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The leader of the Rural Democratic Union (UDR), Luiz Antônio Nabhan Garcia, yesterday accused the government of going along with the invasion of productive farms promoted by the landless movement (MST). Garcia, who was testifying in Brasí­lia at the parliamentary commission on land reform, said rural producers are living 'in a state of panic' since the MST stepped up land invasions at the beginning of April. At present, 102 farms have been invaded, 69 of those by the MST. Garcia demanded that the leader of the MST, João Pedro Stédile, be arrested.

Stédile himself testified to the commission two weeks ago and promised the MST would 'bring hell to the countryside' if the government did not speed up land reform. Since then several marches, road blockages and farm invasions have occurred across the country. The most recent invasion took place over Easter in Pontal do Paranapanema in the state of São Paulo, near the UDR leader's property. The MST says the sem-terra are acting according to the law when they invade farms, as the Brazilian constitution states that unproductive properties have to be reclaimed for land reform.

The government's lack of criticism over the wave of invasions and its slow response to settle the sem-terra have sparked fears of armed conflicts between farmers and the landless. According to the president of the Brazilian Agricultural Confederation, Antônio Ernesto de Salvo, the polarization in the countryside will escalate violence and poverty. Salvo considers the government inert and unable to resolve the situation in rural areas.

The wave of invasions has destabilised support for the government. Governors have been criticising the government for not doing enough to stop the invasions and to settle the landless. Geraldo Alckmin, governor of São Paulo, said the invasions of farms in the state are illegal and that he will fight in the courts on the side of proprietors. The minister for agrarian development, Miguel Rossetto, answered the critics saying that tomorrow (15 April) the government will ask the commission to approve the release of R$1.7bn (US$586m) to settle 110,000 families until the end of the year.

The government's peace commissioner, Luis Carlos Restrepo, floated the idea on 20 May of reducing the area designated for the demobilisation of the Autodefensas Unidas de Colombia (AUC). The original area is 368 square kilometres in the north of the country, around Moneterí­a. 

Restrepo said that the government and local police chiefs were looking at excluding a couple of small towns, Los Volcanes and Palmira, from the safe haven. Restrepo said that the government's priority was to ensure that the zone was as secure as possible.

The AUC has countered by saying that its other fronts should have their own demobilisation areas. The government has not ruled this out, but has not confirmed that it will set them up. The government's goal is to demobilise 5,000 AUC fighters this year. There are probably around 13,000 AUC fighters in total.

Development: Bolivia's President Carlos Mesa's decision to raise the topic of his country's desire for access to the Pacific has been greeted with a mixture of hostility and indifference in Santiago. Mesa's speech, at the inauguration of the first inter-parliamentary meeting of the countries of Mercosur and the Andean Community, in the Bolivian city of Santa Cruz on 28 June, has yet to merit an official response, but one Chilean senator called on his government to suspend dialogue with the 'politically weak' Bolivian president.

Significance: Following a brief thaw in the two countries' perennially frosty relationship, a number of recent events suggest a deal on a Bolivian port remains as far away as ever.

Mesa described the issue of access to the sea as 'a stone in the shoe' of South America's integration process. According to the Bolivian president, if the territorial conflict is not resolved it will impede the progress of those countries wishing to use Bolivia as a regional hub. If this was meant as a veiled threat, it may have impressed a Bolivian audience but it cut no ice with the Chileans. Shortly after the speech Jorge Tarud, from the Partido por la Democracia (an ally of the ruling, center-left Concertación party), called on the Chilean government to suspend talks with the Bolivians while they maintained their hostile stance. He said that Chile was happy to talk with 'responsible people, not like Mesa who is politically weak', adding later that current Bolivian leaders 'use an old-style populism'.

Full diplomatic relations between Chile and Bolivia have been suspended since 1978, a situation instigated by La Paz in response to Chile's refusal to listen to its demands for access to the ocean. Bolivia lost its coastal territory in the 1879 War of the Pacific.

