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Development: On 21 August the new US ambassador to Nicaragua, Robert Callahan, arrived in Managua.

Significance: While promising to work together with the government of President Daniel Ortega in order to build a “mature, respectful and mutually beneficial relationship", it remains to be seen whether this will be the case. Callahan was former assistant to John Negroponte, who was instrumental in coordinating the Contras during Nicaragua's civil war in the 1980s and his appointment in early February was met with widespread consternation locally.

One of the issues up for discussion will be the ongoing proposal that Nicaragua destroys its 1,015 surface-to-air missiles (SAM-7 missiles) in exchange for medical assistance. On 19 August Ortega reiterated his openness to such a plan but added that the US would have to increase their aid package from US$5m to US$32m. He also said that Nicaragua would seek to retain 400 missiles as long as its maritime dispute with Colombia remains unresolved.

REGION: US considers that relations with Latin America have improved since the current administration of George W. Bush took office in 2001, said the spokesman of the US Secretary of State, Sean McCormack, on 18 September. The official said that the US government believes it now has better relations and contact with more leaders from Latin America than it had eight years ago, and underlined that “the depth and width of the relations with Latin American countries has increased during this Administration". The declarations occurred just one week after the US ambassadors in Bolivia and Venezuela where expelled by the respective presidents of these two countries. Although McCormack recognised the difficulties with Bolivia and Venezuela, the argued that there is a positive general tendency in the region as a whole.

REGION-VENEZUELA: During a radio interview on 22 September, the Democrat Presidential Candidate, Barack Obama, expressed his intention of establishing a “respectful dialogue" with Latin American leaders, including Venezuela's President Hugo Chávez . Obama said that Chávez has enhanced the anti-US feeling in the region partly because “the US has been obsessed with Iraq" and has not “focused enough its attention on the situation in Latin America". Almost immediately, the campaign of the Republican candidate, John McCain, launched a TV advert in which Obama is attacked by using the footage of President Chávez when he expelled the US ambassador from the country.

CUBA: Cuba's foreign minister, Felipe Pérez Roque, said on September 18 that the trade and financial “blockade" (technically an embargo) imposed by the US since 1962 has cost the island more than US$93bn. According to the official, Cuba has seen the most brutal application of the blockade in the last year due to the “irrational prosecution against companies, banks, and North American citizens", producing an economic damage of US$3.7bn in 2007. These are some of the figures presented by Pérez Roque in the draft resolution that will be submitted to the UN next 29 October and that will allege the need of putting an end to the embargo. These declarations occur in the middle of the Cuba's struggle to deal with damage caused by hurricanes Gustave and Ike, calculated at US$5bn by the country's government. President Raúl Castro has refused US$5m in aid from the US arguing that aid “from a government which blockades us" cannot be accepted and has taken the opportunity to call on the US administration to lift its trade embargo “at least for the next six months". Pérez Roque also accused the US Secretary of State of creating an advertising campaign around the facts related to the hurricanes. The official said that the US's authorisation of sales of agricultural products to the island for US$250m on 10 September is not new, since they were excluded from the prohibitions set by the embargo from 2001.

COLOMBIA:President Alvaro Uribe arrived in Washington on September 18 in attempt to attract support for Colombia's Free Trade Agreement (FTA) with the US, which is currently stuck in Congress. Although no significant results were obtained on this issue, Uribe had a busy time in the US capital. On 20 September Colombia's President met his counterpart George W. Bush, who claimed that his successor 'must' understand the relation with Colombia as 'strategic' for the US and urged the Congress to sign the FTA. However, Democrat presidential candidate Barack Obama expressed his desire to strengthen relations with Colombia but reiterated that he does not support the FTA due to its impact on US workers and his concerns over labour rights in Colombia. The Democrat Party is responsible for stalling the trade deal in the legislature. Uribe also held meetings with Republican vice-presidential candidate Sarah Palin; the French President Nicolas Sarkozy; China's Prime Minister Wen Jiabao; a former Colombian presidential candidate Ingrid Betancourt; and the high representative for the UN, foreign and security policy, Javier Solana.

