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The US is continuing to secure guilty pleas from high-profile members of the Cártel de Sinaloa. On 1 December Joaquín Guzmán López, one of the leaders of the cartel’s Los Chapitos faction which is led by the sons of the imprisoned former drug kingpin Joaquín ‘El Chapo’ Guzmán Loera, pleaded guilty to charges of drug trafficking and engaging in a continuing criminal enterprise. His plea came after that of his brother and fellow Los Chapitos leader, Ovidio Guzmán López, in July and that of Ismael ‘El Mayo’ Zambada [SSR-25-10], who co-founded the cartel along with El Chapo, in August. The most explosive element of the plea concerned Zambada, with Guzmán admitting to having coordinated his kidnapping and arrest. This threatens to further exacerbate the deadly conflict in Sinaloa between members of Los Chapitos and those loyal to Zambada, known as La Mayiza or Los Mayos.

Guzmán pleaded guilty to one count of drug conspiracy and one count of engaging in a continuing criminal enterprise. The plea agreement describes him as “a logistical coordinator” who oversaw drug trafficking to the US, importation of drugs and precursor chemicals into Mexico, and the laundering of drug money. He is also accused of overseeing the manufacturing and distribution of fentanyl, the synthetic opioid that is driving overdose deaths in the US and which is a priority of US President Donald Trump’s campaign against drug cartels. The convictions carry a mandatory minimum penalty of 10 years in prison and a maximum penalty of life in prison.

In reaching a plea deal, Guzmán follows in the footsteps of his brother, Ovidio, who pleaded guilty to two counts of drug distribution and two counts of participating in a criminal enterprise in July. The pair are accused of leading Los Chapitos along with two other brothers, Iván Archivaldo Guzmán Salazar and Jesús Alfredo Guzmán Salazar, who remain at large albeit under much pressure in Mexico. In pleading guilty and cooperating with US prosecutors, Guzmán is ensuring that his case will not go to trial, where the inner workings of Los Chapitos and organised crime in Mexico more widely could have been exposed.

The main point of interest in Guzmán’s guilty plea was the confirmation of his betrayal of Zambada, which corroborated accusations made in a letter written by Zambada in August 2024 [SSR-24-09]. In the plea agreement, Guzmán said that he lured Zambada to a meeting at a ranch on the outskirts of Sinaloa state capital Culiacán on 25 July 2024. When Zambada arrived, Guzmán asked him to come into a room alone with him, where armed men entered through floor-to-ceiling windows and handcuffed Zambada. He was then transported to an airstrip and loaded onto a plane, which Guzmán also boarded, and which took them to the US where they were both arrested. Although the plea agreement does not name Zambada, the details closely match the accusations made in his letter.

This appears to shut the door on speculation as to how the arrests came about. At the time, the arrests had caused friction between the US and Mexico, with former president Andrés Manuel López Obrador (2018-2024) questioning whether the US government had prior knowledge of or a role in the operation. Washington denied involvement. However, it seems unlikely that US authorities were unaware of the plot given Ovidio was negotiating with federal prosecutors at the time and US agents were on hand to arrest Guzmán and Zambada as soon as they landed in the US. While a sentencing date has yet to be set for Guzmán and his brother, Zambada is due to be sentenced in April.

Sinaloa violence

Murder rates in Sinaloa spiked following the arrests of Guzmán and Zambada, with cartel infighting beginning in September 2024. According to Mexico’s national executive public security secretariat (SESNSP), there were 1,432 murders in Sinaloa between January and October 2025, up 116% on the 663 recorded in the same period of last year. While monthly murder numbers have reduced somewhat from the high of 207 seen in June this year, they remain far above those registered prior to September 2024.

Development: On 21 July newspapers and broadcasters from across the region  proclaimed their support for El Universo, an Ecuadorean newspaper group whose directors and opinion-editor where jailed and fined US$40m for criminal libel against President Rafael Correa.

Significance: Correa is not bothered by the international condemnation of the sentences and his lawyer said that he was considering whether to go back to court to increase the damages: Correa had asked for US$80m. The paradox is that the court’s judgement  underlines the necessity of Correa’s drive for judicial reform. Correa is also trying to establish a commission with legal powers to regulate the press.

Key points:

• The harshness of the sentences, which are being appealed, reflects the fact that El Universo, the country’s biggest newspaper, admitted that the article Correa sued over had no factual basis.

• El Universo published a virtually blank front page on 21 July, the day after the judgement. The only words on it were from Ayn Rand, a right-wing US political philosopher and writer. The quote argued that laws protected the state and those with power rather than ordinary people.

• Correa’s lawyer, who apparently gets a 5% of the damages as a success fee, said that the rest of the money would go into the fund to preserve the Yasuní national park from being developed by the oil industry.

Copper deposit: Héctor Córdova, the president of Bolivia's state mining company, Corporación Minera de Bolivia (Comibol), has confirmed that the Corocoro deposit, which it is developing through a joint venture with South Korea's Korea Resources Corporation (Kores), could contain about 100m tonnes (t) of ore – some ten times more than was first assumed when the joint-venture was established in 2008. He said the project plans to produce 30,000t of cathode copper annually and that the deposit, which spans an area of 27km² contains other metals such as manganese, gold and silver. The construction of a mine and a processing plant is due to begin in 2013. Copper exports accounted for just 0.5% of Bolivia's metallic mining exports, which totalled US$1.68bn in the first half of 2011, a 46% increase on the same period in 2010 (due to higher prices). Bolivia's main metal export is silver, which accounted for 40% of exports in the first half of the year, followed by zinc (28%) and steel (15%).

The opposition Partido Revolucionario Dominicano (PRD) is already starting to accuse the government of economic mismanagement. It said that the fiscal deficit this year was RD$55.99bn (US$1.45bn) which is almost twice the deficit agreed with the IMF of RD$33bn.

