Thursday, August 27, 2015
Wednesday, August 26, 2015
|Citizenship as a Weapon: Travel Controls and What You Can Do About It|
|by Nick Giambruno, Senior Editor ||
It’s an extremely potent weapon, yet most are not even aware of its existence.
That is, unless they have been unfortunate enough to be on the receiving end of it.
The weapon I’m referring to is travel controls, also known as people controls. It’s the power any government has to limit the ability of its citizens to travel. They do this by restricting the issuance of travel documents like passports.
Any government can use this weapon can at a moment’s notice. It just needs to find a convenient pretext.
Many countries in the past have notoriously turned to people controls. For example, the Soviet Union would routinely revoke the citizenship of its perceived internal enemies.
Recently, look at how the Dominican Republic stripped tens of thousands of people of their citizenship with no due process. Or how the Syrian government previously refused to renew the passports of Syrians abroad whom it suspected of being associated with the opposition. Or how the US government revoked Edward Snowden’s passport with the stroke of a pen. These are but a few of countless examples.
The point here is not to pick good guys and bad guys. The point is that there are many instances throughout history and modern times that prove that you don’t own your own passport or citizenship… the government does. And they use them as a weapon.
If you hold political views that your government doesn’t like, don’t be surprised if they restrict your travel options.
Unfortunately, the situation is getting worse. Over the last couple of years, there have been several attempts to pass a bill that would make it easier for the US government to cancel the passport of anyone accused of owing $50,000 or more in taxes. I suspect that sooner or later Congress will pass this bill.
Fortunately, there is a way to protect yourself from these repressive measures. More on that in a bit, but first let’s look at the most common forms of travel controls.
Different Shapes and Colors
Desperate governments always seek to control money with capital controls and people with travel controls.
Here are the three most common forms of the latter:
1. Soft Travel Controls
These include arbitrary fees and burdensome bureaucratic procedures. These measures amount to unofficial travel controls.
It’s similar to how FATCA works with money. FATCA doesn’t make it illegal to move capital outside of the US. But it achieves the same effect by imposing onerous regulations that can make it impractical.
In the same sense, the government could achieve de facto people controls through deliberately excessive rules and regulations.
2. Migration Controls
Migration controls are official restrictions on the movement of a country’s citizens.
Sometimes governments will put restrictions on certain citizens from leaving the country. This is especially true during times of crisis and for those who have accumulated some savings.
Many people feel that they can simply wait till things get bad and then exit. But it’s likely the politicians will have slammed the door shut by then.
For example, after Castro came to power in Cuba, the government used to make its citizens apply for an exit visa to leave the island. They did not grant it easily.
3. Revoking Citizenship and Passport
This is the most severe form of people and travel controls.
Preventing people from leaving has always been the hallmark of an authoritarian regime. Unfortunately the practice is growing in so-called liberal democracies for ever more trivial offenses.
In the US, for example, the government can cancel your passport if they accuse you of a felony.
Many people think felonies only consist of major crimes like robbery and murder.
But that isn’t true.
The ever-expanding mountain of laws and regulations has criminalized even the most mundane activities. A felony is not as hard to commit as you might think. Many victimless “crimes” are felonies.
A study has found that the average American inadvertently commits three felonies a day.
So, if the US government really wants to cancel your US passport, it can find some technicality to do so… for anyone.
Second Passports - An Antidote to Travel Controls
Here’s what my colleague and the always insightful Jeff Thomas has to say about travel controls:
As a country approaches an economic collapse, a crystal ball is not necessary to predict that, amongst the actions of the government, will be increased currency controls, travel controls, tariffs, and a host of other last-ditch efforts to keep the sheep penned in - to assure their presence for a final shearing.
What remains for the reader to determine, if he is a resident of one of the nations that is presently in decline, is whether he: a) believes that, in the future, his ability to travel internationally may be either restricted or prohibited; and b) whether he should take steps to assure his liberty for the future. If so, it might be wise to do so before he actually has lost his ability to travel.
If you have only one passport, you’re vulnerable to travel controls.
I think it’s absolutely essential to obtain the political diversification benefits of having a second passport. You’ll protect yourself against travel controls. You’ll give yourself peace of mind knowing that you will always have options.
Among other things, having a second passport allows you to invest, bank, travel, reside, and do business in places that you could not before.
More options mean more freedom and opportunity.
I believe obtaining a second passport makes sense no matter what happens.
Unfortunately, getting one isn’t easy. There are no solutions that are at the same time cheap, easy, fast, and legitimate. Worse, there’s a lot of misinformation and bad advice out there that could cause you big problems. It’s essential to have a trusted resource to guide you through the process. That’s where International Man comes in.
