COFFEE: The nine main coffee-exporting nations of Latin
America (Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Mexico,
Colombia, Peru, and the Dominican Republic) registered a 3.77% increase on
coffee exports in the 2007-2008 coffee trading year compared with the previous
one. According to the Guatemalan National Coffee Association, the nine countries
exported a total of 29.3m (60kg) bags of coffee between October 2007 and
September 2008.
HAITI: The UN sub-secretary for humanitarian affairs, John
Holmes, asked the international community on 27 October to give more donations
to help Haiti rebuild after being devastated by four hurricanes this summer. He
said the UN has so far only received 40% of the US$108m that have been requested
for the beleaguered Caribbean nation.
Chavistas win majority of states, but opposition makes key gains
President Hugo Chávez interpreted the results of Venezuela's regional
elections on 23 November as a victory for his Partido Socialista Unido de
Venezuela (PSUV) and a message from the electorate to keep travelling down the
path of 21st century socialism. The opposition, naturally, placed a different
interpretation on the results. While PSUV candidates won 17 out of 22 states,
the opposition won five, including three of the six key battlegrounds. Perhaps
the most eye-catching development, however, was that dissident Chavistas, widely
tipped to pose more of a threat to the PSUV than the official opposition,
suffered a crushing defeat.
The case for the government Before the elections, Chávez
said that he would consider the loss of three states to amount to an electoral
defeat for his government. After losing five states, he quickly moved the
goalposts. On the whole, however, he will be content. While Chavistas won all
but two of the states in the 2004 regional elections, the governors of three
states distanced themselves from Chávez shortly before last December's
referendum. The PSUV recovered all of these states from dissidents.
The PSUV also swept the municipal elections, winning 267 (81%) of the 328
municipal governments. This was an improvement on 2004, when parties supporting
Chávez won 226 municipalities. In all five states won by opposition candidates
the PSUV won control of the majority of the municipalities. The PSUV also won
the most important of the five municipalities in the metropolitan district of
Caracas - Libertador, the capital city proper - as well as 18 state capitals.
The case for the opposition The five states won by the
opposition include three of the six within the so-called electoral corridor, the
most populous and economically powerful states where the bulk of the electorate
is concentrated. These were the largest state, Zulia, which it retained;
Miranda, the second largest state; and Carabobo. The opposition retained Nueva
Esparta and won Táchira.
The opposition also won the mayoralty of Greater Caracas. This was taken by
Antonio Ledezma, part of the old political guard, the like of which Chávez said
would never come to power again. In addition, the opposition won four out of the
five municipalities in Caracas: previously it controlled only the three
wealthiest - Chacao, Baruta, and El Hatillo. It added Sucre. This was the one
loss which really lived up to the hyperbolic headline in the leading opposition
daily, Tal Cual: “We hit him where it hurts." Sucre was a Chavista stronghold:
it includes the Petare slum, home to nearly one-third of the capital's
residents. Here, Jesse Chacón, a close associate of Chávez , was turfed out of
office by a young opposition leader, Carlos Ocariz, who capitalised on Chacón's
unpopularity and by promising to reduce violent crime. Sucre apart, the
opposition suffered a reverse in the municipal elections. It only managed to win
57 municipalities, down from 85 in 2004: Acción Democrática won the most, 19,
with Copei taking nine. As expected, Manuel Rosales, who Chávez threatened to
have thrown in jail during the electoral campaign, won in Maracaibo, the state
capital of Zulia and second most populous city in Venezuela.
Dissidents demolished The dissident Chavista parties were
annihilated at the polls. They lost the three states which they held and failed
to make an impression in six further states they contested. Podemos, which won
52 municipalities four years ago, and two states - Aragua and Sucre, was left
with just two municipalities. Patria para Todos fared little better, winning
four municipalities.
It seems that voters did not heed Chávez 's threats and personal attacks on
opposition candidates, for instance his threat to send tanks into Carabobo, but
did accept his branding of dissidents as “filthy traitors" and
“counter-revolutionaries". The defeat for the dissidents is a boon for Chávez .
It should discourage others from breaking ranks and might lead to greater unity
in the PSUV.
Where now for opposition? Chávez was quick to recognise
the opposition's victories, despite his combative campaign rhetoric. “Who can
say there is a dictatorship now, and concentration of power in my hands?" he
asked. The answer to the second part of his rhetorical question will become
apparent when he implements his “new geometry of powers", under which he will
handpick regional presidents to whom governors and mayors will be
answerable.
Chávez might also undercut opposition governors and mayors by sticking to his
campaign promise to cut investment to the regions that voted them in. He said
that his “plan to accelerate regional development" (Padre in the Spanish
acronym) would only be administered in states that elected Chavista
governors.
