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La presión sobre el gobierno para que reconsidere su estrategia de seguridad está aumentando y proviene de dos lados. Por una parte, la casi diaria evidencia que la “estrategia de oleadas" no da resultados: eso involucra el despliegue de gran número de soldados y policí­as federales para quitar el control de áreas del paí­s de manos de las bandas de drogas. Por otra parte, los activistas de derechos humanos están arguyendo que el ejército toma demasiados atajos con relación al respeto por los derechos humanos cuando es utilizado como una fuerza policial.

Ambos grupos de crí­ticos de la estrategia de seguridad del gobierno pueden reunir muchas evidencias de la semana pasada para respaldar sus visiones. El primero podrí­a señalar informes de prensa que indican que el 17 de agosto ha dio un dí­a record para los asesinatos de las bandas, con 57 personas muertas por las bandas. Los activistas de derechos humanos pueden señalar la aparentemente ilegal redada en la casa de un prominente polí­tico, Manuel Espino Barrientos.

El gobierno no publica un conteo oficial de muertes, de ahí­ la afirmación que el 17 de agosto fue el peor dí­a en la guerra del gobierno contra el crimen organizado, no ha sido cuestionada. El previo peor dí­a fue el 14 de julio, cuando fueron asesinadas 53 personas.

El gobierno ha estado desplegando tropas y policí­as federales contra las bandas desde que asumió el Presidente Felipe Calderón, el 1 de diciembre de 2006. Hace un año el gobierno lanzó el Acuerdo Nacional por la Seguridad. Esta iniciativa fue diseñada para movilizar a todos los niveles del gobierno (municipal; estatal y federal) contra el crimen organizado.

La iniciativa no ha logrado reducir el conteo de muertes. En el primer año, 7.296 personas fueron asesinadas por los gangsters. En los 12 meses antes que fuera lanzado el acuerdo el 21 de agosto de 2008, fueron asesinadas 3.742 personas por los gangsters. La tasa diaria promedio de asesinatos desde que el Acuerdo fue firmado es ahora de 20.

El gobierno arguye que la tasa de asesinatos de México es aún baja en términos regionales. Eduardo Medina Mora, el Procurador General de la República admitió el 17 de agosto que la tasa de muertes era “seria y sin precedentes", pero afirmó a renglón seguido, que la tasa de muertes era menor de lo que era en 1994. También afirmó que la tasa de asesinatos de México, de 10,7 por cada 100.000 habitantes era menor que la tasa de asesinatos en Colombia (33 por cada 100.000 habitantes), Brasil (alrededor de 40 por 100.000), Guatemala y El Salvador (ambas con tasas de asesinatos de más de 50 por 100.000).

Medina Mora señaló que en 1994 la tasa de asesinatos fue de 18 por 100.000. No está claro si las cifras del gobierno incluyen ví­ctimas del levantamiento del Ejército Zapatista de Liberación Nacional en Chiapas. Los grupos de derechos humanos estiman que al menos 400 personas resultaron muertas. La cifra oficial de muertes fue de 145.

Lo que inquieta al gobierno es que las bandas parecen haber finalizado el periodo de calma en que cayeron en la primera parte de 2009. Los meses más letales desde el Acuerdo fueron octubre y noviembre de 2008 (con 791 y 729 muertes por las bandas, respectivamente). En junio el cómputo de muertes estaba por encima de los 700 en el mes y julio no fue mucho menos.

El único consuelo que el gobierno puede extraer de las cifras es que seis estados (Chihuahua, Durango, Sinaloa, Guerrero, Michoacán, y Baja California) sumaban 6.007 de las muertes desde el Acuerdo. Esto es 82,33% del total de muertes por las bandas. Menos alentador es que los estados donde hubo la mayorí­a de las grandes confrontaciones entre gangsters y las fuerzas de seguridad incluye a Nuevo León y Tabasco. Quintana Roo es otro estado con un gran problema de violencia relacionada con las drogas.

Sin embargo, el estado más violento es Chihuahua. Desde el Acuerdo, 2.955 personas fueron asesinadas en el estado por criminales organizados. El 17 de agosto, 33 personas fueron muertas en el estado. El epicentro de las muertes es Ciudad Juárez, en la frontera con EU. Pese al despliegue de una tropa de 8.000 hombres en las calles de la ciudad, las bandas actúan con impunidad. En tempranas horas del 17 de agosto, atacaron un night-club con ametralladoras, matando a ocho personas.

Dos dí­as más tarde mataron a Alan Cristian Domí­nguez, que encabeza la Policí­a Ministerial (PM) en Ciudad Juárez. La PM es la nueva agencia federal que se estableció oficialmente a fines de mayo de 2009, y que fue diseñada para reemplazar a la Agencia Federal de Investigación (AFI), que ha sido debilitada por las casi constantes revelaciones acerca de los lazos de los oficiales de la AFI con las bandas de drogas.

Otra preocupación para el gobierno es la creciente violencia relacionada con las bandas en Monterrey y Nuevo León. El 17 de agosto, hubo un tiroteo de tres horas entre gangsters y la policí­a en una de las principales calles de Monterrey, que dejó el saldo de cuatro personas muertas.

Derechos humanos
Los activistas de derechos humanos tienen dos piezas de evidencias para usar al argumentar que el uso del ejército se está manejando con mano muy dura. El primero es la redada por el ejército en una casa que pertenece a Manuel Espino, un ex presidente del gobernante Partido Acción Nacional (PAN). Esa casa, en Ciudad Juárez, fue allanada por el ejército temprano el 16 de agosto, durante una fiesta para uno de los sobrinos de Espino.

El allanamiento parece haber sido un embarazoso error y no un deliberado intento de intimidar a Espino, que tiene unas ya famosas malas relaciones con el Presidente Calderón. Espino lidera el ala derecha del PAN y fue uno de los principales crí­ticos del elegido de Calderón, César Nava [IL-09-32] para asumir el liderazgo del partido.

Espino afirma que el ejército no se habí­a molestado en tener una orden para el allanamiento de la casa. Agregó que el ejército debe ser puesto en vereda y no se le deberí­a permitir que pisotee los derechos humanos de la gente. Tan fuerte declaración de un partidario de la lí­nea dura, muestra cuan controversial se ha vuelto la polí­tica de Calderón de usar al ejército contra las bandas de drogas.

El ministerio de defensa (Sedena) difundió una declaración el 18 de agosto negando que sus hombres hubiesen allanado la casa de Espino. El ministerio   dijo que sus hombres estaban patrullando en Ciudad Juárez y notaron un número inusual de personas en la casa de Espino. De acuerdo con el ejército, Espino desafió a los soldados en la calle, pero también aparentemente no tuvo problema con lo que ellos estaban haciendo y él les agradeció.

Esta versión de los eventos fue cuestionada por Espino, que dijo el 19 de agosto que él sospechaba que el gobierno estaba tratando de utilizar los eventos para sus propios propósitos. Espino repitió su acusación que soldados fuertemente armados habí­an entrado en su casa sin una orden legal. Espino dijo que él habí­a frenado a los soldados sobre esta cuestión, señalando que ellos estaban actuando ilegalmente y logró que se retiraran. Espino dijo especí­ficamente dijo que los soldados entraron en su propiedad, sea en el patio o en el estacionamiento. También negó la afirmación del ministerio de defensa que su crí­tica inicial al ejército habí­a sido producto de una mala información. Espino dijo que sus reclamos habí­an sido informados correctamente.

El año pasado, Espino pido al gobierno que reconsidere su estrategia de seguridad porque no hay indicios de que esté dando resultados. El sugirió que el gobierno ponga más énfasis en la inteligencia y menos en confrontar con los gangsters en tiroteos. Espino es actualmente presidente de los partidos Demócratas Cristianos en América Latina (al cual pertenece el PAN). Ese grupo realizará una conferencia sobre delito y seguridad, en Ciudad Juárez, el 24-27 de agosto.

