Development: On 10 August Ecuador’s main indigenous organisation, Conaie, announced a nationwide “uprising” against the government led by President Rafael Correa.

Significance: Uprisings by Ecuador’s indigenous have toppled governments in the past. President Correa is more popular than his predecessors who suffered this fate and his strategy of divide and conquer has successfully emasculated the indigenous movement, but his approval rating has fallen in recent months as falling international oil prices begin to bite and an unpopular inheritance tax reform has spawned protests. Correa has been dismissive of the Conaie march which departed from the southernmost province of Zamora Chinchipe on 2 August and is due to arrive in Quito tomorrow (12 August) ahead of a general strike being staged the following day by the umbrella trade union Frente Unitario de Trabajadores (FUT). But Correa remains wary and has urged supporters of the ruling Alianza País (AP) to gather to express their backing for his ‘Citizens’ Revolution’.

• The president of Conaie, Jorge Herrera, addressing marchers from Latacunga, the provincial capital of Cotopaxi province, drew up a list of 10 demands, including archiving a constitutional reform project that would allow indefinite re-election; annulling the ‘water law’ governing access to water and responsible management of water resources; providing free university education; ending negotiations with the European Union (EU) on a free trade agreement; and terminating large-scale mining activities.

• Writing on Facebook, Correa said that this would be “a crucial week for the country”, pitting the country’s past of strikes and protests against the future of unity and progress offered by the ‘Citizens’ Revolution’. Correa accused Conaie of serving “the destabilising interests of right-wing groups”, something Conaie vehemently denies, denouncing Correa for stigmatising legitimate protests. So far AP supporters have provided the greatest disruption, filling a square in Latacunga where the indigenous marchers had intended to convene, and forcing them to find an alternative venue. Conaie denounced on Facebook “an enormous and disproportionate presence of anti-riot police”.

Looking Ahead: Conaie insists it will not leave Quito “empty-handed”. But Correa is in no mood to negotiate. He said the march would be “a massive failure” and ruled out dealing with “the indigenous elite”.

Development: At a meeting with her closest ministers on 9 August, Brazil’s President Dilma Rousseff decided to hold talks with the leaders of all her coalition allies this week in an attempt to avoid impeachment.

Significance: The political crisis in Brazil is deteriorating rapidly. Over the weekend (8-9 August), one economic consultancy, Arko Advice, put the chances of the President being impeached as high as 40%. Last week, one of the founders of the ruling Partido dos Trabalhadores (PT), José Dirceu, was accused of masterminding the Petrobras corruption scandal; the federal chamber of deputies, including over 50 deputies from the PT itself, voted against the President’s wishes on salary increases for the judiciary; two parties left the ruling coalition; and the vice-president, Michel Temer, said, ominously, that “someone needs to be found who can reunite Brazil”.

• Last night Rousseff met with 13 ministers, plus Temer, from the nominally-allied Partido do Movimento Democrático Brasileiro (PMDB). According to Edinho Silva, the minister for social communication, the main result of the meeting was the decision for the President to meet individually with each of the leaders of the 17 parties that make up the ruling coalition. “We are aware of the political difficulties we are facing, but we are confident that these difficulties can be overcome by dialogue” Silva said. Silva added that the government had “lost” 362 congressional deputies and it now needed to win them back.

• Various other ideas are being kicked around the Planalto presidential palace in an attempt to stop Rousseff’s collapse in support. One is to reduce the number of ministries. At present there are 39 ministerial portfolios. But given that the government coalition is only stitched together by the ministerial jobs available it seems likely that such a move would further exacerbate the crisis. It is also rumoured that the PMDB may gain some ministerial positions at the expense of the PT, but again that is likely to increase the mutinous mood in the President’s own party yet further.

• Last week the leadership of the Partido Democrático Trabalhista and the Partido Trabalhista Brasileiro announced that from now on they would vote independently from the government in congress. Between them, the two parties control 45 seats in the chamber of deputies. According to reports in the local press, the government is now trying to ensure that it has at least 200 loyal deputies who will resist any attempts to initiate impeachment proceedings. At least two-thirds of the 513 federal deputies need to support the process for it to move forward.