ARGENTINA: On 23 September Guido Antonini Wilson testified to a court in Miami that there was a further US$4.2m on the Venezuelan jet aboard which he carried US$800,000 to Argentina. Antonini Wilson's testimony has increased the so-called suitcase scandal fivefold. US prosecutors claim that Venezuela's president, Hugo Chávez , provided the election campaign of his Argentine counterpart, Cristina Fernández, with at least US$5m. Chávez and Fernández both deny the story and have accused the US government of fabricating the scandal for political ends. In his first day on the stand, Antonini Wilson did not implicate Fernández directly but he did point the finger at her planning minister, Julio De Vido, who held the same role under her husband and predecessor, Néstor Kirchner.

CENTRAL AMERICA: A trade mission headed by the US Secretary of Agriculture, Edward Schafer, visited Guatemala from 21 to 24 September with the aim of promoting bilateral cooperation, trade and investment with the Central American countries. While representatives of the US, Guatemala, and Dominican Republic governments held meetings to analyse the benefits of the free-trade deal and to look for mechanisms that help increase the participation of the private sector, 17 businessmen from the US held meetings with about 70 companies involved in the agricultural sector in Central America. The bilateral trade of agriculture products between the US and Central America grew 21% in 2007 thanks to the CAFTA-DR and is likely to have increased further by the end of 2008, according to figures given by the US Embassy.

Development: On 28 October the lower chamber of congress approved the government's mild reform of the state oil monopoly, Petróleos Mexicanos.

Significance: The reforms will give Pemex a bit more operational independence but may not be enough to tempt foreign oil companies into developing Mexico's potentially attractive offshore oilfields in the Gulf of Mexico. Without foreign capital and technology these fields are likely to remain untapped.

The leftwing Frente Amplio Progresista (FAP), which is led by Andrés Manuel López Obrador made a fuss about the reforms, interrupting the congressional session in an effort to derail the vote. The vote on the seven reforms went ahead, however, and only in one section, the seventh, did congress vote on individual articles of the law. Even on these congress voted against López Obrador's suggestion that the new Pemex law should state specifically that foreign companies should be banned from operating oilfields on Mexican territory. In the vote on the articles covering these issues, congress voted to accept the government's argument that specific wording was unnecessary because the new law made it clear that foreign oil companies could only act as subcontractors for Pemex.

López Obrador's antics have split the Partido de la Revolución Democrática, which is the most important element in the FAP. Even on the seventh reform, only about half the FAP, which has 156 seats in the 500 seat congress, backed López Obrador. The vote on the seventh reform was 395 in favour and 82 against with no abstentions, though 23 congressmen did not attend the session.

Who is he? A former triple world champion boxer, Argüello was Managua mayoral candidate for the ruling Frente Sandinista de Liberación Nacional (FSLN) in the 9 November municipal elections.

Why watch him? Mayor of Managua is the most important political position after the presidency. Official results (following a recount) showed Argüello defeating the main opposition candidate, Eduardo Montealegre (who ran on the Alianza Partido Liberal Constitucionalista Vamos con Eduardo (PLC-VCE), ticket by 51% to 47%. The opposition however maintains that fraud took place (both in the capital and across the country) and that the Managua contest was won by Montealegre.

Born: 19 April 1952, Managua, Nicaragua.

Education: Argüello did not complete his primary education.

Public life: Born to an impoverished family, Argüello left school at an early age because his family was unable to afford the fees. At the time, one of his sisters was married to a boxer, Eduardo “El Ratón" Mojica and Argüello's father encouraged him to take up the sport as one means of escaping a life of poverty. He fought his first bout at the age of 14, marking the beginning of a career which lasted nearly 20 years. During the early stages of his career, he was sponsored by the country's dictator, Anastasio Somoza Debayle.

Argüello went on to win the world boxing championship on three occasions (1974, 1978 and 1981) before retiring in 1995. Having accrued a sizeable fortune through his boxing success, his property was confiscated by the Sandinistas after they came to power in 1979 and he fled to the US after collaborating with the Contras.

Argüello then returned to Nicaragua in the early 90s and joined the Convergencia Nacional, an alliance formed by the FSLN, other political parties and celebrities to compete in the 2000 presidential elections. He was picked by the FSLN to stand as deputy mayor of Managua in the 2004 elections, in which the Sandinistas triumphed, before running successfully as mayoral candidate four years later.

Time Line:

1978: Defeats Puerto Rica's Alfredo Escalera to take the title of WBA junior lightweight champion.