La otra decisión que fue cuestionada por los activistas de derechos humanos fue el arresto y subsiguiente liberación de la madre y el hermano de Servando Gómez Martí­nez, alias “La Tuta", que se supone que es el lí­der de La Familia Michoacana, una de las principales bandas en el paí­s. La Tuta habí­a ofrecido una tregua al gobierno en julio, que el gobierno federal rechazó.

Además de ser cuestionable desde el punto de vista de los derechos humanos, la persecución a la familia de La Tuta puede producir una reacción de las bandas. Una de las quejas principales de La Tuta, en una extraordinaria entrevista con un periodista de TV, en la que él ofreció una tregua, fue que las autoridades perseguí­an a las familias de los gangsters en vez de ir tras los mismos gangsters.

• Visita a Brasil

El Presidente Felipe Calderón visitó Brasil desde el 15 al 17 de agosto y aceptó establecer un mercado bilateral para estimular el comercio entre los dos paí­ses que en la actualidad sólo alcanza un modesto US$7,4bn anuales.

• Lluvias

El ministerio de agricultura dijo que las lluvias en los primeros siete meses de 2009, fue de 81,8% del promedio anual para ese periodo.

El Primer Ministro de St Vincent y las Grenadines, Ralph Gonsalves, no logró su intento de cambiar la constitución. En un referéndum el 25 de noviembre, el resultado de la votación mostró el rechazo a la propuesta por 56% a 43% contra el cambio, que podrí­a haber creado una república con un presidente electo como jefe de estado en vez de la monarca británica, y reemplazar al Privy Council con la Corte Caribeña de Justicia (CCJ), como la institución de apelación final del paí­s. El resultado del referéndum deberí­a proveer un impulso al opositor New Democratic Party (NDP), que condujo una estridente campaña por el “no", ante las elecciones del año próximo.

El referéndum, el primero de esta clase realizado en la Organización de Estados del Caribe Oriental (Oecs, siglas en inglés), el grupo sub-regional dentro de la Comunidad del Caribe (Caricom), de 15 miembros, no logró la mayorí­a de dos tercios requerida para su aprobación. Gonsalves tení­a la esperanza que el referéndum reflejarí­a la mayorí­a de 12 a 3 del gobernante United Labour Party (ULP) que retiene en el parlamento. El atribuyó la derrota principalmente a la “alarmista" campaña del NDP que, aceptó, habí­a sido “más exitosa de lo que habí­amos anticipado." El lí­der del NDP, Arnhim Eustace, pidió a Gonsalves que renuncie.

El resultado del referéndum es otro revés para las aspiraciones de la CCJ de convertirse en la corte de apelación final del Caricom: solamente Guyana y Barbados la reconocen con esa capacidad. Los estados de la Caricom pueden no haber adoptado a la CCJ, pero una cosa en la que todos están de acuerdo es la seria amenaza a su supervivencia planteada por el calentamiento global. El Primer Ministro de Grenada, Tillman Thomas, el Presidente de la Alianza de Pequeños Estados Insulares (AOSIS, siglas en inglés), dejó en claro antes de la Cumbre del Cambio Climático el 7 de diciembre, que la Aosis no aceptará un acuerdo a menos que se limite el calentamiento global por debajo de 1,5 grados Celsius. “Ningún estado o grupo de estados, tiene el derecho de condenar a otro a la tragedia sin precedentes de la desaparición del estado por causa del cambio climático, dijo Thomas.

• Cambio climático

La declaración acordada por la bianual Reunión de Jefes de Gobierno de la Commonwealth (CHOGM, siglas en inglés) en Trinidad el fin de semana, fue decepcionante desde la perspectiva de la Alianza de Pequeños Estados Insulares (Aosis). El llamado Consenso sobre Cambio Climático de Puerto España, que los lí­deres de la Commonwealth adoptaron fue vago y confuso. Se puede leer: “Enfatizamos nuestra común convicción que se necesita una urgente y sustancial acción para reducir las emisiones globales y tener un rango de visiones sobre si la temperatura global promedio debe estar constreñida a debajo de 1,5 grados o a no más de dos grados Celsius por encima de los niveles pre-industriales."

BRASIL | PAC-2. El Presidente Lula da Silva, acompañado de su ministra de la presidencia y su evidente heredera, Dilma Rousseff, develó esta semana la segunda etapa del esquema de desarrollo nacional de infraestructura del gobierno, el multibillonario en dólares 'Programa de Aceleración del Crecimiento' (PAC). La oposición censuró la ceremonia como “polí­tica" ante las elecciones de octubre. La primera etapa del PAC, administrada por Rousseff, ha quedado bajo escrutinio por supuesto mal planeamiento e implementación. De acuerdo con la ONG local, Contas Abertas, 54% de los proyectos aún faltan iniciarse desde que el PAC fue lanzado en 2007.

URUGUAY | Sólido crecimiento. La economí­a creció en 2,9% en 2009, sobrepasando confortablemente el crecimiento del PBI proyectado por el banco central, de 2%. El crecimiento del PBI en el cuarto trimestre se elevó en 4,5% sobre igual periodo de 2008. Las exportaciones se incrementaron en 2,5% en 2009, y las importaciones cayeron en 8,6%. Las manufacturas cayeron en 3,7% en 2009 con relación a 2008, pero la agricultura informó de un fuerte crecimiento de 12,9% para compensar por la contracción de 1,3% en el importante sector ganadero. La construcción se expandió en 4,8% y la venta minorista en sólo 0,8%. El gobierno predice un crecimiento de 4% en 2010.

Delegaciones de Bolivia y Chile se reunieron esta semana en La Paz para reanudar las discusiones con relación a la agenda de 13 puntos que, desde 2006, ha formado las bases de las relaciones bilaterales, que fueron cortadas en 1978. La reunión fue la primera desde que el gobierno de centro derecha del Presidente Sebastián Piñera asumió el poder en marzo. Esto sugiere que a pesar de las diferencias ideológicas de Piñera con el Presidente Evo Morales, el acercamiento que comenzó bajo su predecesora, Michelle Bachelet (debido a su personal ví­nculo con Morales) continuará.

La última ronda de conversaciones produjo signos de cooperación más cercana en varias áreas, sugiriendo que ambas partes permanecen comprometidas en impulsar los lazos, y Morales, notablemente, mantiene que Chile es su prioridad en polí­tica exterior, como fue ilustrado por su designación en marzo de uno de sus aliados más confiables, Walker San Miguel, como el nuevo cónsul en Chile [IL-10-09].

Especí­ficamente, la reunión produjo promesas de más cooperación en seguridad (ver más abajo) y comercio, que fue profundizado en julio pasado con la firma de un acuerdo comercial. Las cifras de la oficina chilena de comercio exterior muestra que el comercio bilateral ha llegado a US$389,59m en 2009, un incremento de 57% sobre 2005. También relacionado con el comercio, los diplomáticos insinuaron la posibilidad que se otorgue a Bolivia el acceso al puerto de Iquique en el norte de Chile, un convenio que podrí­a ser aplicado a los otros puertos de Arica y Antofagasta. Mientras tanto, los chilenos prometieron continuar con la restauración de US$34m de una lí­nea ferroviaria que conecta Arica con La Paz, y que habí­a sido dañada por inundaciones en 2005.

