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*** Russian S-400 for China.  On 27 June, Russia’s state news agency RIA Novosti reported that Russia may sell S-400 Triumf surface-to-air missile systems.  China will receive an export version of the system that will be developed by 2017.  According to the agency, “the Chinese will be the first buyers of this system”.

*** Russian general says base in Tajikistan at risk.  The commander-in-chief of Russian Ground Troops, Col-Gen Vladimir Chirkin, said on 26 June that “there are many problems” with the signing of an agreement for the extension of the Russian military base in Tajikistan.  The Tajik side has apparently proposed to reduce the period of the extension to 10 years.  The 201st Russian Military Base in Tajikistan is home to 7,000 Russian troops and is a key component in Russia’s presence in Central Asia.

Speaking to the Defence and Security Committee of the Russian upper house of parliament, Chirkin also warned that “local military conflicts” involving Uzbekistan, Tajikistan, and Kyrgyzstan could erupt “in connection with the predicted deterioration of inter-state disagreements in the sphere of energy, water, and land use”.

*** A small Russian reminder to China.  Russia has committed itself to a very close strategic relationship with China.  However, in a reminder to Beijing that Moscow has other options as well, it is to hold a joint counter-terrorism drill with India near the Mongolia-China border in August.  The war games, called INDRA-2012, will will include 250 troops from each side at a training range in eastern Russia.

*** Japan-South Korea military agreement.  Japan is due to sign a “non-combat military pact” with South Korea which will encompass the sharing of military intelligence.  Seoul has completed its necessary domestic political procedures and Japan is expected to complete its this week.

A South Korean military official says: “[South Korea] needs the pact on sharing military intelligence with Japan because we have to use Japan’s intelligence assets, including its spy satellites and high-end surveillance aircraft.  It is an undeniable fact that the existence of Japan is important for our national security.”

A senior official from South Korea’s foreign ministry made clear that the collaboration was not just about North Korea.  He was quoted by the Yonhap news agency as saying: “To cope with the rise of China, the military-intelligence pact with Japan is needed to boost our intelligence capability.”

Separately, Philippines Foreign Secretary Albert del Rosario will visit Japan from 27-29 June to discuss, amongst other matters, cooperation over maritime security.

Real annualised GDP growth was 4.0% in 2012, following a result of 3.6%  in the fourth quarter, according to the latest (30 January) report from the finance ministry (SHCP).

On the strength of this both the central bank (Banxico) and local private analysts nudged up their 2013 forecasts. Banxico now expects annual growth of 4.03% and inflation of 3.66%, with underlying inflation of 2%-4% and a stable exchange rate of about  M$12.69/US$.  Banco Ivex is more cautious, predicting a GDP result of 3.4%, with inflation of 3.66%. It forecasts a year-end exchange rate of M$12.40/US$. Rodolfo Campuzano, an economist at the bank, said in a late January press conference that “the only work the government has to do is to deliver what has been promised; otherwise the markets will feel deceived, undermining investor confidence”.

On 22 January the central bank governor, Agustín Carstens, said that in his opinion, it was still “not opportune” to cut Banxico’s benchmark interest rates, despite the fact that the economy was showing “some deflationary tendencies”. Carstens gave an interview after Banxico held interest rates steady at 4.50% for another month.

Rates have now been steady since June 2009.  He explained that while the bank had observed an “important fall” in the rate of inflation since September, which has taken the underlying rate under the 3% target set by Banxico, and there are still signs of “weakness in the domestic and international economy”, in his opinion it is still not the “right time” to apply a cut. He said that he was in favour of the deflationary scenario “consolidating itself before taking that step”. End-year inflation was 3.57% in 2012, down from 4.8% in September. The peso was trading steady at M$12.67/US$ on 7 February.

Unemployment falls

According to the latest Inegi figures, unemployment in the economically active population fell to 4.47% in December 2012, compared with 4.51% the previous month. While unemployment figures tend to fall slightly during the Christmas period (due to seasonal employment gains), the seasonally-adjusted unemployment figure ,which takes into account such fluctuations, stood at 4.96%, 0.15 percentage points lower than in November, suggesting that permanent jobs had been created in the period.

Inegi also reported that the rate of underemployment in December was 7.6%, down from 8.2% in December 2011. Underemployment is considered an important indicator in Mexico, given that the Inegi employment figures are very broad, including anyone that has worked six hours a week in the past month.

• Supporting MSME’s

President Peña Nieto in January inked a decree to create a national institute of entrepreneurship (Instituto Nacional del Emprendedor) in support of micro, small, and medium enterprises (MSME), which he called “the heart of economic activity” in Mexico. He said that they supplied 70% of jobs in Mexico and contributed more than one-third of GDP. Peña Nieto, who first announced the decree on 7 December at a meeting with business leaders at the Los Pinos presidential palace, said that there was a need for “an ecosystem that contributes to the development of new entrepreneurs”, and promotes and protects them. Productivity gains and economic growth to lift the real income of Mexicans, were the only real ways to address poverty, he said.

• Investor friendly

At a ceremony to open an plant in Silao, in the central state of Guanajuato, set up by the German automobile manufacturer Volkswagen, President Peña Nieto said his government would be “an ally of big investors” in order to generate jobs and economic opportunities. VW has invested US$550m in the plant, which aims to produce 330,000 engines annually and will provide “over 700 new jobs in the medium term”,  according to a company statement.

ARGENTINA | YPF. El 9 de mayo, la firma petrolera controlada por el Estado argentino, Yacimientos Petrolíferos Fiscales (YPF), informó ganancias netas del primer trimestre de Arg$1,26mm (US$246m, a la tasa de cambio oficial), cayendo un 2,8% año en año con relación al mismo periodo del 2012. YPF quedó bajo control del estado en mayo del 2012, después de que el gobierno argentino expropió (hasta ahora sin compensación) una participación controladora del 51% de la firma Repsol de España, sobre la base de que la compañía no había invertido suficientemente en el desarrollo de los depósitos de hidrocarburos del país, específicamente su vasto depósito de esquisto bituminoso de Vaca Muerta en el sur del país. La factura de Argentina por la importación de combustibles llegó a casi US$10mm el año pasado, y se espera que alcance entre US$13mm y US$15mm este año.

Consiguientemente, YPF reveló un nuevo plan de desarrollo de US$7,0mm para 2013-2017. Sin embargo, dado el incierto ambiente operativo en el país la firma, corta de dinero, ha encontrado difícil atraer a socios internacionales para ayudarle a financiar y ejecutar su ambicioso plan de desarrollo, que prevé unos US$4,5mm en financiamiento privado. Sin embargo, el 16 de mayo, las acciones de YPF se elevaron en Buenos Aires por más del 12%, después de que la compañía dijo que había firmado un acuerdo con la gran empresa petrolera de EU, Chevron, para definir los términos y condiciones de la inversión de Chevron de hasta US$1,5mm en Vaca Muerta, anunciada por primera vez a fines del año pasado. En una declaración, YPF dijo que el proyecto piloto conjunto incluiría la perforación de más de 100 pozos no-convencionales en los próximos 12 meses, específicamente en las áreas de Loma La Lata Norte y Loma Campana (en la provincia de Neuquén). YPF apunta a perforar 132 pozos petroleros en Vaca Muerta este año. El último acuerdo se firmó a pesar del hecho de que los activos de Chevron en Argentina fueron congelados a comienzos de este año, como parte de un caso de US$19mm en la corte medioambiental de Ecuador. Sin embargo, el congelamiento (que incluye el 100% del capital y dividendos y el 40% de las ventas de petróleo de Chevron en Argentina) no cubre futuras inversiones por Chevron, sugirió a fines de marzo el equipo legal que representa a los demandantes ecuatorianos.