Looking Ahead: Today (10 August) Rousseff is due to receive a number of federal senators for lunch. The federal senate is less restive and more supportive of the President. It could block impeachment proceedings.

Development: On 7 August Colombia’s President Juan Manuel Santos gave a televised address to mark the end of the first year of his current four-year presidential term, in which he stated that while securing a peace deal with the country’s guerrillas remains the top priority for his government, “there are other issues” on which his administration is also looking to focus.

Significance: President Santos won re-election in last year’s presidential elections by promising to carry out to conclusion the current peace negotiations that his government has been advancing with the Fuerzas Armadas Revolucionarias de Colombia (Farc) guerrillas since 2012. But the peace process has recently been through a series of crises that have lost it public support. With economic growth on the slide this year as a result of lower international oil prices, Santos’s popularity has suffered and his administration is facing growing criticism for almost exclusively focusing on the peace negotiations at the expense of other issues. Santos sought to combat these criticisms in yesterday’s address by highlighting some of his government’s other priorities, particularly on the economic front.

• The latest public opinion poll, published by Ipsos Napoleón Franco on 29 July, found that Santos’s approval rating had fallen from 71% in July 2014 to 47% in July 2015. This drop was attributed to the vagaries of the peace negotiations as well as a lower level of domestic economic activity. The poll found that a major concern for respondents was the performance of the domestic economy with unemployment cited as the chief public concern (40%), followed by public insecurity (33%), inflation (19%) and violence (18%).

• Yesterday’s address appeared designed to show that addressing these concerns is on Santos’s agenda. He made no apologies about maintaining peace as his main priority but acknowledged that the public had other concerns that his government would also seek to tackle. “The search for peace is of course very important, but it is not the only thing that we dedicate our efforts to”, Santos said.

• In particular Santos focused on concerns relating to public security and the economy. As regards the former, Santos said that as the peace process moves along, he has ordered the security forces to prioritise the fight against organised and street crime. On the economy, Santos pointed out that the less favourable international economic scenario had negatively affected the Colombian economy. But he said that his government had been and would continue to adopt “corrective measures” to counter act this.

Looking Ahead: Santos also sought to put a positive spin on the domestic economic difficulties. He said that the peso’s devaluation against the US dollar “produces more winners than losers... by giving us the opportunity to diversify our exports and substitute our imports, generating more jobs”.

Registration for legislative elections on 6 December got underway this week. While the government frontloaded its list of candidates with the First Lady Celia Flores, some cabinet heavyweights, singers and sportsmen, the national electoral council (CNE) rejected the application of María Corina Machado to run for the opposition coalition Mesa de la Unidad Democrática (MUD). Machado won more votes than any other candidate in the 2010 legislative elections and her exclusion is a major blow for the MUD. In a sign of the tension that is likely to build as the electoral campaign unfolds, a youth was shot dead in the midst of the looting of a supermarket in the city of Ciudad Guayana in the south-eastern state of Bolívar on 31 July.

President Nicolás Maduro announced the list of legislative candidates to drive forward the Bolivarian Revolution during a rally to mark the start of the five-day registration period on 3 August. Flores, a former president of the unicameral national assembly, leads the way as “the first combatant”, representing her native central state of Cojedes. Other big hitters on the list include Communes Minister Elías Jaua; Oil Minister Asdrúbal Chávez; Infrastructure Minister Haiman El Troudi; Education Minister Héctor Rodríguez; Indigenous Affairs Minister Aloha Nuñez and Housing Minister Ricardo Molina; singers Cristóbal Jiménez and Roque Valero; Olympic fencing champion Rubén Limardo; and TV presenter Érika Ortega.

Maduro maintained that the forthcoming electoral campaign would be “the toughest battle in the 16 years of the Bolivarian Revolution”. He said that this was due to the “economic war” being waged against his government, which would intensify as the elections approached with a planned wave of violence “sponsored by the Pentagon” to sow discord and chaos in Venezuela. Maduro described the killing of a youth in the looting of a supermarket in Ciudad Guayana, which led to 60 arrests, as a “planned” incident staged by the Right following orders from the US to undermine the Bolivarian Revolution. The governor of Bolívar, Francisco Rangel, maintained that the looters were “armed and induced”.