Las conversaciones subrayan el hecho que la cooperación entre Bolivia y Chile permanece confinada a esas áreas especí­ficas, sin embargo, sin solución a la vista sobre los dos grandes puntos conflictivos de la agenda de 13 puntos: la cuestión del acceso de Bolivia al mar, que perdió en la Guerra del Pací­fico a fines del siglo 19; y los derechos sobre el rí­o Silala. No hubo progresos con relación a esos dos grandes temas en discordia más allá de prometer “propuestas concretas" ante la próxima reunión, que está fijada para noviembre.

• Cooperación en la seguridad

Otros signos de lazos más cercanos entre Bolivia y Chile incluyen la posibilidad de crear una comisión bilateral anti-drogas, que se deberá discutir en una reunión en Santiago el mes próximo, como también la inauguración de un nuevo puesto de frontera cercano al lago Chungará, junto al paso de montaña Chungará-Tambo Quemado.

El presidente de la Confederación Patronal de la República Mexicana (Coparmex) declaró el 1 de noviembre que la violencia desatada por las bandas en partes de México ha alcanzado un nivel “insoportable". Esta declaración luce extraña al compararla con el último informe World Bank Doing Business (2010), publicado el 3 de noviembre, que afirma que México y Perú son los dos mejores paí­ses en América Latina en los cuales hacer negocios.

En una actitud sin precedente, el gobierno admitió que el presidente de Coparmex, Gerardo Gutiérrez Candiani, tení­a razón. El ministro de economí­a y desarrollo industrial, Bruno Ferrari, admitió que la violencia en algunas partes del paí­s estaba afectando severamente los negocios del pequeño sector de servicios, como restaurantes y bares. Ferrari dijo que el gobierno aumentarí­a su programa de prestar ayuda a los pequeños negocios en lugares como Ciudad Juárez. Hasta ahora, el gobierno habí­a acusado a los empresarios que se quejaban de la situación de seguridad, de “desdeñar" a México.

Ciudad Juárez, ya la ciudad más violenta en las Américas con una tasa de asesinatos que llega a 200 por cada 100.000 habitantes, está viendo un incremento en su tasa de asesinatos. Octubre fue el mes más violento en la ciudad hasta ahora en este año, con 350 asesinatos, de acuerdo con el servicio procesal del estado de Chihuahua. El peor mes previo fue agosto, con 338 muertes. Además, el 31 de octubre, dos ciudadanos de EU fueron muertos a tiros en el Puente Zaragoza que une Ciudad Juárez con El Paso, Texas, y otro ciudadano de EU resultó muerto en un incidente separado en Ciudad Juárez. Hasta ahora, la violencia en Ciudad Juárez no ha cruzado la frontera. El Paso tiene una de las tasas más bajas de asesinatos en EU: su tasa de asesinatos es comparable con la de Suiza.

Sin embargo, el argumento de Gutiérrez, fue mucho más amplio que el efecto de la violencia en la industria de la hospitalidad. Dijo que a lo largo del paí­s, se cerraban comercios debido a la violencia y las inversiones están siendo cortadas. “La inseguridad pública, la violencia, el dominio que las bandas sostienen sobre la sociedad y su penetración en las instituciones en muchas partes del paí­s, han llegado a niveles intolerables, como fue demostrado la semana con las masacres de jóvenes," dijo Gutiérrez.

Hay mucha evidencia anecdótica que sugiere que importante empresarios están evitando a México, lo que significa que los proyectos en México hacen cambiar la lista de prioridades de sus compañí­as. Más preocupantemente, Reforma, el más importante diario de Ciudad México, informó el 2 de noviembre que una compañí­a mexicano retiró un contrato para proveer acero ofreciendo en una licitación la oferta más baja, de una compañí­a en Monterrey, debido a que él no creí­a que la compañí­a en Monterrey podrí­a producir confiablemente debido al malestar en Monterrey. El proveedor que ganó el contrato fue 8% más caro que el oferente de Monterrey.

Como Monterrey es un centro comercial de México, otras compañí­as deberán estar tomando similares decisiones, que socavan la competitividad general de México. Dado que el peso mexicano también se está apreciando frente al dólar, el panorama para la economí­a luce deprimente.

Gutiérrez señaló que entre el 22 y el 28 de octubre hubo siete masacres separadas de jóvenes, con una lista total de muertes de 60. Gutiérrez exhibió cifras que mostraban que los secuestros se habí­an cuadruplicado durante los últimos cinco años; los robos se elevaron en 20%; los atracos en 30%; y la extorsión habí­a trepado a más del doble.

El punto de Gutiérrez sobre la penetración que tienen las bandas en las instituciones es una referencia a la vergonzosa evidencia que varias diócesis católicas se habí­an mostrado felices de aceptar donaciones de las bandas para nuevas iglesias y otras instalaciones. El también señaló que los estudios académicos muestran que 80% de las fuerzas de policí­a municipal tení­an algún grado de penetración de las bandas.

• Beltrán Leyva

El 3 de noviembre, Luis Angel Cabeza de Vaca, el jefe de la seguridad del estado en Morelos, que está actualmente bajo custodia, fue acusado de proveer un helicóptero del gobierno para ayudar a Arturo Beltrán Leyva, un connotado gangster, a escapar de sus perseguidores en 2008. Aparentemente, Beltrán Leyva simplemente llamó por teléfono a Cabeza de Vaca para pedirle un helicóptero.

Debí­a haber sido un triunfo. El Presidente Fernando Lugo se embarcó en una gira por el Sudeste Asiático esta semana para estimular la inversión extranjera e impulsar los lazos comerciales. Que él esté lo suficientemente saludable para realizarla sugiere que hizo una fuerte recuperación de su enfermedad. Y aún así­, el principal punto del que se habla, en la prensa local al menos, es que él está acompañado de su canciller, Héctor Lacognata. Eso no hubiera sido considerado raro para un jefe de estado de irse al exterior con su canciller, pero Lacognata está bajo intensa presión para que renuncie luego de emerger que él recibí­a un doble salario.

Lugo se sometió a seis sesiones de quimioterapia en Brasil en la segunda mitad de 2010 luego de haber sido diagnosticado con un linfoma. Hubo entonces algunos murmullos entre la oposición  acerca de si serí­a capaz de mantener su posición. Un largo y extenuante viaje de esta clase al extranjero, que, incidentalmente, el presidente de Uruguay, José Mujica descartó por razones de salud, disipa cualquier duda acerca de si está o no en condiciones para sus tareas. Sin embargo las dudas mayores sobre la gira eran sobre si Lacognata debí­a acompañar al presidente. Lugo ha quedado bajo fuerte presión de la oposición, grupos de la sociedad civil y los medios en semanas recientes para deshacerse de Lacognata, por contravenir la constitución al retener dos puestos al mismo tiempo. Una filtración a los medios locales reveló que Lacognata ganaba G$59m (US$12.366) por mes como asesor ministerial en el consejo de administración de la represa hidroeléctrica binacional de Itaipú. Por su posición ministerial recibí­a G$10m (US$2.146) por mes.

La oposición insiste que sólo un o de los tres cursos es posible: Lacognata renuncia; Lugo lo destituye; o el congreso le hace juicio polí­tico. El Artí­culo 105 de la constitución establece inequí­vocamente: “Ninguna persona podrá percibir como funcionario o empleado público, más de un sueldo o remuneración simultáneamente, con excepción de los que provengan del ejercicio de la docencia." Lacognata ofreció renunciar a su rol de asesor y renunciar al salario que recibí­a, un tácito reconocimiento, para la prensa local, que eso no era legí­timo, pero Lugo pospuso su decisión hasta después de su retorno de Asia. Eso es embarazoso para Lugo porque él llegó al poder en agosto de 2008 prometiendo luchar contra la corrupción y mejorar la transparencia en la vida pública, para elevar la imagen de Paraguay en el exterior. Aún así­, él ahora está llevando a cabo una gran gira por el exterior para elevar el comercio y las inversiones acompañado de un hombre que aparece beneficiándose de alguna clase de oscura maniobra financiera de la vaca lechera del estado que produce dinero, Itaipú, igual que los funcionarios en los gobiernos anteriores.