The outgoing government of President Leonel Fernández is still trying to secure (going through the motions, the PRD sniffs) IMF approval for the seventh and eighth tranches of the existing standby agreement. Without approval, the government will have missed out on US$511m in loans from the IMF. Of this US$128m was due to be spent under the budget while the balance would go to support the central bank’s reserves.

The PRD is trying to allege that the IMF  feels that it has been duped by the outgoing government because for each of the past four years the fiscal deficit has been over RD$50bn. Arturo Martínez Moya, the economic research director for the PRD, claims that the cumulative deficit now stands at RD$220bn. The result of this profligacy the PRD alleges is that 37% of the government’s fiscal revenues now have to go on servicing the public sector debt and 11% goes on subsidising the Corporación Dominicana de Empresas Eléctricas Estatales (CDEEE).

The PRD alleges that Fernández and the Partido de la Liberación Dominicana (PLD) government have taken the decision to break the agreement with the IMF and to forego the money because the political costs of making the cuts the IMF is insisting upon are too great. The country holds general elections on 20 May 2012.

The problem with this decision, according to the PRD, is that the government will become overdrawn at the central bank and also fail to pay its debts to the electricity companies. This will mean, the PRD calculates, that the government will have to freeze fuel prices and this in turn will increase the debt of the refining company, Refidomsa, which is 49% owned by Venezuela’s state oil company Pdvsa. 

Debt: The country’s debt is equivalent to 27.8% of GDP. According to the Dirección de Crédito Público, at the end of October the public sector debt, excluding the central bank, stood at US$15.5bn. On the assumption that the country’s GDP is US$55.7bn, this is equivalent to 27.8% of GDP. Of the total US$11bn is owed to foreign creditors. Debt to multilaterals comes to US$3bn; bilateral (inter-government) debt is US$4.5bn. Of the rest, US$366m is owed to commercial banks and US$2.2bn is in the form of bond debt.

Cuba | Rousseff fence sits. On 31 January Brazil’s President Dilma Rousseff declared in Cuba, on the final day of a two-day state visit, that political and human rights should be not be used as “an ideological weapon”, adding that all countries have work to do on human rights, including Brazil. She added that people who live in glass houses shouldn’t throw stones, before specifically calling out the US over the Guantánamo detention centre in Cuba. Rousseff is in Haiti today (1 February).

Guatemala | Climate change effects. On 31 January Guatemala’s agriculture ministry released a report which showed that climate change caused losses worth Q$570.8m (US$76m) to agriculture in 2011, damaging 56,128 hectares of territory.

*** Dagan reveals Israeli hopes on Egypt.  Former Mossad chief Meir Dagan has been much quoted for his opposition to a military strike against Iran, but it is his comments on Egypt that caught our attention this week.  In comments reported on 27 April, Dagan said that it was premature for Israel to get too fearful about Egypt as “things there have yet to ripen”.  He said: “You have to remember that the army still hasn’t decided what it is going to do.  Ultimately, let there be no mistake, the real power in Egypt is not in the hands of parliament but in the hands of the president, and the military council hasn’t decided what course of action to take.  We have to wait and see.  I’m not a prophet, but there’s no reason to just predict doom and gloom.”

*** Strategy change in Jordan.  The resignation on 26 April of Jordan’s Prime Minister Awn al-Khasawinah and his replacement by Fayez Tarawneh was presented as a move to speed reform.  Tarawneh is said to be a liberal.  Khasawneh had in turn replaced Marouf Bakhit, a former army general who had been slow to respond to the events of the Arab Awakening that has led to the fall of leaders in Egypt, Yemen, Tunisia, and Libya.

However, it isn’t quite that simple.  King Abdullah's criticism of al-Khasawneh is said to have been based on disagreement over proposed changes to the electoral law that currently favours the king's traditional Bedouin supporters.  Al-Khasawneh was working on a bill to even out the representation, but his proposed changes were opposed by the security services and conservative tribal elders.

One local political activist responded to the move by saying that the government “is not concerned with political reform, the Muslim Brotherhood, the popular activities, the citizenship, the Jordanians of Palestinian origin, the state of law and institutions, or the civil society”.  He added that the government is trying “to restore the traditional alliances with Israel, the United States, Europe, and Saudi Arabia at the regional and international levels, and with the classical structure of the old guard in society and the conservative elite at the domestic level”.

*** Europol warns on lone terror actors.  In its Terrorism Situation and Trend Report 2012, Europol warns about the radicalization of lone extremists as a key ongoing concern at a time when overall the number of terrorist attacks in the European Union is decreasing.  In 2011, there were 174 terrorist attacks in EU member states, with 484 individuals arrested for terrorist-related offences.  The director of Europol, Rob Wainwright, said: “Radicalization into violent extremism and lone-wolf attacks represents a significant threat for European citizens and have led to many tragedies, such as in Norway.”  In fact only two EU citizens were killed by a lone-wolf attack in 2011, in Germany.  Norway, where 77 people were killed by deranged loner Anders Breivik, is outside the EU.

Mexico’s state-owned oil firm, Petróleos Mexicanos (Pemex), opened the 2014 edition of its Expo Foro Pemex energy sector conference on 22 April, promising to present its vision of the sector’s future in the face of the energy reform driven by the government of President Enrique Peña. This is the second year that Pemex has organised the Expo Foro, which it describes as a “forum designed to bring together those responsible for Pemex’s development and representatives from national and foreign firms […] to facilitate [the sector’s] integration”. But given that last year congress approved a reform allowing for increased private participation in the state-controlled energy sector, and that its implementation is imminent pending the approval of accompanying secondary legislation, the level of interest in this year’s conference (which concludes on 24 April) is much higher.

The opening speech of the conference was made by Pemex’s CEO, Emilio Lozoya Austin. Pointing out that the reform’s ultimate goal is to turn Pemex into a “competitive state-owned firm over the next two years”, Lozoya said that Pemex’s objective now is to seek associations and strategic alliances with national and foreign firms to “promote synergies between Petróleos Mexicanos and its suppliers, contractors, partners and technicians […] so that the firm can compete across the entire oil industry value chain”. Lozoya said that the purpose of this year’s conference was to present the potential areas in which interested parties could look to associate themselves with Pemex, which go “from exploration and upstream crude oil production to retail fuel distribution, as well as refining, hydrocarbon transportation and petrochemistry”.