Relations deteriorated further this year when Bolivia sold gas to Argentina on the condition it did not sell it on to Chile. Chile imports 90% of its gas from Argentina. On 24 June the Bolivian government cancelled the mining licence for a Chilean firm, Non Metalic, to mine ulexite, a mineral found in Bolivia's Salar de Uyuni.

In an unwittingly frank interview in the Chilean daily La Tercera on 20 June, President Ricardo Lagos said he expected the issue to take another 20 years to sort out. He said that Chile would not countenance a Bolivian corridor running through its territory and dividing the country, so the only possible solution was to have a Bolivian corridor to the north of Chile, running through Peruvian territory.

Development: A few 'ill-chosen' words about Peru's readiness for war by the Peruvian defence minister and vice-president have triggered a diplomatic row between the two countries which has now embroiled the Chilean foreign minister, Soledad Alvear, and the Peruvian president, Alejandro Toledo.

Significance: Toledo's involvement appears to be a desperate attempt to play on nationalist sentiment to boost his pitiful ratings, while Alvear's robust rebuttal of Peru's suggestion that the countries' 1929 borders are being renegotiated can do no harm to her chances of becoming her party's presidential candidate for the December 2005 elections.

On 4 August President Mesa travelled to Lima in order to sign a 'letter of intent' that would grant Bolivia land to build a port and the facilities needed to process and export natural gas and other hydrocarbons. However, building the plant in Peru rather than Chile will cost gas companies an extra US$600m because of the longer pipeline needed to transport the gas to the port.

While Mesa was there, Toledo took the opportunity to tell the press that Peru and Chile's foreign ministers were currently renegotiating the 1929 treaty, which established that any handover of territory to Bolivia in the Primera Región (the department bordering Peru) would depend on Peruvian consent. The treaty effectively certified the boundaries established at the end of the 1879 War of the Pacific, in which Peru lost the area of Tarapacá and Bolivia lost access to the Pacific. Peru's foreign minister, Manuel Rodrí­guez Cuadros, claimed that Toledo was not referring to the 1929 treaty, but to the lack of clear maritime boundaries between the two countries. last week Cuadros was forced to publicly reprimand General Roberto Chiabra for refusing to rule out an eventual war with Chile.

Alvear's immediate response was clear. 'President Toledo has been misinformed. We are not engaged in any dialogue about treaties or borders,' she said. Alvear's response happened to correspond with a training exercise organised by the ministry of defence in Iquique that simulated a war between two neighbouring countries, one of which is eager to recover their access to the sea to export gas. Alvear was also keen to point out that, as far as Chile was concerned, the maritime boundaries were resolved by a treaty, in which Ecuador was also involved, signed in 1954. Patricio Zuquilanda, the Ecuadorean foreign minister currently in Chile, threw his country's weight firmly behind Chile. The borders 'are absolutely clear,' he said.

Development: The interim government could be facing a general uprising from former soldiers within days. On 8 September, former sergeant Ravix Remissaint called for former soldiers to rise up against the government after two of them were shot dead by police in an incident in Port-au-Prince earlier this week.

Significance: This is the most serious challenge to the interim government of Prime Minister Gérard Latortue since it replaced ousted former president Jean-Bertrand Aristide in March. Remissaint appears to have assumed unofficial command of former soldiers, who are demanding the restoration of the army, which was disbanded by Aristide in 1995. They also want ten years' worth of back pay, and full pensions.

Remissaint led the seizure of Petit-Goave in the south of Haiti on 30 August. Since then former soldiers have also taken control of Jacmel in the southeast and Gonaí¯ves in the north. Gonaí¯ves was at the centre of the rebellion that led to the ouster of Aristide in February.

CHILE: The central bank held its benchmark interest rate at 2% on 12 October.

EL SALVADOR: The 2003/04 sugar harvest was up 8.6% on the previous harvest. It amounted to 11.5m quintals, the biggest harvest for 25 years.

MEXICO: Domestic sales of Mexican vehicles rose 15.9% year-on-year in September, while exports fell 7.6% over the same period. Vehicle production rose 7.3% year-on-year in September.