• Lacognata

Héctor Lacognata se convirtió en canciller en abril de 2009 como miembro del Partido del Movimiento al Socialismo (P-MAS), un pequeño partido de izquierda en la coalición gobernante del Presidente Lugo, luego de haber desertado de otro pequeño partido, pero de derecha, el Partido Patria Querida, que él ayudó a fundar y por el cual obtuvo una banca de diputado en el parlamento del Mercosur. Lugo firmó la semana pasada un decreto designando a Lacognata como el coordinador general, en su capacidad de canciller, de la cumbre del Mercosur a mediados de 2011, lo que sugiere que él podrí­a intentar seguir manteniéndolo. El congreso controlado por la oposición está amenazando con iniciarle juicio polí­tico. Luis Bareiro Spaini renunció como ministro de defensa antes que el senado pueda hacerle juicio polí­tico por negligencia en el cumplimiento de su deber [IL-10-34].

La prueba de la naturaleza indí­gena de la administración de Evo Morales es probable que no llegue hasta después que la asamblea constituyente finalice sus tareas, sin haber aprobado las propuestas más controversiales de las organizaciones indí­genas. Morales ha dicho que pondrá esas propuestas ante el electorado en un referéndum -pero deberá tener en mente que la clave de su éxito polí­tico ha sido su habilidad para atraer el voto de la población no-indí­gena, algo que los más radicales lí­deres indí­genas nunca han podido hacer.

Cuando él concibió la asamblea constituyente, Morales declaró que le gustarí­a ver la representación indí­gena de "60% a 70%". Sin embargo, descartó establecer una cuota indí­gena, tal como él hizo con las exigencias de cuotas corporativas para los sindicatos y organizaciones sociales.

El mensaje era que las demandas indí­genas deberán ser canalizadas a través del partido gobernante, el Movimiento al Socialismo (MAS). Ese enfoque no cayó muy bien a las organizaciones indí­genas, en particular entre los electoralmente débiles, como la Confederación de Indí­genas del Oriente Boliviano (Cidob), que representa a los menos populosos grupos étnicos de las tierras bajas del este.

Una de las más controversiales propuestas del Pacto de Unidad, la alianza de organizaciones indí­genas reunidas bajo el ala del MAS, es el nuevo trazado de los lí­mites administrativos de Bolivia para incorporar territorios indí­genas autónomos. 

Eso va en opuesta dirección a la demanda de autonomí­a de los departamentos más ricos de Bolivia. Lo que plantea un problema, pues hay 36 grupos étnicos reconocidos que demandan autonomí­a territorial, y como fue ilustrado por la experiencia de Colombia y Brasil, la superficie de los territorios exigidos tiende a ser desproporcionados con la dimensión del grupo étnico (debido a los requerimientos de pequeños pueblos cazadores).

Pero hay más. Félix Patsi, ex ministro de educación al que muchos consideran el ideólogo del Pacto de Unidad, dice que la propuesta completa es para establecer la coexistencia de dos sistemas en Bolivia, una liberal y otra comunitaria -esta última formada por territorios indí­genas autónomos.

La extensión en que Morales y el MAS han confiado en el voto no-indí­gena, está ilustrado por un sondeo conducido por Latin America Public Opinion Project (Lapop) sobre la auto-identificación étnica de los que votaron en las elecciones generales de 2005.

De aquellos que votaron por el MAS, 27,2% se identifica como indí­gena u "originario", pero más del doble, 61,3%, se describe como mestizo o cholo.

Esa última proporción no es mucho menor de lo declarado por los que votaron por el partido que salió en segundo lugar, Podemos (68,7%) -de los cuales sólo 9,2% se identifica a sí­ mismo como indí­gena.

El partido con la segunda más grande proporción de votantes indí­genas (22,5%) fue del muy menguado Movimiento Nacionalista Revolucionario (MNR).

Para ponerlo en perspectiva, el MAS atrajo, en general, 53,7% de los votos no mucho menos del doble de los votos por Podemos, y más de ocho veces de los votos por el MNR. Una palabra de cautela: incluso después de la elevación de la reafirmación indí­gena, la mayorí­a de los bolivianos prefiere identificarse a si mismos como mestizos (65% en un sondeo de Lapop de 2002, contra 11% que se llama a sí­ mismo indí­gena).

Morales, un Aymara, es indudablemente indí­gena y él aparece ante los distritos indí­genas con vestimentas indí­genas y dirigiéndose a ellos en Aymara o Quechua (aunque él prefiere hablar en castellano).

Se ha sugerido que su atractivo ante los no-Aymara viene del hecho que muchos ven a Morales como tí­pico del migrante interno y alguien que ha construido su carrera dentro de la tradición sindicalista, que permanece como un fuerte rasgo de identificación de indios y mestizos.

Su búsqueda de votantes no-indí­genas fue deliberada, y exigió que él vaya más allá de su base de poder original entre los productores de coca y la base polí­tica proveí­da por los gobiernos locales de Cochabamba.

El ha cultivado a los sindicatos y las organizaciones sociales en todas partes del paí­s, y ha buscado candidatos no-indí­genas para que lo acompañen. En las elecciones de 2002, cuando él llegó como segundo cercano en la contienda presidencial, casi la mitad de los candidatos del MAS que obtuvieron bancas en el congreso, fueron no-indí­genas.

Ese patrón fue repetido, a grandes rasgos, en 2005 y en las elecciones para la asamblea constituyente.

Identificación con grupos étnicos especí­ficos, % de la población Grupo étnico                        %  Quechua                             36.4 Mojeño                               2.9 Aymara                              24.2 Guaraní­                               2.6 Chiquitano                           3.7 Other native                        1.9 Fuente: INE.

A succession of political scandals has shaken the government. The government has now shed eight cabinet members and more may go. President Abel Pacheco is being tainted by a congressional investigation into the way the two main parties financed the elections last year. The treasurer of his party, the Partido Unidad Social Cristiano, refused to speak when called to testify to the investigation earlier this month (September), on the grounds that he might incriminate himself.  

Pacheco has all but admitted that his party broke the law on campaign finance: he said that what was done was nothing compared with what his predecessors had done. Pacheco has denied, however, that he had full knowledge of what his election team did when collecting campaign funds. A congressional commission, set up to investigate the issue last October, has found serious irregularities in the way Pacheco's campaign was financed. In particular, the investigation found that US$67,000 had been given to Pacheco's campaign by Chi Kwon Li Su, a businessman of Taiwanese origin but Costa Rican citizenship. Under the law, the maximum personal donation to any one campaign is US$30,000. What makes the scandal reek is that Chi Kwon Li Su fled from Costa Rica to Canada at the end of August, having defrauded the government of US$12.3m in income and sales taxes over the past three years.  

Pacheco admitted that he had been introduced to Chi Kwon Li Su by leading members of the Taiwanese business community. He added that officials from the Taiwan embassy had also been present at the meeting. Chi Kwon Li Su had been president of the Taiwanese-backed Banco de Cathay.  

The economy
The irony is that the political scandal is obscuring an impressive economic recovery. The economy is on course for 5% growth this year. This growth is leading to a rise in budget spending: it is scheduled to rise by 11%, to US$5.3bn. The big problem for the government is that debt service is still swiping the bulk of spending: next year the government expects to pay US$2.6bn on debt service. Altogether 78.6% of the proposed budget will go on staff and pension costs and debt servicing.