The MUD said the incident was evidence of the extremes to which many Venezuelans are pushed to acquire basic necessities amid scarcity of food and other essentials, and the rapid erosion of the value of the local currency amid hyperinflation. The MUD’s executive secretary, Jesús Torrealba, called for a day of national protest on 8 August “against hunger and crime and for freedom”, to take place in Caracas and all of the state capitals, to demand the immediate adoption of MUD proposals “to confront corruption and official ineptitude with common sense rather than bullets”.

The MUD released a statement saying that, “We condemn the intolerable and unprecedented situation of collapse which the Venezuelan people endure today due to the government’s destruction of the economy”. It blamed the “destruction of the productive apparatus” and “the massive theft of dollars from oil” as the principal causes of this collapse, aggravated by recent measures, such as restricting foreign exchange for importers, which it said was simply “throwing fuel on the fire of scarcity”. The MUD concluded that this “absurd conduct seems designed to generate a social revolt with the aim of creating the pretext of suspending or postponing the legislative elections which it knows are lost”.

The MUD has tried to capitalise on public discontent with food shortages and rampant inflation in the past without the desired success. The loss of Machado will only make its task tougher. Machado received an administrative sanction from the comptroller general’s office on 14 July barring her from standing for election for one year so the CNE’s decision to deny her registration was not unexpected. Machado said that neither of the two bodies had the legal standing to deny her registration, and that “the regime” had not forgiven her for speaking out against the presence of Cuban soldiers in the Venezuelan armed forces as well as denouncing official corruption. She had a ready-made replacement by her side to stand in her place for the MUD: Isabel Pereira, a director of the liberal thinktank Centro de Divulgación del Conocimiento Económico para la Libertad (Cedice).

On 4 August the US State Department released a statement expressing “concern” at the decisions to block the candidacy of Machado and other opposition politicians which “clearly have the intention of complicating the ability of the opposition to run candidates for the legislative elections, and limiting the range of candidates that can be presented to the Venezuelan people.” It went on to argue that “democracy must be inclusive”, and urged “all relevant Venezuelan authorities to reconsider the ban imposed on candidates”. The Venezuelan government responded with a statement of its own accusing the US of “interfering in internal constitutional matters”.

Meanwhile, Maduro ruled out monitoring of the electoral process by the Organization of American States (OAS), insisting that “Venezuela will not be monitored by anyone”. He claimed that the political opposition would denounce irregularities and fraud with or without monitoring.

• Polar warehouse expropriated

The looting of the supermarket in Bolívar came a day after the government sent in troops to seize (not for the first time) the Caracas warehouse of Venezuela’s largest food distributor, Polar, which President Maduro has accused of seeking “to sabotage the economy”. “This is our principal dispatch centre,” Polar director, Manuel Larrazábal, said, from which the company sends out 12,000 tonnes of food and 6m litres of drink per month. Larrazábal said that expropriating the warehouse at a time of food supply problems was “irrational”, and urged the government to reconsider its action.

Development: On 5 August Chuck Rosenberg, the acting head of the US Drug Enforcement Administration (DEA), said that the escaped leader of the Sinaloa drug trafficking organisation (DTO), Joaquín ‘El Chapo’ Guzmán, was probably still in Mexico, and that the agency was stepping up its attempts to bring him to justice.

Significance: A key issue in the attempt to control Mexican DTOs is the quality of the collaboration between Mexican and US law enforcement agencies. Rosenberg’s comments at a press briefing show that despite US reservations about drug gang infiltration of the Mexican police, the two governments maintain a degree of security collaboration.

• Asked about the whereabouts of Guzmán, whose spectacular tunnelling escape from prison on 11 July humiliated the Mexican government, Rosenberg said “Where is he probably the safest and best protected? Probably Sinaloa”.  The DEA chief said that his agency, the US Federal Bureau of Investigation, the US Marshals Service, and the US State Department are all stepping up the hunt for information leading to Guzmán’s recapture. The campaign includes setting up “Chapo tips” telephone lines and an email address for members of the public to provide information about his whereabouts; the US State Department is also offering a US$5m reward for information leading to Guzmán’s recapture.