Development: The Alianza por la República, the party of President Enrique Bolaños, cried foul on 15 November to the Organization of American States over the municipal elections held on 7 November.

Significance: The Apre is clearly embittered. The party managed to win just seven of the country's 152 municipalities. The leftwing opposition, the Frente Sandinista de la Liberación Nacional, won 91. The provisional results of the municipal elections also confirmed that the opposition Partido Liberal Constitucionalista performed miserably, picking up just 52 municipalities. Final results will be released on 1 December.

The president of Apre, Miguel López claimed that there were irregularities in the vote counting in the municipalities of Cuapa and Santo Tomás in the centre of Nicaragua and the city of Granada, just south of Managua. Granada was narrowly won by the Sandinistas despite traditionally being a bastion of conservatism, balancing the liberal stronghold of León, north of Managua ever since independence. López claimed that the fraud was a direct result of an alliance between the Sandinistas and the PLC aimed at freeing the imprisoned PLC leader, Arnoldo Alemán. He provided neither evidence nor an explanation for this claim.

Development: The deputy president of congress, Ricardo Gutiérrez, said on 16 December that one of its priorities for 2005 will be to appoint permanent electoral supervisors.

Significance: The opposition parties fear that these supervisors will penalise them further. Congressional elections are due in mid 2005. The government has a comfortable majority in the 165-seat congress which will appoint the five new members of the Consejo Nacional Electoral.
The opposition claims that the last CNE board, which was chaired by Francisco Carrasquero, who has now been elevated to the supreme court, was too pro-government.

The opposition is feeling particularly vulnerable. On 13 December the congress approved 17 new supreme court judges: the opposition was appalled that it had not been consulted about the nominations and walked out of congress.

Development: On 27 January, the central bank's monetary committee (Copom) released the minutes of its last meeting, when it decided to increase the basic interest-rate (Selic) for the fifth consecutive month, to 18.25% annually.

Significance: This time, however, the Copom has not only indicated that the "readjustment process" would continue, but alerted the monetary tightening could 'gain speed' in February. The document was considered "tough and conservative" by most market analysts, who forecast "at least" another 0.5 percentage point increase in the Selic next month.

The arguments in the committee's minutes to justify the latest increase did not faze the market: the rise in the pace of economic activity, increasing consumer prices and the markets strict inflation forecasts. After the last 0.5% Selic increase on 19 January, financial institutions stubbornly kept their 2005 inflation forecast at 5.7% annually, above the central bank's 5.1% target.

The Copom's minutes were published on the same day the Fundação Getúlio Vargas (FGV) released its inflation index, the IGP-M, for January. According to the FGV figures, inflation fell to 0.39% in January from the 0.74% registered in December. When told about the FGV's numbers, Paulo Skaf, the president of the São Paulo Industries' Federation (Fiesp), said the Copom's proceeding was "trying to justify the inexplicable".

Meanwhile, in the World Economic Forum in Davos, Henrique Meirelles, the central bank's president, rebuffed rumours he was being "pressurised" by the critics of the monetary policy in government to leave the presidency of the bank. According to Meirelles, his only future plan was "to comply with the inflation target". The finance minister, Antonio Palocci, who is also in Davos, denied President Lula da Silva wanted to fire the central bank's directors whom he considers "excessive conservative".

Development: Hundreds of delegates to the special assembly of the Partido Revolucionario Institucional walked out on the evening of 3 March.

Significance: Those walking out were loyal to the Tucom (Todos Unidos Contra Madrazo) who are unhappy with the PRI's leader, Roberto Madrazo. The walk-out shows how tense the party has become as it senses that it has a good chance of regaining the presidency in 2006. The Tucom (which prefers to be known as the Unidad Democrática group) is determined that Madrazo should not be the party's presidential candidate by default. 

A prominent member of the Tucom, Natividad González Paras, the governor of Nuevo León, put the issue starkly in an interview with La Jornada, a Mexico City newspaper. He said that if Madrazo won the PRI nomination in a fair fight, the party would rally around him. If, however, the fight was not fair, the party would split and Madrazo would have little chance of winning the presidency. 