The recovery in the economy in 2003 and 2004 will not be even. The computer component manufacturer Intel will grow by 8.4% this year, while agriculture will have a tough time just to keep abreast of last year's marked decline. The business and construction sectors would have the least growth, according to forecasts from a set of private-sector analysts, Ecoanálisis. These projections shatter the expectations of a vast number of Costa Ricans, who anticipated a major increase in production and an ensuing rise in job numbers and greater income for workers.  

As we noted last month, this year is shaping up as a much better one for the region, economically-speaking, than most people expected. The problem is that foreign investors are not rewarding this achievement with new investment. Instead, they are putting their money in Asia. The most graphic illustration of this was comparing the most recent foreign direct investment figures for China and Brazil. China received US$7.97bn in actual FDI disbursements in June, while Brazil got a measly US$260m in May.

It is not only companies which are shunning Latin America. Banks too are shifting the balance of their portfolios away from the region to Asia, where, supposedly credit risks are lower. Banks reduced their Latin American holdings by about 10% in the fourth quarter of 2003, according to the Bank for International Settlements (BIS). Latin American assets now account for about 26.5% of total emerging market assets held by banks, down from about 31% at the end of 2002. 

Asia overtook Latin America as the biggest emerging market holding for BIS-reporting banks at the beginning of 2003. Since then, banks have been selling Latin American and Middle Eastern assets and buying Asian and emerging European assets (a category which covers everything from Turkey to Poland). Inside Latin America, the main financial business appears to be arranging bond deals for non-bank Latin American borrowers. The BIS points out that loans as a percentage of total credit to non-banks in the region have fallen to 35% of total credit. It had been 56% at the end of 1997. 

So what does all this mean? We would argue that it is no bad thing for Latin America that banks have turned cautious about the region as whole. It is interesting to note from the BIS data that international banks are again net lenders to Brazil. They had been net recipients for the previous 18 months. The main reason for this is non-bank borrowers in Brazil pulling back money from their US-bank deposits and offshore centres. 

Equally interesting is that the banking system is still pulling money out of Argentina. Loans to non-bank borrowers in Argentina were down by US$3bn in the final quarter of 2003. The BIS comments that this is probably due to write-offs by banks on defaulted loans. Total loans to Argentina are down to US$23bn, just 9% of total loans to Latin America by BIS-reporting banks.

The reason why we are encouraged by the banks' pickiness about the region is that this should mean that they will not all rush for the exit when the cycle turns down again. Our view is that Brazil, then Mexico and Chile are improving credits. Venezuela, Bolivia and Peru, where the political noise is obscuring improving economies, may also become worthy of bankers' renewed interest in the next six months.

The economy is starting to slow down, inflation is beginning to pick up and the government is worried about labour unrest. The central bank is forecasting that inflation will be between 7.5% and 10.5% this year. Most independent economists expect a rate towards the top end of that range. 

The central bank is doing its best to curb inflation by restricting the money supply and bolstering the dollar. The bank took Arg$2.275bn (US$780m) out of circulation in the first quarter. It has also been active in buying dollars: it is doing this for two reasons. One is to keep exports competitive; the other is to curb inflation. The bank noted, on 20 April, that its reserves now stand at US$20.6bn. 

Although the G7 group of the world's biggest industrialised countries criticised the government's refusal to deal with those investors who refused to tender their securities in the recent debt exchange, the IMF has made conciliatory noises. The government is counting on IMF help to meet the US$10bn in debt and interest payments due to the multilaterals over the next two years. The managing director of the IMF, Rodrigo Rato, said that if Argentina asked for a loan, the IMF would consider it, but Argentina has yet to ask. 

What is clear is that the economy is slowing down. In March industrial production grew by 5.9%, rather more than most independent economists had forecast. The March figure was significantly better than the February rate. Despite the decent March figure, industry is clearly rubbing against capacity constraints: the steel industry is running at 96% of capacity; packaging is at 85% and oil refining at 93%. 

Companies are still not confident enough to invest. This may be changing. Camargo Correa, a Brazilian construction conglomerate announced on 19 April that it was buying Argentina's biggest cement company, Loma Nega for US$1bn. A couple of days later, Daimler Chrysler announced that it was investing US$50m to build a new production line for sports utility vehicles in Córdoba.

The March figures follow year-on-year growth in industrial output in February of 5.3%. The best performing industrial sector in February 2005 was the car industry, even though its output was down by 35% on January's figure. The staggeringly good January output means that output for the first two months of the year is up by 31%. 

The other worry facing policymakers is a pick-up in inflation. Businesses are trying to push up prices. In March the monthly rate was 1.5%, bringing the rate for the first two months of the year to 4%. In the whole of 2004, the inflation rate was just 3.7%. The lagging 12 month rate is now 9.1%.

Wholesale prices are rising at much the same sort of rate as retail prices. The index was 6.8% higher in February 2005 than it was a year earlier. For retail prices the year-on-year increase was 8.1%. The government is now trying to head-off further prices increase with a mixture of bribery and bullying. It struck a deal with chicken producers and supermarkets to cut the price of chicken by about 6% until the middle of June. Beef producers accepted a 10% price cut on cuts of meat that were not destined for export. 

GDP: The country's GDP came to Arg$417bn (US$142.4bn) in 2004. The economy ministry has raised its forecasts for growth this year from 4% to 5.5%. 

Fiscal surplus: The government has kept a tight grip on spending in the first quarter of the year, spending exactly what it had budgeted. The fiscal surplus in the first three months of the year was Arg$4.2bn, 6.5% more than for the first quarter of 2004. largely because fiscal revenues were ahead of budget. In the first quarter, because the economy is still growing faster than the government forecast, fiscal revenues were 30% ahead of what the government had expected at Arg$25.4bn.

The government is pencilling growth of 3.5% for 2006. It expects tourism, agriculture and financial services to be the main engines of growth.

The 2006 forecast is bullish. In 2005 the economy grew by more than 2% for the first time in five years, hitting a rate of 2.8%.

The government argues that the activation of the free trade agreement between the US and Central America and the Dominican Republic (Cafta-DR) will pep up the growth rate. The implementation of Cafta, which had been expected to start on 1 January 2006, has been delayed by the US insistence that all of the Central American signatories pass the enabling legislation before the treaty takes effect.

The government has not been put off by the non-implementation of Cafta,. It is betting on agreeing more free trade agreements this year. It wants deals with the European Union, Canada, Taiwan and Caricom, the Caribbean community.

The government is betting considerably on an expansion of the tourism industry. A new tourism law, designed to encourage investment, came into force in mid-January.

Tourism: Tourism revenues in the country set a new record in 2005: US$644m, up from US$425m in 2004. The country entertained 1.15m tourists in 2005, up 20% on the 2004 number. Most tourists are either returning migrants or visitors from neighbouring countries. Their average spend was only US$92 a day. Their average stay was six days. The tourism ministry reported that 70% of the visitors came from Central America; 24% came from North America but less than 3% came from Europe. Fewer than 2% came from South America and just over 1% came from either Asia, Africa or Oceania. Guatemalans were the most avid tourists: just under 400,000 visited El Salvador in 2005.

Inflation: The rate for 2005 was 4.3%. This was lower than the 2004 rate of 5.4%.

On 18 October the central bank's monetary policy committee (Copom) cut base interest rates by half a point to 13.75%. This was the lowest interest rates have been since the Copom started meeting, in 1996. Yet even with the cut, real interest rates are still over 10%. According to the official statistical agency, IBGE, inflation is running at 3.7% for the 12 months to September.

Interest rates are likely to fall further in what remains of the year, as inflation remains quiescent. The most widely used official index for consumer prices inflation, the IPCA, is at 2% for the 12 months to September, which would mean that real interest rates are still over 11%. According to the independent Fundação Getúlio Vargas, inflation for the 12 months to September was 3.1%.