Después del anuncio del Boden, las acciones de YPF se hundieron agudamente el 8 de mayo, tanto en la bolsa de valores local, cayendo un 4,81%, y un 3,46% en el New York Stock Exchange. Ese mismo día, YPF emitió bonos para pequeños inversionistas por tercera vez hasta la fecha este año. La firma logró reunir Arg$312m (llevando la cifra combinada para las tres emisiones este año a Arg$750m), pero sólo ofreciendo un rendimiento del 19% anual.

BRASIL | Mitsui nuevo socio en Jiraú. El conglomerado japonés Mitsui Group, anunció el 14 de mayo la compra del 20% de la participación en la planta hidroeléctrica Jiraú, en el nordeste de Brasil, de la firma francesa de energía, GDF Suez. El proyecto de Jiraú de 3.750MW sobre el Río Madeira en el estado de Rondônia será la segunda mayor planta hidroeléctrica de Brasil y como tal es un proyecto prioritario para el gobierno brasilero. GDF Suez tiene un 60% de participación en el proyecto, con el restante 40% propiedad de una compañía local de distribución de energía afiliada al gobierno brasilero. De acuerdo con una declaración de Mitsui, la firma llegó a un acuerdo para la compra de parte de la participación de GDF Suez por US$687m. Y agregó que la adquisición era parte de la estrategia de la compañía de expandir su presencia en América Latina. El año pasado, Mitsui y otra firma japonesa, Enac Corporation, anunciaron la compra conjunta por U$77,8m de Ecogen Brasil, el mayor proveedor de servicios al sector de la energía de Brasil.

CHILE | Boom de inversión en la construcción. El 9 de mayo el Presidente de Chile, Sebastián Piñera, dijo que la inversión en el sector local de la construcción fue de US$30mm en el 2012, subiendo un 9% sobre el año anterior. El sector es ahora una de las fuerzas conductoras de la economía, representando el 48% de las nuevas inversiones, proveyendo unos 700.000 empleos y contribuyendo un 7% al PIB total. El Presidente Piñera dijo que el boom de la construcción era parcialmente el resultado de las ambiciosas políticas de inversión en infraestructura de su gobierno, bajo el cual se han construido 3.513kms de nuevas carreteras, 1.580kms de autopistas, y se han modernizado y mejorado 1.500kms de carreteras rurales.

Congress approved a seminal piece of legislation on 7 November aimed at cracking down on official corruption and stamping out impunity. While the bill was hailed by the new prime minister, César Villanueva, as advancing the government’s zero-tolerance policy toward corruption, it was overshadowed by the fallout over another vote in congress a week earlier to appoint deputy Martha Chávez as coordinator of the congressional justice commission’s human rights subgroup. The incongruous appointment of Chávez, who has defended some of the most egregious human rights violations of the authoritarian government of Alberto Fujimori (1990-2000), confirmed just how out of touch congress is, although the commission eventually acted to remove her from the position.

Public sensitivity to (and suspicion of) official corruption is particularly acute in Peru after a decade of Fujimori’s kleptocracy. The new legislation means that public officials will now be able to be charged for corrupt acts even if these were perpetrated before their election (or appointment in the case of employees of state agencies or civil servants).

Susana Silva Hasembank, the coordinator for the high-level anti-corruption commission (CAN), said the legislation would “strengthen [Peru’s] legal framework to prevent impunity”. She added that “it brings our legislation into line with international standards in the fight against corruption.” The CAN, which was enshrined in law in January 2013, coordinates between government bodies at the regional and national levels as well as the business community to propose long-term policies for preventing and combating corruption (see sidebar).

Martha Chávez

Restoring public confidence in congress will take more than this new bill targeting official corruption. Congress is the least trusted branch of government, with a single-digit approval rating in opinion polls, and its credibility took a real knock a week earlier when Martha Chávez was elected by the six-strong human rights subgroup as its coordinator on 31 October. Given that the subgroup has taken upon itself to evaluate the conclusions of the truth and reconciliation commission (CVR), drawn up in 2003 to review the armed conflict of 1980-2000, her election provoked a strong reaction. Chávez slammed the CVR report as biased, a vindication of Sendero Luminoso (SL) guerrillas and thoroughly discredited. She said she would lead a corruption investigation into the authors of the report to “find out who paid them” to reach their conclusions “whitewashing Sendero”.

Peruvian human rights groups, CNDDDHH and Aprodeh, excoriated congress for appointing Chávez to the role, claiming that she had no respect for human rights (not that respect for human rights has always been a prerequisite for leading human rights bodies - China, Cuba, Russia and Saudi Arabia won three-year seats on the United Nations Human Rights Council only this week). They called for the congressional justice commission to remove her and encouraged public protests against her appointment; on 5 November some 1,000 people took to the streets of Lima to protest.

Chávez stood firm, even goading President Ollanta Humala for being “a hostage to human rights groups”. However, despite initially voting to uphold her appointment, a week later, on 12 November, the justice commission responded to the protests, voting by nine votes to six to disband the human rights subgroup. Chávez called the decision a formal coup de grâce much like Sendero administered to its enemies. She maintained, however, that she had already achieved what she had set out to do, “stripping the CVR of its sacrosanct reputation”.

• Anti-corruption commission

The anti-corruption commission (CAN) comprises the prime minister and justice minister, presidents of both the judicial and legislative branches, as well as the heads of the constitutional court, the national judicial council, the national assembly of regional governments, and the association of municipalities of Peru.

One year on since TPA with US took effect: US and Panamanian officials recently hailed the one-year anniversary of the implementation of the US-Panama Trade Promotion Agreement (TPA). According to a 19 November press release by the US State Department, bilateral trade with the US – Panama’s largest trading partner, accounting for approximately 23% of all two-way trade – grew by “roughly 20 percent to more than $10 billion in 2012 and has only continued to increase” since the TPA took effect on 31 October 2012. Another press release by the Office of the US Trade Representative highlighted the various positive results for the US of the agreement. Examples include the fact that from “November 2012 through August 2013 exports of agricultural products increased 18 percent to nearly $500 million. Exports of soybeans and soy products increased 94 percent to $72.5 million, and dairy product exports grew 24 percent to $40.8 million. Pork exports were up 70 percent to $17.6 million, and beef and beef products exports increased 42 percent to $7.6 million. Wheat exports grew 18 percent in the same period, to $40.1 million, while processed potato product exports increased 21 percent to $8.9 million”.

ACP: On 25 November the Panama Canal authority (ACP) reported that the Canal had contributed US$981.8m to State coffers in last fiscal year, which ran to 30 September 2013. This is 2.2% higher than that budgeted by the ACP for this year. It brings the total contribution to government coffers since the Canal’s administration passed into Panamanian hands at the start of the new millennium to US$8.5bn, according to an ACP communiqué. The ACP statement added that the US$981.8m included US$369m from customs duties linked to the traffic of goods through the Canal, and US$2.2m in payment for services.

