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Within a little more than a week after a massacre that shocked Guatemala, President Álvaro Colom was claiming that the government had dealt a considerable blow to the suspected perpetrators, a ‘cell' of the Mexican drug-trafficking organisation Los Zetas, capturing more than 15 of its members, including two leaders. Colom has good reason to pump up his public security records, as his ex-wide is running for the presidency in September against a tough law-and-order rival.

The massacre, in which 27 rural workers were shot dead (and 26 were later decapitated), took place at nightfall on 14 May in a cattle ranch near La Libertad, in the northern department of Petén, which borders on Mexico. Graffiti painted in blood at the site alluded to a theft of drugs and was signed by ‘Z-200' which, the authorities promptly said, represented a ‘cell' of Los Zetas called ‘Zetas 200'.

The very next day President Colom flew to Petén and after having been briefed by the local authorities, the police and the army, announced that he was imposing a 30-day state of siege in the department. Only hours earlier in Santa Elena, next to the departmental capital, Flores, a two-person team on a motorcycle threw grenades at a school, a restaurant and a police station in the outlying municipality of San Benito. In the latter, a police officer was seriously injured.

Before the day was out, the authorities were announcing that a joint army-police unit had been involved in a gunbattle with suspected Zetas close to the ranch where the killings had taken place. Three of the gunmen were killed and one was captured; one police officer was injured. President Colom announced that there would be ‘important captures' within the following 48 hours.

On 18 May police announced the arrest of Hugo Álvaro Gómez Vásquez who, they said, was a top leader of the Zetas 200 organisation, known as ‘Comandante Bruja'. He was captured in Tactic, a municipality at the southern extreme of Alta Verapaz, the huge (8,686 sq km) department immediately to the south of Petén. Gómez Vásquez, a Guatemalan national, was presented as a former member of the army (the media were told informally that he was a former member of the notorious special forces called Kaibiles).

Six days later President Colom himself announced the capture of the person believed to have led the group that carried out the Petén massacre: a Guatemalan national called Elder Estuardo Morales Pineda, identified as a ‘top leader' of the Zetas 200 known by the nom-de-guerre ‘el Pelón'. He was arrested in San Benito, next to Santa Elena. The same day interior minister Carlos Menocal announced the arrest of five members of Los Zetas in the northwestern border department of Huehuetenango and the seizure of documents linking them with ‘Comandante Bruja' (now identified as Hugo Álvaro Betata).

Backlash
It must be noted that Los Zetas did not simply melt into the background, as they had six months earlier when President Colom imposed a state of siege on Alta Verapaz. Apart from the grenade attacks next to the capital of Petén, they hung banners signed by Z-200 in Quetzaltenango, capital of the southwestern department of the same name, in which they announced, ‘The war is not against the civilian population, the government or, even less, the media. It is against those people who work for the Gulf [cartel] and against Otto Salguero, who is one of the most important suppliers of cocaine to the Gulf cartel.' They also claimed that the people killed in Petén were employed by Salguero to ‘maintain his organisation'. Salguero had been identified by the authorities as the owner of the ranch where the massacre took place. On 21 March in Quetzaltenango, police arrested three Guatemalan nationals as they were carrying similar banners.

The police interpreted the grenade attacks as a diversionary tactic, meant to spread thin the efforts of law enforcement agencies. The appearance of banners in Quetzaltenango has been interpreted as a sign that the influence of Los Zetas is spreading across the country. They have so far been strongest in Zacapa, Alta Verapaz and Petén, on the cocaine route from the Honduran coast to Mexico, and they have been vying with the Sinaloa cartel for the control of Huehuetenango.

On 24 May, as Colom was announcing the capture of ‘el Pelón', body parts began to turn up in Cobán, capital of Alta Verapaz. The victim was identified when the head, accompanied by a note signed by Z-200, appeared in a bag in the central market. He was Allan Stowlinsky Vidaurre, an assistant public prosecutor who had been kidnapped a day earlier and had been involved in the investigation that led to the capture of ‘Comandante Bruja'. The message from Z-200 said, ‘This is for the 500 kilos of cocaine confiscated.'

Contrast
The speed with which the Guatemalan law enforcement agencies began to produce results in the investigation into the Petén massacre contrasted markedly with the outcome of the state of siege imposed last December in Alta Verapaz, which was extended into mid-February. At the end of that period the government announced the seizure of more than 230 rifles, 28 vehicles and five light aircraft, but did not find many of the Zetas it had depicted as ‘controlling' 75% of the territory of Alta Verapaz. It managed to arrest 18 people, suspected of involvement in ‘organised crime', but of these only two were specifically linked to the drugs trade.

President Colom openly admitted that the Zetas had either gone to ground or fled to other jurisdictions for the duration of the state of siege, and that he was well aware that the Zetas could return to Alta Verapaz. Indeed, for that reason he said he would be keeping deployed in the region the 300-strong police and military force sent there. Colom said that he was considering the extension of the state of siege to other areas where the Zetas had established footholds, but did not act on this intention.

The public prosecution service reported in late 2010 that the Zetas had established a presence in Alta Verapaz, Petén, Huehuetenango, Quiché, San Marcos, Chiquimula, Zacapa and districts of Guatemala City. Their main objective appears to be the control of the drug route from the Caribbean to Mexico, via northern Honduras and Zacapa-Alta Verapaz-Petén inside Guatemala.

Also, they have been seeking to dislodge the Mexican Sinaloa cartel from Huehuetenango and some local traffickers who still hold sway in Cobán, the capital of Alta Verapaz. While the Sinaloa cartel, established mainly along the Pacific coast, has tended to work with local drug gangs, Los Zetas have preferred to use force or the threat of force to subjugate the Guatemalan traffickers. Their methods were vividly illustrated by two massacres in 2008; of local narco boss Juan José León and 10 members of his gang in Zacapa, and of 17 local traffickers in Huehuetenango.

The Zetas have also established a working relationship with the street gang known as Mara Salvatrucha (MS-13), some of whose members it has trained in the use of firearms at a camp in Petén.

On-the-hop intelligence
The official emphasis on the ‘results' of operations in Petén and their follow-up elsewhere has distracted attention from the fact that the authorities were obviously unsure of what was happening there.