• On the sensitive subject of collaboration between US and Mexican agencies, Rosenberg said “institutional problems” on the Mexican side made information gathering difficult. “We have sources in Mexico we can work closely with. It doesn’t extend through the entire government”, he said.  Despite its disastrously poor record on keeping top drug lords such as Guzmán in prison, the current Mexican government, working through navy marines and other elite units, actually has a good record for tracking down and apprehending DTO leaders. Some analysts therefore say the answer is to extradite the top mafia bosses to stand trial in the US – a move previously resisted on sovereignty grounds. Should Guzmán be once more re-arrested this is a real possibility: at the end of last month a Mexico City judge accepted a US extradition request filed before El Chapo’s escape. Should El Chapo be recaptured the Mexican government will therefore have the option to process the request.

Looking Ahead: The major question is whether after two arrests (1993 and 2014) and two escapes (2001 and 2015) over the last two decades, there will be a “third time lucky” for the authorities trying to capture El Chapo. Most Mexican analysts believe, for the moment at least, that the answer is “no”: he has the power and resources in Sinaloa and elsewhere to continue to escape arrest for a number of years.

The fatal shooting of a young woman and two children last month by the Nicaragua’s national police (PN) in a botched counter-narcotics operation is only the latest incident to reignite concerns regarding the PN – previously one of Nicaragua’s most trusted institutions. With its response to protests against the government’s US$50bn ‘Gran Canal’ project already subjecting it to criticism at the end of last year, the PN’s handling of recent anti-government protesters have also fanned opposition complaints regarding its lack of independence and subjugation to the Frente Sandinista de Liberación Nacional (FSLN) government led by President Daniel Ortega.

The incident, which also left two other children injured, occurred on 11 July in Las Jagüitas, an area in south-eastern Managua, when PN officials reportedly mistook the family’s vehicle for that of suspected criminals. According to a PN statement, the driver, Milton Antonio Reyes Martínez, failed to obey orders to pull over. However, the local media cited Reyes and his wife, Leyka Ramirez Delgadillo, as saying that they did not see a sign for them to stop, only groups of men shooting at their vehicle from both sides of the road. Two days later the PN announced the arrest of 14 police officials in connection with the case while on 30 July a judge issued nine of the PN officials with prison sentences ranging from two to eleven years.

The violence sparked national outrage, with prominent opposition figures like Dora María Téllez of the FSLN dissident Movimiento Renovador Sandinista (MRS) party calling for PN director, Aminta Granera, to step down while local human rights organisations like Centro Nicaragüense de Derechos Humanos (Cenidh) demanded a full investigation. The main political opposition party, Partido Liberal Independiente (PLI), led by Eduardo Montealegre, also released a statement accusing the FSLN government of having destroyed the institutionality of the police and using it for its own purposes.

The incident took place just a week after the PN was accused of alleged brutality against government opponents – including Montealegre. The clashes took place on 9 July during demos against the recent election of a supreme electoral court (CSE) magistrate (see box) and more general concerns about the CSE. As well as Montealegre, eight other opposition national deputies were detained (all of whom were subsequently released), some of whom claimed to have been attacked by the police. Also arrested (and released) were two photographers, Jorge Torres, of the leading national daily, La Prensa, and Esteban Félix of the Associated Press, whose camera equipment was reportedly destroyed. As well as concerns from local human rights groups like Cenidh and the main private sector lobby, Cacif, the violence also prompted a response from the US embassy which on 9 July released a statement expressing “concern by the reports of violence surrounding scheduled demonstrations in front of the Consejo Supremo Electoral (CSE) in Managua”.

New CSE magistrate

The clashes over the ten-member CSE were triggered by the 3 July selection of Judith Silva as a new magistrate by the FSLN-controlled 91-seat unicameral national legislature. Silva, who is FSLN-aligned, was appointed for a five-year term to fill a vacancy left by José Marenco Cardenal, who died of a heart attack on 11 June. Marenco had been appointed to the court in 2005 by the Partido Liberal Constitucionalista (PLC) of disgraced former president, Arnoldo Alemán (1997-2002), although he later broke with that party. Silva was selected with 64 votes in favour – all from the FSLN – to two against. The concerns regarding the CSE’s independence come ahead of the November 2016 general elections in which President Ortega is expected to run and win a third consecutive victory.