Still, the gains by the opposition could provide it with an important
stepping stone to winning a decent representation in the unicameral national
assembly in legislative elections in 2010. The opposition is still far from
unified but it has everything to gain, having boycotted the last legislative
elections. Significantly, Primero Justicia (PJ) and Un Nuevo Tiempo (UNT)
consolidated their position as the most important political alternatives to
Chavismo, winning far more votes than the other opposition parties, especially
in Zulia, Miranda and Caracas. PJ and UNT represent the reformed, more moderate,
opposition.
Chávez will inevitably lose some seats in the legislative elections as all
167 seats are in the hands of his supporters, minus a handful of dissidents.
Just how many seats he loses will depend on his stewardship of the economy in
the coming months. His government has never managed to get to grips with
inflation, which hit 24.47% in the first 10 months of 2008. However, an even
more pressing concern, about which his government is powerless to do anything,
is the plummeting price of Venezuelan crude, which has fallen from US$132/barrel
to US$40.6/barrel in recent months. The budget for 2009 is predicated on a crude
price of between US$55 and US$60/barrel.
The other issue Chávez will need to combat is violent crime. Despite unifying
the country's 126 police forces under a single national command, insecurity
remains rife. It lost him Táchira state, which borders Colombia, and the Caracas
municipality of Sucre. Here, the PJ had particular success with a campaign
poster depicting a bloody corpse over the caption “46 deaths a day" and under
the banner heading “Patria, Socialismo o Muerte"- Chávez 's favourite battle
cry.
Opposition figureheads The most visible new opposition
figureheads are Henrique Capriles, the newly elected governor of the state of
Miranda, and Antonio Ledezma, the new opposition mayor for Greater Caracas.
Capriles, who had served as mayor of the upper class Caracas municipality of
Baruta, defeated Diosdado Cabello, the incumbent governor and close confidant of
President Chávez . Ledezma is part of the old guard, given his ties to former
President Carlos Andrés Pérez. Both were conspicuously conciliatory to Chávez ,
offering to work with him to “defeat the criminal underworld" and improve public
security.
Venezuela: The rate of household
poverty in Venezuela fell to 26% (of total households) in 2008, down from 55%
a decade earlier, according to President Hugo Chávez .
Development: On 20 February President
Evo Morales accused the US Central Intelligence Agency (CIA) of infiltrating
Bolivia's state oil company Yacimientos Fiscales Petrolíferos de Bolivia.
Significance: Morales has so far failed
to provide evidence but the implication is that the US agency is partly
responsible for the corruption scandal which shook the state oil company last
month, resulting in the departure and subsequent imprisonment of its president
Santos Ramírez.
The accusations will do little to help the process of
repairing diplomatic ties between the two countries, a declared priority of
Morales after relations hit rock bottom last year, when both ambassadors were
expelled, Bolivia was added to the US drugs blacklist and the US Drug
Enforcement Administration (DEA) was kicked out of Bolivia.
As regards the most recent allegations concerning the
CIA, so far only a former YPFB manager, Rodrigo Carrasco Jhansen, has been
accused specifically of collaborating with the US agency. According to the
interior minister, Alfredo Rada, Carrasco Jhansen used to work for the Comando
de Operaciones Especiales (Copes) an “irregular" intelligence outfit which, the
Bolivian government claim, had been established with the logistical and
technological support of the US embassy. Copes was re-designated the
Organización de Estudios Policiales (Odep), before being dissolved in February
2008.
The YPFB scandal, the worst to afflict the Morales
government since it came to power in January 2006, broke at the end of January
when the manager of an Argentine-Bolivian company, Catler Uniservice SRL, Jorge
O'Connor D'Arlach was murdered, allegedly attempting to enter the house of
Ramírez's in-laws with a US$450,000 bribe. The scandal revealed a web of
corruption in the state oil company, with Ramírez and a further 16 ex YPFB
employees currently facing legal action.
Development: On 31 March data from the
car industry showed new vehicle sales rose by 14%, year-on-year, in the first
two months of 2009.
Significance: The increase comes
despite the government's decision to slap a 35% tariff on imported vehicles at
the end of January. Buyers, however, realised that prices would jump, so they
rushed to buy vehicles which had been imported before the tariffs were imposed.
This stock of vehicles is now exhausted. The effect of the popping of this
bubble will be magnified, most motormen say, by the fact that banks are
becoming even choosier about the people to whom they make car loans.