The events in Petén had begun to unfold before the ranch massacre. On 10 May a man called Luis Carlos Bardales Chacón was abducted, and the kidnappers contacted his family demanding a US$60,000 ransom. When his wife Keiri Eunice Franco and his father Luis Carlos Bardales Tobar turned up with the money on 13 May, all three were murdered. Separately, on 14 May on the outskirts of Flores, capital of Petén, gunmen shot dead Haroldo León, brother of the local drug boss murdered by Los Zetas in 2008.

It was this second event that the police immediately connected with the massacre. Haroldo León, they said, was the owner of the Los Cocos ranch where the killings had taken place. This connection was what led to the conclusion that Los Zetas had been the killers. Some 200 Zetas were said to have taken part in the massacre.

On 16 May the official version had changed. Interior minister Carlos Menocal told the media that the owner of the ranch was Otto Salguero, uncle of the murdered Keiri Eunice Franco, and the real target of the Zetas. Some 30-40 members of the Z-200 group, he said, had carried out the killings in a fit of rage at not finding Salguero.

More conflicting details were put forward on 19 May by Juan José Salguero, father of Otto, who claimed to be the real owner of the ranch where the massacre had taken place — the correct name of which was San Juan, not Los Cocos as the authorities and the media kept saying. The elder Salguero said that he and his family had been receiving death threats since last year, when his son refused to give in to the demands of extortionists. This, he added, had been reported to the police, which had taken no action. He also denied that Otto had any involvement with the drugs trade.

That same day the newspaper Prensa Libre cited unnamed anticarcotics police sources as saying that Los Zetas had been after Otto Salguero because he had stolen 2,000 kilos of cocaine from them.

The Z-200 mystery
It has become evident that the initial police claim that 200 Zetas had taken part in the massacre had been a misinterpretation of the graffito left on a wall of the ranch, signed by Z-200. While officials soon began to issue authoritative statements about Z-200 as a ‘cell' or ‘faction' of Los Zetas, the fact that it had not made itself known earlier remained a puzzle.

On 18 May, the newspaper La Hora attributed to ‘antinarcotics authorities' the conclusion that Z-200 was the cypher of a high-ranking Mexican member of Los Zetas called Pedro or Flavio Méndez Santiago (‘el Amarillo'), who has been on Mexico's most-wanted list for about three years. Actually, on 18 January the Mexican authorities had announced the capture of one Flavio Méndez Santiago with the same nom-de-guerre and identified as a founding member of Los Zetas — but with the cypher Z-10.

To complicate matters further, on 19 May another Zeta with the nom-de-guerre ‘el Amarillo', Víctor Hugo Morales González was sentenced by a Guatemalan court to a 60-year prison term for his part in the 2008 Huehuetenango massacre.

The political angle
Even before the Petén massacre the Colom administration had been drawing attention to its antidrugs record. On 9 May the national police (PNC) issued a communiqué announcing that in the first four months of the year it had seized from drug-trafficking networks drugs worth US$2.8bn, up from US$2.1bn in the whole of 2010 and US$2bn in the whole of 2009.

The latest figures must be taken with some caution. The breakdown shows that the bulk of this was accounted for by the 637.5m opium poppy plants eradicated in that period, which the PNC valued at US$2.1bn. Much of the rest was the result of uprooting 13.8m cannabis bushes, valued at US$682m. Actual seizures of drugs — cocaine, ephedrine and pseudoephedrine — were valued at US$18.4m.

To put this into perspective, accounts kept by the Zetas in a notebook seized by the police in a safe house late last year reveal that in February they moved 8 tonnes of cocaine through Honduras and Guatemala to Mexico, and entered for this a value of US$97.6m.

The police also announced that since the beginning of the year they had arrested 541 people suspected of involvement in drug trafficking.

On 18 May, when news of the first ‘successes' after the Petén massacre had come in, President Colom called an emergency Central American summit ‘to analyse the most recent acts of violence recorded in the region [and] adopt joint measures' to deal with the situation. Two presidents turned up the following day: Mauricio Funes of El Salvador and Porfirio Lobo of Honduras. Belize sent deputy prime minister Gaspar Vega, Nicaragua, its deputy foreign minister, Orlando Gómez. A presidency official said that Costa Rica had not been able to attend because of the speed at which the event had been organised.

The attendees spent a few hours in Antigua, had their pictures taken and, according to Colom's summing-up, agreed to exchange information and coordinate joint actions ‘rapidly and efficiently'. They did not specify the nature of these actions. They also reported on progress on the preparation of a subregional security strategy, proposed by Colom back in February and scheduled to be presented to the international community in June, in the hope of raising US$900m in antidrugs assistance. On this there was clear evidence of acceleration: on 22 May in Managua the presidents of Guatemala, El Salvador, Honduras and Nicaragua signed the ‘strategy' document.

As the meeting was taking place, the Guatemalan authorities announced another success: a Mexican woman had been arrested the previous evening at La Aurora airport as she attempted to board a flight to Panama carrying US$260,157. She was charged with money laundering. Two days later a Guatemalan lawyer was arrested at the same airport trying to board a flight to Colombia carrying US$202,000.

Public security is a major concern in Guatemala and, inevitably with general elections rapidly approaching (they take place in September), a decisive campaign issue. Colom has an important stake in this contest: his ex-wife Sandra Torres (divorced pro-forma to beat a ban on the candidacies of any close relatives of the incumbent) has been closing the gap with frontrunner Otto Pérez Molina, a retired general with a tough line on law and order. In the week before the Petén massacre she had risen to within seven percentage points in a CID-Gallup poll, attracting 24% of voting intentions against her rival's 31%. With both of them together polling only 55%, the contest is likely to go to a runoff, so Torres stands a reasonable chance.

Development: On 29 June the Southern Common Market  (Mercosur) formally criticised comments by Britain's defence minister, Liam Fox, over the Falklands.

Significance: The surge in ministerial rhetoric in Argentina and Britain over the Falklands means, paradoxically, that a confrontation is less likely. The 1982 Falklands War started when Argentina misinterpreted UK policy over the islands in the South Atlantic. Fox's comments this week were unequivocal.