• Silva

Nominated by President Daniel Ortega, the new supreme electoral court (CSE) magistrate, Judith Silva, defeated two other candidates to take up the post - one put forward by the main opposition Partido Liberal Independiente (PLI) and the other, by an independent deputy, Mauricio Montealegre. She had previously served as the executive president of the government’s urban and rural housing institute (Invur).

Development: On 4 August allegations of murder and drug trafficking – along with the management of currency exchange rates – dominated Argentina’s political scene, with just five days to go ahead of the national primaries.

Significance: Almost everything Argentine politicians do for the rest of this week will be about gaining or losing votes in the national, open, mandatory and simultaneous party primaries (Paso) ahead of the October general elections, due to be held on 9 August. Two strategies seem to have been deployed: sensational revelations over government corruption on the one hand, and an attempt to reassure floating voters over economic policy on the other.

• Allegations that the government’s cabinet chief, Aníbal Fernández, was involved in a triple homicide linked to drug trafficking in 2008 continue to dominate Argentine press headlines. Jorge Lanata, the high-profile journalist who made the claim, says the entrance to his private apartment in Buenos Aires was stoned and empty 9mm cartridges were left in the road – a clear message of intimidation.

• The government has dismissed this, saying police inquiries show “drunken tramps” had thrown stones at the entrance. Fernández himself, while angrily denying involvement in the triple homicide or in drug trafficking, says the allegations against him are electorally motivated and that he will take legal action, as “the electoral code says you can’t try and influence the vote by lying and making things up as is happening in this case”.  Fernández, who hopes to run for governor of Buenos Aires province for the ruling Frente para la Victoria (FPV) faction of the Partido Justicialista (PJ, Peronists), has also lashed out at his rival in the nomination race within the ruling party- the incumbent FPV governor of Buenos Aires province, Daniel Scioli.

• Scioli, the front-runner in the presidential race, is downplaying the allegations against Fernández. The two men are not close, but Scioli said he did not believe the accusations against his fellow party member, which were part of a series of “political and media moves”. Opinion polls have been suggesting Scioli will get up to ten percentage points more votes than Mauricio Macri, the main opposition presidential candidate, in Sunday’s Paso.

• But opinion polls have been unreliable in the recent past and to try and be doubly sure, Scioli is appealing to swing voters and to the middle ground.  In an interview published yesterday, Scioli said that if he becomes president he will gradually remove foreign currency controls – an issue important to the middle classes.  He also spoke in support of middle class desires for better security, and for commercial and professional development: in short for what he called the desire for a “normal” country.

Looking Ahead: As a presidential hopeful Scioli is trying to maintain the loyalty of the government’s core supporters – including traditional hard liners and ‘machine’ politicians represented by the likes of Aníbal Fernández – while also reaching out to middle class voters interested in more market friendly policies. While he stands a reasonable chance of balancing the two ahead of Sunday’s Paso, the tension between them is likely to persist for much longer.

Development: On 3 August José Dirceu, the former cabinet chief of Brazil’s former president Lula da Silva (2003-2010), was arrested, accused of being the mastermind behind the corruption scandal at state-owned oil company Petrobras.

Significance: Dirceu’s arrest puts Lula, the ruling Partido dos Trabalhadores (PT) and, by extension, President Dilma Rousseff back in the firing line, ahead of nationwide protests called for 16 August. Dirceu was the mastermind of the ‘mensalão’ scheme, the cash-for-votes scandal that operated in 2003-2005 and badly damaged the Lula government. Already under house arrest in Brasília as he completes the final years of his sentence over the mensalão, Dirceu now faces being transferred to a prison in Curitiba, in the southern state of Paraná, where ‘Operation Car Wash’, the official investigations into corruption at Petrobras is based. The question now is whether Dirceu will implicate Lula in return for a lighter sentence.

