugurated as
Costa Rica's First Female President
Laura Chinchilla on Saturday was sworn
in as Costa Rica's first female president,
succeeding Nobel laureate Óscar Arias.
Chinchilla, 51, vowed to govern with
"humility, honesty and firmness" and
added she will pursue economic policies
similar to those of Arias, which brought
the Central American country into a trade
agreement with the United States and
increased trade with China, the
Associated Press reported. Chinchilla has
also promised to push for new ecological
protections for Costa Rica's parks and
reserves. "We're teaming up for a safer
Costa Rica," said Chinchilla, who added
that education, health care, good housing
and caring for senior citizens and children
are also among her administration's pri-
Featured Q&A
Continued from page 1
in politics via social media than any
other type of forum. Social media use by
established governments and parties
need not weaken its potential to create
positive change or to make the opinions
of the populace heard—but the debate
will be as complex and multi-voiced as
Latin America itself."
Lucas Lanza, director of
A
ePolitics Consulting in
Argentina and president of the
Information Society of the
Americas Foundation: "So far, we haven't
seen any foundational moments that
would define the beginning of a new way
of doing politics in the region using these
new media. It's quite paradoxical that the
one who has invaded this new digital
space is none other than Venezuelan
President Hugo Chávez—together with
his guerrilla communications army—in
order to strengthen communication and
links to citizens (both locally and global-
ly). Paradoxical or not, Chávez's move
has gotten tongues wagging, and it is
Monday, May 10, 2010
orities. Chinchilla, a graduate of
Georgetown University, is a social conser-
vative, opposing same-sex marriage and
abortion. The presidents of Mexico,
Colombia, Ecuador and Georgia attended
her inauguration in San José. Just hours
after taking office, Chinchilla signed a
decree prohibiting new gold mining proj-
ects in Costa Rica, Reuters reported. The
order will have no effect on the country's
largest gold mining project, Crucitas, said
Carlos Roverssi, a spokesman for
Chinchilla. He added the Crucitas mine,
owned by Canada's Infinito Gold, has
already obtained a government permit.
Environmentalists have called on
Chinchilla, who was elected in February,
to restrict mining. "[Gold mining] is not
profitable enough to sacrifice the envi-
ronmental aspect," Roverssi told Reuters.
Construction of the Crucitas mine has
been stalled due to environmental groups'
complaints that it would harm plants and
animals.
helping to convince Latin American
politicians to stop ignoring these new
interactive channels and incorporate
them into their campaigns, communica-
tions and relationships with the elec-
torate. Social networks and Web 2.0 are
definitely not a passing fad. The new
generations are immersed in a multime-
dia context that is revolving more and
more around social networks, in new
ways of communication such as text
messages and social networking tools
that are proliferating throughout the
Web every day. These new generations
are having a growing impact on the elec-
torate. Young people have always been an
attractive constituency for politicians;
therefore, now more than ever it's key to
understand this phenomenon, not just
by learning the new code of communica-
tions, but also by managing these new
channels where information, conversa-
tion and influence circulate freely. Social
media is already becoming an important
part of the 'media mix,' of convergence
strategies in political campaigns and of
Continued on page 4
Page 2 of 4
 Inter-American Dialogue’s Latin America Advisor
Chávez Opponent Sentenced to
Nearly Eight Years in Prison
Retired Gen. Raúl Baduel, an outspoken
critic of Venezuelan President Hugo
Chávez, was sentenced Friday to seven
years and 11 months in prison after
being convicted of abuse of power and
embezzlement, the Associated Press
reported. The sen-
tence also bars
Baduel from running
for public office.
Baduel was a close
ally of Chávez and
had served as his
defense minister.
However, he later
Baduel became a Chávez
critic after the presi-
File Photo: Venezuelan
Government. dent fired him from
the defense minister
post in 2007. Baduel opposed a referen-
dum to eliminate presidential term lim-
its in 2007. The referendum failed, but a
similar referendum passed last year,
allowing Chávez to run for re-election.
Baduel was convicted on charges that 40
million bolivars, then equivalent to U.S.
$18.6 million at the official exchange
rate, disappeared while he was defense
minister and wound up in bank accounts
of Baduel's family members. Baduel has
denied the accusations and maintains
that they are politically motivated. "He
was tried without any evidence," one of
Baduel's daughters, Andreina Baduel,
told the AP. "My father has been an hon-
est man and he always will be." Chávez
has denied using the courts to crack
down on his opponents, but several of
them have faced charges. Manuel
Rosales, who ran against Chávez in 2006,
was charged last year with corruption,
which he denies, and has since fled to
Peru. Leopoldo López, another opposi-
tion politician, was briefly imprisoned
on corruption charges and was barred
from running for office. In March, oppo-
sition politician Oswaldo Álvarez Paz, a
former governor of Zulia state, was
arrested after saying the government
enables drug trafficking. The opposition
politicians have denied involvement in
any wrongdoing.
Copyright © 2010, Inter-American Dialogue
Monday, May 10, 2010
Subscriber Notice
The Inter-American Dialogue hosts
A Conversation With the Mayor of Lima
with
Luis Castañeda Lossio,
Mayor of Peru's Capital
and potential presidential candidate
Tuesday, May 11
8:30 – 10:00 a.m.
Inter-American Dialogue
1211 Connecticut Ave., NW, Suite 510
Washington, DC
RSVP to meetings@thedialogue.org
Please include your name and affiliation.
This meeting will be conducted in Spanish.
Company News because of the size of its market, followed
by Chile and Mexico," Muriel told
Bloomberg News. "We want to consoli-
ING Seeking 15 Percent Sales date our operations in those countries
Growth in Latin America where we already operate. We aren't look-
ing to enter new countries."
Dutch financial services company ING
Groep is seeking a 15 percent increase in Bancolombia Posts $169 Million
sales this year from Latin America, a com- Net Profit for First Quarter
pany official told Bloomberg News in an
interview published Friday. Carlos Bancolombia, Colombia's largest bank,
Muriel, head of the company's insurance on Friday reported a net profit of 341 bil-
and pension unit, said Brazil, Mexico and lion Colombian pesos ($U.S. 169 million)
Chile will fuel growth in the region. Last for the year's first quarter, a 10 percent
month, the International Monetary Fund year-on-year increase, Dow Jones report-
boosted its growth forecasts for 2010 for ed. The bank said the increase was due to
the region and its two biggest economies, banking fees and other noninterest oper-
Brazil and Mexico. In Brazil, the IMF is ating revenue, which increased 14 percent
expecting 5.5 percent growth this year, in the quarter to 564 billion pesos. The
after an 0.2 percent contraction last year. bank also was able to reduce provisions
ING, which also operates in Peru, by half as the ratio of past-due loans
Colombia and Uruguay, will concentrate declined. For 2009, Bancolombia had
on organic growth rather than through reported 1.23 trillion pesos in net profit.
acquiring other companies, said Muriel. In New York, Bancolombia shares fell 1.7
"The motor of growth will be Brazil percent Friday to close at $43.03.
Page 3 of 4
 Inter-American Dialogue’s Latin America Advisor Monday, May 10, 2010