1979: Leaves Nicaragua for the US when the Sandinistas assume power.

1981: Defeats Scotland's Jim Watt to take the title of WBA featherweight champion.

Early 1990s: Returns to Nicaragua.

2000: Joins the Convergencia Nacional.

2004: Elected deputy mayor of Managua for the FSLN.

9 November 2008: Elected mayor of Managua for the FSLN.

Strengths: Through his fame as a boxer, Argüello is a popular figure in the country. Crucially he has the full backing of President Daniel Ortega and the FSLN, with all its powerful organisational apparatus and publicity machinery. In the build-up to the 9 November elections for example, local commentators such as Claudia Neira, director of a local public relations company noted the presence of national government propaganda in his campaign; his campaign materials reportedly used the “same colours, same font and same discourse [as the national government]".

Weaknesses: Argüello is widely considered a puppet of the Ortega government. More immediately his victory in the 9 November elections has been stained by allegations of fraud, which began with Ortega's refusal to allow established national and international election monitors to oversee the process and has since escalated. The supreme electoral court itself acknowledged the possibility of fraud with its agreement to allow a recount in Managua after ballots and other election material were found in a rubbish tip.

The recount, however, confirmed Argüello's victory. Montealegre, whom opinion polls had shown ahead in the contest, maintains that he won with “more than 50% of the vote". These claims were backed by Ética y Transparencia (EyT), Transparency International's national representative which, despite being denied authorisation to oversee the electoral process, sent observers to polling stations. EyT released a report showing Montealegre with an advantage of between two and five percentage points over Argüello.

The number of votes that Argüello allegedly received has been flagged up by local commentators as proof of fraud. According to the CSE results, Argüello received more than 223,000 votes. This compares to the 145,000 received by Dionisio Marenco in 2004 and 135,000 for Herty Lewites in 2000.

Prospects: Argüello's prospects are uncertain. A recent survey released by pollster M&R Consultores showed that a majority (53.4%) of the population were in favour of nullifying the elections and holding new polls, while 43.1% opposed the idea.

The opposition is mooting the possibility of presenting a bill to nullify the elections altogether, although the bill's chances of success are slim. The opposition needs the support of 47 members of congress (out of 92) to get the elections annulled.

Development: On 14 January the government of President Evo Morales announced that Bolivia was cutting diplomatic ties with Israel.

Significance: Morales said the decision was made in protest against the offensive in the Gaza Strip that has killed an estimated 1,000 Palestinians. He also told a group of diplomats in La Paz that he planned to ask the International Criminal Court in The Hague, Netherlands, to bring human rights abuse charges against Israel.

The move, which will be frowned upon by the US, follows the expulsion by Venezuela's President Hugo Chávez , a close ally of Morales and vehement opponent of the US, of Israel's ambassador to Caracas on 6 January for the same reason. Shortly after Morales announced the severing of ties with Israel, Chávez then followed suit.

Bolivia's foreign minister, David Choquehuanca, said that the move by Bolivia should not however affect economic relations between the two countries but was merely intended to prod Israel into resuming talks with the Palestinians.

He also denied that Iranian officials were behind the decision. An Iranian delegation led by the minister of cooperatives, Mohammad Abbasí­, had met with Morales the previous day in La Paz.

Israel doesn't maintain an embassy in Bolivia and Israeli ambassador Salid Mansour, who works out of Peru and leads Israel's diplomatic efforts in Bolivia, has yet to comment on the development.

Peru: a regional star

On 16 February Peru announced that real GDP rose 9.84% year-on-year in 2008. Within the region, this is matched by only Uruguay and Panama. Peru is slowing but will still outpace its Andean neighbours this year. Regional leaders like Chile and Venezuela will struggle to post anywhere near trend growth this year.

The result was the best since 1994 and caps 10 years of consistent strong economic growth. The 2008 figure was a bit higher than independent economists had expected: a Reuters' consensus poll had forecast 9.1%.
The economy is slowing down, however. In December 2008 output rose 4.9% over December 2007, slightly below the Reuters' forecast of 5.4%. The consensus forecast is that real GDP growth will slow to 5% year-on-year in 2009.