Key points:

• The Mercosur (composed of Argentina, Brazil, Uruguay and Paraguay) agreed to ban any vessel flying the Falkland Islands' flag from using Mercosur ports. The associate members of the Mercosur (Bolivia, Chile, Colombia, Ecuador and Peru) have also agreed to this policy. The Latin American countries will also inform Argentina if any oil exploration ship working in the Falklands Islands' oil basin uses a local port.  This declaration is virtually identical to the policy adopted by the Union of South American countries at its November 2010 meeting.

• The Mercosur reiterated its call for negotiations between the UK and Argentina over the future of the Falklands. Héctor Timmerman, Argentina's foreign minister, accused Britain of creating "an anachronistic colonial situation" because of its refusal to negotiate over the Falklands.

• On 27 June Fox said that Britain was prepared to use force to defend the Falklands.

Development: On 6 May a majority of Ecuadoreans either voted against, voted blank or spoilt their ballot papers in the government's 10-point constitutional reform referendum, according to partial results from the official Consejo Nacional Electoral (CNE).

Significance: The result, which is still not final as less than 40% of the votes have been counted, means that President Rafael Correa can no longer rely on elections and referendums to defeat his opponents. Formally, a narrow majority of voters (excluding blanks and spoilt votes) approved the proposed reforms but by a much smaller margin than the government expected. Correa's opponents clearly hope that this setback will tempt him to govern in a more authoritarian way.

Key points:

• The election looks clean because the official CNE results published so far contradict an exit poll from the government's favourite pollster, Santiago Pérez, which claimed that the government's "Yes" campaign had won 60:40. The final result is likely to be much closer: although the CNE figures show the government winning on all 10 questions, its victory is hollow because at 4.40am local time today (10.40am BST), if blanks and spoilt ballots are taken into account, a clear majority had not voted "Yes".

• The government was clearly defeated in several provinces on all 10 questions (notably the opposition heartland of Napo which is one of the few provinces where all the results are in). Even in Pichincha, which surrounds Quito, where less than 30% of the votes have been counted, the government is losing on Question Four, which would give it the authority to appoint (or sack) all judges for the next 18 months. The government is also losing on Question Seven which asked voters to approve the banning of commercial gambling.

• The government initially hailed its victory, following the exit poll, but as the full story unfolded yesterday (8 May), its reaction became more aggressive. Leading government figures said that they expected the opposition in congress, where Correa's majority is flimsy, to try to boycott congress. The government warned that if the opposition followed this strategy, it would use its powers to expel opposition members from congress. 

• Correa's opponents claim that the result of the wide ranging referendum will give the government huge, unquestioned powers to reform the judicial system and curb criticism in the media. The complicated 10-question consultation covered issues ranging from judicial reform to the definition of what constitutes an economic crime and whether bull-fighting and commercial gambling should be banned.

Pointer: It is easy to argue that Correa and the government are the consultation's losers. However, the winners are harder to find. Although the mayor of Guayaquil, Jaime Nebot, the standard bearer for the traditional opposition, claimed that his city rejected five of the government's proposals, at the provincial level, according to the CNE's still partial count, Guayas voted in favour of the government. If this proves to be the case, Nebot's threat to Correa's power will remain muted. A bigger winner from the consultation appears to be former president Lucio Gutiérrez (2003-2005), whom Correa defeated in the last (2009) presidential election. The provinces which supported Gutiérrez then, voted against Correa in yesterday's referendum.

Annulment of the Alfonsí­n laws by congress is cited as the main reason not to proceed with `dirty war' cases.

The annulment by congress of the Alfonsí­n laws barring prosecution of `dirty war' criminals has already had one side effect which is unlikely to be celebrated by those who want to see the cases reopened. On 29 August it was cited by the Spanish government as its reason for not requesting the extradition of the 39 former Argentine military and one civilian to stand trial in Spain on charges of genocide, terrorism and torture.

Spanish Vice-President Mariano Rajoy invoked the bilateral extradition with Argentina which says that extradition shall not proceed when the country where the crimes were committed is able to prosecute those responsible. He went on to say that as the Argentine congress had declared the nullity of the laws barring the prosecution of the cases in question, and in view of public statements made by President Néstor Kirchner, it could now be expected that the accused would be tried in Argentina.

The congressional annulment of the Alfonsí­n laws may yet be challenged in the courts [WR-03-33], but the Spanish government has preferred to steer clear of that eventuality.

Other objections
The extradition request had also been disputed in Spain on purely domestic legal grounds. Spain's chief prosecutor, Pedro Rubira, argued that according to jurisprudence Spain can only try torture cases in which the victims are Spaniards, and that the charge of genocide is inapplicable. Torture could be actionable, but only in cases dated after July 1978, when this possibility was incorporated into Spain's penal code. However, he noted, all the torture cases involving Spanish nationals brought by Garzón refer to events that took place either in 1977 or earlier.

Rubira also provided some of the grounds for the recent decision of the Spanish government. Jurisprudence also says, he argued, that Spain cannot prosecute when the events are being tried in the country in which they took place - and that there was information about political and judicial changes in Argentina which would enable trying over there the cases judge Baltasar Garzón is pursuing. The Spanish prosecutor added that, in any case, it is in Argentina `where all the evidence can be found and where trials of the accused can be carried out with due attention to the principles of publicity, orality, concentration and immediacy.'

Political dimension at home
While President Kirchner was the one who had cleared the way for the Spanish extradition request in the first place (by withdrawing the standing opposition by two successive governments), he had later expressed his preference for conducting the trials in Argentina. Similarly, his approval of the congressional annulment of the Alfonsí­n laws has gone hand-in-hand with pressure on the supreme court to rule that those laws are unconstitutional, and therefore null and void. The obverse of that situation is that the supreme court appears to be using its pending ruling on that issue as a bargaining chip in its efforts to avoid impeachment by congress. News that a federal appeals court in Buenos Aires is already reopening cases must be viewed in the light of the pending supreme court decision.

A mere 8% of the newly elected congressmen come from the 23 indigenous ethnic groups that make up 41% of the population, and most of Guatemala's landless poor.