The September cut was the 10th consecutive month in which the Copom has cut rates. The Copom said that its action was warranted by the "the new macroeconomic perspectives"; code for forecasts of falling inflation and disappointing economic growth.

At the end of September the government reduced its official forecast for GDP growth this year from 4.5% to 4%. This is still significantly higher than the consensus from independent economists who reckon that 3.1% growth is more likely. The independent consensus about inflation is more optimistic: 3.3%.

The timing of the cut, just 10 days before the second round of the presidential election, was controversial. Government supporters hailed the interest-rate cut as "another step taken [by the government] to accelerate economic growth".

Brazilian economic growth rates have fallen a long way behind other developing countries in recent months. In an interview with Folha de São Paulo on 18 October President Lula da Silva promised to "force interest rates down" if he is re-elected on 29 October. Lula said he wants to see the Selic at a "civilised level, comparable with the rest of the world". Lula added that he wanted real interest rates down at no more than 5% a year".

Lula took the opportunity to blame his former finance minister, Antonio Palocci, for the central bank's conservatism. Lula said, disingenuously, since there was a deliberate political fudge over the issue, that he did not know that Palocci had given "complete independence" to the Copom. The government now estimates that this "autonomy" cut the overall rate of GDP growth by three percentage points from 2003 to 2006.

The Copom will meet again on 29 November. Most Copom-watchers expect at least another half point cut in rates. The opposition argued that the main reason why the economy has performed so sluggishly this year is that real interest rates have had to be high because "the central bank has to be conservative because it cannot trust the government's claims that it is fiscally responsible".

The government is making great play of its determination to hit its fiscal targets for this year. It said that its lower (4%) growth forecast for this year would mean that spending would have to be cut by US$727m. The government said that it was determined to hit its primary fiscal deficit target of 4.25% of GDP. In May the government announced that it was cutting spending by R$14.2bn to hit its fiscal target. The government did not make these cuts because it then increased (in July) its growth forecast to 4.5%.

If, in fact, the growth rate comes in close to what the consensus of independent economists forecast, spending will have to come down even more to hit the fiscal deficit target. Currently the country's GDP is around US$950bn.

State companies: The government's fiscal position has been helped by some bumper profits from state companies. In August the deficit fell to R$2.4bn from R$7.9bn in July thanks to bumper earnings from state companies. The state companies increased their surplus from a meagre R$337m in July to R$5.1bn in August. The main reason for the jump was the sale of R$3.2bn in shares in Companhia Energetica de São Paulo, the country's third biggest power generator.

Debt: The government's net debt in August was 50.3% of GDP, down marginally on July's 50.7% of GDP. As interest rates fall, the debt level should dip to under 50%. In the first eight months of the year, the government paid R$111bn on interest payments on the national debt.

Soya: The agriculture ministry said that the soya crop it has just harvested was 53.4m t. The Brazilian soya year ends on 30 September. In the previous soya year, the crop weighed in at 51.5m t. The final figure is a bit of a disappointment. The agriculture ministry had been forecasting a soya crop of 58m t initially.

The agriculture ministry said that the weather was more favourable this year than last. The area sown with soya actually fell this year by 4%, so production was up by 5.3%. The overall grains and oilseed harvest came to 120m t, up from 114m t in the crop year 2005.

Forecasts: The consensus among Brazilian economists is that inflation in 2007 will be below 4.2%. The consensus forecast for interest rates by the end of 2007 is 12.25%. This would mean that in real terms rates would fall by about two percentage points over the next 13 months.

GDP growth in 2007 is forecast by the government to come in at 4.7%, well above the 3.5% forecast by independent economists.

The big question is what will happen to the Real. It has rallied over the past couple of months and is now at R$2.14 to the dollar. As Brazilian interest rates are still high in nominal terms, speculators may continue to be attracted by Brazilian assets. Borrowing dollars to buy Brazilian debt has been hugely profitable for the past 18 months, though there have been months when investors have got whipsawed.

Trade: The consensus among economist for the trade surplus this year is now US$44bn. The 100 or so economists polled by the central bank also expect a hefty trade surplus in 2007: US$38bn.

Investment: Public investment is running at its lowest level since 1995. Instead the government is paying more in interest. The figures come from a study by the Sindicato Nacional dos Auditores Fiscais da Receita Federal.

IMF: The IMF appointed Murilo Portgual, a former close associate of Antonio Palocci, to take over from Agustí­n Carstens as the second deputy managing director. Carstens is almost certain to be Mexico's next finance minister. Portugal was deputy finance minister in Brazil from 2005 until he left earlier this year when Palocci resigned.

The coastal plains around Pisco and Ica, close to the epicentre of the devastating earthquake that hit on 15 August (which measured 7.9 of the Richter Scale) are the centre of the Peruvian asparagus and wine and brandy industry. Farmers say that 90% of their crop has been destroyed.

Asparagus has been one of the country's biggest export successes. Local economists warn that the destruction of a key export industry will hit the growth rate, which had been hurtling along at 7%, and raise inflation as food prices rise on scarcity. The country was already suffering from a run-up in food prices even before the earthquake. The inflation target for 2007 is 2.5%. Whether the earthquake will have wide economic effects must be doubtful. The Ica-Pisco area accounts for less than 4% of the country's total economic output.

The Pisco, Chincha, Cañete and Ica region also had a decent tourist industry based around the nature reserve of Paracas. A week after the earthquake, Pisco had only restored about a quarter of the city's electricity supply. Rich international tourists are going to spurn the area until their comfort can be guaranteed.

The Instituto del Vino y del Pisco said on 20 August that the eponymous brandy (Pisco) industry would be badly affected by the earthquake which had damaged most of the distilleries producing the spirit. Peru and Chile are competing for the international rights to name their spirit Pisco.

The Asociación de Agricultores de Ica.said that the immediate loss was 700 hectares of asparagus which would cost the industry US$4m in lost exports. In the first half of 2007, the asparagus industry had been booming: exports were up by 60%, year-on-year at US$157.25m.

Sugarcane: Brazil is forecasting that its sugarcane crop in the centre-south of the country will not meet its target. The Unión de la Industria de Caña de Azúcar (Unica) reckons that the 2007/2008 crop will be 410m t, down about 10m t on the previous crop. The weather has not been particularly good for the crop, which went into production in March. The slide in sugar and ethanol prices has also discouraged farmers from harvesting their highest yielding fields. The average yield is likely to be 5kg p t of sugar, which is below what the industry had expected in April. According to Unica, which covers the states of Espí­rito Santo, Minas Gerais, São Paulo and Rio de Janeiro) the industry had milled about 190mt of cane by 1 August. This was 3% up on the same period of 2006. Unica expects about 55% of the sugar produced from this crop to be distilled into ethanol.

Brazil harvest: Brazil expects to harvest a record crop of 133.4m t of grains and oilseeds, according to the official statistics agency, the Instituto Brasileiro de Geografí­a y Estadí­sticas. The Ibge's latest estimate draws on its July fieldwork. It estimates that the 2007 harvest will be 14% bigger than the 2006 one and easily beat the previous record of 123.3m t set in 2003.

What is interesting is that the harvest is increasing even though the acreage sown is down (by 0.4%) at 45.4m hectares. The biggest crops are: soya (58.2m t) and maize (51.7m t). The soya crop will be up by 11%, the Ibge says, while the maize crop will be up by 21%. Wheat production will be up by 4% at 4.1m t. Bean production will fall because farmers are switching to soya.