Despite the strong economy, a new 5-11 February opinion poll from the Compañia Peruana de Estudios de Mercado y Opinión Pública indicated that 61.7% of Peruvians living in the main urban centres disapproved of President Alan Garcí­a. Garcí­a's approval rating, while a low 27%, was nevertheless four points up on an earlier survey in November.

Strong domestic demand is the reason for the 2008 growth figure. Peru's growth was likely one of the highest in Latin America: only Uruguay and Panama, yet to report official figures, may post better results.   Annualised growth in Uruguay in the first three quarters of 2008 was a strong 11.8%, driven in large part by the new Botnia pulp mill, as well as the agriculture sector.

As in Panama (where overall growth is being driven by the project to widen the Canal), the construction industry had a particularly strong year in Peru, with 16.4% annual growth compared with 2007. Commerce, up 12.7%, also did well on the back of increased consumer spending, thanks to cheaper credit.

Manufacturing rose 8.5% annually, with secondary manufacturing (up 8.7%) doing rather better than the primary sector (up 7.5%). Mining and hydrocarbon production were also both up: mined-metal production rose 7.5%, with hydrocarbon production up 10.2%: natural gas production expanded 26.9% and zinc by 10.9%. Even the volatile agricultural and fishing industries had good years: agricultural output rose 6.7%, with fishing up 6.1%.

Development: On 31 March two men were gunned down in Ciudad Juárez.

Significance: This is the first major incident in the city since the federal government deployed 7,000 troops and 1,000 federal policemen in the city at the end of February. Another problem is that this deployment appears to have pushed the violence out into other parts of Chihuahua state.

On 31 March, the governor of Chihuahua, José Reyes Baeza Terrazas, said that feds would now start to be deployed right across the state, though not in such numbers as they had been in Ciudad Juárez.

From 1 January to 27 March 485 people have been killed in Chihuahua, mostly in Ciudad Juárez. In the whole of 2008, 1,652 were killed in Chihuahua. In 2007 only 147 people were killed by gangsters in the state.

Development: On 11 May the United Kingdom submitted a claim to a United Nations (UN) commission to extend its rights over an extensive tract of South Atlantic seabed around the Falkland Islands, South Georgia and the South Sandwich Islands, an area of around 1.2m km sq.

Significance: Last month (21 April) the Argentine government filed a claim which encompasses an almost identical area of - potentially oil and mineral rich - seabed. The foreign ministry yesterday (11 May) expressed its “most vigorous rejection" of the UK's claims, which it described as “illegitimate".

The Argentine foreign minister, Jorge Taiana, said that the government would formally object the UK's possession claim before the UN. The UK's move, he added, was “unacceptable and inadmissible".

Both the UK and Argentina are concerned about the rights to explore and exploit the area's natural resources. Oil exploration companies may start drilling in the Falklands area later this year.

According the UN convention of the law of the sea, states have jurisdiction over their continental shelf for up to 200 nautical miles off shore. The UK is, however, seeking to extend its rights by up to 350 nautical miles through application to the UN commission on the limits of the continental shelf under article 76 of the convention.

The UK's 63-page document detailing its claims states: "The UK has no doubt about its sovereignty over the Falkland Islands, South Georgia and the South Sandwich Islands and the surrounding maritime area."

In truth, the UK's application is unlikely to bear fruit. In cases where countries make competing claims, the UN Commission will usually refuse to rule on the issue until the states settle the dispute. Both the Argentine and British applications are instead intended to serve as a safeguard to ensure a precedent is set for future claims.

The UK's application is one of more than 30 possession claims submitted to the UN commission in advance of an international deadline on 13 May.

A longstanding dispute over sovereignty of the Falkland Islands precipitated Argentina's, ultimately temporary, occupation of the islands in 1982.

Development: On 16 June Presidents Lula da Silva of Brazil, Dmitry Medvedev of Russia, Hu Jintao of China, and Prime Minister Manmohan Singh of India held the first ever formal BRIC summit in Russia's Ural city of Yekaterinburg.

Significance: Dmitry Medvedev declared that the host city of Yekaterinburg was at “the epicentre of world politics", and the summit “historic", however the final statement was predictably generalised, calling for emerging economies to have “a greater voice and representation" in global institutions and for further talks on reforms to the global financial system, while also highlighting the need for a “diversified, stable and predictable currency system". Brazil secured the next summit in 2010.