The Asociación de Empresas Automotrices de Ecuador is
now forecasting that its members will sell around 72,000 new cars in 2009, down
from an initial expectation of 96,000. In 2008 the industry shifted 112,599 new
vehicles. In the first two months of 2009, Aeade members sold 16,904 vehicles,
up from 14,533 in the first two months of 2008.
Car salesmen say that prospective purchasers have been
rarer in March, even though some companies such as Renault, which assembles its
vehicles for Ecuador in Colombia, had cut costs in order to cope with the higher
tariffs. In the first two months of 2009, the market leader, Chevrolet saw a
21.5% increase in sales to 7,412. Japanese brands also did well: Toyota was up
15%, year-on-year to 1,453 while Nissan's sales went from 483 to 750.
Development:
On 10 May President Morales of Bolivia called President Alan García of Peru a
“jerk" ('chabacano') for offering asylum to former Bolivian ministers accused of
genocide.
Significance:
Morales's insult obscured an interesting legal point. Under Peru's asylum law,
asylum cannot be offered to people wanted for crimes against humanity. Morales's
insult allowed Peru's foreign minister, José Antonio García Belaunde, to argue
that the Bolivian government was trying to interfere in Peru's sovereign
affairs. Bolivia's supreme court is due to start to consider, on 18 May, which
Bolivian ministers were responsible after Bolivian troops were ordered to fire
on demonstrators in October 2003 and killed 68 people.
The row will split the
Comunidad Andina de Naciones further. Ecuador and Colombia do not have
diplomatic relations while Venezuela has recalled its ambassador from Lima after
Peru granted political asylum to Manuel Rosales, a prominent critic of President
Hugo Chávez .
Peru has already granted
asylum to Jorge Torres Obleas, who was economic development minister in the
second government (2002 to 2003) of President Gonzalo Sánchez de Lozada in
Bolivia. This government collapsed after the killing of protesters in October
2003. Belaunde said that the Peruvian government was also considering asylum
applications from two other Sánchez de Lozada ministers: Mirtha Quevedo, who ran
Participación Popular and Javier Torres Goitia, a former health minister.
Who is
he? Skerrit is the prime minister of the Eastern Caribbean
island of Dominica (pop, 69,625).
Why watch
him? The youngest head of government in the world when he first came
to power in January 2004 (aged just 31), Skerrit quickly reshaped Dominica's
political alliances, breaking off ties with Taiwan in favour of China and
signing up to the Venezuelan-led Petrocaribe and Alternativa Bolivariana para
los Pueblos de Nuestra América (Alba) initiatives. These decisions, while
controversial in this commonwealth state, have paid off handsomely in investment
terms, leaving the popular Skerrit well placed to seek re-election in August
2010.
Born: 8 June
1972, in the North Eastern village of Vieille Case.
Education:
Portsmouth secondary school, Dominica Grammar school BA in
English and Psychology, University of Mississippi (after transferring from New
Mexico State University).
Public life:
Politically active from an early age, Skerrit was head boy and president of the
student council at Dominica Grammar School and president of the Dominica
Students Association while at New Mexico State University. While a student he
was a member of the youth arm of the Dominica Freedom Party (DFP), the Young
Freedom Movement. He joined the Dominica Labour Party (DLP) upon his return to
Dominica from university. Skerrit worked as an English lecturer at the
Clifton-Dupigny Community College until his election to parliament for the
Vieille Case constituency in the February 2000 elections.
Timeline:
February
2000: Appointed Minister of Sports and Youth Affairs.
October 2000:
Following the death of the prime minister, Roosevelt Douglas, Skerrit became the
minister of Education, Sports and Youth affairs. As Minister of Education, he
established the Dominica State College. He also led a confidential mission to
the Embassy of the People's Republic of China in Barbados.
January 2004:
The prime minister, Pierre Charles, died on 4 January. On 6 January, Skerrit was
nominated as his replacement and was sworn in on 8 January, aged 31, the
youngest head of government in the world. After becoming prime minister, he was
also elected political leader of the DLP.
April 2004:
Skerrit severed relations with Taiwan and established diplomatic relations with
the People's Republic of China. As part of the move, Beijing agreed to a capital
aid package worth US$300m.
May 2005: In
the general elections, Skerrit retained his seat by a wide margin. The DLP took
52% of the popular vote and gained one additional seat in parliament (giving it
12 seats). The opposition United Workers' Party (UWP), led by Edison James, took
44% of the vote and 8 parliamentary seats. The UWP's campaign had been scathing
of Skerrit's age and relative inexperience and the country's weak economic
performance since the 2000 elections. Skerrit argued the economic ills dated
back to the UWP's earlier profligate borrowing. His successful bid for Chinese
aid also helped his victory, and he successfully mobilised the youth
vote.