The two candidates heading for the presidential run-off, Oscar Berger and Alvaro Colom, are already having to face at least one manifestation of the group most neglected by all politicians in the general elections: Guatemala's Indians, who account for 41% of the population. The manifestation they face is an extreme one: the former members of the `civilian self-defence patrols' (PACs) who served on the frontline of the counterinsurgency campaign in the 1980s and have sporadically acted as shock troops for the ruling Frente Republicano Guatemalteco (FRG).

Well aware that they are a force to be feared, the 520,000 former PACs last year extracted from President Alfonso Portillo the promise to pay compensation for their military services, at a rate of US$640 each. When the money did not materialise, in the run-up to the elections they kidnapped four journalists to extort from Portillo a commitment to disburse the funds immediately. Portillo agreed, but the ex-PACs maintained until the last minute a threat to boycott and disrupt the elections if he failed to deliver a first instalment of US$120.

The threat was lifted even though the government had only managed to pay 76% of the ex-PACs. The former militias then shifted their attention to the candidates headed for the run-off, since payment of the remaining two instalments was left by Portillo to the new administration (clearly a ploy designed to attract votes to FRG candidate Efraí­n Rí­os Montt, which failed). This will cost the new government about US$200m.

The ex-PACs have already held a negotiating session with frontrunner Berger, chiefly because until recently Colom had been promising to halt the compensation payments and put the former militiamen on trial for human rights abuses (they have been accused of some of the worst atrocities in the internal war that formally ended with the 1996 peace agreements). They have offered to vote for Berger if he puts in writing a promise to pay the balance of the promised compensation. Berger had already stated that he would honour Portillo's agreement because it was `a state commitment', but the ex-PACs want this in black and white.

Unseen by the parties
The high visibility of the former PACs did not make the political parties more sensitive to the demands of Guatemala's indigenous population. Beyond a few flights of rhetoric, the extent of their real interest was illustrated by the fact that the number of indigenous candidates was just under 10% (spread out among the 17 competing parties), and many of these were placed so far down the lists that their election was far from assured. As it turned out, only 13 of the 158 candidates elected to the single-chamber congress are Indians. This is an improvement on the 8 indigenous seats in the outgoing congress, but still grossly disproportionate to their share of the population.

Discrimination against Guatemala's 23 indigenous ethnic groups is most visibly expressed in the fact that the country remains firmly monolingual. Less visible (because ignored) is the fact that the poverty rate, 57% of Guatemala's total population, rises to 70% of the indigenous population (the relative rates of extreme poverty are 16% and 21%).

The land issue
These figures do not take into account the worsening of the Indians' lot over the past couple of years due to the crisis in the coffee industry: since the beginning of 2002 some 200,000 seasonal jobs have been lost. These are vital to the indigenous population, which otherwise must rely on subsistence agriculture in marginal lands. The degree of concentration of land ownership in Guatemala is extreme even by Latin American standards: 70% of the land is in the hands of 0.15% of the population.

Though their actions have been overshadowed by the attention focused on Rí­os Montt's presidential bid, the landless peasants of Guatemala, mostly Indians, have been emulating their peers in Brazil, staging land invasions. Since the beginning of last year they have invaded at least 115 fincas, which given Guatemala's size, is even more impressive than the 305 invasions recorded in Brazil in the same period.

The insurrection in Haiti appears to have changed in nature over the past weekend. Until then, the driving force had been the Gonaí¯ves-based Revolutionary Artibonite Resistance Front, a formerly pro-Aristide gang of political `enforcers', emulated by disparate groups, some of the same kind, in a few other parts of Haiti. Now a new force has come onstage: former elements of the disbanded Haitian army and of paramilitary squads that operated during the period of military rule.

Early last week, the national police were able to recapture St Marc, a town lying almost halfway between Port-au-Prince and Gonaí¯ves. The rebels there, a small group known as Ramicos, had previously engaged in non-violent protests. They did not offer much resistance, and the police, accompanied by armed pro-Aristide chimí¨re members, are said to have conducted a massacre. The central government later announced that it had reestablished control of Grand-Goave, southwest of the capital. In northern Cap Haí¯tien, the country's second-largest city, as in Port-au-Prince, pro- and anti-Aristide mobs engaged in arson attacks against prominent members of the opposing camps.

As the days passed, however, it became evident that other armed men were acting against the government. Raiders based in north-central St Michel de l'Atalaye began to strike out in the direction of Cap Haí¯tien, and were said to have taken control of St Raphael and Dondon.

The new allies
At the weekend, listeners tuning in to Radio Signal FM heard that Buteur Métayer, leader of the Artibonite Front, had struck an alliance with Guy Philippe (a former soldier and later, in the US-trained police, chief of police in Cap Haí¯tien) and Louis Jodel Chamblain, prominent in the paramilitary squads that operated under General Raoul Cedras when he ruled Haiti in 1991-94. They have contributed a force, recruited mainly among former members of the army, claimed to be about 500 strong. Metayer's group numbered fewer than 70.

The new anti-Aristide fighters were soon in action: a group of 50 overran the police station at Hinche, on the central plateau not far from the border with the Dominican Republic. Whether connected or not, a group calling itself the Armée Kosovo claimed to have taken control of Trou du Nord, in the northeastern department, close to Cap Haí¯tien.

At the beginning of the week, a former army colonel who opposes Aristide, Himmler Rebu, was saying of the Gonaí¯ves-based revolt, that it did not have the features of a national rebellion; rather, it could be better described as a rebellion `within the Aristide camp'. This no longer seems to be the case. Nor is the government's version accurate: that the rebels are acting as the `armed wing' of the mulatto business and political élite represented by the Groupe 184 of business associations led by André Apaid and the Convergence Démocratique, the broad political and civic alliance fronted by Evans Paul, former mayor of Port-au-Prince. With the incorporation of people like Philippe and Chamblain, who clearly outweigh the former Armée Cannibale, what might be brewing now is a bid to regress to before Aristide's reinstatement by US intervention.

One thing that President Alvaro Uribe was unable to achieve, as he had wanted via his mega-referendum, he now appears about to get from a surprisingly pliant congress. The senate has just rushed through the approval of a draft constitutional amendment allowing presidential re-election for successive terms.

The text now goes to a committee of the chamber of deputies, then to the full chamber, then back to the senate to complete the series of eight debates required for constitutional amendments.