• Global Entry Program

During a recent visit to Panama City, US Vice-President Joe Biden announced that the US is adding Panama to its Global Entry Program, which enrols travellers in a pre-screening security process that simplifies their entrance procedure into the US. According to a US embassy press release, Biden praised this stating: “Facilitating the flow of people is good for trade, it’s good for tourism, and it’s good for relationships between the countries…It’s a reflection of our friendship and our trust in Panama and the Panamanian people”.

PERU | Petroperú share sale. On 24 March the government published guidelines governing the sale of up to 49% of shares in the state-owned oil firm, Petroperú. In December last year congress approved a proposal by the government to open up Petroperú to private participation for the first time as part of plans to reorganise the firm in order to strengthen its corporate governance and help raise funds to conduct the proposed US$3.5bn upgrade of Petroperú’s ageing Talara refinery; increase its fuel production levels form 65,000 barrels per day currently to 95,000bpd; and eventually cut some of the country’s fuel imports.

According to the share sale guidelines published in the official gazette, Petroperú will hold an Initial Public Offering (IPO) in the local stock market open to all investors. To this effect Petroperú will now contract an investment that will assist it with the IPO process, as well as an international consulting firm that will help it design the firm’s reorganisation strategy which will include the restructuring of its physical and financial assets, its operations and corporate governance.

PERU | Humala shores up economic ties with Canada. During his first official visit to Canada on 10 April, President Ollanta Humala told a group of Canadian businessmen in Toronto that his country is a “reliable” business partner as he urged Canadian businesses to continue investing in Peru. In recent years Canada has become Peru’s fourth largest export market thanks in large part to the significant amount of minerals that Canadian-owned mining companies operating in Peru ship back to their home country.

As a sign of the growing economic ties between the two nations, last year Canada’s Prime Minister Stephen Harper became the first Canadian head of state to visit Peru. Humala has now reciprocated by embarking on a three-day official visit to the North American country on 8 April.

During a meeting with Harper in Ottawa, the two men signed a new memorandum of understanding to promote bilateral trade and investment. Humala then headed to Toronto, to attend a business conference organised by the Canadian Council for the Americas (CCA), which took advantage of the visit to present Humala with its Statesman of the Year Award for 2013. In presenting the award the president of CCA, Kenneth Frankel, said that “Humala has demonstrated strong domestic economic leadership with financial management based on a robust economic policy while strengthening the financial reforms initiated in Peru”.

In accepting the award, Humala reaffirmed his government’s commitment to fight poverty and reduce inequality. Humala then took time to explain the main objectives of the mining sector reforms that his government is pursuing, including a proposal to change the way in which the country’s mining royalties (canon minero) are distributed between Peru’s regions. He said that the goal of the reforms was to “overcome the rentier vision and build a new mining [sector]”. However, in a bid to reassure mining sector investors that the reform would not result in changes to the operating environment in the sector, Humala added that “We are the government of a serious country that honours its promises and complies with what it signs”.

Until this week, the main opposition to a Kirchnerista successor to President Cristina Fernández is the Frente Amplio-Unen, an electoral coalition with eight parties and five presidential hopefuls. But, as with all coalitions, Frente Amplio-Unen is proving fractious, and there is still almost a year to go until the general elections. Debate within the grouping coalesces around the benefits of alliances at provincial levels when the parties are running as opponents at the national level.

On 19 November, the Unión Cívica Radical (UCR), the backbone of the coalition, announced that it would reject any alliances with other political parties at the national level. The decision prompted the exit of Elisa Carrió, a high-profile government opponent, from the coalition. “The decision by the UCR to not make alliances is the best way for Peronism to win the elections,” Carrió told reporters. “It is alright for the UCR to do what it thinks. But I do not commit suicide,” Carrió added. “I am leaving UNEN.” The Chaco province-born legislator, however, did not rule out all possibilities of competing for the presidential seat.

Another legislator from the Frente Amplio-Unen, Fernando Pino Solanas, said that Carrió’s decision to leave the centre-left coalition does not mean the end of the alliance. “I am a little surprised, I am just finding out. It is a pity,” he said about Carrio’s exit. “She [Carrió] is a founder of UNEN, it is a shame that this coalition could not keep the exemplary unity we sought from the beginning,” Solanas said in a television interview.

BOLIVIA | Exportando GLP a Brasil. Dentro de poco tiempo, Bolivia comenzará a exportar gas licuado de petróleo (GLP) a Brasil, reveló el Presidente Evo Morales el 28 de marzo, y ya está vendiendo al combustible a Paraguay, Perú, y Uruguay. Hablando en una conferencia de prensa en la ciudad central de Cochabamba, Morales dijo que el nuevo mercado sería abastecido por una planta en la provincia sureña del Gran Chaco, con una producción inicial de 1.000 toneladas por día, elevándose con el tiempo a 3.000 toneladas.

El GLP, normalmente una mezcla de propano y butano es utilizado principalmente en aparatos de calefacción y equipos de cocina, como también en aplicaciones industriales y vehículos. La planta en el Gran Chaco separa los líquidos del gas natural que Bolivia exporta a Argentina, para que pueda ser procesada en GLP. La planta actualmente está en la fase de prueba.

COLOMBIA | Reducción de la pobreza. El departamento administrativo nacional de estadísticas (Dane) de Colombia difundió el 24 de marzo sus datos sobre la pobreza, que muestran que la tasa nacional de la pobreza ha estado cayendo constantemente durante los últimos años, gracias al consistentemente sólido crecimiento económico y a varios programas sociales implementados por el gobierno liderado por el Presidente Juan Manuela Santos. Los últimos datos de Dane confirman que esta tendencia continuó el año pasado y proveería un estímulo para el gobierno, que ha continuado dirigiendo los gastos sociales hacia la provisión de mejor educación, acceso a la vivienda y al cuidado de la salud, y otros servicios sociales a los pobres de Colombia.

Los datos del Dane también muestran que una significativa reducción de un punto porcentual en la tasa de la pobreza extrema el año pasado, a 8,1%, la tasa más baja de la pobreza extrema registrada en Colombia en una década. De acuerdo con el Dane, los resultados significan que 748.000 colombianos salieron de la pobreza en el 2014, mientras que 407.000 se escaparon de la indigencia.

Sin embargo, a pesar de tales progresos, el Dane señala que aún permanecen 13m de personas consideradas pobres en Colombia, y 3,7m que viven en la pobreza extrema de una población total de 48m de habitantes.

La ONU dice que Colombia debería esforzarse en reducir su coeficiente Gini a 0,47 durante el próximo par de años. El Gini mide los niveles de la desigualdad económica dentro de una sociedad, otorgando un puntaje de 1,0 a las sociedades totalmente desiguales y 0,0 a las sociedades perfectamente igualitarias.

COLOMBIA | Exitosa nueva emisión de bonos. El ministro de finanzas, Mauricio Cárdenas, confirmó la semana pasada que el gobierno había ubicado exitosamente US$1mm en bonos soberanos a 30 años en los mercados internacionales.

La operación fue una reapertura de la emisión de bonos con maduración en el 2045 que el gobierno hizo en enero y que ahora ha recolectado US$2,5mm. Los nuevos bonos ofrecen un rendimiento de 5,04%, levemente menor que el 5,06% ofrecido por la emisión original, lo que significa que la confianza de los inversionistas en letras de Colombia permanece alta. Esto también es sugerido por el hecho que la emisión fue superada por la demanda surgida que llegó a unos US$4,9mm.