The reason why the delegates from four states (the Estado, Nuevo León, Sonora and some from the Distrito Federal) walked out was that they suspected that the counting of the votes to reform various of the party's statutes were fiddled. They were particularly annoyed about a vote on Article 79 of the party's constitution which sets out the powers and membership of the national standing committee. 

This group could be the one which steers the party through its presidential primary, given that Madrazo will, almost certainly, have to resign as party president to run for the presidential nomination. Madrazo does not want his number two, the party's secretary-general, Elba Esther Gordillo to take over. She has allowed the union she runs, the Sindicato Nacional de Trabajadores de la Educación, to set up a new political party. Gordillo is so out of sympathy with the current PRI hierarchy that she did not bother to go to the party's XIX national assembly in Puebla which concludes today, the PRI's 76th birthday.

Significantly, this issue of who should take over from Madrazo was too hot for the assembly to handle. Madrazo withdrew reform of Article 164 of the PRI constitution from discussion. This article stipulates that when the party president resigns, the secretary-general should take over. Madrazo said that the issue will now be settled by the party's national policy committee. Madracistas have dominated this body. 

David Penchyna, the chairman of the statutes commission at the assembly and a prominent Madracista, said that the debate about the reforms of the party's statutes had been heated and that the votes had been so close that some had to be taken three times, but he denied that there had been any chicanery. Penchyna holds the pivotal role of secretary of the national policy committee, so he can ensure that the Madracistas get their way there. 

The big question now is what will happen today, 4 March, when the assembly is due to close with a plenary session. The assembly has drawn 6,400 delegates. The Madracistas have been trying to portray the walkout as a premeditated stunt. This is unlikely because not all the Tucom delegations walked out: the delegates from Tamaulipas and Hidalgo both remained.

What is clear is that Madrazo does not have the support of a majority of the party. He suffered minor but significant defeats on policy issues: the assembly voted decisively to keep oil and electricity under state control, though the party did not exclude private sector investment in either industry.

Development: As expected, the federal congress stripped Andrés Manuel López Obrador, the mayor of Mexico City, of his immunity from prosecution on 7 April. 

Significance: The vote in congress was overwhelming: 360 congressmen voted against López Obrador and only 127 in his favour. This means that virtually the whole of the Partido Revolucionario Institucional followed the orders of the party leader, Roberto Madrazo and ignored the doubts expressed by his rivals inside the party. Only seven of the 224 prií­stas broke ranks and voted for López Obrador: only one of the 149 members of the Partido Acción Nacional voted for the mayor.

What happens next is far from clear. The Mexico City assembly, controlled by the López Obrador's Partido de la Revolución Democrática, reacted to the congressional vote by voting to confirm López Obrador as mayor of Mexico City. The PRD bloc in the Mexico City assembly took legal advice which argued that the federal congress had violated Article 111 of the constitution which, it claims, sets out the rights of the Mexico City assembly. 

The issue is complicated because until 1997 the mayor of Mexico City was appointed directly by the president, rather than elected as other state governors were. In the states, the local assemblies have the right to depose governors, and they have done so, notably in Morelos. In December 2003, the supreme court issued a ruling which implied that the mayor of Mexico City was identical to a governor. That ruling covered human rights: the issue is whether the court will extend that principle

The federal congress may have voted, as it stripped López Obrador of his immunity, to also remove him from his post. Under Article 28 of the public service law, officials who lose their immunity from prosecution are also immediately and automatically suspended. This law, however, is overridden, López Obrador's supporters say, by the constitution, which guarantees his rights. 

Lawyers say that under the constitution, López Obrador can only lose his post when a judge signs a warrant committing him to prison on criminal charges. This has to be done within 10 days of the application being made. It is not impossible that a judge will refuse to issue such a warrant: this happened in the effort to prosecute a former president, Luis Echeverrí­a. 

The prosecutor and the accused can appeal against the judge's ruling. If López Obrador were to appeal he could be granted an injunction. López Obrador has said, however, that he will not fight the case but rather go straight to prison.