In the senate the text was approved by 57 votes: 34 senators opposing re-election chose to walk out of the session. Before the vote was taken, the senators added to the bill a clause stipulating that ministers wishing to run for the presidency must resign their posts a full year before the elections.

Deal for the Farc too?
The surprise of the week was what appeared to be a welcome from the Farc to the prospect of Uribe's re-election. Raúl Reyes (real name: Luis Edgar Devia Reyes), who frequently acts as the Farc's chief spokesman, sent a written statement to a TV news programme saying that the Farc sees the re-election as an opportunity to achieve the exchange of prisoners it has been proposing for some time. Reyes suggested that `if some Liberals condition their support to projects of interest to the government, it is possible to achieve this'. What the Farc is now proposing is to release around 60 politicians, soldiers and police in exchange for the freeing of some 500 imprisoned guerrillas.

President Uribe has turned down this offer, demanding instead the freeing of all hostages held by the Farc. However, there does appear to be a movement afoot to offer the Farc an arrangement akin to that held out to the AUC. At a forum last week on proposals for a `humanitarian exchange', retired General Eduardo Herrera Verbel, an adviser to the peace commission, said that if the Farc were to agree to an exchange `dignifying their position' in the eyes of the world, `it would open up the possibility' of lifting their designation as a terrorist organisation. The terrorist label, he said, `is not a straitjacket, but a legitimate tactic of political pressure'.

Local currency per US$1
COUNTRY	CURRENCY	Year ago	Previous	Current
		04.04.03	23.07.04	02.08.04
Argentina	peso	2.93	2.97	2.98
Barbados	dollar	2.00	2.00	2.00
Belize	dollar	2.00	2.00	2.00
Bolivia	boliviano	_	7.94	7.95
Brazil	real	3.22	3.05	3.03
Chile	peso	723.00	623.00	643.00
Colombia	peso	2,951.35	2,619.92	2,619.55
Costa Rica	colón	389.61	439.88	440.63
Cuba	peso	1.00	1.00	1.00
Dominican Rep.	peso	24.39	44.88	44.39
Ecuador	dollar	1.00	1.00	1.00
El Salvador	colón	8.75	8.75	8.75
Grenada	EC dollar	2.70	2.70	2.70
Guatemala	quetzal	7.95	7.84	8.01
Guyana	dollar	180.50	_	_
Haiti	gourde	28.00	_	_
Honduras	lempira	17.37	18.37	18.38
Jamaica	dollar	48.70	_	_
Mexico	nuevo peso	10.80	11.39	11.36
Nicaragua	córdoba oro	15.04	16.04	16.05
Panama	balboa	1.00	1.00	1.00
Paraguay	guaraní­	6,920.00	5,875.00	5,875.00
Peru	nuevo sol	3.47	3.43	3.43
Suriname	guilder	2,178.50	_	_
Trinidad & Tobago	dollar	6.07	_	_
Uruguay	nuevo peso	29.40	29.28	29.38
Venezuela	bolí­var	1,600.00	1,917.40	1,917.40
Sources: EFE; Bank of America.

Los Zetas, the gang of former commandos turned narco hitmen, are well on their way to joining the pantheon of Mexico's legendary outlaws. As the government, after writing them off several times as 'decimated', is seen scrambling to rearrange prison security on warnings that Los Zetas might be planning another spectacular jailbreak, in northern Coahuila the media reports that they are being credited with - uncharacteristically - rescuing kidnap victims.

The story from Piedras Negras, Coahuila, is that local businessman Rolando Chapa was kidnapped on 11 October while driving through the border town. No report of his abduction was filed with the police. The very next day, according to the media in Saltillo, the state capital, members of Los Zetas stormed a safe house and released Chapa and three other kidnap victims. Neighbours were cited as having witnessed the event. Towards the end of the week the state prosecutor's office insisted that, according to relatives, Chapa was still missing.

There are many possible explanations for the incident, but its salient feature is the readiness with which the story was believed. The authorities find themselves having to keep reminding the public that Los Zetas are actually a gang of brutal professional killers. At the same time they have contributed to the gang's legendary status by repeatedly referring to its dangerousness and all too often claiming that they had succeeded in disrupting the gang, only to have Los Zetas stage another 'spectacular'.

Los Zetas were formed in the mid-to-late 1980s by members of élite military units who had been seconded to the organised crime unit of the federal chief prosecutor's office, the agency coordinating Mexico's antidrugs efforts. Members had been trained in special forces units such as the Grupo Aeromóvil de Fuerzas Especiales (Gafes), Grupo Anfibio de Fuerzas Especiales (Ganfes) and Brigada de Fusileros Paracaidistas. They eventually deserted, attracted by the far-higher earnings promised by the drug gangs they had been pursuing.

Early on they became associated with Osiel Cárdenas, boss of the Gulf cartel. Initially they operated mainly in the northeastern state of Tamaulipas (mainly in Nuevo Laredo, Matamoros and Reynosa), but by late 2002 they had reportedly spread their influence westward to Monterrey (Nuevo León) and Piedras Negras (Coahuila). They survived the arrest of Cárdenas and the killing of their leader, Arturo Guzmán Decena, both in 2002.

They also 'graduated' from drive-by assassinations to kidnapping and extortive 'protection' rackets (there are reports of used-car firms in Nuevo Laredo going out of business because they lacked the resources to meet the protection contribution demanded by Los Zetas). The kind of exploits that have made the reputation of Los Zetas are best exemplified by their raid on the Apatzingán prison in central Michoacán, far from their usual stomping-grounds, to spring five members of the Gulf cartel. This derring-do, of course, was assisted by the corruption of prison officials: the prison's director and a number of wardens have been indicted for collusion. 

Following the recent killing of a drug trafficker in the La Palma prison [WR-04-40] the authorities have launched a massive drive to relocate inmates and purge the prison service of suspect personnel. Martí­n Huerta, the new federal security minister, says that the aim is to reduce the concentration of members of a single gang in any one jail, and also to alleviate prison overpopulation.

ECUADOR | Gutiérrez to push again for reforms. Emboldened by his recent success in building up a 'new majority' in congress, President Lucio Gutiérrez is preparing to push through his planned electricity, oil sector and fiscal reforms previously rejected by congress. Just how much of the original projects remain is not yet clear, but the presidency has revealed its strategy to achieve prompt approval. It will submit all these reforms as a package, labelled 'urgent' (a rough equivalent to fast-track procedure in the US).