Following the election,
Skerrit assumed the ministerial portfolios of Finance, Planning, National
Security and Overseas Nationals. He continued relations with the IMF and
followed the Fund's orthodox economic policies as Dominica continued to seek
ways to replace the formerly dominant banana industry with tourism and financial
services, along with business environment and infrastructure reforms to
facilitate private sector growth.
September
2005: Dominica, along with 11 of the other 15 Caricom members, plus
Cuba and the Dominican Republic, officially joined Petrocaribe. Dominica agreed
to play a major part in the regional initiative, with plans for crude oil from
Venezuela to be stored on the island for export to other islands in the Eastern
Caribbean region. The Chávez government gave Dominica a US$10.1m grant for the
expansion of the Melville Hall Airport and forgave the country's US$1.5m debt to
Venezuela.
February
2007: A Caribbean Development Research Services (CADRES) poll found
that Skerrit was the most popular leader in the country, with 58% of respondents
approving of his leadership.
16 February
2007: President Hugo Chávez paid a state visit to the capital, Roseau,
where he inaugurated a Petrocaribe fuel storage tank. In addition, he announced
the construction of a 10,000-barrel/day refinery at a cost of some US$80m.
(Environmentalists were aghast, saying it would damage Dominica's efforts to
promote itself as an eco tourist destination.) Skerrit also agreed to join Alba.
16 October
2007: In a cabinet re-shuffle, Skerrit assumed the portfolios of
Foreign Affairs and Social Security, while remaining in charge of Finance. He
relinquished National Security and Economic Planning.
January 2008:
Dominica joins Alba
18 November
2008: Cabinet reshuffle - Skerrit gave up the Foreign Affairs brief and
took on the National Security portfolio for a second time.
May 2009:
Skerrit announces that he will seek additional IMF funding as part of efforts to
mitigate the effects of the global economic crisis. The opposition argues that
this will lead to higher taxes.
12-13 June
2009: Skerrit attends the Sixth Petrocaribe summit in St. Kitts and
Nevis.
14 June
2009: President Chávez visits the island for the official
commissioning of the new US$35m Waitukubuli Fuel Storage and Distribution Plant
at Jimmit, funded by Petrocaribe. The plant, with a capacity of 35,000 barrels,
will processes diesel, cooking gas, gasoline, Liquefied Petroleum Gas and Jet A1
fuel. Chávez says the plant will guarantee the island's energy security “for 200
years" and Skerrit says every family on the island will receive a free cylinder
of gas. Chávez also announces that Venezuela will help fund a coffee-processing
plant and set up a local Alba office (and potentially a branch of the proposed
Alba bank) on the island.
Skerrit said Dominica would
form part of a delegation to the United Nations General Assembly in September,
seeking a resolution to bring greater attention and recognition for Petrocaribe.
He said he would never regret his decision to join Alba.
Strengths:
Skerrit has proved a pragmatic and able politician - implementing an orthodox
economic development plan while following his fellow Caribbean neighbours into a
relationship with Venezuela, which under Petrocaribe has made these small,
externally dependent island states an offer too good to refuse. Dominica's Alba
membership should be seen in a similar pragmatic context.
Weaknesses:
Under Skerrit, Dominica has effectively put all its eggs in one basket by
building up such strong ties with Venezuela. Skerrit's growing political links
to Chávez have been the subject of criticism on the island, with some voters
uncomfortable with his swing towards radical groups like Alba. The opposition
accuses him of being a populist and of becoming a client state of Venezuela.
Sustained Chinese investment in Dominica may be limited moving forward given its
limited natural resources and the fact that the island is not really
strategically positioned in the region.
Skerrit's control over the
executive leaves him open to allegations of power grabbing and suggests he is
unwilling to delegate. It also means that he becomes the face of every
transgression, however minor. In June 2009 the prime minister denied opposition
corruption allegations over the government's procurement of garbage bins (from a
US company) for Roseau city council.
Prospects:
Skerrit remains popular, but it is not clear that he will be automatically
returned to power in August 2010. Recent polls suggest he will face stiff
competition from Ron Green of the UWP. Like other countries in the
Caribbean, Dominica has suffered from the global economic crisis, which if
prolonged, might hurt the government. However, given his young age, Skerrit is
set to remain a leading force on the political scene for the foreseeable
future.
Development: On 22 July one man was shot dead and two journalists were injured on the first day of a two-day strike in the northern town of Bonao (Monseñor Noel province).
Significance: The 42 hour general strike was convened by grassroots organisations to demand an end to electricity blackouts, as well as improvements to the water supply and other public works projects.