The constitutional and political aspects of the case are further complicated by the fact that no one is clear who has the right to replace López Obrador as mayor. Mexico City assembly argues that only it has the right to replace López Obrador. The three measures passed by the assembly first note the congressional decision; then assert that the congressional decision is wrong and that López Obrador will continue in office and thirdly take these issues to the supreme court. 

Another line of López Obrador's defence, which may yet enable him to run for the presidency in 2006, is an agreement by the PRD to bring forward the date for choosing the party's presidential candidate. López Obrador told a rally of 100,000 of his supporters in the Zócalo, the main square in Mexico City, on 7 April that the PRD would choose its presidential candidate on 31 July. 

The PRD's line is likely to be that it is one thing to knock out a prospective presidential candidate from the election but it is quite another to knock out a nominated candidate who has headed every opinion poll for those elections. López Obrador has had time to organise his campaign and has established 4,000 support committees across the country. The first test of this organisation will be the “silent march" López Obrador has called in Mexico City on 24 April. Its route will deliberately follow that of the biggest student march of 1968, although its more recent predecessor was the “silent march" of June 2004, which drew an estimated 2m people to protest against crime and violence, but which López Obrador opposed.

Development: The supreme court ruled, on 12 May, that the president has the constitutional right to veto the spending side of a budget approved by congress.

Significance: The decision was by the narrowest margin: 6:5, and depended on the casting vote of the president of the supreme court, Mariano Azuela. The supreme court deliberated, at least in part, in public and at the outset of the deliberations four of the 11 judges hearing the case declared themselves to be backers of the government's right to veto.

Now that the judges have established the principle, they will move on to considering the detail of the case before them. This involves congress essentially adding M$22bn (US$2bn) in spending to the 2005 budget which calls for spending of M$1.6 trillion (US$160bn). 

Azuela suggested on 12 May that the court may call for the lower chamber of congress to hold an extraordinary session to consider President Fox's objections to congress's amendments to the 2005 budget. Other judges say that Azuela is rushing: the court still has to rule on to what degree congress can modify the budget.

Development: On 16 June Antonio Leal, a deputy from the Partido por la Democracia, one of the four parties in the ruling Concertación coalition, announced his intention to lobby for a repeal of the amnesty law enacted during the regime of Augusto Pinochet.

Significance: The amnesty law, approved in 1978, protects members of the armed forces and police from legal action for human-rights violations committed during the period from September 1973 to March 1978. However, pressure to change the law has been growing following the publication of the Valech report on political detention and torture in November last year and a number of contradictory rulings by different courts who have tried agents of the state active in that period.

In April 2003 the head of Dina, the Pinochet-era secret police, Miguel Contreras, was convicted, along with four others, of the "permanent kidnap" (disappearance) of a member of a leftwing group. In a landmark ruling, judge Alejandro Solí­s rejected the defendants' invocation of the amnesty law. Solí­s employed an argument that has been gaining strength since 1990: kidnapping is an ongoing crime until the victim appears dead or alive and therefore the amnesty law does not apply. In November 2004 the supreme court upheld Solí­s's judgement. However, on 3 June 2005 an appeals court absolved five former Dina agents of kidnap by applying the amnesty law, a move which appalled human-rights groups and prosecutors.

Leal based his argument for a repeal of the law on the primacy of international over domestic law. He referred to the second article of the amnesty law which states that "this decree cannot contravene international rules on war crimes and wrongs against humanity". Leal also noted the recent decision by the Argentine supreme court, which voted 7-1 in favour of scrapping the country's amnesty laws, paving the way for the prosecution of up to 3,000 military officers.

ARGENTINA: The economy of Argentina expanded 10.5% year-on-year in May 2005 and marked a 0.6% rise, compared to April 2005, the national statistics institute INDEC said on 20 July 2005.

ARGENTINA: Economic activity in the first five months of 2005 was up 9% on the same period in 2004

BRAZIL: Unemployment in Brazil's largest metropolitan area of São Paulo has been stable at 17.5% of the workforce for three consecutive months because high interest rates have caused a reduction in investments while depressing

BRAZIL: Brazil's trade surplus continues to grow. From January up to the third week of July it reached US$22.369bn, a 34% growth in relation to the same period last year.