Previously, the opposition in congress (which included several of the parties now included in the pro-government 'new majority') rejected the electricity and oil sector reforms on the grounds that they would pave the way for privatisation.

PERU | Growth outlook. Last November productive activity in Peru was up 8.4% year-on-year, the highest such rate since April 2002, when a 9.1% rise was recorded. The main driving forces were fishing (up 30.7%), manufacturing (+10.8%), construction (+8.4%) and mining (5.2%, driven by copper, iron, oil and gas). Agriculture was up a more modest 3.2%, despite the recovery in the production of potatoes, cotton and rice.

Worth noting: the upswing in manufacturing was driven chiefly by the non-primary branches, particularly textiles and apparel.

With the US invited to join the Central American countries and Mexico in a joint effort to deal with the mara street gangs [WR-05-13], the media in the US, and particularly the Spanish-language media, have been wondering aloud whether the US can provide any useful guide to action. Media attention last week was prompted by two events involving gangs: a campaign of mass arrests by the US Bureau of Immigration and Customs Enforcement (ICE) and a scheme by Los Angeles mayor James Hahn to use city-wide 'gang injunctions' as a tool.

Last week the ICE arrested 103 members of the Mara Salvatrucha, also known as MS-13, the largest of the Salvadorean gangs which originated in the US (it was formed in the Ramparts district of Los Angeles in the 1980s). A detail which many highlighted was that more than half of those arrested had been seized before in connection with violent crimes, including homicide. Among the questions raised was just how many of those taken in mass arrests end up going to prison. On the strength of previous cases, more than 10% was deemed rare.

It was generally taken for granted that most would be deported, but La Opinión cited experts dismissing this as a solution, inasmuch as it merely transferred the problem from one country to another and often initiated a circuit which eventually brought the deportee back to the US. This is an argument widely heard in Central America. The same newspaper notes that 'positive interventions' to reduce gang violence only manage to affect a small proportion of the gang universe - which it put at 209 'Latino' gangs with about 22,000 members in Los Angeles alone.

Los Angeles scheme
LA already has a scheme of 'gang injunctions' whereby gang members are barred from publicly assembling in designated areas, bearing and owning guns and other weapons, or possessing alcohol or drugs. Twenty two such injunctions have been issued, affecting an estimated 25% of the city's gang members. On 4 April mayor James Hahn, a former city attorney, announced a plan to make the injunctions city-wide rather than targeted, the rationale being that this would prevent the gang's activities from merely moving from one area to another. His aim: to make LA totally 'gang-free'.

Those who violate the injunctions commit a misdemeanour for which they can be jailed. One problem which has not been sorted out is that the Sheriff's Department has in place an 'early release' programme under which prisoners can be freed after serving only 10% of their term. This is a response to the fact that county jails are already too full, so questions are being asked about what will happen if there is a much larger influx of injunction violators.

One public prosecutor has said that the swift release of those jailed under the gang injunction scheme will only erode the deterrent value of the injunctions (he actually thinks this is also the case with other misdemeanour offences, not only the gang-related ones). From an entirely different angle, spokesmen for the American Civil Liberties Union (ACLU) have warned that the system might 'unfairly target young people of colour and try to limit where they can go in the city'.

The gang-injunctions scheme differs from the approach adopted by Honduras and El Salvador which provoked much concern among jurists, in that it does not criminalise gang membership per se but only certain acts - though its weak point is also the question of how to determine gang membership.

“We are not going to get involved in the conflict. Not intervening means not taking the side of one or the other."
Antonio Parra, foreign minister of Ecuador, on the recent flare-up of fighting in Colombia along Ecuador's northern border.

“Images like these have no place in today's world."
Scott McLellan, White House spokesman, on a Mexican stamp issue featuring the country's oldest cartoon character, a black schoolboy.

“I am at his orders to work on that integration."
Vicente Fox, president of Mexico, welcoming what he understood as a proposal by Zapatista leader Marcos to turn his movement into a legal political party.

In the first round of elections for the top job in the lower chamber Rebelo, of the Partido Comunista do Brasil (PCdoB), tied with José Thomaz Nonô, of the Partido da Frente Liberal (PFL), at 182 votes apiece - a measure of their scant core support in a chamber of 513 members. To secure the run-off the government pulled out all the stops and resorted to the old-style 'physiocratic' practices of allocating funds to projects in the constituencies of wooed congressmen, as well as to the ministries in the hands of allied parties (which were also assured of a quota of posts in state firms). It has been estimated that the operation may have cost R$1.5bn (US$673m). As Nonô put it: 'The government threw in all it had, plus all it didn't have.' The result: 258 votes for Rebelo versus 243 for Nonô.

That such allegiances are shaky was demonstrated on Rebelo's first day on the job when he attempted to gain consensus for a quick change in the electoral rules, among other things to extend the deadline for would-be candidates to register with a party. He failed to achieve that; the issue was postponed for further discussion until 4 October - after the deadline had passed.

In a country where floor-crossing is frequent, such deadlines allow 'snapshots' of the balance of power in congress, especially necessary as no fewer than 260 candidates are known to have changed party since the current legislature was installed in February 2003. For the ruling Partido dos Trabalhadores (PT) this particular deadline was particularly important as it was hoping to recover its lost position as the largest bloc in the lower chamber. 

At the outset the PT had 91 seats; just before re-registration the number had fallen to 83, and it had been overtaken by the Partido do Movimento Democrático Brasileiro (PMDB) whose bloc had swollen from 75 to 85. The third-placed PFL had seen its bloc shrink from 84 to 59.

An unofficial tally late on 30 September, a day before the deadline, showed the PMDB still ahead, with 89 seats, the PT hard on its heels, with 87, and the PFL trailing behind with 60.

Alencar joins evangelicals
Perhaps the most prominent of the late floor-crossers was Vice-President José Alencar, who resigned his membership of the Partido Liberal to join the Partido Municipalista Renovador (PMR), recently set up by Brazil's largest evangelical church, the Igreja Universal do Reino de Deus. Alencar said he had become uncomfortable with the involvement of the PL in the current corruption scandals; he does not apparently mind the more high-profile involvement of the church behind the PMR.