Lozoya concluded his speech by stating that he was sure that the conference would “produce ideas that will enrich the transformation process we are currently embarked upon”. Over 200 energy sector firms are taking part in the Expo Foro. Among these are the French energy firms, Total and GDF, which on 10 April signed respective memorandums of understanding to exchange technology linked to the production of conventional hydrocarbons and for exploring future joint business opportunities in the area of unconventional hydrocarbon production with Pemex. The signing of the memorandums took place during the recent visit to Mexico by France’s President François Hollande [WR-14-15].

CHILE | Violence in Araucanía. Since the last week of January two major arson attacks took place in different parts of the Araucanía region. Both of them bore the signs of politically motivated incidents, but no organisation has claimed authorship. The first was in a parking lot in Teodoro Schmidt, in Cautín: three cars, and ambulance, a minibus and a mobile clinic were torched. The Carabineros investigating the incident said no leaflets of Mapuche or anarchists groups were found.

The second took place in a rural estate owned by Diego Paulse, a legislator of the Partido Renovación Nacional (RN). On 16 February he reported having located four separate areas where fires had been started deliberately. This raised to 10 the number of similar attacks since the beginning of the month; they had destroyed about 250 hectares of pines and eucalyptus. He alluded to the arsonists as ‘hooded cowards’ but did not identify them more precisely.

A third incident in Pangüeco Bajo, Lautaro, which made local headlines on 6 February because it involved serious injury to a sergeant of Carabineros, proved to have been the outcome of an aggression by the relatives of a man the police officer had come to arrest.

PARAGUAY | Law to defend airspace. On 3 February the senate gave final approval to a law of vigilance and protection of Paraguay’s airspace. This provides for manoeuvres to force a suspect aircraft to land, but does not allow shootdowns. A draft version that would allow an interceptor to return fire from a suspect aircraft was left out.

There was much vocal scepticism in the senate over the usefulness of the law, given that the civil aviation directorate, DINAC, had not yet used its 2014 budget of US$1.7m to buy equipment that would enable it to detect irregular low-altitude flights. DINAC has two secondary radars, one in Luque and the other in Ciudad del Este, which can only track aircraft flying above 450 metres within a radius of 724 kilometres in a straight line.

Some senators also pointed to the jurisdictional rivalry between the DINAC and the air force as a factor hindering progress in this matter.

PARAGUAY | Military-led drug-trafficking ring. On 5 February agents of the antidrugs agency, SENAD, arrested army Captain Augusto Isaías Bogado López, who is suspected of leading a ring that traffics cannabis from Asunción to Argentina and Chile. Also arrested was Fredy González Montiel, believed to manage the logistics of the ring. A raid on a rural property owned by Bogado López yielded a haul of 350 kilos of cannabis packed and ready to go.

In January the Chilean and Paraguayan authorities had disrupted another ring of international cannabis traffickers, seizing more than half a tonne of the drug. SENAD said that though they were not part of the same organisation as the more recent detainees there had been indications of ‘close links’ between them.

Seizure in Concepción. On 31 January the antinarcotics department of the national police reported that it had intercepted a truck carrying 2.75 tonnes of cannabis in the area of Yby Yaú, Concepción, close to where the guerrillas of the Ejército del Pueblo Paraguayo (EPP) had abducted and later allegedly executed a couple of German farmers [see page 17].

Paraguay is the biggest producer of cannabis in South America, with several harvests a year yielding an estimated 30,000t of the drug. Most of it is exported to Brazil, but a growing share has been going to Argentina and Chile, along routes that are also used for the transport of cocaine from Bolivia.

*** IMF POINTS TO STRONG OUTLOOK FOR ST KITTS & NEVIS. Reporting on 3 September, the International Monetary Fund (IMF) said of the St Kitts economy: “The near-term outlook remains strong, but there are risks on the horizon.”

The current strength of the St Kitts & Nevis economy is based on a strong recovery in tourism which “fuelled rapid GDP growth of about 6% in 2013 and 2014”, according to the Fund. One welcome consequence of this rapid growth has been a decline in debt to 79% of GDP at end-2014 from 100.8% at end-2013.

More cautiously, the IMF says that over the medium term growth will “converge to the regional average of about 2.5%”, and it points to a number of worries. These include competition for the lucrative citizenship by investment (CBI) programme from nearby countries and globally, and the widening of VAT and customs exemptions – “which may undermine fiscal and debt sustainability over the medium term”. Another potential threat to debt sustainability would be a reversal of the debt-land swap programme.

In its concluding remarks, the IMF said that faster progress was required on structural reform to enhance competitiveness. According to the Fund, “priorities include strengthening support to the tourism sector, improving the business climate, and diversifying into alternative energy sources”.

*** DEVASTATION FOR DOMINICA. In an address to the nation on 28 August, following the passage of Tropical Storm Erika, Prime Minister Roosevelt Skerrit warned that the devastation caused by the storm “may have set our development process back by 20 years”.

Roosevelt said: “The extent of the devastation is monumental. It is far worse than expected…Many communities…have been swamped and are still cut off from the rest of Dominica…nearly every community has been hit. There is extensive damage across our small island after floods swamped villages, destroyed homes, and wiped out roads. Some communities are no longer recognizable.” Twenty people were killed by the storm. The cost of rebuilding the island’s infrastructure has been estimated over US$230m, which is about half the island’s GDP.

*** DOWNGRADE FOR THE BAHAMAS. In late August, Standard & Poor’s credit rating agency downgraded The Bahamas’ foreign and local currency sovereign rating from BBB/A-2 to BBB-/A-3 and attached a negative outlook to the economy. A key problem is the Chapter 11 filing for the vast as-yet-unfinished Baha Mar tourist resort development. The earliest that the resort is now thought likely to open is during the first half of 2016, provided the legal wrangling can be resolved.