BRAZIL: The inland revenue collected R$31.582bn (US$12.89bn) in June, a record figure for that month. In the first half of the year the government has collected R$177.561bn (US$72.473bn) in taxes, 6.19% more than in the same period last year.

CHILE: Chile's trade deficit with Mercosur full members, Argentina, Brazil, Paraguay and Uruguay has jumped 469% between 1995 and 2004, from 902 million US dollars to 5.1 billion US dollars by far the country's largest with any trade block, according to the Chilean Industries Confederation, Sofofa.

Development: On 23 August the US State Department attempted to distance itself from comments by Pat Robertson, the televangelist and former Republican presidential candidate, who called for President Hugo Chávez to be assassinated.

Significance: Speaking on his religious television show, "The 700 Club" on 22 August, Robertson said, "I don't know about this doctrine of assassination, but if he thinks we're trying to assassinate him, I think that we really ought to go ahead and do it." US State Department spokesman Sean McCormack described Robertson's comments as "inappropriate", adding that his view did not represent the policy of the US but was merely that of a "private citizen".

McCormack refused to answer directly a number of questions related to Robertson's comments put to him at the State Department briefing. He did not respond when asked if he considered Robertson a terrorist, nor did he comment on the 1971 convention the US signed forbidding the assassination of leader and president. When asked if the US felt an obligation to prevent that type of act, McCormack ignored the question. Finally, when quizzed on whether these comments represent a violation of US law, McCormack said, "I'm not a lawyer. You'd have to check with a lawyer on that."

Venezuela wants a more robust response by the US government. Vice-president José Vicente Rangel said, "The response of the US government and institutions to this criminal declaration will put to the test their anti-terrorist rhetoric". Leading anti-chavistas in the country have also rejected Robertson's comments.

Meanwhile Chávez himself has downplayed Robertson's comments. Speaking from Cuba, the Venezuelan president said, "I don't know who this person is, and I don't know him. In my view, it is neither here nor there. We take care of ourselves when we have to." Chávez 's subtle response was in marked contrast to his repeated claims that the US is trying to kill him.

Development: On 26 September the governor of the south-western state of Barinas, Hugo de los Reyes Chávez , father of President Chávez , ordered the expropriation of a processing plant owned by Ramavenca, an affiliate of Alimentos Polar.

Significance: The sudden acceleration of the government's land reform programme has alarmed even some its supporters. Nevertheless it is still somewhat short of its target for land redistribution this year. President Chávez has accused Venezuela's private media of trying to demonise land reform, when he claims it is really about putting lands to use for the good of the country.

The seizure of the Ramavenca plant is the third such expropriation in the state, following the military takeover of the industrial slaughterhouse Matadero Fribarsa, owned by Alimentos Polar, and La Marqueseña ranch. The move prompted José Luis Betancourt, the president of the Venezuelan business association Fedecameras, to halt the "unnecessary" takeover of land deemed idle by the government.

The land reform programme has undergone three phases since its launch. The first, which lasted until 2003, saw very little activity. This changed when President Chávez put his brother Adán in charge of the programme: in his first 12 months in office he managed to distribute 1.5m ha of mainly state-owned land to 130,000 families; by the end of 2004 the area affected had reached 2m ha (the number of beneficiaries is unclear). The third phase, beginning in 2005, shifted the emphasis towards the seizure of privately-held land but has proceeded by fits and starts.

With Chávez comments on the 25 September edition of his weekly broadcast "Aló, Presidente!" that it was time for landowners to accept the reality of the government's plan to utilise idle land, the programme now appears to be moving full steam ahead.

Development: José dos Santos, a leader of the Movimento dos Sem Terra (MST), was killed on 29 October.

Significance: Dos Santos was the second senior rural activist to be killed in the Agreste de Pernambuco region (Pernambuco state) in four days. On 27 September a leader of the Movimento de Liberación dos Sem Terra, an offshoot of the MST, was shot in the municipality of Itaí­ba.