• According to federal prosecutors, based on testimony from some of the plea bargainers already arrested, Dirceu appointed Renado Duque to become director of services at Petrobras. From that point on, the ‘petrolão’ scheme, by which construction companies colluded and overbid on Petrobras infrastructure projects, with the surplus cash going to corrupt executives and politicians, became institutionalised. While Dirceu was not accused of benefiting personally from the mensalão scheme, it is alleged that he received R$39m (US$11m) from the petrolão operation between 2006 and 2013.

• Alongside Dirceu in the latest, 17^th phase of ‘Operation Car Wash’, a Petrobras engineer and a lobbyist were also placed in preventative detention; a further five were held under temporary arrest, including Dirceu’s brother, Luiz Eduardo de Oliveira e Silva. Oliveira was Dirceu’s partner in his consulting firm JD Consultoria, which was allegedly used to launder the petrolão bribes as fees.

• As most of the evidence implicating Dirceu was gathered from prisoners seeking lighter sentences, the PT is now seriously concerned that those under arrest will seek to connect Lula with the scheme. According to some party members quoted in Estadão newspaper, federal prosecutors have told some of those in preventative detention that if they hand over the former president, they will get out quickly. In particular the PT fears that João Vaccari Neto, the former party treasurer under arrest, Oliveira, and possibly Dirceu himself, may now implicate Lula.

• Already the opposition is seeking to pile on the pressure. Senator Aloísio Nunes, from the Partido da Social Democracia Brasileira, said that the arrest of Dirceu showed the operation was getting “very close” to Lula and Rousseff. The leader of the Democratas party in congress, Mendonça Filho, said the latest developments showed the PT was a “criminal organization”.

• The party is due to meet today (4 August) to discuss its response to Dirceu’s arrest. After a small parliamentary recess, the government had hoped to relaunch with a new campaign to “humanise” Rousseff, putting her on TV more to get her message across. The government had also hoped that the recent bribery allegations against Eduardo Cunha, the president of the lower chamber of congress and a perennial thorn in the executive’s side, would make it easier to pass its legislation. Both plans now appear to be in tatters.

Looking Ahead: In recent weeks, Lula had jokingly told reporters that he expected to be the next to be arrested by ‘Operation Car Wash’. Now that comment is starting to look like a prediction. There are rumours that should that happen Lula might take advantage of his Italian citizenship, acquired through marriage, to flee the country.

Development: On 3 August HSBC Plc announced that it had sold its Brazilian division to Bradesco for US$5.2bn.

Significance: By purchasing HSBC, Bradesco now rivals Itaú Unibanco as the largest bank in Brazil. Its assets are now valued at R$1.193trn (US$348bn), compared with R$1.295trn for Itaú. Taking over HSBC means that Bradesco has taken on 5m extra customers, R$168bn in assets, and 851 bank branches in 529 cities across the country. HSBC, which is shifting resources to Asian markets, will continue to maintain a small presence in Brazil to attend to its business clients.

• According to the press release from HSBC, the two reached agreement on 31 July, and the weekend was spent hammering out the details. The price tag was above market expectations of US$4bn.

• In its own statement, Bradesco said that the purchase would make possible “economies of scale and platform optimisation, with wider national coverage, consolidating its leadership in a number of bank branches in several states, as well as reinforcing its presence among the high-net worth sector”.

Looking Ahead: Brazil’s banking sector is proving resilient even as the domestic economy faces a recession, high inflation and a weakening currency. Bradesco announced last week that it earned R$4.5bn in the second quarter, its best quarterly results ever.

Sierra Oil Wins Round 1 Licences: Mexico’s Sierra Oil and Gas led the only consortium to win licences in the first phase of the country’s Round 1 hydrocarbons licensing auction, announced on 15 July. Sierra, in partnership with Talos Energy of the US and Premier Oil of the UK, was declared the winner of the shallow water Blocks 2 and 7 in the Gulf of Mexico. Under the bidding rules, companies were required to offer a share of profits to the government and a minimum level of investment in developing the blocks. Mexico’s regulator, Comisión Nacional de Hidrocarburos (CNH), said that the consortium had offered the government 74%-86% of the profits from Block 2 (off the coast of Veracruz) and 83%-88% of the profits on Block 7 (facing the coast of Tabasco). The CNH estimated that investment in each block would be around US$1.3bn over the next five years. Each licence has a 30-year term. Contracts will be signed in August.