Countrywide blackouts caused by failings in the country's power infrastructure have provoked sporadic unrest since the beginning of the year. The crisis has become acute in recent weeks, and came to a head on 15 July with an outage which left much of the country without power for over three hours. The next day (16 July), two people were shot dead during violent protests over blackouts in the Capotillo neighbourhood of the capital, Santo Domingo.
President Leonel Fernández yesterday (22 July) met representatives from the electricity sector in an attempt to put an end to the protests. He offered up US$15m to fund fuel for two plants that are currently offline.
Development: On 1 September the Iranian parliament defended President Mahmoud Ahmadinejad's decision to appoint Ahmad Vahidi as defence minister.
Significance: The Argentine government claims that Vahidi was involved in the 1994 bombing of the Jewish community centre (Amia) in Buenos Aires. Argentina believes that the attack was a reprisal for Argentina's decision to suspend a nuclear technology transfer contract with Tehran. Argentina is seeking to arrest Vahidi and other high-ranking Iranian government officials.
The 1994 bomb attack on the Asociación Mutual Israelita Argentina (Amia) killed 85 people and injured hundreds more. Although Vahidi's involvement in the bombing has never been proven, Argentina claimed that his cabinet appoinrment is 'an affront to the victims'.
Iran responded to Argentina's accusations by again denying its involvement and accusing Argentina of interfering in its internal affairs.
Vahidi is clearly a controversial choice even in Iran - one member of parliament interrupted a speech by the defence minister-designate yesterday to declare that he had previously been against the appointment but that the 'Zionists' allegations' had convinced him to change his mind and vote for Vahidi.
Honduran economy flails
Honduras, one of Latin America's poorest countries, with GDP per capita of just US$1,858 in 2008, is suffering a double whammy this year as a result of the global economic slump and the internal crisis resulting from the 28 June coup d'etat against the elected president Manuel Zelaya. Trade and remittance flows were already suffering prior to the coup, while tourism has also fallen away since then. Domestic economic activity has also idled in the period since the coup.
According to just published figures from the central bank, remittance inflows fell 10.9% year-on-year in the first nine months of the year to US$1.82bn, down from US$2.04bn in the same period of 2008. Remittances came to US$2.69bn overall in 2008, up 7.3% from US$2.51bn in 2007. The cash transfers sent by the approximately one million Hondurans living in the US are the main source of hard currency for the country, and accounted for 18.8% of total GDP in 2008 (on estimated GDP of US$14.3bn in 2008).
In late 2008, the central bank warned that remittances and export revenues would fall in 2009, largely due to the recession in the US, which is the country's main trade partner and where thousands of migrant Hondurans have lost jobs in construction and other industries. Honduras also receives remittances from Mexico and Spain, both also enduring a sharp recession, as well as Canada and Italy.
Last week (8 October) Rebecca Santos Riviera, the finance minister under Zelaya, said that overall real annual GDP may now contract by up to 4% in 2009, noting that foreign currency revenue from tourism, a sector fundamental to domestic job creation, had fallen an estimated 40% in the three months since the coup. The de facto central bank president, Sandra Midence, appointed by the civilian coup government in late June, said in late September that she expected a contraction of about 2.0% this year.
The central bank's gross international reserves, which stood at US$2.34bn on 8 October, are sufficient to pay for just under three months of imports. Total imports came to US$9.96bn in 2008, with exports of US$6.15bn, the equivalent of 43% of GDP. According to the latest available central bank data, exports came to US$1.4bn in the first quarter of 2009, down 16% year-on-year, while imports came to US$1.88bn, down 26.5% year-on-year. The US took 39.9% of exports from Honduras in 2008m, while it accounted for 40.1% of its imports.
Aside from remittances and exports, Honduras also relies heavily on aid flows. Since the coup, most multilateral and bilateral aid and financial cooperation with the Honduran government has been suspended. Agencies like the Inter-American Development Bank, the World Bank and the International Monetary Fund, as well as the European Union and the US, do not recognise the coup government.
Foreign debt has been reduced in recent years. Total foreign debt stock was worth an estimated 25% of GDP in 2008, down from a high 53.1% in 2005.
Development: Mauricio Funes, the president of El Salvador,
is the Americas' most popular leader, with the support of 85% of his
countrymen. President Cristina Fernández of Argentina, comes bottom with only
20% support.
Significance: Recently elected presidents do best, as Funes
is followed by Panama's Ricardo Martinelli on 82%. The big exception is Fernando
Lugo, who has only been president of Paraguay for 15 months. The data comes from
recent polls compiled by the local offices of the CID-Gallup Organization and
its associates.