Argentine harvest: The country's harvest in 2006/07 will set a new record: 95m t. A bigger soya crop is the main reason. The area sown was up by 6% at 18.9m hectares, the Secretarí­a de Agricultura, Ganaderí­a, Pesca y Alimentos reported. Oilseed production will come to 51.9m t, 16% more than in the 2005/06 harvest. The soya crop will weigh in at 47.6m t 17.5% up on the previous crop. The cereal crop will be up by 33% at 43.2m t.

Mining: The copper price has been one of the main casualties of the fear that the US economy will suffer a hard landing as it slows down. The Comisión Chilena del Cobre (Cochilco) noted that the price was now down to US$3.15 a pound and inventories are rising. They are still under five days of world consumption, though. Cochilco noted that the average price for 2007 so far is US$3.17 a pound, still above the US$3.05 average price in 2006.

Codelco: The state-owned Corporación del Cobre (Codelco) made record profts of US$4.67bn in the first half of 2007. This was US$45m up on the same period of 2006.

Businessmen, mostly from the east of the country which is more opposed to President Evo Morales than the western highlands, want the government to change economic policy and make lowering inflation its priority.

Inflation is soaring. In June the rate was 1.26%. This brought the rate for the first six months to 8.85%, putting the country on course for a rate of 17.7% for the year. Gabriel Dabdoub, president of the Confederación de Empresarios Privados de Bolivia (CEPB), called for the government to change its attitude to inflation.

In 2007 inflation was 11.7%. The government had set an inflation target of 8% for 2008.

Dabdoub blames government decrees and policies for the high rate and calls on its to change its policy. The most controversial decrees issued by President Morales prohibit the export of various foods in order to keep the domestic market well supplied. Morales has also set up a state owned food company to ensure that poor people can get staple foods. Dabdoub claims that neither of these measures have been effective.

Dabdoub also dismissed the bragging by some ministers in Morales government who claim that the country is doing better, economically, than some of its neighbours such as Peru. He noted that according to data from the UN Comisión Económica para América Latina, Bolivia has the second highest inflation in the region after Venezuela. Dabdoub claimed that Morales was modelling his economic policies on those pursued by President Hugo Chávez of Venezuela. 

Exports: The president of the Cámara de Exportadores de La Paz, Guillermo Pou Mont, said that if the US did not renew the privileges Bolivia enjoys under the Andean Trade Promotion Drug Eradication Act (Atpdea), the area of El Alto, the sprawl around La Paz will be badly affected. He said that El Alto was one of the poorest areas in South America and had seen a lot of industrial investment geared to export to the US under the Atpdea.

The US has already extended Atpdea four times but the privileges are due to expire at the end of this year. Paradoxically, one of the most likely reasons for Atpdea's extension would be that the US Congress had still refused to approve a free trade agreement with Colombia.

Atpdea was originally approved in 1991 for 10 years. It was extended in 2001; 2006; 2007 and again in February this year. The US is not happy that the government of President Evo Morales has ordered USAID out of the coca-growing region of Chapare.

Pou Mont said that without Atpdea, Bolivian products would cost more in the US than their Peruvian competitors. In El Alto, Morales has a 80% approval rating. In La Paz his rating is around 65%. In the prosperous east of the country in areas such as Santa Cruz, Morales's popularity is down to around 20%.

Inflation: The main reason for the 1.26% inflation rate in June was the 10.5% surge in potato prices. Onion prices rose by 20% in the month. The worst hit places were Sucre, the capital of Chuquisaca, where inflation was 3%; Oruro (2%) and La Paz (1.66%). The lowest inflation was in the prosperous east of the country: in Santa Cruz pries rose by 0.9% while in Trinidad, the capital of the department of Beni, prices were up by 0.5%.

Privatisation: The French ambassador to Bolivia, Alain Fouquet, who now represents the European Union since France holds the rotating presidency, said that the European companies were deterred from investing in Bolivia by the uncertain legal situation. Fouquet named the oil companies, which signed new agreements in October 2006, as being particularly affected. He said that oil companies agreed to the new terms with the government but were alarmed to see congress making changes in the detailed annexes of the agreements.

Fouquet noted that 12 oil companies had signed deals with the government which came into force in May 2007. He claimed that fresh investment under these deals had, however, been slow. Bolivia has proven reserves of 48.7 trillion cubic feet of gas. This makes it home to the second biggest gas reserves in South America after Venezuela. The most important foreign investors in Bolivia, after Petrobras, are Repsol YPF (Spain); British Gas and British Petroleum and TotalFinaElf which is a Franco-Belgian company.

Independent economists are becoming gloomier about the economic outlook. The consensus amongst independent analysts polled by the Banco Central del Paraguay (BCP) in April is that the economy will register positive growth of only 1.8% in 2009.

This is the Expectativas de Variables Económicas (EVE). In March independent economists were much more optimistic and the EVE stood at 3.45%. The consensus for inflation in 2009 is 6.56% and for a rate of 7.05% in 2010.

Inflation: In April the inflation index fell by 0.6%. The main reason for the fall was a drop in food prices, particularly meat prices. The Guaraní­ also appreciated in the month against the dollar, helping to drive down prices. As a result of the April figure, inflation over the first four months of 2009 was negative, to the tune of 0.9%. Over the past 12 months, inflation has been positive, at 2%. Underlying inflation, which excludes volatile fresh food prices, is on a similar track: it was negative to the tune of 0.2% in April and positive, at 2.6%, over the past 12 months.

What is interesting is that food prices have now fallen for eight consecutive months. In April, meat prices were driven down by weak export prices, which encouraged farmers to send animals for slaughter locally. This lead to a glutting of the market because farmers were anyway sending stock early to slaughter because of the drought.  On 5 May the government declared a state of emergency, because of the drought, in five provinces. Three of them are in the arid Chaco.Fruit and vegetable prices also fell in April thanks to increased imports, some legal, some smuggled, from Argentina and Brazil. The strength of the Guaraní­ against the dollar explained why those indices covering products such as vehicles and spare parts fell. Prices of telephonic equipment also fell.

On 18 March President Lula da Silva hinted that congress should not make any immediate decision on the proposed new scheme for the division of oil royalties between oil producing states and the rest of the country. He wants congress to wait until after the October general elections, or even until the next government takes office in January 2011.

The problems in congress demonstrate that the ruling Partido dos Trabalhadores' main coalition ally, the   Partido do Movimento Democrático Brasileiro (PMDB), is someting of a loose cannon. The row was caused by two pmdbistas, Sergio Cabral, the PMDB governor of Rio de Janeiro, and a PMDB congressman, Ibsen Pinheiro. Ibsen broke with Lula's new proposal to revise the traditional division of oil revenues whereby the three main producer states, Espirito Santo, Rio de Janeiro (both PMDB-governed) and São Paulo (opposition governed), get a bigger share of oil revenues. Ibsen proposed, and the lower house of congress approved, on 10 March, that royalty revenues (excluding those destined for the federal government), should be divided more or less equally between all states and municipalities - this was much more radical than the original government proposal and would slash revenues in the three producing states. The lower house vote in favour of the Ibsen amendment was thumping (362 votes to 72, with two abstentions). The Ibsen version is now before the senate.

The new scheme, which forms one part of the government's proposed new regulatory framework for the offshore oil sector, is not scheduled to take effect until 2016, so it can withstand some delay. Its implications make it a tricky issue to resolve in an election year, when short-term advantage is everything. The Lula government is determined to get the main three sections of its proposed four-part regulatory framework signed and sealed this year, and was furious that the PMDB and the government's other allies in congress broke with its original proposal, for transparently electoral motives.

The powerful state governor of Rio, Cabral, was moved to furious public tears after the vote, calling it a “lynching" by congress. Lula quickly indicated he would veto the change, alleging constitutional flaws (as it could potentially be applied retroactively, in breach of existing oil contracts).