A week after S&P’s move, Moody’s Investors Service issued a warning along with a reduction in its forecast for Bahamas GDP growth in 2015 from 2.2% to 1.7%. It is estimating growth for next year of 1.5%-2.0%.

*** JAMAICA'S OPPOSITION KEEPS ITS LEADER. There had been speculation that the opposition Jamaica Labour Party (JLP) would drop its leader Andrew Holness, but his leadership was confirmed at a parliamentary caucus on 11 August. He will now lead the party into the general election that is due by December 2016 but which some observers believe Prime Minister Portia Simpson Miller could even call before the end of this year. After the meeting, JLP officials denied that there had ever been any support among the party’s 21 members of parliament for a change in leadership.

President Juan Carlos Varela last week marked the second anniversary of his Partido Panameñista (PPA)-led El Pueblo Primero (EPP) coalition government taking office. Varela’s popularity remains low [WR-16-25] amid continued transparency concerns (in the wake of both the US government’s blacklisting of one of Panama’s most important business groupings, the Waked family, and the ‘Panama Papers’ – the biggest leak of secret information in history) and complaints regarding public security despite claims of progress by the government in this area.

In his balance sheet, President Varela highlighted progress regarding major infrastructure projects. Following the inauguration of the US$5.3bn Panama Canal expansion last week [WR-16-25], Varela pointed to other major infrastructure projects in the pipeline. These include the second line of the Panama City metro, officially launched in October 2015. The line, which will span 21km, will comprise 16 stations, and is expected to be complete by December 2018.

The metro line is being built by the Línea 2 consortium, comprising Brazil’s Constructora Norberto Odebrecht and Spain’s FCC Construcciones, for about US$1.8bn. The same consortium built the first metro line, which was inaugurated in 2014 under the previous administration led by Ricardo Martinelli (Cambio Democrático, 2009-2014). Varela also plans to construct a third line of the Panama City metro – the first monorail in the Americas to use Japanese technology – capable of transporting 20,000 people an hour, for which Panama and Japan finalised a US$2.6bn agreement in April this year after signing the initial technical and financial cooperation agreement in January.

Other key projects mentioned by Varela include plans to construct a fourth bridge over the Panama Canal, to be overseen by the public works ministry through the recently created coordinating unit of public infrastructure (UCIP); a new terminal of Panama City’s Tocumen international airport; the construction of more than 500km of new roads (with a further 400km in the process of being contracted out); as well as the start of construction last month of Central America’s first-ever energy generation plant based on liquefied natural gas (see sidebar).

New security minister

In his balance sheet, Varela also pointed to improvements in security, claiming there was a 23% decline in high-profile crimes between 2014 and 2016 – from 14,077 for the first four months of 2014 (and 35,546 for the whole of 2014) to 10,824 in the first four months of 2016.

Varela reported that there had been a 22% fall in homicides in the first five months of 2016 compared with the same period in 2015 (from 227 to 177), while 150 gangs had been dismantled as part of the government’s ‘Barrios Seguros’ (‘safe neighbourhoods’) initiative, which offers job training and an amnesty to gang members who surrender their weapons as well as severing their ties with organised crime.

Yet despite these claims of progress, local commentators attribute the continued slump in Varela’s popularity in part to public security concerns, while the credibility of the security ministry (Minseg) has come under question due to reports of a power struggle between the (now former) security minister, Rodolfo Aguilera, and his deputy, Rogelio Donadío, both of whom quit last May after months of bickering (see sidebar).

Last week Varela confirmed that Alexis Bethancourt Yau, the head of Panama’s financial analysis unit (UAF), would be the permanent replacement for Aguilera. He had been filling the post in an interim capacity since Aguilera’s resignation on 5 May.

• New LNG plant

On 26 May President Juan Carlos Varela inaugurated work on the 380MW Costa Norte II combined-cycle gas turbine plant in Colón Province, a project which is being carried out by AES Colón with an investment of more than US$1.15bn. According to a press release by Panama’s energy ministry, construction of the new Combined Cycle Gas Turbine will generate 1,500-2,000 jobs in the construction phase and around 200 direct and indirect jobs when in operation.

• Rogelio Donadío

The final straw came with local media reports of an internal investigation into claims that, back in October 2015, Rogelio Donadío had, while dressed in a uniform of the national border service, handcuffed a ministry official, Carlos López, and questioned him over irregularities. These allegations are being investigated as Donadío would not have had the authority to detain the official or subject him to questioning in that manner.

Drug trafficking from Mexico into the United States has been a major issue between the two countries since the 1970s. It has increasingly been recognised that the cross-border relationship between drugs and organised crime is complex and interrelated. Mexico is a major producer or shipper of a range of drugs including marijuana, cocaine, heroin and methamphetamines. The business is run by powerful criminal cartels. It is estimated that as part of their illegal operations the cartels move between US$19bn and US$30bn a year. Since 2006, stepped-up efforts to combat these cartels using the Mexican armed forces have led to violent clashes in which over 150,000 people have been killed. The US is involved at various different levels. Some argue that Mexican drug supply has arisen almost entirely because of US drugs demand. The US is the world’s largest single consumer market for illicit drugs. US arms traders also provide much of the weaponry used by the Mexican drug cartels. And the Washington government remains deeply concerned over the security implications of the activities of the Mexico-based cartels, and the possibility that their illicit businesses may be used as cover by political or terrorist organisations seeking to attack the United States.

The drugs issue has once more gained political attention because of a growing heroin and opioids crisis in the United States. Heroin produced in Mexico is increasingly being laced with fentanyl, a powerful synthetic drug mainly manufactured in China. This has led to a situation where the human cost of drug production and consumption is visibly impacting both societies. In Mexico that cost has typically been reflected in a very high homicide rate, caused by armed clashes between the security forces and the drug cartels, and between the cartels themselves as they fight for control of drug smuggling routes. In the United States, in contrast, the human cost is reflected in high fatality rates caused by drug overdoses. Recent data suggests that the scale of these two problems may be comparable. Mexico’s homicide rate in 2016 was 18.7 per 100,000 members of the population. In 2015 the rate of death from opioids in the United States was over 10 per 100,000.