You need to know the best countries to obtain a second passport in and exactly how to do it. We cover that in great actionable detail in our Going Globalpublication. Normally, this book retails for $99. But we believe this book is so important, especially right now, that we’ve arranged a way for US residents to get a free copy. Click here to secure your copy.
Tuesday, August 25, 2015
August 25, 2015 1:04 pm
Gloomy reality dawns on Brazil
John Paul Rathbone in São Paulo
Roberto Setubal, the head of Brazil’s biggest private bank, sees a long period of gloom for Brazil’s economy as unemployment rises and Congress is roiled by corruption scandals. However, he does not believe Dilma Rousseff, the president, will be impeached.
Latin America’s biggest economy has fallen into its biggest recession since the Great Depression, hit by a triple whammy of lower commodity prices, a multibillion-dollar corruption scandal at state-controlled oil company Petrobras, and a political crisis that has made Ms Rousseff the most unpopular president in Brazilian democratic history.
ON THIS STORY
- Rousseff battles sense of crisis in Brazil
- Brazil jobless rate hits five-year high
- What has gone wrong for emerging markets?
ON THIS TOPIC
- EM Squared Brazilian rates to stay higher for longer
- Fresh protests pile pressure on Rousseff
- Cracks appear in Brazil austerity plan
- Brazil raises rates to 14.25%
IN AMERICAS ECONOMY
“Five years ago, everyone felt that Brazil was on the brink of development,” Mr Setubal, the chief executive of Itau, said. “But happiness is the difference between expectations and reality, and expectations were too high. In a year, perhaps, expectations will be more realistic, and we will have a lot of hard work to do.”
Amid a corruption scandal that has permeated the highest levels of government and an economy forecast to shrink 2 per cent this year, Ms Rousseff’s approval ratings have fallen to 8 per cent. Hundreds of thousands of protesters have taken to the streets calling for her resignation, while investors have pushed down the real by 25 per cent, making it one of this year’s worst-performing emerging market currencies.
But rather than the economy or financial markets, the government’s most pressing issue in coming weeks will probably be the fallout of the burgeoning kickback and bribery probe at Petrobras that has already jailed dozens of senior business executives.
The probe’s focus is now shifting to Congress, probably increasing the political heat on Ms Rousseff and her fragile governing coalition. Last week, Eduardo Cunha, the head of Brazil’s lower house, became the first sitting politician to be formally charged with corruption. He quit Ms Rousseff’s coalition last month to join opposition lawmakers seeking her impeachment and has called the probe politically motivated.
Mr Cunha, who will be investigated by the Supreme Court, insists he is innocent and has said he will remain in his post. Fernando Collor, a former president impeached on corruption charges in 1992 but who has since made a comeback as a senator, was also charged.
Five years ago, everyone felt that Brazil was on the brink of development. But happiness is the difference between expectations and reality, and expectations were too high
- Roberto Setubal, chief executive of Itau
“To her credit, Dilma has kept the [corruption] investigation going. The country’s institutions are holding,” Mr Setubal said. “I do not think she will be impeached.”
Although Ms Rousseff has not being investigated, she chaired Petrobras when much of the corruption took place, and her government faces separate probes that it cooked the budget and broke campaign finance rules. Both are possible grounds for impeachment, a process that would require the support of two-thirds of Congress where many lawmakers are increasingly focused on saving their own skins than pushing through unpopular economic stabilisation measures.
Business leaders, fearful that political instability could turn a bruising recession into a more widespread economic crisis, have called on lawmakers to pull together and pass measures needed to put the economy on track and stave off of a downgrade that could see Brazil’s credit rating cut to junk status.
A mixed bag of spending cuts and tax breaks, called the Brazil Agenda and supported by Senate house leader Renan Calheiros of the centrist PMDB party, has made some progress through the legislature. But analysts said it was unlikely to be fully implemented.
“Even with a friendly Senate and the PMDB . . . Rousseff’s fiscal agenda faces an uphill climb with Cunha presiding over the lower house,” warned Cameron Combs, an analyst at Eurasia, the risk consultancy.
Meanwhile, there are few signs the Brazilian economy has yet touched bottom. Unemployment has risen sharply to 7.5 per cent, while inflation is running at 9.6 per cent as regulated energy prices have been unfrozen and the real’s depreciation has fed through into higher domestic prices.
Analysts say those effects should pass quickly, though, thereby allowing the central bank early next year to start cutting interest rates, which have been jacked up to 14.25 per cent.
Still, while that might stabilise domestic consumption, it is unclear what might power Brazilian growth in future. For the past decade it has been helped along by high commodity prices and abundant consumer credit.