Cárdenas dijo que el éxito de la venta de bonos otorga a su gobierno más flexibilidad para ajustarse en tiempos económicamente inciertos, y muestra que los inversionistas financieros internacionales confían en los estrategas económicos colombianos.

PERÚ | Crecimiento, pero a un ritmo menor. La economía creció 1,68% en enero, comparado con igual mes del 2014, reveló Alejandro Vilchez, el director del instituto nacional de estadística e informática (Inei). A pesar de la relativamente lenta tasa de crecimiento, el resultado significa que la economía peruana ahora ha registrado crecimiento durante los 22 meses consecutivos pasados.

Vilchez dijo que el crecimiento fue conducido por la incrementada actividad en el sector clave de la minería e hidrocarburos, que se expandió en 5,6% respaldado por la incrementada extracción de cinc (12,6%), plata (12%), y molibdeno (2,6%), durante el primer mes del 2015.

Otros sectores que contribuyeron al crecimiento general en enero fueron el sector bancario (9,86%), las telecomunicaciones (9,63%), y las ventas minoristas (3,56%). Los sectores que  no han tenido un buen desempeño fueron: las manufacturas, la agricultura, y la pesca, que se contrajeron en-5,54%, -2,99%, y -23,51% respectivamente, cuando se compara con enero del 2014.

Los datos del Inei también muestran que las personas con trabajo en la región de Lima se incrementaron en 3,7% entre diciembre del 2014 y febrero del 2015.

• Extienden las licencias por maternidad en Perú

El congreso nacional de Perú aprobó el 22 de marzo una resolución ratificando la Convención 183 de la Organización Internacional del Trabajo (OIT) sobre beneficios de protección de la maternidad. Entre otras cosas, la convención de la OIT estipula que las licencias pagadas por maternidad deben ser de al menos 14 semanas y que al menos seis semanas de esa licencia deben ser destinadas al periodo siguiente que la madre haya dado a luz. Hasta ahora, la legislación laboral de Perú autorizaba 12 semanas de maternidad pagada, pero siguiendo a la ratificación de la convención ese periodo se incrementó automáticamente a 14 semanas. Perú se ha convertido en el 30^mo país que ratifica la Convención 183.

COLOMBIA | Turning to the IMF. The government led by President Iván Duque has appealed to the International Monetary Fund (IMF) for the extension of a US$11bn credit line to mitigate the economic impact of the coronavirus (Covid-19) pandemic. The finance minister, Alberto Carrasquilla, announced the request on 7 April, the day after Duque extended the lockdown in Colombia (which began on 27 March) until 27 April.

In a virtual appearance before a lower chamber of congress commission, Carrasquilla said that while Colombia had international reserves there was a risk of an economic and financial crisis if the lockdown was prolonged. Carrasquilla was keen to stress that there was no immediate need for the funds but that it was crucial to have a safety net in place if necessary, especially as the scale of the present economic challenge confronting Colombia, compounded by low oil prices, was unprecedented.

“Without a doubt this second quarter will be the worst in our history,” Carrasquilla said, adding that the month-long quarantine could cost the country 6% of GDP. Carrasquilla said that Colombians would need to display “resilience, innovation, and creativity” to pull through the crisis.

President Pedro Castillo once again drew the ire of congress on 27 June when he snubbed a congressional commission investigating his alleged involvement in the granting of corrupt contracts [WR-22-09]. Castillo’s failure to meet the commission came as his government is also taking heavy criticism for a bill that would prevent the media from covering corruption allegations until they are heard in court.

Benji Espinoza, a member of President Castillo’s legal team, had previously indicated on 26 June that the president would meet the congressional commission at the presidential palace Carondelet. The following day, however, Espinoza announced that Castillo would not attend the meeting as “unfortunately, this is a commission that isn’t seeking truth or acting objectively but is aiming to bring charges”.

With the commission expected to present its findings as soon as 30 June, Espinoza expressed doubts over the impact that Castillo’s testimony would have on its conclusions. The commission’s president, Héctor Ventura of the right-wing Fuerza Popular (FP, Fujimoristas), accused Castillo of showing “total disregard for the whole country,” arguing that he had a “moral obligation” to testify.

Castillo has done his best to shut down investigations into his meetings with the lobbyist Karelim López Arredondo, who – according to the attorney general’s office – met the president at his private residence to secure state contracts for infrastructure projects. As well as snubbing the congressional commission, Castillo’s team lodged a legal appeal seeking to derail the investigation by the attorney general’s office, arguing that sitting presidents can only be investigated for treason or electoral foul play.

Those efforts were foiled on 24 June with a precedent-setting verdict by the supreme court’s preliminary investigations magistrate, Juan Carlos Checkley. Checkley ruled that the attorney general’s office had a constitutional responsibility to fight corruption and that this took precedence over anything else. He also ruled that the constitution did not preclude a preliminary investigation into alleged presidential wrongdoing, although he made it clear that a full investigation with the intention to prosecute would contravene the constitution and would not be permissible until after Castillo leaves office.

PL moves against Castillo

For months, there has been mounting hostility towards President Castillo from the far-left Perú Libre (PL), the party with which he came to power. On 29 June, PL’s leader, Vladimir Cerrón, published a statement signed by the party’s national executive committee, its political commission, and its diminished legislative bench, issuing a unanimous call for Castillo to “irrevocably resign” his membership.

The statement accused Castillo of promoting the fragmentation of PL, following the defection of less-hardline deputies to the breakaway parties Perú Democrático (PD) and the Bloque Magisterial de Concertación Nacional (BMCN) [WR-22-02]. It also maintained that Castillo’s policies “do not reflect those promised during the election campaign,” accusing him of “implementing a failed neoliberal agenda”.

PL has lost legislators at a rapid rate since the outset of the congressional term in July last year. At that point, it was the largest party in congress with 37 of the 130 seats. Fewer than half of them remain. Internal differences have seen a steady stream of defections with just 17 deputies remaining in the legislative bloc. PL is now the second largest party in congress after Keiko Fujimori’s FP with 24, although it has only one more deputy than the centrist Acción Popular (AP).

Castillo responded to the PL request by thanking the party for having given him the opportunity to run on its presidential ticket. He said he would make a decision in due course, but he stressed that PL, and all of the parties in congress, needed to focus on issues of import, such as the food security crisis, exacerbated by the war in Ukraine, and the coronavirus (Covid-19) pandemic, a fourth wave of which is now underway, the health minister, Jorge López, announced on 26 June.  

The justice minister, Félix Chero, said that he was confident that Castillo would resign from the party forthwith rather than face expulsion. It is not clear precisely what this will mean going forward. The opposition has long claimed that Cerrón wields an undue influence over Castillo, and that he pressured for the PL to have a strong presence in the cabinet. The president’s immediate response suggests he is keen to avoid antagonising Cerrón, given his government’s scant congressional support, and pushing PL into open opposition.

Government bill stokes press concerns

The Peruvian press association Consejo de la Prensa Peruana (CPP) has criticised a government bill submitted on 24 June as an “attack on citizens”, claiming that it would “shield those involved in suspected corruption”. The bill would make it a crime to publish leaked information on judicial processes, punishable by up to four years in prison. Prime Minister Aníbal Torres claimed that the bill was necessary to prevent “the commercialisation of confidential legal information” and said that the press would be free to report on cases once they had come to trial.

DOMINICAN REPUBLIC | Set for strong growth in 2023. Dominican President Luis Abinader said last week that he was “optimistic” about the economy next year, attributing the good outlook in part to the strength of a productive alliance between his government and the private sector.