Funes and Martinelli are followed in the popularity stakes by three
longstanding leaders, Michelle Bachelet of Chile (80%), Luiz Inácio Lula da
Silva of Brazil (77%) and Oscar Arias of Costa Rica (73%).
From the bottom up, Fernández is topped by Lugo (25%) and Daniel Ortega of
Nicaragua on 30%. President Barack Obama of the US scores 50% and just
above him Colombia's President Alvaro Uribe of Colombia (64%); Bolivia's Evo
Morales (57%); Guatemala's Alvaro Colom (55%); and Mexico's Felipe
Calderon (54%). Just below Obama are Venezuela's Hugo Chavez (46%) and
Ecuador's Rafael Correa with 44%.
Development: On 12 January the UN-backed International
Commission against Impunity in Guatemala (Cicig) cleared President Alvaro Colom
of involvement in the May 2009 murder of a prominent lawyer, Rodrigo
Rosenberg.
Significance: In another twist to this bizarre
case, the UN-backed committee instead concluded that Rosenberg - whose
posthumously released video accusing Colom of the crime caused an unprecedented
crisis for the government last year - ordered his own assassination.
The result undoubtedly spells relief for Colom and a whole host of other
prominent business and political figures implicated in the crime.
In a two hour press conference, Cicig's chief, Carlos Castresana, argued that
Rosenberg, who was suffering severe personal problems and suspected the
government was behind the murders of his client and girlfriend, Marjorie Musa,
along with her father, Khalil Musa, one month before Rosenberg himself died, had
left the video blaming Colom as a way of shaking up the powers that be and
''opening up a Pandora's box that would result in change in the country.''
Castresana cited among evidence to support Cicig's claim the fact that
Rosenberg, who was also reportedly suffering depression over the recent death of
this mother and the loss of custody of his children, had bought two cellular
phones: one to communicate with his killers and another to deliver threatening
messages to his own personal phone.
Development: On 23 February the Colombian national press
reported that the constitutional court magistrates examining the possible
re-election of incumbent president Alvaro Uribe had concluded their
deliberations and would reach a vote by the end of next week (5 March).
Significance: There are nine magistrates presiding over the
case and both “El Tiempo" newspaper and the weekly publication, “Semana" quoted
sources close to the magistrates as saying that a six to three majority would
vote against re-election.
According to the sources, the magistrates had been on the verge of holding a
deciding vote when two of them requested more time to reflect on their decision.
The court has been examining the legality of last year's congressional approval
of a referendum on changing the constitution to allow Uribe to seek re-election,
amid accusations that there were irregularities in the referendum process. The
most contentious issue is the use of funds for the referendum which are reported
to have exceeded the legal limit.
On 22 February dozens of people gathered outside the court in Bogotá in
protest against any change in the constitution to allow Uribe to stand in the 30
May presidential election. Recent opinion polls have shown a downward trend in
support for his re-election.
Brazil: On 6 April, the US government announced it had
reached a preliminary agreement with Brazil to resolve the longstanding bilateral
dispute over US subsidies for its domestic cotton producers. Under the agreement,
Brazil would waive until 22 April US$829m in pending retaliatory tariffs on
imports of US cosmetics, cars, food and appliances. The tariffs followed a World
Trade Organisation (WTO) ruling in Brazil's favour in the dispute. The tariffs
will be waived for a further 60 days thereafter if negotiations continue to move
forward. For its part, the US has so far agreed to: create an annual fund of
US$147.3m to provide technical assistance to the Brazilian cotton industry;
review and modify its export credit guarantees for domestic producers; declare
the Brazilian state of Santa Catarina 'Foot and Mouth disease free' and;
complete a study into the possibility of the US importing fresh meat from
Brazil.
Ecuador: The US Assistant Secretary of State for Western
Hemisphere Affairs, Arturo Valenzuela, visited Ecuador on 6 April as part of an
official tour of the region that also included Colombia and Peru. He met
President Rafael Correa and the foreign minister, Ricardo Patiño, who described
the meeting as “very positive" and stated that Ecuador must “maintain cordial
and close relations" with the US on the “basis of mutual respect". Valenzuela
and Patiño discussed bilateral trade, investment and environmental issues.
Patiño also alluded to the “creation of a working group" of representatives from
the Union of South American Nations and the US to discuss mutual issues of
interest. While unspecified, these issues are likely to include US security
policy in the region.