MEXICO | Banking system under attack. Mexico’s central bank (Banxico) confirmed this week that the interruptions in online banking transactions experienced between 27 and 30 April, were in fact caused by a cyberattack targeting the country’s inter-bank electronic payment system (Spei). According to Banxico, the attack, in which hackers managed to steal some M$300m (US$15m) by transferring money held by some local private banks to fake bank accounts, affected Citibanamex, Banorte and Banjército, all of which reported problems in connecting to the Spei. Meanwhile the Mexican government’s financial protection agency, the Comisión Nacional para la Protección y Defensa de los Usuarios de Servicios Financieros (Condusef), received 60 complaints from the public about problems encountered when trying to make online bank transfers on 30 April.

• Banxico

Banxico’s president Alejandro Díaz de León issued a statement this week announcing the creation of a new cybersecurity unit at the bank that will be tasked with establishing new policy guidelines and strategies to improve the protection of electronic financial data. Meanwhile, on 16 May, Mexico’s federal attorney general’s office (PGR) announced that it had launched an investigation into the incident and that it would work in conjunction with Banxico to try to determine the origin of the cyberattack and whether it came from within Mexico or from abroad. This is the first time that a Spei, which last year moved M$270.4trn (US$13.7trn), has been targeted by a cyberattack.

Lorenza Martínez, Banxico’s Spei director, confirmed that, during the attack money was moved without authorisation using the Spei. She was adamant that it was not taken from customers’ accounts but from the private banks themselves and that no customers have been left out of cash. According to Martínez, as soon as irregularities were detected in the Spei, all transactions were migrated to the alternative electronic payment system to prevent any more issues. She added that Banxico was working with the banks to try to trade the stolen funds and to mitigate any risks to the Spei.

On 7 July, Prime Minister Andrew Holness announced that a state of public emergency had been declared in the St Andrew South Police Division, which includes parts of Kingston, until 21 July. Subsequently, the senate approved extending the state of emergency (SOE) until at least 5 October. SOEs were already in place in the parishes of St James, Hanover, and Westmoreland.

The reason for the 7 July decision was the fact that St Andrew South had recorded the highest number of shootings and murders so far in 2019, with 94 murders. This was 33% higher than the second-highest, the Clarendon division, with 72 murders.

Making the announcement, Holness pointed to Jamaica’s murder rate of 42 per 100,000 inhabitants and he compared it with the global average of six per 100,000 and the Caribbean average of 16 per 100,000. Only Venezuela and El Salvador have worse murder rates in the Latin America and Caribbean regions. Holness said: “This is an epidemic and there is no one who can tell me that the country could be satisfied with this…and that our constitution contemplated this kind of murder rate.”

However, an additional problem for the government is that the opposition People’s National Party (PNP) has been questioning the effectiveness of the SOEs. The PNP’s spokesman for national security, Fitz Jackson, said in a statement issued on 14 July that recent shootings in West Kingston and St James showed that gangs were no longer deterred by the imposition of special security measures. The PNP said: “Criminals are no longer fazed or deterred by the presence of the military and/or special police units.”

Jackson added: “It has become increasingly clear that effective policing techniques have been abandoned and replaced by an ever-growing reliance on the military to achieve what effective policing is capable of doing.”

In January, the prime minister said that the government’s ‘Plan Secure Jamaica’ would reduce the country’s murder rate to below the regional average within 10 years.

A bill tabled by Chile’s opposition that seeks to reform the country’s labour code to reduce the working week looks set to advance in congress. This even though a separate bill tabled by the ruling right-wing Chile Vamos coalition, which has similar aims, is also currently before the legislature. Both initiatives are slated as improving the work-life balance and providing workers with more leisure and family time. But the opposition argues that unlike the Chile Vamos proposal theirs is in the interest of workers not business. Meanwhile Chile Vamos says that the opposition proposal will produce more harm than good. The debate over the proposals looks set to produce significant political divisions that could undermine the reform plans.

The opposition’s bill tabled by Partido Comunista (PC) Deputy Camila Vallejo, was given general approval by the chamber of deputies’ labour commission on 23 July. The commission is now due to vote on the specifics of the bill on 2 September. If the bill is then approved, it will be examined by the chamber of deputies’ plenary. The bill aims to reduce Chile’s working week from 45 hours to 40, which will be phased in over three years for small and medium enterprises (SMEs). The possibility that the Vallejo will continue advancing in congress prompted the government to in recent days launch a campaign against the bill and urge legislators to urgently vote on the alternative Chile Vamos bill.

The Chile Vamos bill was submitted to the senate in May, but it has not moved since. This bill seeks to reduce the working week to an average of 41 hours, as part of a broader labour modernisation project, which seeks to make Chile’s labour market more flexible and inclusive (with the aim of encouraging more women, young people and disabled adults to join the labour force). It proposes a working month of 180 hours (reduced from 198 hours), “that could be distributed in a different form every week” with a “working week that could be distributed in no less than four and no more than six days”. The allocation of working hours would depend on agreements between employers and employees.

Labour & Social Security Minister Nicolás Monckeberg argues that reform along the government’s proposals is essential for making the labour market more flexible and for Chile’s development: “it is not possible that Chile becomes a developed country while maintaining the rigid norms of the labour code…there is no sense in denying labour flexibility”. According to the government the so called ‘labour adaptability project’ would create 300,000 new jobs. In contrast, President Sebastián Piñera has said that the Vallejo bill is unconstitutional and could result in increased labour costs and potential job losses.