Addressing a national congress of the private sector lobby, Federación de Comerciantes y Empresarios de la República Dominicana (Fenacerd), President Abinader said he expected the economy to grow between 5.0% and 5.5% in 2022, easing down slightly to 4.0%-5.0% in 2023.

Abinader acknowledged challenges posed by a difficult global economy, which is still suffering from the effects of the coronavirus (Covid-19), an energy and cost of living crisis linked to the war in Ukraine, and generalised monetary tightening.

Available data shows all these things have a measurable local impact, but that the domestic economy is still better placed than some of its neighbours to absorb the turbulence – as outlined in a recent report by international credit ratings agency Fitch, released last month [WR-22-43].

With activity data indicating underlying strength in services, hotels and restaurants, health, construction, and free trade zones, a report by the economy ministry released on 14 November estimates that exports this year will come in at US$14bn; remittances at US$10bn; tourism receipts at US$8.5bn; and foreign direct investment (FDI) at US$3.8bn. These inflows constitute a major foreign currency “buffer” against economic shocks. They also explain why, unlike many other Latin American currencies, the Dominican peso has actually been strengthening against the US dollar: it appreciated by 6.4% in the first nine months of this year.

Inflation

The 12-month inflation rate in the Dominican Republic rose to 8.63% in September, prompting the central bank to hike its benchmark interest rate the following month by 25 basis points (bps) to 8.5%.

Chile’s President José Antonio Kast has appointed economist Bernardo Fontaine as the new chairman of Codelco, the world’s largest copper producer, with a mandate to streamline the state-owned mining company and return it to growth. Along with other changes to Codelco’s leadership, Fontaine’s appointment was framed by Chile’s Minister of Economy and Mining Daniel Mas in stark terms, citing a “worrying level of indebtedness” and a “stagnation in production” at the copper giant.

On 14 May the Kast administration officially named Fontaine as successor to Máximo Pacheco, who completed his four-year term on 25 May. Fontaine assumed the chairmanship on 26 May, alongside two newly appointed board directors: Luz Granier, a commercial engineer with public and private sector experience who had previously held senior positions in the ministries of mining, energy and public works, and Alejandro Canut de Bon, a lawyer who had previous led the legal teams of various mining companies.

Fontaine is an economist and commercial engineer who graduated from the Pontificia Universidad Católica de Chile. With over 30 years of professional experience, he has served on the boards of more than 20 companies spanning industry, finance, real estate, insurance, retail, logistics, and public services – including the traditional department store Falabella and the underground Metro de Santiago. Fontaine was forced to resign from Citigroup Chile in 1996 after an investment went sour with massive repercussions for taxpayers and pension funds.

During the second term of former president Michelle Bachelet (2014-2018), Fontaine entered politics when he became active in formulating economic policies for the opposition. Though officially an independent, he has close ties to Chile Vamos, the coalition of right-of-centre parties that held power during the second term of former president Sebastián Piñera (2018-2022).

Fontaine was elected a member of Chile’s Constitutional Convention in 2022 and became closely associated with the Kast campaign during the 2025 election and in the subsequent government handover period, helping design key policy measures for the administration’s first 90 days. He declined ministerial office but accepted the Codelco chairmanship, describing the challenge in blunt terms: “Codelco is running with a lead backpack. We need to lighten it.”

His appointment has not been without controversy. In November 2025, his foundation Ciudadanos en Acción was linked in press reports to alleged digital campaign bots targeting presidential candidates Evelyn Matthei and Jeannette Jara – accusations Fontaine flatly denied. Critics, including former Finance Minister Nicolás Grau, questioned his lack of direct mining sector experience. Opposition voices called it a politically motivated appointment at a critical moment for the company.

Fontaine’s arrival comes at one of the most turbulent moments in Codelco’s recent history. The company has been facing structural headwinds: aging ore deposits, delays in major expansion projects, a string of safety incidents including a deadly tunnel collapse at the El Teniente mine last year, and a debt burden that Fontaine himself summed up by noting that over the past four years the company transferred US$7bn to the Chilean state while increasing its own debt by more than that amount. The company’s medium-term goal remains a recovery to 1.7m tonnes of annual production by 2030.

Accounting scandal

In recent months, Codelco was hit by an accounting scandal, in which 2025 production figures were inflated to show that the company was rebounding, even though in reality output had fallen and reached its lowest level in nearly three decades. Following the internal audit that revealed the fraud, Codelco subsequently fired one executive and disciplined several others in May, referring the matter to public prosecutors to determine whether criminal conduct had occurred. Against this backdrop, Economy and Mining Minister Daniel Mas said that the new board would carry a special mandate to conduct a full investigation.

The appearance of a United Nations (UN) report concluding that the 2022 arrest of Peru’s former president Pedro Castillo (2021-2022) was “arbitrary” has increased pressure on president-elect Keiko Fujimori to consider his release.

Castillo, a left-winger, led a short and chaotic administration. He was arrested in December 2022 after leading a failed coup attempt; he had sought to remain in power, shut down congress, and override the judiciary. Castillo was eventually sentenced to 11 years, five months, and 15 days in prison for conspiracy to commit rebellion. He is presently being held in Barbadillo prison on the outskirts of Lima. 

The catalyst for re-examining Castillo’s case came from a recent report from the UN Working Group on Arbitrary Detention. It concluded that, during his prosecution, Peru had failed to uphold key due process guarantees, failed to produce a judicial warrant, and violated presidential immunity rules. Furthermore, the report stated that the government had violated Article 9 of the International Covenant on Civil and Political Rights, as well as Articles 3 and 9 of the Universal Declaration of Human Rights. Consequently, the panel called for Castillo’s immediate release and financial compensation for a miscarriage of justice. 

Domestic reactions in Peru were mixed. Conservative members of congress, many of whom are longstanding opponents of Castillo, expressed anger over what they termed an unwarranted intervention in Peru’s internal affairs. The foreign ministry countered that the opinions of a UN working group are not legally binding - a position challenged by several legal scholars. Conversely, the interim president, José María Balcázar, who has expressed political sympathy for Castillo previously and raised the possibility of a presidential pardon, acknowledged that the legal situation will need to be re-examined.

Possibly the strongest reaction came from Roberto Sánchez, who contested this year’s elections on the ticket of the left-wing coalition Juntos por el Perú (JPP) promising to secure Castillo’s release. Throughout his campaign, and as a symbolic gesture of solidarity, Sánchez wore the traditional wide-brimmed straw hat – known as a sombrero chotano – favoured by Castillo.

Following the UN report, Sánchez renewed his call for Castillo’s immediate release. His backing carries significant political weight; despite finishing as runner-up in the second-round run-off, he secured almost half of the total votes cast (49.9%). Nevertheless, a planned demonstration in Lima on 15 July was cancelled due to indications of low attendance.

Crucial to whether Castillo remains in prison or is released will be the stance of President-elect Fujimori, who has thus far observed a studied silence on the matter. Fujimori represents the other, more conservative and urban half of Peru, having achieved a narrow second-round ballot victory (50.1%) over Sánchez. There are indications that she may consider releasing Castillo as a goodwill gesture aimed at defusing deep-seated left-right polarisation. Such a move could also alleviate the prevailing urban-rural social friction since many indigenous communities would celebrate his release.