Falabella subsidiary boosts Colombia investment: Department store Sodimac Colombia, in which Chile’s Falabella has a 49% holding, says it is boosting its 2015 investment by 46.7% to US$81.8m. The chain, which is 51% controlled by Colombia’s Corona, said the money would be spent on opening new stores, refurbishing existing outlets and offering new online services. General Manager Miguel Pardo said the company had opened a new Homecentre-branded store early this year, and planned at least one more. First quarter sales in Colombia had grown by 10.7% year-on-year. Sodimac also operates retail chains in Peru, Argentina, Brazil and Uruguay.

Grupo Alfa fails in takeover bid for Pacific Rubiales: In early July Alfa SAB of Mexico and Habour Energy of the US dropped their US$1.7bn takeover bid for Pacific Rubiales, the Colombia and Canada-listed oil company. The bid was seen as a key move to develop a multinational Latin American oil company but faced resistance from a Venezuelan-based group of minority shareholders, who with a 20% stake in the company were able to reject the combined offer of 6.50 Canadian dollars a share as insufficient. The O’Hara group that blocked the takeover is also known as ‘Bolichicos’ because of its claimed proximity to the Venezuelan government. According to press reports, the Bolichicos managed to postpone a special shareholders’ meeting to consider the Alfa-Harbour offer to 28 July. In advance of the meeting, Alfa-Harbour improved the offer to C$7.00, but this was insufficient to meet the Bolichicos’ demand for C$9.0. Analysts said that Pacific Rubiales, which has been impacted by low oil prices and the ending of its licence to operate a key production field in Colombia, will now have to reconsider its strategy. As far as Alfa is concerned, Andrés Bezamilla, an analyst at Mexican brokers Valmex, said, “There are two scenarios. In the first, the company will look for other partners to bid in Mexico’s licensing rounds. In the second, it will give Pacific some time to think it over and then come back with a new offer. The positive thing is that it hasn’t allowed itself to be pushed by O’Hara into increasing the offer price.”

Profits down for the top 500: According to Chile-based AmericaEconomía Intelligence, profits at Latin America’s top 500 private sector companies dropped for the second year running in 2014, falling by 41% to US$2.48bn. There hadn’t been a two-year consecutive fall in earnings since 2001-2002. The fall was attributed to a number of factors, including the end of the commodities boom, the depreciation of local currencies against the US dollar and the fact that many of the companies are based in economies that experienced slow growth. Of the top 500, 203 companies are based in Brazil, 119 in Mexico, 65 in Chile, 44 in Argentina, 30 in Peru and 24 in Colombia. Brazil and Argentina – together home to about half the Latin American total – experienced economic stagnation last year. Andrés Almeida, head of the team that wrote the report, noted, “This is a new and less prosperous era. The commodities super-cycle is over. Profits and sales growth experienced from the 1990s to now cannot be maintained. Then, there was explosive growth in the commodities sector. Now prices have fallen and are stabilising.”

Carrefour does well in Brazil: Despite the slowdown in the Brazilian economy, sales by the French retailer Carrefour rose by 7.1% year-on-year in the second quarter, company executives said. Carrefour was doing better in the Brazilian recession than its also French-owned rival Casino, because a greater proportion of its sales were food or food-related, and spending on food items tends to be inelastic in a downturn, officials commented. Globally, Carrefour said that sales growth had slowed because of competition in France and a fall in consumer spending in China. Second quarter sales were EUR21.4bn (US$23.2bn). Excluding energy and forex fluctuations, sales grew by 2.6% in the period, down from 3.2% in the first quarter. Sales in Spain and Brazil were the bright spots. Brazil is the company’s second largest market after the home market in France. Carrefour’s Financial Director Pierre-Jaen Sivignon said that a global EBIT of EUR2.51bn-EUR2.53bn seemed a “reasonable” forecast for this year. Carrefour was considering listing its Brazilian subsidiary, but short-term capital market conditions in Brazil were not appropriate for an IPO. In any case, he noted, “we don’t need an IPO to support our growth in Brazil”.