• Job losses

President Piñera has warned that the Vallejo bill, if approved, “will destroy between 200,000 and 350,000 jobs” and will not “remedy our legislation’s serious problem, which is extreme rigidity”. This has been echoed by Finance Minister Felipe Larraín, who has said that the initiative will have “a very negative effect on the labour market, because everyone would like to work less and earn more”. 

But the Chile Vamos initiative has drawn criticism from the opposition, which argues that the proposed changes are essentially pro-business. Vallejo has said that leaving it to workers and employees to agree on working schedules would invariably result in employees taking advantage of workers by offering them to work more hours one week in exchange for working less another so as to maintain the 41-hour average. This view is shared by Frente Amplio Deputy Gael Yeomans, the president of the lower chamber’s labour commission, who has said that “They [the government] have an agenda, that is in fact totally the opposite [of empowering workers]. It is to give more flexibility to business owners”.

If either bill successfully modifies Chile’s labour code, it would mark a reduction in Chile’s working week for the first time since 2005, when it was reduced from 48 to 45 hours. With Chile currently experiencing a period of slow economic growth, with GDP increasing only 1.9% year-on-year in the second quarter of 2019, which is also driving up unemployment (7.1% in the second quarter). Approving a reform that could kickstart the labour market and stimulate economic growth would be in the general interest. But by the same token any reform that has the potential to produce job losses would be concerning.

The United Nation’s Development Programme (UNDP) released its Human Development and Covid-19 in Mexico: Challenges for a Sustainable Recovery report on 14 July. The reports highlights that for the first time since 1990, Mexico’s Human Development Index (HDI), which comprises measurements of income, health, and education, is declining. The report also looks at the issue of gender, as the female population is more exposed to situations of vulnerability and discrimination which may be exacerbated by the coronavirus (Covid-19) health crisis.

While the authors specify that there is no data available to calculate the actual decline of the HDI in Mexico, it is clear that the effects of the Covid-19 pandemic will be significant.  The report criticises the low level of Covid-19 testing undertaken in the country, which is below the average for Latin America. Indeed, it estimates that there could be more than 90,000 fatalities by the beginning of October due to the government’s failure to implement a mass testing programme to guide its pandemic actions, and because of this, it claims that the Covid-19 emergency will remain unabated in Mexico until 2021.

The report also points out that the pandemic has exacerbated pre-exiting problems that have undermined human development in the country, as has indeed been the case in many other countries. These include the weakness of its public health system, the lack of quality education, and limited access to modern technology, all of which are core elements needed to overcome the public health emergency and associated economic crisis. Regarding health, the fact that Covid-19 affects mostly adults would not necessarily negatively impact life expectancy levels. However, the UNDP report notes that a possible contraction of 25% in health service coverage in Mexico would lead to a significant rise in infant mortality and thus affect life expectancy at birth, leading this indicator to fall to 2013 levels. With regards to education, the report estimates that a potential fall in years of schooling as a result of the pandemic could set the country back to 2015 levels.

However, the most detrimental impact of the pandemic will be felt in household income levels. The downturn in economic activity that resulted from the restrictions imposed to curb the spread of the disease has had a significant impact, which has particularly affected the segment of the population that lacks a regular income. As a result, the UNDP report maintains that there will be a substantial increase in poverty levels. A likely contraction in gross national income (GNI) of 8.55% could see the income component of the human development index set back to 2011 levels, more than a decade of lost progress.

Crucially, the report includes recommendations to address these challenges and mitigate the impact of the pandemic in all three areas. Regarding health and education, these comprise measures such as ensuring access to quality services, particularly for the most vulnerable sectors of the population –something that the incumbent government led by President Andrés Manuel López Obrador would argue it has focused on even before the pandemic. With regards to addressing failing income levels, the report recommends prioritising support for the most important economic sectors in Mexico, such as tourism, and the issuing of more public debt to pay for this.

However, the López Obrador government has refused to support businesses arguing that it would be “elitist”, while arguing that issuing more debt would jeopardise the health of public finances, which López Obrador promised to reinforce. This inability to adapt to the current circumstances is only likely to make Mexico’s economic recovery from Covid-19 more protracted and painful.

COLOMBIA | Second metro line gets green light. The government led by President Iván Duque and the mayor of Bogotá, Claudia López, announced on 29 June the construction of a second metro line in an effort to address the serious congestion and pollution problems in the Colombian capital. The new line, which is projected to cost Col$13tn (US$3.45bn), and create 5,000 direct jobs during the construction phase, will extend 15.8km with 11 stations (eight of them underground), and benefit an estimated 2.5m people.

As things stand Bogotá’s first metro line has not made it off the drawing board, held up by the coronavirus (Covid-19) pandemic. The Empresa Metro de Bogotá (EMB) closed the tender process for the first line of the metro in October 2019, with the US$4.5bn concession awarded to a consortium including China Harbour Engineering Company Limited and Xi’An Metro Company Limited.

López, a member of the centre-left Alianza Verde (AV), expressed confidence that the first line will come into service in 2028, with work commencing on the second line in 2030. López said this would honour her “commitment to climate change and sustainable development, and will replace thousands of contaminating buses, improving the air quality and quality of life for our citizens”. Duque, for his part, heralded a “structural transformation”, saying that more had been achieved in 18 months than would normally be accomplished in a decade.

ECUADOR | Mining exports. Ecuador’s mining exports totalled US$421m for the first four months of the year, according to the energy and non-renewable natural resources ministry. This is an increase of 127% on the same period in 2020.

Large-scale mining projects Fruta del Norte (copper) and Mirador (gold), located in the southernmost province of Zamora Chinchipe, accounted for 65% of total mining exports, with small-scale mining making up the rest.

Projections for this year are for mining exports to reach US$1.6bn, which would be an increase of 74% on 2020. These projections are based on Mirador processing 60,000 tonnes of copper per day and Fruta del Norte increasing annual gold production from 325,000 ounces per year to 340,000 ounces in the second half of 2021.