Officials from Rio calculated that the state government would stand to lose R$5bn (US$2.8bn) under the Ibsen scheme, while the state's municipalities would lose R$2.5bn (US$1.42bn). Rio alone accounts for some 80% of Brazil's total oil output. There have been major demonstrations in both Rio and Espirito Santo against the Ibsen amendment.

The justification for Ibsen's change is academic evidence which shows that the royalties have not benefited the recipients in producing states in measurable ways. Professor Cláudio Dantas, who carried out a study at the Universidade Estadual Paulista (Unesp), concluded that the royalty revenues had led to higher levels of corruption. He focused on the Rio municipalities of Campos and Macaé, which get the highest royalties. Campos gets R$1.1bn (US$611m) a year and Macaé R$344m. Altogether, 89 of Rio 92 municipalities benefit from oil royalties.

Under a possible compromise suggested by the government, negotiated with both Ibsen and Cabral, the federal government would compensate the two main producing states - Rio and Espirito Santo - for the full amount of their losses, under a so-called “extra royalty" deal.

On 6 January the central bank raised its benchmark interest rate from 3% to 3.25%. The bank's monetary policy committee said that it was taking pre-emptive action in face of strong domestic demand and rising international food and energy prices.

The central bank gave a clear hint that unless inflationary pressures subsided it would raise interest rates further. The bank is clearly worried about the pace of growth in the domestic economy: it noted that electricity output in December was up 9.3% year-on-year, while cement sales were up 14% year-on-year.

What is interesting is that the inflation rate is barely flashing amber. In December the monthly rate was 0.18%. which brought the annual rate to 2.08%. Underlying inflation was a bit higher (0.23% in December and 2.12% for the year as a whole), but not way off the bank's target rate of 2% for 2010.

The move by the bank came after three consecutive months of holding the rate steady. The central bank had raised its base interest rate five times in 2010 from an all-time low of 1.25% before it paused in October.

The economy is likely to have grown about 9% in 2010, one of the fastest paces in the world, and some sectors of the economy are growing at double-digit clips.

Local economists, unlike the central bank, are confident that inflation will remain within the bank's target range of 1%-3% in 2011. This may be optimistic given that 2011 is an election year. The first round of the presidential contest is on 10 April.

FTA: The second anniversary of the implementation of the Free Trade Agreement (FTA) with the US falls on 1 February 2011. So far the deal has delivered far less of a boost to Peruvian exports than its proponents expected. The country still runs a thumping trade deficit with the US and the price of medicines in Peru, which FTA advocates had said would fall as Peru removed its tariffs, has not changed. Free traders argue that the record has been distorted by the economic crisis in the US and that in the long term the country will benefit from the deal.

Yet neither is it clear whether the FTA with the US has boosted investment. Local economists  say that most of the big foreign investments  (especially those to do with Camisea gas project and mining) were started before the FTA came into force. There is no obvious evidence that the FTA has provided any further boost.

The direct cost of the FTA, in lost tariff revenues, is about 0.5% of GDP, local economists calculate. The indirect costs are likely to be higher because a more competitive local market means that local companies become less profitable and have to lower prices to stay in business. This means that they make lower profits. The other indirect cost is on Vat receipts. Lower prices in the domestic market, thanks to foreign competition, have probably depressed receipts. 

Carlos Gonzalez, the economic research manager at the Asociación de Exportadores (ADEX),  admits that there may not be much benefit from the FTA this year because of continuing weak demand in the US economy and the Peruvian government's general inability to support export promotion campaigns in the US.

Inflation: Inflation in Peru in 2010 was 2.08%, after December's rate came in at 0.18%, the lowest rate for any December in the past three years.

President Vicente Fox is proposing to end parliamentary immunity. This will mean that members of both chambers of congress could be prosecuted on corruption charges. He also wants to end immunity for state governors and diplomats. The proposal will be sent to the new congress, which convenes next week.

The changes are part of the package of measures Mexico will sign at the forthcoming international convention against corruption. The convention is scheduled for Mérida in December.

Mexico has had several corruption scandals. The most recent involved Carlos Romero Dechamps, a federal deputy in the last congress, who was accused of siphoning money off from the state oil company Pemex, via the oil workers' union (which he led) to fund the election campaigns of the Partido Revolucionario Institucional in 2000.

The biggest party in congress, the Partido Revolucionario Institucional (PRI) is under heavy financial pressure. It admits to having mortgaged its buildings to raise M$60m (US$5.5m) to pay party workers' wages and raise funds for next years elections. Ten states go to the polls next year. 

The loan is a direct result of the fine of M$1.1bn (US$96m) imposed on the PRI for its part in using money snaffled from the state oil company to finance its election spending in 2000. The PRI said that the M$60m loan was taken out with Banco Interacciones: the loan is for 18 months, with six months of grace. This means that it will have to be paid back well before the 2006 presidential elections. 

The financial pressure on the party is telling. Wages are being paid late and the party says it will have to cut spending by 65% over the next three years. This is a far cry from the famous dinner party, called by President Carlos Salinas, before the 1994 elections: the guests, leading businessmen, coughed up US$30m for the party in an evening.

The government's fumbling over the 2004 budget is about to create major problems. The main opposition party, the Partido Revolucionario Institucional, has rejected one of the key proposals in the budget. This is to extend Vat to food and medicines. The government argues that it needs to widen the Vat net in order to finance the cut in the overall Vat rate from 15% to 10%.

The government claims that the changes to the Vat rate and its scope will have the net effect of increasing Vat revenues by M$43bn (US$3.9bn). The budget, which will be presented formally to congress today, calls for spending of M$1.63tn (US$148.8bn). The government is aiming for a fiscal deficit of just 0.3% of GDP, down from this year's 0.5%. Elba Esther Gordillo, the leader of the PRI in the lower chamber of congress, said that the changes to Vat were simply unacceptable. She said that the PRI was against both a unified rate and the extension of the tax to food and medicine. Gordillo's statement may have come as a surprise to the government: she has been criticised within the PRI for being too supportive of the government.

The anti-government wing of the PRI seems to be calling the shots in congress. Gordillo knows that if she is outmanoeuvred on the budget, which is the first big challenge for the new congress, her authority will be severely impaired. If this happens her slender chance of becoming the PRI's Presidential candidate in 2006 will disappear. Gordillo has to show that she can bend the government to the PRI's will.

The big surprise in the budget is that the government has dropped its ambitious plan to slash income taxes. It had floated the idea of cutting personal income taxes from 35% to 25% and corporate taxes from 33% to 30%. The government now says that it will only do this if there is congressional support for the idea.

Overall, the government is relying on wishful thinking to balance the budget. It is forecasting that better collection methods will generate an extra M$100bn in revenues. Even with this hoped-for income, the budget sums are tight. The finance minister Francisco Gil Dí­az admitted that the budget for 2004 represents a 3.1% cut in public spending on this year's outturn.

The big cuts are in the budgets for the agriculture ministry (down 9%) foreign relations (down 13%) environment (down 13%), social security (down 8%), and the anti-poverty Desarrollo Social (2.6%). Capital spending is being slashed by 14% with the communications ministry seeing its programme halved. The capital spending budget for the environment ministry is being cut by 37.5% and the education ministry is seeing its capital works programme cut by 3%.

The key budget variable, the export price of oil, is forecast to be US$20 in 2004, up from US$18.35 this year. Oil revenues provide 35% of the government's income. The government is reckoning, optimistically, on growth of 3.5% in 2004 and inflation of 3%.

To be fair there is some scope for improving collection. Mexico's tax base is extremely narrow: the government said that there are only 7.65m taxpayers in the country. The finance ministry reckons that the evasion rate is running at 50%. The total tax take is around 11% of GDP, the lowest among the countries which belong to the Organisation of Economic Cooperation and Development.