Guatemala: According to the US Immigration and Customs
Enforcement agency (ICE), during the first quarter of 2010 5,665 illegal
Guatemalan immigrants were deported from the US, with 2,054 repatriated in March
alone. The figures, though high, represent an 11.8% decrease in comparison to
the same period of last year, when 6,427 people were deported. While official
figures continue to show a decline in deportations year-on-year, US officials
believe that of the estimated 1.2m Guatemalans living in the US, 700,000 are
there illegally.
Venezuela: In response to the recent announcement by
Russia's Prime Minister, Vladimir Putin, that Russia would sell Venezuela up to
US$5bn in new armaments, the US state department spokesman, Philip J Crowley,
said on 5 April that the US was “hard-pressed to see what legitimate defense
needs Venezuela has for this equipment". He added that the US's primary concern
was that “if Venezuela is going to increase its military hardware, we certainly
don't want to see this hardware migrate into other parts of the
hemisphere".
Development: On 17 May, two Central American presidents broke the silence surrounding the EU-Centam discussions and announced that the treaty “is ready".
Significance: The treaty has been described as “the first of its kind" and is expected to go beyond the terms of a free trade agreement (FTA); Costa Ricas's Laura Chinchilla described it as an agreement “that also integrates the pillars of political dialogue and cooperation, and its implementation has a deciding role in the government-civil society-private enterprise trilogy."
Centam's ability to negotiate as a region should in itself be considered a success; from Managua, Nicaragua's Daniel Ortega, stated that the differences that arose from each nation (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama) “pulling for his own side", had been overcome. It has taken the region almost three years to surmount the discrepancies - discussions for the agreement began in June 2007.
Alex Segovia, technical secretary to the Salvadorean president, Mauricio Funes, also confirmed that the discussions “concluded with success". While the exact terms of the agreement remain unknown, it is likely that the EU has conceded to some of Centam's demands to alter EU tariffs and quotas which affect key Central American agricultural exports.
The agreement will be presented to all Latin American and EU leaders at today's (18 May) VI EU-Latin America Summit in Madrid, and will be signed by the contracting parties at tomorrow's (19 May) special EU-Central America satellite summit.
Separately, Spain's Prime Minister José Luis Rodríguez Zapatero announced that the EU and Mercosur would re-launch talks to sign a similar association agreement, a process that has been stalled since 2004. Argentina's President Cristina Fernández, who accompanied Rodríguez Zapatero at the press conference, called on the EU and Latin American nations to put aside their protectionist practices. Her statement appears to signal that Argentina will do a U-turn over its latest ban on food imports (see Daily Briefing 13 May). The measure triggered formal complaints from the EU ambassadors in Buenos Aires as well as from Brazilian, Chilean, Paraguayan and Uruguayan business associations.
Development: On 24 June President Alvaro Colom appointed
Jaime Leonel Otzín as the new director of the Policía Nacional Civil (PNC).
Significance: The PNC has been without a head since March,
when its former director Baltazar Gómez Barrios was arrested and charged on 10
counts of theft, possession of weapons and drug trafficking. Gómez's predecessor
was also arrested for attempting to steal 900kg of cocaine seized by the
police.
According to President Colom, Otzín was chosen because he passed polygraph
tests, which other senior officers failed. Otzín will face regular such tests in
his new job, as well as audits of his bank accounts and assets. In the past
eight years, 90 senior police officers (ranking commissioner or above) have been
sacked: 75% of them face or have faced criminal prosecutions.
Development: On 2 August Luis Rosadilla, Uruguay's minister of defence, announced that a group of auditors from the defence ministry would begin investigating the way funds to the armed forces are managed.
Significance: The announcement was the result of an internal audit of military funds which began two months ago and revealed a new naval scandal. The armed forces were investigated earlier this year for the disappearance of US$2.6m of UN funds.
Rosadilla informed the cabinet that a navy captain (whose name has yet to be released) is thought to have been involved in the misuse of supplies of petrol worth Ur$7m (US$336,900). He emphasised however that this case was not related to those already under investigation. The captain was sacked on 31 July by the defence minister.
This latest development changes Rosadilla's standing in the investigation. The other cases of corruption all occurred during the previous government of President Tabaré Vásquez (March 2005-March 2010) and some former ministers of the opposition Partido Colorado were angered when Rosadilla hinted that they should take responsibility for malpractice within their department.
As the most recent case is thought to have taken place in April and May
this year, Rosadilla may have to accept some responsibility.
Corruption in Uruguay's armed forces has resulted in the government calling on Brazil for assistance in maintaining its equipment. In 2005 the Uruguayan force received a helicopter free of charge but could not afford the US$800,000 needed to make it serviceable. Last week Uruguay gave Brazil another aircraft: in return Brazil will pay for the upkeep of the 2005 helicopter. Separately, in another case of apparent corruption, US$600,000 was supposedly set aside for the purchase of a hydraulic crane in 2008 but it never materialised.