“I think the economic recovery will be slow,” Mr Setubal said. “But price distortions have been removed, and you are already starting to see a positive response on the external accounts — the current account deficit is falling and exports are rising. It is the external sector that will lead the recovery.”
Saturday, August 22, 2015
Letter from Sao Paulo: Paulista Avenue Protests
The massive Aug. 16 Sao Paulo protests against Brazilian President Dilma Rousseff and her Workers' Party were, in many ways, similar to the protests I had previously observed in Rio de Janeiro. The march brought together a patchwork of social movements from the center right to the far right. Together they had two demands: an end to corruption and the ouster of the Workers' Party from government. From their perspective, these two things were essentially synonymous. As in the past, social activists led the marchers, including those from the Free Brazil movement, the Come to the Street movement and other similar groups. The crowd consisted primarily of well-off residents, although their personal beliefs varied. A majority of them were people moderately unhappy with Brazil's current political and economic situation. These were, however, accompanied by a fringe that supported a motley array of platforms: religious conservatism, libertarianism, a military government or monarchic rule.
Police pose with protesters on Paulista Avenue. (Stratfor)
The protest stretched along Sao Paulo's Paulista Avenue, where I was once told property is the most expensive by square meter in Latin America. It was here that the previous anti-Workers' Party protest occurred, reportedly mobilizing over a million people. The route was lined with police, while others were grouped around mobile support vans and armored shock battalion trucks. A family friend (and former soldier) had warned me to be careful because he had heard rumors of a counterprotest that would cause things to escalate, which may have required military intervention to stabilize. Fortunately, this did not happen. Even the sorts of lone counterprotesters whom I had seen at a demonstration last March on Copacabana Beach in Rio de Janeiro were hardly present. Rumors of military public order operations proved unfounded, since security guaranteed that there would be no chaos along Paulista Avenue, where the Sao Paulo Modern Art Museum and the influential Federation of Sao Paulo Industries is located.
Protesters hold up banners on Paulista Avenue. (Stratfor)
Large trucks carrying speakers, rented by each individual movement, were posted along Paulista Avenue, and around them congregated sympathetic listeners. Trucks rented by pro-military activists broadcast praise for Brazilian women who "inspire their sons and men to work." The religiously inclined condemned the godless ideology of the left. Many of these activists also spoke about how this protest did not consist of paid demonstrators, unlike (they said) Workers' Party rallies. Anti-government demonstrators, they continued, were upright citizens who earned their living honestly. Other miscellaneous slogans poured from the speakers: "Out PT," "Out Dilma," "Out Lula," "Out Renan Calheiros," "Prison for Corrupt Politicians," "Go to Cuba," "Our flag will never be red," "Thank God for the Federal Police/Car Wash Investigation/Military Police/Armed Forces," all mashing together with pauses for a round of singing the Brazilian national anthem.
Between most of these trucks there was still room to move. Crowds packed densely around certain trucks, especially the vehicles for the Come to the Street movement and the Free Brazil movement. Getting around them took 10 minutes of slowly inching between people. Elsewhere there was a great deal of room. This stood in stark contrast to the uniformly packed crowd I had had to wade through during the million-strong demonstration in March.
A vender watches protesters stream by. (Stratfor)
This protest did not seem to have gotten nearly as many people out in the streets. When I returned home, my sister told me that the rumor was that protesters were reusing photos from the March protest on social media. I saw one such online post showing an avenue with streets packed shoulder to shoulder with people under a sky that seemed more overcast than it was today. "We broke the threshold for one million people!" one of the speakers at a Paulista Avenue truck had exclaimed while I was near. I doubted it.
Indeed, Brazilian news is already reporting frustration at the relatively small number of people who came out to protest throughout the country. According to estimates by polling and data organization Datafolha, 135,000 people were on Paulista Avenue. This was smaller than the March protest of a million and even smaller than another in April that brought out over 200,000 people. Sao Paulo is both the commercial and industrial driver of Brazil and the main bastion of votes for the opposition Brazilian Social Democracy Party in the last election. The numbers in Sao Paulo's latest protest do not suggest that the impeachment movement is picking up steam.
The possibility that Rousseff will be impeached is still divisive in Brazil, even among those who are unhappy with the current state of affairs. "I think they're just hurting themselves," said a pro-business friend of mine who had voted for Aecio Neves, a Dilma opponent, referring to the Aug. 16 protests. I did not see many independent or opposition political parties taking prominent roles in the protest. For them, the measure is not clear-cut. Politicians such as former President Fernando Henrique Cardoso have said it will not happen. Though the government, with assistance from Senate President Renan Calheiros, may be standing on slightly surer ground for now, it continues to be unclear how much of a chance the Workers' Party has of winning the next election.