The PMR plans to rename itself Partido Republicano (PR) at its forthcoming convention.

Under heavy diplomatic pressure, Prime Minister Gérard Latortue agreed last week to hold the elections on 7 February, the date originally set for the handover of power to the new authorities. The new timetable, if kept, means that a new government should take over on 29 March.

The UN Security Council had reacted to the most recent postponement of the elections [WR-05-01] by holding an urgent meeting on 6 January, at which it resolved to demand that the elections be held no later than 7 February. In Port-au-Prince Latortue announced that he had requested a personal meeting with the Council to explain why more time was needed. He also renewed his pledge to step down, regardless of when the elections were held, on 7 February - though he also said that he would continue to manage the day-to-day business of government until the new authorities took over.

The following day US Secretary of State Condoleezza Rice held a tele-conference with her peers from Argentina, Brazil, Canada, Chile and France; they agreed to exert jointly 'strong political pressure' on Haiti to set a new date for the elections. The response from the interim Haitian government was immediate: a decree was issued calling the legislative and first-round presidential elections on 7 February, providing for a run-off on 15 February and setting the date for the handover on 29 March.

This leaves a month to sort out the logistical problems, which remain formidable. Of the 3.5m registered voters, only 1.8m had been given their voting documents by 6 January. There are those outside Haiti who have their doubts about the possibility of overcoming these problems. On 5 January Caricom and the African Union announced that they would be sending a joint mission to Haiti to ascertain whether the country was ready to hold elections.

Many local analysts believe that behind the logistical problems lie in attempts to manipulate the elections so as to avoid a victory by Lavalas. Former president René Preval, the candidate backed by the Lavalas grassroots, was shown attracting 31% of voter preferences in a late-November poll by CID-Gallup. Indirect evidence suggests that he would muster more votes than that. A survey by the US-based National Organization for the Advancement of Haitians (Noah) and The Democracy Group showed 51% of respondents in favour of the return to Haiti of ousted president Jean-Bertrand Aristide. 

The deputy ministers of foreign affairs and defence of most of South America (Brazil and Venezuela have not been listed as participants) have scheduled a meeting in Buenos Aires to discuss further action regarding Haiti.

On the table, inevitably, will be the appointment of a new commander for Minustah, the UN 'stabilisation force', following the sudden demise of General Urano Teixeira da Matta Bacellar. Da Matta was found dead of a bullet wound in his hotel room on 7 January. Lieutenant-Colonel Fernando Cunha Mattos, spokesman for the Brazilian contingent, initially said this had been an accident, but the fact that Minustah followed up with the announcement that it was investigating the event strengthened the suspicion that it had been suicide.

At first it looked as if Peru's 9 April presidential contest would end in a three-way near-draw which would demand careful recounting and a tense, anxious wait. By 11 April part of that prospect had dissipated: the first round had a clear winner, Ollanta Humala of the Partido Nacionalista-Unión por el Perú (PNUP). However his two closest rivals, Lourdes Flores of Unidad Nacional (UN) and Alan Garcí­a of the Partido Aprista Peruano (PAP) were locked in a virtual photo-finish that might take up to 20 days to reveal an outcome, which in turn could determine the fate of the run-off.

With just over 80% of the vote counted, Humala was the undisputed victor with 30.2% of the vote. Garcí­a and Flores followed with less than one percentage point separating them: the former at 24.9%, the latter at 24%. The proportion of uncounted votes is seen as unlikely to challenge Humala's lead, but could make a big difference to the would-be second-runners.

Two developments stand out which may affect the run-off. The first is that Humala did attract a greater share of the vote than the polls had been suggesting. Many analysts had noted that the polls were probably understating rural voting intentions. In the event, they did not do so by all that much. 

The second is that the strength of Garcí­a's late climb was not as great as many had imagined: the provisional outcome seems to point more to Flores having lost ground in the final stretch than to Garcí­a having gained much. This observation, of course, might conceivably have to be reviewed after the remaining 19% of the vote is counted.

This is no minor matter as one feature common to most opinion polls was that Humala would not stand a chance of winning a run-off against Flores, but would be likely to see off Garcí­a.

One surprise

The elections did produce one surprise: Humala's PNUP appears to have attracted far more of the congressional vote than anticipated. An early projection of partial results shows the PNUP winning about 40 seats in the single-chamber congress, to about 35 for the PAP and 20 for UN. 

If the final count even roughly confirms this pattern, a victorious Humala would have to find allies to build a working majority. To judge by the speculation among local analysts, it cannot be taken for granted that there would be anything like a solid anti-Humala front in congress.

Should one emerge, with around a third of the 120 seats in congress, Humala would also need allies to block any adverse major legislation requiring a qualified majority. This line-up does not bode well for Humala's intention to call a constitutional assembly to rewrite Peru's charter (and give him another shot at altering the balance of political power). The scheme, which is already being challenged on constitutional grounds, requires a two-thirds majority if it is to have any hope of prospering.

Treading carefully

Humala has already started treading carefully with a view to the run-off. He is attempting chiefly to win over those who are slightly suspicious of his inclinations, while not alienating those who support his nationalist and implicitly populist stance. Thus, since the election, he has stated that the Venezuelan model cannot be replicated in Peru, while reiterating his sympathy for Hugo Chávez . 

He has also said he is not anti-US while reiterating that he will not allow the US to tell Peru what it must do. On the economic front, he has largely avoided spelling out the more nationalistic and statist components of his platform, confining himself to very general soundbites.

This is very much in line with his stance during the last leg of his first-round campaign. He does not appear concerned about any attacks on his military record and supposed links with Chávez and the coca growers. What might prove more damaging is the 'help' his jailed brother Antauro keeps proffering - most recently, the day after the elections, in the form of a statement that Ollanta had only softened his message for electoral purposes.

Explaining the phenomenon

An answer to those puzzling over the reasons behind Humala's rapid rise to political prominence came last week from an unexpected source: Economy Minister Fernando Zavala. Addressing the annual meeting of the IDB in Belo Horizonte, Zavala described Peru's macroeconomic situation as 'extraordinarily good'. However, he added: 'The macroeconomic figures hide serious problems of inequality and distribution of wealth: 48% of Peru's population lives below the poverty line and an important proportion in extreme poverty.'