Featured Q&A
Continued from page 2
government communication. The ques-
tion for open debate is whether these new
technologies will increase citizen partici-
pation, make governments more open
and contribute to an improvement in
democracy in Latin America."
Daniel Castro and Scott Andes,
Latin America Advisor
is published every business day by the
ties for political participation by home- Inter-American Dialogue, Copyright © 2010
bound senior citizens, busy parents and Erik Brand
full-time workers who are otherwise General Manager, Publishing
ebrand@thedialogue.org
unable to attend political events.
However, these types of forums also pro- Gene Kuleta
vide an opportunity for tech-savvy, polit- Editor
gkuleta@thedialogue.org
ically motivated interest groups to
Matthew Schewel

A
senior analyst and research
analyst at the Information
Technology and Innovation
Foundation: "As businesses and politi-
cians alike have found, social media Web
sites like Facebook and Twitter provide
an unprecedented opportunity to gain
real-time, unfiltered access to the public.
The most effective use of social media
involves a two-way conversation, and not
just a means of getting out a message.
Time will tell whether President Hugo
Chávez will use the medium to truly
engage with citizens and whether they
will listen. However, the early signs are
impressive—if the reported figures are
correct, after just two days he had more
than 100,000 followers on Twitter and
after one week he had more than 200,000.
Engaging in online forums like this
allows more people to participate in the
political process. Without these types of
online forums, there are few opportuni-
advance their agenda disproportionately
to the size of their membership. Large-
scale social media projects work well for
the dispassionate crowd, but not as well
for the passionate mob—the loudest
voice is not always the one government
should be listening to. But if actions like
this lead to more openness, participation,
and civic engagement, this will have a
Katherine Anderson, V.P., Finance & Administration
positive impact on politics in Latin
America. It is also important to remem-
ber that Twitter is only one of the many
Web 2.0 tools available to government
officials to reach citizens. By employing
Web 2.0 applications such as blogs, online
videos and forums many governments
have taken e-government to a new level. "
The Advisor welcomes reactions to the
Q&A above. Readers can write editor
Gene Kuleta at gkuleta@thedialogue.org
with comments.
Jeffrey Puryear, Vice President, Social Policy
Reporter, Assistant Editor
mschewel@thedialogue.org
Inter-American Dialogue:
Michael Shifter, President
Peter Hakim, President Emeritus
Genaro Arriagada, Senior Fellow
Joan Caivano, Director, Special Projects
Dan Erikson, Senior Associate, U.S. Policy
Paul Isbell, Visiting Senior Fellow
Claudio Loser, Senior Fellow
Nora Lustig, Senior Fellow
Áurea Moltó, Fellow
Manuel Orozco, Director, Remittances
and Development Program
Tamara Ortega Goodspeed, Senior
Associate, Education
Marifeli Pérez-Stable, Senior Fellow
Viron Vaky, Senior Fellow

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