Jorge Nieto, who came fourth in the presidential elections running for the centrist Partido del Buen Gobierno (PBG), says he has urged Fujimori to “consider the pathways for the release of former president Castillo, so that the country may find space to de-compress and de-polarise”. He also framed the potential release of Castillo as a “symbolic policy of reconciliation”.

Not just Fujimoristas

A majority of Peruvians (61%) believe that the next prime minister should not be a member of Fuerza Popular (FP), the right-wing party of president-elect Keiko Fujimori, according to a survey by the national pollster Datum. A smaller 39% say they want political diversity within the ministerial team.

Putting human rights at the core of her foreign policy has, ironically, caused President Dilma Rousseff nothing but trouble.  This week Rousseff was subject to apparent complaints by Iran that she had done too much, and by Human Rights Watch and Cuban dissidents that she has not done enough.

Brazil’s foreign minister Antonio Patriota insists until he is blue in the face that there has been broad continuity in foreign policy from Lula da Silva (2003-2010) to Rousseff. That is a little disingenuous. The fact that Patriota was brought back from the US embassy in Washington DC in the first place signalled a shift in focus. The shift is subtle, but perceptible nonetheless. The main problem, however, is that there is still an inconsistency surrounding Brazilian foreign policy that undermines its ambitions to get a seat at the top table in forums like the United Nations Security Council (UNSC). Part of the ‘problem’ is that Brazil has a non-interventionist foreign policy written into its constitution. And, though it may well be the case that Brazil is being held to rather higher standards than some of the UNSC permanent members themselves, Rousseff at least seems to have grasped that Brazil needs to engage in some realpolitik in order to be taken seriously by the powers that be.

This new attitude has apparently been noticed in Teheran. Ali Akbar Javanfekr, the personal spokesman for Iran’s President, Mahmoud Ahmadinejad, complained to the daily Folha de São Paulo this week that Rousseff has “struck down everything Lula had achieved. She’s destroyed years of good relations.”

The Itamaraty (Brazil’s foreign office) was clearly taken aback. Faced with a flurry of requests for a response, Patriota avoided a direct comment on the Iranian’s statement, stating: “I have had normal contacts with the Iranians. At the UN General Assembly the Iranian foreign minister asked to see me. He telephoned on 7 September to wish me well. At the WTO [World Trade Organization] ministerial meeting I met Iranian officials and identified an interest in good political and commercial relations”. Patriota added that President Ahmadinejad has been invited to the Rio+20 conference on the environment and sustainable development in June (Patriota admitted that he did not yet know whether the Iranian would attend). Ahmadinejad’s failure to include Brazil on his recent Latin American tour did not go unnoticed, especially in the US.

Patriota likewise refused to comment on reports that Brazilian products like poultry and beef are being stalled at Iranian borders of late. According to Folha, the Brazilian Poultry Union (União Brasileira de Avicultura) says that chicken exports have been subject to “unjustified inspections” since October 2011, while the Brazilian food multinational JBS also claims that thousands of tonnes of beef have been held up at an Iranian port for three weeks.

The Rousseff administration claims that its treatment of Iran has not changed. Yet in March 2010, Brazil notably supported, for the first time, a vote at the UN Human Rights Council to send a human rights rapporteur to Iran. In December 2010 (then president-elect) Rousseff had also condemned (in an interview with the Washington Post) the stoning of an Iranian woman. However, last week, Patriota publicly reiterated to the UK’s visiting Foreign Secretary, William Hague, Brazil’s doubts about the effectiveness of sanctions on countries like Iran.

Libya and Syria
In March 2011 Brazil voted against the UN resolution to impose a no-fly zone over Libya, citing concerns about citizen safety. The Itamaraty later waited several months before recognising the Libyan National Transitional Council. It has also urged the UN and the European Union to remain engaged with Syria, arguing that the UN resolution on Libya was used to justify months of excessive military force and should not be repeated. In October 2011 it abstained (along with India, Lebanon and South Africa) in a vote on a legally binding UN resolution threatening sanctions against the Syrian government. Russia and China used their vetoes against the resolution. At the same time, a well-known Brazilian diplomat, Sergio Pinheiro, is the head of the UN Commission of Enquiry into human rights violations in Syria.

This week the US-based NGO, Human Rights Watch (HRW), accused Brazil of an ideologically driven foreign policy, rather than one based on universal respect for human rights. José Miguel Vivanco, HRW’s Americas director, accused Brazil of fence-sitting over the Arab Spring, while Philippe Bolopion, the United Nations director at HRW, told the daily O Estado that “Brazil should not act in the same way as the West. In truth, Brazil should be consistent with its positions in defence of human rights”. He noted that Brazil “has international weight as a democracy. By abstaining from condemnation of a dictator, the Brazilian government ends up legitimising a repressive regime”. At the same time, though, Vivanco acknowledged that things had “notably improved” under President Rousseff (presumably in reference to Iran).

Brazilian academics take a more nuanced view, noting that Brazil not only acts in line with its non-interventionist stance but also in defence of its extensive commercial interests in the Middle East  - which likely explained the delay in recognising the Libyan transition council, for instance. “At the end of the day, Brazil is following the UN principle of exhausting all pacific methods before an intervention,” points out one. However, there is a consensus that Brazil could be more active on human rights in the international arena, perhaps starting by adopting a more critical stance at the UN council of human rights.

Where does that leave Cuba?
President Rousseff will make her first presidential visit to Cuba on 31 January, bringing with her a commercial delegation. Rousseff will be under a lot of pressure to say something about human rights in Cuba. As a woman, a former political dissident and prisoner and a public defender of human rights, Rousseff risks looking hypocritical and cynical if she is not seen to say or do something in Cuba. Cuban dissidents, led by high-profile female activists, including the blogger Yoani Sánchez and the group Ladies in White (Damas de Blanco), have put in requests for an audience with Rousseff, to no avail.

Brazil did, however, grant Sánchez a 30-day visitors’ visa on 25 January. It is a symbolic and deliberately timed gesture of support (Cuba has never allowed Sánchez to travel) that should not go unnoticed in Havana. Sánchez, who petitioned Rousseff personally via a video message on her blog, wrote that she saw herself in a recently released photograph of Rousseff as a young political activist. “I feel like Dilma”, she wrote.

Unfortunately for Rousseff, she is going to Cuba just after the death of another hunger-striking political dissident, Wilman Villar, who died on 19 January, aged 31, after 51 days on hunger strike (see page 16). In a terrible irony, when Lula da Silva made his farewell trip to Cuba as president in February 2010, another hunger-striking dissident also died (Orlando Zapato Tamayo). Lula’s awkward refusal to comment at the time provoked outrage in Brazil and elsewhere.

Despite the pressure on her, Rousseff is likely to follow Lula’s example and make no public comment. The Itamaraty takes the view that talks should only take place in private and behind the scenes. But, as the conservative Brazilian daily O Globo editorialised on 26 January, “No-one expects that from one moment to the next the Brazilian government will buy into the Cuban dissidents.  But the country has all the conditions to create a bridge between the old revolutionaries, the dissidents, the opposition and the more dynamic sectors in Cuba. Brazil has credibility for that much”.

• Argentine dispute

Brazil’s powerful industrial federation Fiesp called for an audience this week with Argentina’s President Cristina Fernández to discuss new trade restrictions being imposed by Argentina from 1 February. Argentina ran up a trade deficit of US$4.24bn with Brazil in 2011, an increase of 20% on the previous year, despite increased Argentine protectionism, according to the Argentine statistics institute (Indec). Argentine imports from Brazil grew by 22% to US$21.94bn, while its exports to Brazil grew by 23% to US$17.70bn. Argentina posted an overall trade surplus of US$10.35bn in 2011, a decline of 11% on the previous year: exports totalled US$84.27bn; and imports US$73.92bn.