The US Department of Agriculture (USDA) has suspended inspections of avocados and mangos in the western state of Michoacán citing security concerns, meaning the state cannot export these products to the US. This is not the first time that the US has halted imports of avocados from Michoacán, one of the world’s biggest producers of the fruit, on security grounds, following a similar suspension in 2022. The decision is indicative of the wider security issues plaguing Michoacán and Mexico’s avocado sector in general.

Mexico’s embassy in the US announced that the USDA’s Animal and Plant Health Inspection Service (Aphis) had suspended inspections of avocados and mangos in the state of Michoacán after two of its personnel were attacked and held against their will while working in the state. The workers were subsequently released. The embassy said the suspension would remain in place until the security issues were resolved, while noting that it did not affect avocados or mangos produced in Jalisco state or those from Michoacán that are already in transit.

Speaking to local radio station Radio Fórmula on 18 June, the Michoacán state governor, Alfredo Ramírez Bedolla, downplayed the incident, which he said was not related to the Aphis inspectors’ work. The US ambassador to Mexico, Ken Salazar, plans to travel to Michoacán next week to meet with Ramírez and members of Mexico’s association of avocado exporting producers and packers (Apeam) to discuss security and other issues.

Mexico’s avocado industry has boomed in recent years. According to the USDA, Mexico’s 2024 avocado production is forecast at 2.77m tonnes (MMT), a 5% increase compared with 2023, due to strong export demand. Exports of avocados totalled 1.4 MMT in 2023, a 17% increase year-on-year, bringing in US$3.03bn. Over 80% of these exports went to the US.

Michoacán and, since 2022, Jalisco, are the only Mexican states certified to export avocados to the US. Michoacán is by far the biggest producer, accounting for 73% of production, according to the USDA. Both states are also home to major drug trafficking organisations (DTOs) such as the Cártel Jalisco Nueva Generación (CJNG). Weak governance and corruption have allowed such DTOs to infiltrate the avocado supply chain as they look to diversify their activities and profit from its expansion. This has led to the extortion of avocado businesses and violence against community leaders and citizens who oppose avocado production on environmental grounds.

López Obrador response

President López Obrador has also downplayed the suspension of inspections of avocados and mangos and criticised the “unilateral measures” of the US government. However, he stated that Mexico had good relations with the US and that he was hopeful that an agreement could be reached.

On 12 February El Salvador’s 60-member unicameral legislature, which is controlled by President Nayib Bukele’s Nuevas Ideas (NI), approved a change removing Art. 210 of the constitution which recognises state campaign funding for political parties. This has drawn criticism from civil society groups amid concerns that it jeopardises the independence of political parties. It is among the first amendments to the constitution approved since the previous month when congress gave final approval to a reform eliminating the requirement that constitutional changes must be approved by two successive legislatures [WR-24-17].

The change removing Art. 210 approved on 12 February leaves political parties entirely dependent on private finance. Previously, public funding, known as ‘deuda política’ (political debt), was determined by the number of votes the party won in the previous elections. The decision to remove this was slammed by rights activists such as Eduardo Escobar, the executive director of local NGO Acción Ciudadana (AC), who said that Art. 210 created “a certain independence” which would be jeopardised if parties are entirely reliant on private finance.

A 12 February AC statement warns that the change will affect political pluralism, describing it as a further measure aimed at “consolidating and maintaining a hegemonic or dominant party system”. This is a reference to the control exerted by Bukele’s NI which won 54 seats in the downsized legislature in 2024, having strengthened its presence since winning an unprecedented two-thirds legislative majority in the previous 2021 vote. That election dealt a major blow to the left-wing Frente Farabundo Martí para la Liberación Nacional (FMLN) and right-wing Alianza Republicana Nacionalista (Arena), whose longstanding political duopoly was ended by Bukele’s 2019 election win.

The amendment eliminating public finance for political parties comes amid more general concerns regarding the transparency of campaign finance. On 13 December 2024, AC published a report which assessed the financial transparency of nine political parties for 2023. The AC report found that four of the parties had a low level of financial transparency: NI; FMLN, which now has no legislative seats; Gran Alianza por la Unidad Nacional (Gana), also with no seats); and Nuestro Tiempo (NT – no seats). The parties with higher levels of financial transparency according to AC were: Arena (two seats); Democracia Salvadoreña (DS – no seats); Partido de Concertación Nacional (PCN – two seats); Partido Demócrata Cristiano (PDC – one); and Vamos (one).

Lack of transparency

According to the Acción Ciudadana (AC) report, Bukele’s NI party did not provide AC with financial information on its expenses or income in 2023, nor did it make this information publicly available. The report also highlights that since its establishment in 2018, NI has not provided any information on its expenses. AC warns that a lack of transparency can conceal illegal funding and misuse of public funds.

Constitutional changes

The changes removing Art. 210 were among the first following the legislature’s ratification on 29 January of amendments to El Salvador’s 1983 constitution which annul the requirement that constitutional changes must be approved by two successive legislatures. Prior to the changes, approved constitutional changes required approval by a simple majority in one legislature and ratification by a two-thirds majority in the next. With the changes, constitutional reforms can now be passed with just the vote of three-quarters of legislators.

These changes to the process of amending the constitution have drawn alarm from rights groups such as international NGO Amnesty International (AI). On 7 February AI warned that “by removing the requirement for constitutional amendments to be approved by two separate legislative assemblies, the ruling party guarantees a fast-track path to constitutional change without due deliberation processes or public participation”. It adds that “in a context where the independence of the judiciary and the right to a fair trial have been systematically eroded, this measure could pave the way for the implementation of reforms that further undermine… human rights.” 

The high-profile fraud investigation involving the collapsed bank Banco Master has raised questions over the credibility of Brazil’s supreme court (STF), especially regarding the impartiality of STF justice José Antonio Dias Toffoli, who stepped down as the presiding judge of the case on 12 February. Dias Toffoli had been under pressure for months, with several reports in the media highlighting his indirect connections to Banco Master, raising concerns over a possible conflict of interest, given that a company owned by his family had previous business dealings with individuals tied to the controversial bank.