Zavala had no intention of helping Humala. Instead, his main purpose was to warn against the threat he believes Humala poses. He said: 'The challenge for economic policy is to achieve a sustainable equilibrium over time, far beyond macroeconomic equilibrium. 

The aim of public policies should be to seek macroeconomic balances that are positive and socially sustainable. Should this not happen, the temptation of a populist-style policy, with the results we all know, will always be present.'

He could have added an item mentioned in Santiago two days later by José Graziano da Silva, the new regional representative of the Food and Agricultural Organization (FAO). Da Silva warned that, at the present rate, Latin America will not achieve the UN target of halving the number of people under the poverty line by 2015. Peru is among the four South American countries singled out by the FAO as calling for more urgent anti-hunger policies (the other three being Bolivia, Ecuador and Paraguay).

The new FAO representative, who was involved in Brazilian President Lula da Silva's 'Zero Hunger' plan, which had to be scaled down under macroeconomic imperatives, said that, 'all figures show up the region as "champions" of inequality. In order to reverse that situation it is necessary to make political commitments and keep them'. He said: 'The issue of hunger and poverty in Latin America is linked to the problem of the distribution of wealth and land.'

The bill ordering the destruction of 651 Sam-7 anti-aircraft missiles, held up in the national assembly since last year by the Sandinistas, was suddenly approved last week in a joint manoeuvre by the two main splinters of the old Liberal party. The Sandinistas have denounced the procedure as illegal and served notice that they will try to get the bill repealed by the courts.

On 13 July the president of the assembly, Eduardo Gómez, unexpectedly tabled a vote on the missile-destruction bill. In protest, the Sandinista legislators stormed out. However, their peers of the Alianza Liberal Nicaragüense (ALN, backing the presidential candidacy of US-endorsed Eduardo Montealegre) and the Partido Liberal Constitucionalista (PLC) managed to muster a remaining quorum of 47 so the vote went ahead. It was approved by 46 to 1.

This goes some way towards meeting the US demand for the destruction of Nicaragua's missile arsenal, on the grounds that it ran the risk of ending up in the hands of terrorists. However, there is a broad consensus in Nicaragua on the army's argument that 400 missiles should be retained for defensive purposes.

René Núñez, the Sandinista vice-president of the assembly, insists that under the existing armaments law, 56 votes are required to authorise the destruction of the missiles, and that an injunction would be sought to stop the government from going ahead with the decomissioning.

MEXICO: 30-year bond. The government said that it would issue its first 30-year bond denominated in pesos on 24 October. The bond would be for M$2bn (US$182m). The finance ministry said that it expected to issue 30-year bonds every quarter from now on. In the "grey" or pre-issue market the bonds were changing hands at yields of between 8.28% and 8.26%.

MEXICO: Country risk premium falls. Mexico's risk premium fell to 107 basis points on 22 October. This is the lowest it has been since 27 February, when the premium hit its lowest level ever: 95 basis points over US Treasuries.

MEXICO: Foreign debt. When the Fox government took office on 1 December 2000, the country's foreign debt stood at US$77.6bn. At the end of August 2006, foreign debt stood at US$53.3bn, a reduction of 31%. 

MEXICO: Tax revenues. The biggest problem the likely new finance minister, Agustí­n Carstens, will face when he takes office with the rest of the cabinet on 1 December is the failure of the Fox government to broaden the tax base. In 2000, non-oil tax revenues were equivalent to 15.2% of GDP. In 2005 they were equivalent to 14.6% of GDP. Oil tax revenues, in the same period, have increased from 6.7% of GDP to 8.7%. This year around 40% of the public sector's income will come from oil. The finance ministry reckons that the oil windfall this year will be M$260bn (US$23.7bn). Of this sum M$60bn will be sent back to the state oil company, Petróleos Mexicanos; M$30bn will go into the stabilisation fund and M$30bn will be used to improve the fiscal position by paying off debt.

"Few times in history has a new government had to endure such a ferocious, irresponsible and reactionary opposition."

Ecuador's President Rafael Correa.

 

“Dictatorship is what we had before, a dictatorship of the few. Of course, we want to install a dictatorship, the dictatorship of a true democracy that will be installed forever."

Venezuela's Vice-President Jorge Rodrí­guez.

 

“If I were Uribe, I would do what he is doing."

Colombia's former cabinet minister, Fernando Araújo, who escaped from the Farc in an armed rescue attempt, endorses President Alvaro Uribe's democratic security policy.

Cardinal Miguel Obando y Bravo officially began his work this week as head of the truth, justice, reconciliation and peace commission, a parastate body created by President Daniel Ortega to provide assistance to some 300,000 victims of the civil war in the 1980s. This includes between 15,000 and 20,000 wounded ex-servicemen and counter-revolutionaries, who received little assistance from previous governments. On 15 May Obando held his first meeting with demobilised combatants. 

Ortega said the new body was a successor to the reconciliation commission established in August 1987, when the Esquipulas II peace accords were signed, and would provide land, housing and credit to facilitate full social reintegration. The previous commission was not particularly successful: most of the scant resources set aside for the demobilised were used to pay off those who had taken up arms again. More than 35 agreements were signed between the government and rearmed groups in the early 1990s with the last counter revolutionaries not disarming until 1995. 

The government will be represented on the commission by Nelson Artola, president of the Fondo de Inversión Social de Emergencia (FISE). Obando will be empowered to devise relevant projects and programmes but he will not control a budget, meaning it is far from clear where the funding for these initiatives is going to come from. Ortega has requested US$300m from the US, explaining that due to their role during the conflict -the US financially backed the counter-movement throughout they war- the sum is the least they owe. 

• Disputing the peace
  President Daniel Ortega is at odds with his Costa Rican peer Oscar Arias about the commemoration of the 20th anniversary of the signing of the Esquipulas II peace accords on 7 August. Arias, who won the Nobel Peace Prize for spearheading talks that led to the end of the civil wars in Nicaragua and El Salvador, is planning an event in San José but Ortega thinks it should be held in Esquipulas, in eastern Guatemala, with all the Central American heads of state present.