Development: On 9 September, hospitals in Ciudad Juárez, on
the Mexican border with Texas, warned that their stocks of blood were
dangerously low.
Significance: The blood banks are nearing exhaustion because
of the increase in violence this year. Over 2,000 people have been killed by
gangsters so far this year. On average, a further four people are taken to
hospital every day with severe gunshot wounds. The night of 8 August was
particularly gory with 16 people killed.
Mireya Portillo, a haematologist and the coordinator of the local blood
donation campaign, said that the city was now dangerously low in blood stocks.
There are still 1.5m people living in the city. She said that more people needed
to donate blood, but admitted that Mexico had no culture of donating blood.
Development: On 21 October El Salvador's foreign minister
Hugo Martínez met his Russian counterpart, Sergey Lavrov, in Moscow where the
two signed an accord to boost bilateral ties.
Significance: Martínez's trip to Moscow is the first by a
Salvadorean foreign minister and is in line with the explicitly pragmatic
foreign policy pursued by President Mauricio Funes, which prioritises the
national interest over ideology - as was evident in his decision to renew ties
with Cuba which, Funes stressed, was based on the need to boost regional integration
and economic development. Both developments unsurprisingly set off alarm bells
among the vehemently anti-communist and pro US right-wing opposition Alianza
Republicana Nacionalista (Arena).
El Salvador and Russia have diplomatic ties (established in 1992 following
the collapse of the Soviet Union) although have yet to open embassies - a
possibility that was floated during Martínez's visit. Agreements signed covered
areas including diplomatic training and emergency response. More notably, and as was
the case with Cuba, trade also featured highly on Martínez's agenda. He met
Russian business representatives and discussed the possibility of holding a
business summit next year aimed at attracting Russian investment to El Salvador
and boosting bilateral trade (some US$40m a year in 2009), particularly
Salvadorean sugar and coffee exports.
The meeting also points to the growing influence of Russia in Central
America. While Moscow's relations with its former Cold War ally Nicaragua remain
strong (and have intensified under the current left-wing administration of
President Daniel Ortega, who took office in 2007), in February 2010 Lavrov paid
a historic visit to Guatemala - the first ever by a Russian foreign minister,
which yielded pledges to boost diplomatic relations. As in Nicaragua, the
Russians pledged cooperation in the fight against narco-trafficking and
organised crime through the provision of military and technical equipment.
Development: On 6 December Canada's Scotiabank announced the
purchase of Uruguay's Banco Comercial and the financial firm Pronto! for a
combined US$300m.
Significance: Scotiabank's investment comes at a testing
time for the Uruguayan banking sector. For years considered a financial haven,
Uruguay is now in the process of abolishing its banking secrecy laws. Many argue
that this will be very detrimental to the country's banking sector.
The bank employee's association (Aebu) has also been on strike for weeks over
proposed plans for branch closures and the forced retirement of employees of the
troubled Venezuelan owned Bandes bank. The strike actions, which included staff
walk-outs at several branches and a refusal to operate Automatic Teller Machines
(ATM), has affected not only bank customers but also the broader private sector,
amid interruptions to cheque clearing services.
An investment by a new international bank is good news for Uruguay as it
provides signs that there is still international confidence in the country.
Scotiabank is the first Canadian bank to enter Uruguay. The president and
general director of Scotiabank, Rick Waugh, stated that the acquisition
“reinforces the bank's investment strategy in markets with high growth levels".
The secretary of the private banking council at Aebu, Pedro Steffano (a Banco
Comercial employee) commented that “it is good news not only for the union, but
for the financial sector in general, because it is a top international bank".
Banco Comercial, which had been part-owned by the government, is poised to
become Uruguay's fourth largest private bank after Spain's BBVA completes the
purchased of Crédit Uruguay. It will only be surpassed by Spain's Santander and
BBVA, and the state owned, Banco de la República Oriental del Uruguay. Banco
Comercial currently manages 8% of all loans and 6% of all deposits in the
country.
The Montevideo government last week issued a decree to sell its shares in the
bank between 2010 and 2014.
In 2006 Bandes purchased the troubled cooperativa de ahorro y crédito (Cofac)
for US$10m, at the bequest of the Uruguayan government. After five years of
Bandes management, the bank is reported to have recorded losses of up to US$ 84m
and it now wants to reduce its operations in the country in order to cut its
losses. The Bandes management and Aebu have been unable to reach a settlement,
promoting the latest strike. Bandes is seeking government intervention and
threatens to leave the country altogether should the situation remain
unresolved.