The killings demonstrate the continued rivalry between the large landowners in the north of the country and the landless peasant movement. In the week prior to his killing, the community in which Dos Santos lived was awarded 500 hectares of land by the government as part of its rural-reform programme. Witnesses claim Dos Santos' last act was to confront gunmen in the employment of the local landowner who were loitering around the newly transferred land.

Development: President Lula da Silva's former chief of staff, José Dirceu, gave his farewell to public life at a press conference on 1 December.

Significance: Dirceu lost his seat in congress after the lower chamber voted to impeach him for his alleged involvement in the corruption scheme mounted by the ruling Partido dos Trabalhadores (PT) to pay for its campaign debts and to win support for the government in congress. Dirceu told reporters that his impeachment was "political revenge" and maintained his innocence. According to him, the allegation that there was such a scheme is "a myth", despite the fact that strong evidence of the scheme's existence has been found by a parliamentary committee investigating the case.

By being impeached, Dirceu lost his right to hold office for eight years. The former minister told reporters that although he was leaving political life "for good" he would continue in public life as a private citizen. This was taken by some as a sign that Dirceu would try a comeback before the eight-year penalty expired.

For that to happen, Dirceu needs the support of the government to pressure the PT and its allies to make the parliamentary investigations into the corruption schemes "as inconclusive as possible". Without clear proof against him, Dirceu hopes to use the case of congressman Humberto Lucena as a precedent to regain his mandate. In 1995 Lucena was accused of corruption and impeached. Yet congress could not find enough evidence in the case and Lucena was allowed to come back to the lower chamber before his eight-year penalty had expired.

Development: On 13 January, the US ambassador to Mexico, Tony Garza, criticised people who objected to a scheme, approved by the House of Representatives, to build a wall along bits of the border between the US and Mexico.

Significance: Garza's comments are pre-emptive: the plan has only got through the House of Representatives and has yet to get senatorial approval. President Vicente Fox has criticised the proposal to build the wall as "shameful".

It was this statement that appears to have triggered Garza's comments, made in a release from the embassy. He said: "We do not expect that Mexico will support every security measure we take but we have every confidence that our neighbours will respect our right to take these measures on our territory."

The wall and the whole set of proposals from the House of Representatives are designed to curb illegal emigration to the US. Garza pointed out that the embassy had issued 36,000 immigration visas; 940,000 visitor visas and 80,000 work visas in 2005. Garza said that millions of Mexicans now have non-immigration visas for the US and use them frequently. The clear implication is that the Mexican government should not be seduced in opposing the US in support of those who do not go through the system.

Development: The second-in-command of the guerrilla group, Sendero Luminoso, was killed in a clash with the police on 19 February. Ví­ctor Aponte Sinalagua, otherwise known as “Camarada Clay", was killed in Alto Pacae in the department of Huánuco in the central highlands. Two members of Sendero were arrested, interior minister Rómulo Pizarro said. 

Significance: Pizarro said that the police operation that culminated in the death of Clay was the most important strike against Sendero for the last ten years. He accused Clay of masterminding a string of actions by SL in December which left 13 police officers dead and at least six police and military personnel injured, forcing the government to declare a state of emergency in three departments. Eight officers were killed in the worst incident on 20 December when a police patrol was ambushed by about 20 SL guerrillas on the highway running from Tingo Marí­a to Aucayacu, in Huánuco. 

Clay belonged to the Proseguir faction of SL, which opted to continue the armed struggle after the capture of the SL's messianic leader, Abimael Guzmán, in 1992. Proseguir dissociated itself from Guzmán's SL faction, which favours a political solution involving a general amnesty. The government is still giving out mixed messages about the threat posed by Proseguir, which first made a name for itself with the spectacular but brief abduction of 71 pipeline workers in 2003. The prime minister, Pedro Pablo Kuczynski, warned back in September that Peru was facing a more acute problem of terrorism now than four years ago; Pizarro denies this, although he maintains that the group is involved with drug-traffickers.