• Brazil-Cuba trade on the up

Brazil is investing US$800m in the modernisation of Cuba’s Mariel port via the construction giant Odebrecht and Brazil’s National Development Bank (Bndes). It has also offered Cuba technology to set up a local sugar-based ethanol industry, and is providing US$200m in credit for small farmers for the purchase of (Brazil-made) agri equipment. According to Brazil’s trade ministry, Brazil exported goods worth US$550m to Cuba in 2011, up 32% year-on-year and comprising basic and industrial goods. Imports from Cuba were worth US$91.2bn, up 25% year-on-year. Curiously, most of those (80%) were comprised of medical supplies and inputs.

PANAMA-NICARAGUA | Embajadores confirmados. El 29 de marzo, el senado de EU confirmó la designación de Phyllis Powers y Jonathan Farrar como embajadores en Nicaragua y Panamá respectivamente. El Presidente de EU, Barack Obama, inicialmente había indicado a Farrar para el puesto en Managua, una posición que ha estado vacante desde julio del 2011, cuando Robert Callahan, un ex asistente de John Negroponte, quien fue instrumental en la coordinación de los Contras durante la guerra civil de Nicaragua en los ’80, terminó su periodo de tres años. Sin embargo, su ratificación fue bloqueada en el senado de EU en medio de quejas de dos senadores Cubano-Americanos, Bob Menéndez y Marco Rubio para quienes  Farrar, un ex jefe de la Sección de Intereses de EU (USINT) en Cuba, fue muy blando con el gobierno cubano y que se necesitaba un carácter más fuerte en Nicaragua. Powers, un diplomático de carrera, era embajador en Panamá en momentos de su designación.

Given the amount of time and energy required to break through a company’s online defences, it is tempting to imagine that hackers will target big companies to secure the biggest possible payoff for their efforts, but small business now appear to be at greater risk than has been the case in the past.

According to security firm Symantec, the percentage of targeted attacks aimed at small businesses doubled in the first half of 2012. Experts believe this is because although the payoff could be smaller, they are significantly more vulnerable to attack than large companies. Furthermore, small companies often partner with large businesses in fulfilling major contracts. Smaller companies can be the weakest link in the chain, so cybercriminals use them to gain information they can use to penetrate the defences of their larger partners.

Symantec’s mid-year Intelligence Report shows that in the first six months of the year more than a third of targeted attacks on businesses were aimed at companies with fewer than 250 employees, double the percentage of attacks targeting small companies at the end of 2011.

A targeted attack is one tailored to a specific company. Cybercriminals customise malware to particular vulnerabilities and use information gathered publicly, or stolen from other companies, to create emails with malicious attachments that have a higher chance of being opened by employees. Social engineering has proved successful despite corporate efforts to bolster security training and warn workers to not open potentially dangerous emails.

Apparently, companies in the defence industry are the top targets of such attacks, followed by chemical and pharmaceutical firms and manufacturing companies, respectively. Large companies with more than 2,500 employees remain the most popular targets, accounting for 44% of all targeted attacks in the first half of 2012, but the trend will be an important one to watch.

Other factors are also contributing to more attacks on small businesses. More of them are online, interacting with customers on social networks, which in turn increases their visibility to hackers, said International Data Corporation (IDC) analyst Raymond Boggs. In addition, an increasing number of employees are using mobile devices that provide more open doors to hackers.

“It’s not quite a perfect storm of bad news for smaller companies, but close to it,” he said.

• “They [small businesses] are not as prepared, because they don’t think they have to be, and that’s left them vulnerable.”

Kevin Haley, director of Symantec’s Security Response Unit

MEXICO | Telecoms sector boom. On 25 February Mexico’s federal telecommunications commission (Cofetel) revealed that the sector had grown by 13.6% in 2012 compared to the previous year, which was “the highest growth in the sector in the last four years”.

Mexico’s telecoms sector, which is currently dominated by only a handful of very large firms, has long been identified as a potentially important engine of economic growth provided that the authorities can successfully introduce greater competition in the sector. President Enrique Peña Nieto has said that his government will seek to promote a reform of the telecoms sector as part of its ambitious structural reform plans to promote Mexico’s economic development. The figures presented by Cofetel provide further incentive to achieve this.

In a statement Cofetel pointed out that the growth in the sector, which was led by satellite TV services (which increased by 22.8%, or 6.8m new subscriptions) and mobile phone services (17.8% or 1.7m new subscriptions), was much higher than that of the overall economy which, according to official figures, posted growth of 3.9% last year.

Focusing on the expansion of mobile phone services, Cofetel highlighted that the number of subscribers reached 100.6m in the final quarter of last year, which means that there is now a penetration rate for this service of 85.7% for every 100 inhabitants. Significantly, Cofetel points out that while this sub-sector experienced a 19.7% fall in profits as a result of Cofetel ordering Mexico’s main mobile phone services provider, América Móvil, to lower its connection rates- after these were found to be too high by the federal competition commission (CFC) last year - these losses were made up by an increase in revenue resulting from greater use of text and mobile internet services by customers.

MEXICO | From FDI recipient to FDI provider. Mexican firms invested almost US$25.6bn in acquiring foreign firms in 2012, almost double the US$12.66bn of foreign direct investment (FDI) that the country received last year, Mexico’s central bank (Banxico) revealed on 24 February. The release of official figures, which showed that FDI to Mexico had decreased by 34.9% in 2012, had caused some concern that despite the country’s solid economic performance in recent years and positive future prospects, foreign investors were not as attracted to the country as they were expected to be. However, in analysing the investment outflow figures local analysts have found that this may be part of a more systematic shift that for the first time has turned Mexico from a net FDI recipient to an important provider of FDI in other countries.

As positive as this might sound it has only deepened the worries of local analysts. As Ernesto Piedras from the Competitive Intelligence Unit pointed out: “financial capital is a scarce resource in Mexico… and Mexico is in no position to become a net exporter of capital”. Piedras explained that Mexico still needs high levels of investment in order to develop its infrastructure and to move from becoming a developing to a developed country. Piedras said that it is “regrettable that more money is leaving the country than coming in”.

Yet it seems that there is a growing trend of large and successful Mexican firms, such as those led by Carlos Slim, the world’s richest man, looking for investment opportunities abroad, acquiring more and more foreign firms and investing large amounts of capital in the process. Mexican economist Ramiro Tovar has pointed out that while the foreign expansion of Mexican firms is “a positive sign” it would also be important for some of these large Mexican investors to be “more inward looking” and to seek to invest in opportunities in the country which can be just as attractive as elsewhere.

Perhaps a clear example of this came on 20 February when Mexican solar panel manufacturing firm, Solartec, announced that it had acquired Belgian firm Photovoltech for US$63m, the first international deal of the year for a Mexican firm. Solartec spokesman, Gustavo Tomé said that the aim of the purchase was to turn Solartec into one of the “key players” in the global solar energy market by allowing it to export products to the US and China. However, just a day later, on 21 February, experts meeting at the Iniciativa Mexicana para las Energías Renovables (Imere) renewable energy forum said that by investing in the development of its renewable energy capacity, which only accounts for 17% of all consumption, Mexico could boost its GDP growth by 2% a year until 2018.