Dias Toffoli’s decision to step away from his role as the overseer of the case came after the federal police (PF) sent a request last week to the president of the STF, Edson Fachin, to change the investigation’s presiding judge due to evidence which suggested that Dias Toffoli might have had some connection to Daniel Vorcaro, the CEO of Banco Master.

The PF highlighted financial transactions involving the sale of a holiday resort called Tayayá in the southern state of Paraná. Tayayá was owned by the brothers of Dias Toffoli through a family-owned company known as Maridt. In 2021 the justice’s brothers sold part of Maridt’s stake in the resort to an investment fund called Arleen, which is tied to another fund called Leal, which is owned by a businessman named Fabiano Vettel, who is the brother-in-law of Vorcaro and had been implicated in the Banco Master case.

Dias Toffoli has not denied the existence of this indirect chain of connections. He has even admitted that he is a shareholder in his family’s company Maridt, although the justice has insisted that he has never had a personal relationship with Vorcaro. However, the PF had found evidence on Vorcaro’s confiscated phone which mentioned Dias Toffoli and the sale of Maridt’s stake in the Tayayá resort.

Rather than allow the controversy to be stoked further with potential debates and formal inquiries over whether the sale of the resort represented the transfer of funds to personally enrich Dias Toffoli, the judge decided to step away from the case to ease the pressure on himself as well as on the judiciary. On 12 February the 10 STF justices held a meeting which was reportedly around three hours long, after which they released a joint statement announcing that Dias Toffoli would step away from the case while expressing support for every decision he had made as the case’s presiding judge. The top court also confirmed that STF justice André Mendonça will be the new overseer of the Banco Master investigations.

Even before the recent scrutiny on the Dias Toffoli family’s business dealings, the national media had been raising doubts for months over the judge’s impartiality. He was assigned as the case’s presiding judge on 28 November, but it was revealed in the press that the following day he flew to Peru aboard a private jet to watch the final of the Copa Libertadores football tournament accompanied by various former politicians and the defence lawyer, Augusto Arruda Botelho, of a former Banco Master executive. Throughout Dias Toffoli’s handling of the investigation, media reports also highlighted several of his decisions which raised concerns, such as the way he put the case files under court seal and limited who could access the evidence, even restricting access for PF investigators.

PT concerns

News website Metrópoles and other media outlets have reported that leading members of the ruling left-wing Partido dos Trabalhadores (PT) were concerned that STF justice André Mendonça was assigned as the new presiding judge of the Banco Master fraud case. Not only is Mendonça a socially conservative figure who was nominated to the STF by former president Jair Bolsonaro (2019-2023), but he is also the presiding judge of another investigation involving irregular deductions from retirement and pensions accounts, a scandal which hurt the government’s popularity in 2025. This means that Mendonça is now overseeing two cases involving financial crimes and potential corruption, issues which could become political dynamite in an election year.

The resumption of operations of the massive Fénix nickel project, which is owned by Compañía Guatemalteca de Níquel (CGN), a subsidiary of Switzerland-based mining company Solway Investment Group, has drawn concerns from indigenous groups – a key plank of the support base of President Bernardo Arévalo’s left-of-centre government which, since taking office in January 2024, has moved to halt other unpopular mining projects such as the Cerro Blanco gold mining operation [EB-24-05].

Located in El Estor municipality in the eastern department of Izabal, the project had been on hold since 2022, when the US Treasury Department’s Office of Foreign Assets Control (Ofac) sanctioned CGN and a Solway subsidiary, Compañia Procesadora de Níquel (Pronico), along with two executives with ties to the mining project, Russian national Dmitry Kudryakov and Belarusian national Iryna Litviniuk over allegations of bribery and corruption. The two saw their contracts with CGN terminated.

The companies were then delisted from the sanctions in 2024 while Solway carried out corporate restructuring which saw CGN and ProNiCo moved to New York City, under US jurisdiction. This laid the groundwork for the resumption of the project, which was further boosted in August 2024 when Guatemala’s government reactivated the export licenses for Solway Group’s subsidiaries.

The mine is among the oldest and largest in Guatemala but has long been rejected by members of the Maya Q’eqchi’ community of Agua Caliente, who have lived on the land for centuries. Having undergone various shifts in corporate ownership, the mine was acquired in 2011 by Solway and began operating in 2014. In July 2019, Guatemala’s constitutional court (CC) suspended its operating licence on the grounds that it violated the right to consultation with local communities. It then upheld its ruling in June 2020 [EB-20-07], before the mining and energy ministry suspended the mine’s operating licence in February 2021, although in January 2022 Solway announced it had been permitted to reactivate operations after carrying out a consultation process in December 2021.

It has remained controversial. In March 2022, international non-profit journalists’ organisation Forbidden Stories published ‘Mining Secrets’, based on a trove of documents obtained through a data leak from Solway Group, which revealed alleged efforts to conceal environmental damages, bribes made to police and local community leaders, plans to displace local communities, and surveillance of journalists investigating the project. Meanwhile, in December 2023, the Inter-American Court of Human Rights (IACtHR) issued a ruling which found that the Guatemalan State had violated indigenous rights by allowing nickel mining on land in El Estor [EB-24-01].

President Arévalo’s government is seeking to assuage concerns about the project,  which it has declared an important economic opportunity for Izabal and the country. In an interview with national daily Prensa Libre, published on 21 May, deputy mining and energy minister Erwin Barrios, said that his ministry would be supervising the mine, with operating techniques monitored, and the prevention of environmental risks a priority. He added that the environment ministry and the national council of protected areas (Conap) would also be involved in overseeing operations. According to Prensa Libre, in preparation for the resumption of operations, the mining company invested US$85m between 2025 and 2026 for the maintenance and modernisation of facilities.

Production

According to the 21 May Prensa Libre report, the mine is expected to produce 17,000 tonnes (t) of nickel and ferronickel (an alloy of iron and nickel) in 2026, with this expected to rise to 25,000 t in 2027.