Advance speculation that the four might call for an end to the use of the US dollar as the world's reserve currency was wildly overdone: the BRIC countries, led by China, hold US$2.8trillion in dollar reserves: a weak dollar is fundamentally not in their interests.  

However there is an emerging debate on how China and others might gradually diversify some reserves into alternative sources, perhaps IMF bonds.

Lula admitted that any debate about substituting local currencies for the dollar in commercial relations would be lengthy and complex, pointing out that while this is now a reality between Brazil and Argentina, “it demands a lot of work".

The four leaders will next have an informal meeting on the sidelines of the upcoming G20 summit in Pittsburgh in September.

Development: On 23 July the supreme court reopened a bribery investigation.

Significance: The decision suggests that the new right-leaning president, Ricardo Martinelli, is serious about dealing with corruption.

The reopened case centres on allegations that the last rightwing government, headed by Mireya Moscoso (1999-2004), bribed opposition deputies from the Partido Revolucionario Democrático (PRD) to approve the Cemis project in the Colón Free Zone in 2003.

Martinelli, who took office on 1 July, promised to investigate the scandal during his presidential campaign.

The investigation will also assess whether deputies were bribed to approve two supreme court justices.

The key evidence of wrong doing comes from Carlos Afú, then a dissident member of the PRD bloc in congress. Afú was re-elected to the national assembly in the recent elections as an independent. He said that he was offered bribes in 2003, as were some of his colleagues. Other PRD members claim that Afú took bribes to support the nomination of two supreme court magistrates, Winston Spadafora and Alberto Cigarrista.

The constitution was changed in 2004, ending legal immunity for legislators facing criminal investigations.

Development: On 1 September the Mexican peso fell by about 2% against the US dollar.

Significance: Although most other emerging market currencies also weakened against the dollar yesterday, the move against the Mexican peso was disproportionately large at 28 centavos. This was the biggest daily fall in the currency since April 2009.

The big worry with regard to Mexico is that the economic outlook still looks gloomy. It is heavily dependent overall on what happens in the US economy, while government finances heavily depend on oil. The state oil company, Pemex, admitted on 1 September that output from the country's biggest oilfield, Cantarell, is falling much faster than it expected. As oil income provides the government with about 35% of its fiscal revenues, any production undershoot has major fiscal implications.

The collapse in production at Cantarell, for 30 years the country's biggest oilfield, was buried in the State of the Union (Informe) which President Felipe Calderón sent to congress on 1 September. The Informe revealed that Cantarell's production in the first half of 2009 was 35% less than for the same period of 2008, at just 737,400 barrels per day.

Development: On 9 October the ruling communist party daily, Granma, said that paternalism was “an ill" preventing Cuba's economic development and warned readers to prepare for life without the monthly food ration book, the libreta.

Significance: Economic realities have forced the Cuban government to take deeply difficult spending decisions this year. The cash-strapped island, which imports upwards of 60% of its food, simply cannot afford its import bill, while measures to boost domestic food output have been slow to deliver. However, these decisions are not just interim cost saving measures - they also point to an unprecedented shift in the very ideology of the 1959 Revolution under the pragmatic President Raúl Castro.

Lazaro Barredo, editor of Granma, signed the lengthy one-page article, which urged long suffering Cubans to work harder and contemplate life without the cradle-to-grave social support that has been the cornerstone of the 1959 Revolution.

All this year, the official media has discussed the merits of incentive-based work, a reduction in state support and the decentralisation of decision making to local and provincial authorities. “It is proven that only with more work will we emerge from the crisis," Barredo declared, saying that paternalism was “a phenomenon thoroughly engrained in the majority of people, an ill that doesn't allow us to advance and obstructs the clarity about the decisions we should make."

"The ration booklet was a necessity at one time, but it has become an impediment to the collective decisions the nation must take," he added. He said he was not suggesting it should be eliminated by decree, but that it should be made available to the most vulnerable only. The libreta provides every Cuban with monthly rations including rice, salt, green vegetables, potatoes, bread, eggs, sugar and some meat. Most people say it only provides 10 to 15 days of food.

On 1 October the government launched a pilot programme to shut down state-run “workers' canteens" used by about 3.5m people. Instead, workers will be provided with a luncheon voucher of 15 pesos, or about US$0.65, to purchase their lunch from private food stalls.