Fishing robots

On 26 February Mexico’s national fisheries institute (Inapesca) revealed that it will start using a submersible robot armed with a video camera to conduct a survey of marine fishing resources in the Gulf of Mexico. An Inapesca statement said that the project, which will first be launched off the coast of Campeche in March, “will allow our specialists to evaluate more accurately the abundance and biomass of species such as octopus, shrimp and echinoderms… so as to determine better sustainable strategies”. The statement added that the purchase of the US$78,125 ‘camera-robot’ was made possible thanks to the support of the Fundación Produce, an agricultural promotion organisation. Campeche produces some 43,000 tonnes of fish and seafood products a year.

SECURITY| German prisoner dies. On 17 September Colombia’s national penitentiary institute (Inpec) reported that German national, Wilhelma Katharina Krederlbach Geb Jansen, died in a Santa Marta hospital from a chronic pulmonary disease. Krederlbach, a Santa Marta (Magdalena department) resident for the past 25 years, was arrested and charged with illicit association to commit homicide for her presumed involvement in the murder of a man that she believed had stolen her jewellery. The authorities believe that after her Santa Marta home was burgled, in November 2012 Krederlbach contacted members of the Los Urabeños criminal gang and contracted them to locate and punish the perpetrators. Days later the Urabeños murdered a man believed to be responsible for the burglary. The Urabeños were arrested by the police for the murder and confessed that they had been hired by Krederlbach and she was arrested last July. An Inpec statement said that Krederlbach had “been suffering from respiratory problems” and as a result the local prosecutor had requested for her to be placed under house arrest. However, the attorney general’s office opposed this request which was subsequently rejected by a local judge. Inpec adds that as her health deteriorated Krederlbach was transferred to the nearby hospital on 3 September, where “she died in the intensive care unit on 12 September”.

POLITICS| New Ecuadorean ambassador in Lima. On 17 September the Peruvian government approved the designation of José Sandoval Zambrano as Ecuador’s new ambassador to Peru. Sandoval was appointed as the new ambassador by the government led by President Rafael Correa to replace Rodrigo Riofrío, who back in April became involved in a scuffle with Lima residents which resulted in his resignation. The incident created serious tensions between the two countries after, in protest at Correa’s initial decision to back Riofrío, Peru’s President Ollanta Humala recalled his then ambassador to Quito, Javier León, for consultations. Sandoval’s appointment came after Humala, in a token gesture last week, replaced León with Elizabeth Astete, Peru’s former ambassador to Mexico. Peru’s foreign minister, Eda Rivas, announced Peru’s approval of Sandoval’s appointment after meeting her Ecuadorean counterpart, Ricardo Patiño, in Lima where the two presided over the XII meeting of the bilateral commission.

POLITICS | Maduro blames Spiderman for youth violence. On 17 September Venezuela's President Nicolás Maduro again railed against local television networks for broadcasting inappropriate material that he argues foments youth violence. Maduro’s predecessor, Hugo Chávez (1999-2013), took a similar line. Maduro complained: “In recent days we sat and watched Spiderman 3. It’s inflammatory, from the start to the end there are killings and more killings, And that’s one of the series that little children like best, because it’s fun, comics are attractive”. Spiderman 3 is rated PG-13 in the US and UK, meaning that under children under 13 should only watch it in the company of an adult. Maduro has previously suggested that the daily diet of soap operas on Venezuelan TV also promotes youth violence and inappropriate sexual behaviour. Local private TV stations, especially cable channels, have long feared potential government intervention in programming.

SECURITY | Fatal prison riot in Sabaneta. On 17 September Venezuela’s prisons minister, Iris Varela, announced that at least 16 prisoners were killed in a riot at the Yare penitentiary in Sabaneta, in the western state of Zulia. Local media suggested the riot broke out during a row between two rival prison gangs, known as ‘pranes’ locally. Varela said the prison was now under control of the police and the national guard and that an investigation was underway. Varela, who was appointed in 2011 by the late president Hugo Chávez (1999-2013) to oversee an overhaul of the country’s overcrowded and violent prisons after a series of fatal riots in the capital, has been criticised for her failure to deliver any improvements to the sector. Venezuela has almost 53,000 prisoners in a system with a maximum capacity of just over 16,000. Despite calls for Varela, a Chávez loyalist, to be removed, she was kept on in her post by Chávez’s successor, Nicolás Maduro, after his election in April. According to the Venezuelan prisons observatory (OVP), a local NGO, 289 prisoners died in the first six months of this year.

NICARAGUA | New central bank president. President Daniel Ortega has revived concerns about interfering in State institutions, with his decision this week to fire the head of Nicaragua’s Central Bank (BCN), former finance minister, Alberto Guevara, replacing him with the Bank’s number two, general manager, Ovidio Reyes. Ortega failed to give reasons for his decision to replace Guevara but local opposition daily, La Prensa, linked it to Guevara’s “alleged excesses”, such as his insistence on staying in lavish hotels.

Guevara was appointed in February 2012 [WR-12-09], replacing Antenor Rosales, who went after five years in the post – a move attributed to his resistance to President Ortega’s call to move some of Nicaragua’s international reserves to a regional bank proposed by the Venezuela-led regional initiative, Alba.

Fears that the decision to replace Rosales, who was considered key to maintaining Nicaragua’s economic stability, would have a negative impact have not materialised. In its most recent (December 2013) visit, the IMF noted that “over the past two years, macroeconomic developments in Nicaragua have been generally favorable. Real gross domestic product (GDP) grew by an average of 5¼ percent during 2011–12, and the annual average inflation was 7¼ percent during the same period. Looking ahead, the macroeconomic outlook also remains broadly positive. Real GDP is expected to grow by 4¼ percent in 2013 and then stabilize at its potential level of 4 percent over the medium-term. Inflation is projected to remain at about 7 percent supported by the crawling-peg exchange rate system that has helped anchor inflation expectations.” While noting risks persist (see sidebar) the IMF praised “the authorities’ efforts to maintain fiscal discipline and monetary stability, which, combined with progress in structural reform, have helped to strengthen confidence and boost economic growth.”

GUATEMALA-MEXICO | Gas pipeline. Guatemala’s economy minister Sergio de la Torre this week announced plans for Guatemala and Mexico’s state oil company Pemex to construct a 500km gas pipeline linking the two countries. De la Torre said that the pipeline, which would link Mexico’s Salina Cruz city in the state of Oaxaca with the Guatemalan department of Escuintla,, could cut energy costs by up to 75% and would provide local manufacturers with access to cheaper energy.

With Pemex yet to comment, the international media has cited Guatemalan officials at putting the cost of the project at either US$1.2bn or US$700m while President Otto Pérez Molina has also been reported as saying that the Inter-American Development Bank (IDB) has expressed an interest in providing a US$300m loan. The plan, which has yet to be signed by President Pérez Molina and his Mexican counterpart Enrique Peña Nieto, follows a 13 January visit to Mexico by Guatemala’s foreign minister, Fernando Carrera, where he visited his Mexican peer, José Antonio Meade Kuribreña and the two agreed to promote bilateral trade and investment.

• Risks

In its December 2013 report on Nicaragua, the IMF highlighted that “downside risks remain, stemming from Nicaragua’s large external deficit and uncertainties regarding the global outlook and the oil import financing scheme with Venezuela”.