All Categories

Development: On 21 November thousands of pro-and anti-government protesters took to the streets of the capital, both in support and rejection of President Daniel Ortega's controversial bid to remain in power.

Significance: The opposition claims that up to 50,000 anti-government demonstrators turned out - the largest show of anti-Ortega sentiment since a November 2008 municipal election (which saw an allegedly fraudulent victory for Ortega's ruling Frente Sandinista de Liberación Nacional (FSLN)).

The demonstrators were protesting the recent illegal supreme court ruling overturning the ban on presidential re-election, as well as last year's polemical municipal vote (the results of which have so far stood). The protests were called in response to a rally organised by the government to celebrate the anniversary of the municipal vote, although its number of supporters were far below the 300,000 it had hoped for.

Despite efforts to keep the demonstrations peaceful (with 7,000 police deployed in the capital to ensure order), clashes resulted in at least one death and twelve injured (three police officers and nine protesters). Rafael Anibal Ruiz, an FSLN supporter, died after the truck in which he was travelling back to the north-central region of Jinotega was struck by rocks. FSLN supporters also attacked the headquarters of the opposition Partido Liberal Constitucionalista with mortars, breaking windows and causing damage to the building.

Despite the violence, Violeta Granera, the director of the civil society group, El Movimiento por Nicaragua, described the protests as a “triumph for democracy".

New peaks of violence in Mexico's drug wars

The final death toll in the war between Mexico's drug cartels was 7,724 in 2009, 37% higher than the previous year. In the first 10 days of 2010 it reached 283, a daily average of 28.3, higher than the 21.1 recorded for 2009 as a whole. Even more striking is the fact that the number of killings on 9 January was, at 69, the highest ever recorded for a single day.

The figures illustrate clearly that the violence in Mexico is overwhelmingly the result of the war between the cartels. Though there has been an increase in attacks by cartel gunmen on the government forces, these have caused relatively few fatalities. In the whole of 2009, 42 soldiers and 137 federal police, out of more than 40,000 deployed countrywide, were killed.

Most of the violence was highly concentrated geographically. Ten of Mexico's 31 states accounted for 91.2% of all killings; four of these — Chihuahua, Sinaloa, Durango and Guerrero — accounted for 72.3% of the national total. In Chihuahua, by far the most violent with 42.1% of the national total, 81% of the killings took place in a single urban centre, Ciudad Juárez, which on its own accounted for just over a third of the national total. This said, only one state was completely untouched in 2009: Yucatán, where no narco 'executions' were reported.

The defence ministry has reported that the army arrested 8,392 suspects of involvement in organised crime, chiefly the drugs trade, last year. Of these, 178 were classified as either cartel gunmen (sicarios) or local bosses (jefes de plaza), and 27 were deemed highly placed cartel bosses. It is not clear whether these results include those of operations conducted jointly with the federal police, whose statistics are usually reported separately by the federal security ministry. There has been no report on how many of these suspects (or those arrested since the beginning of the big offensive launched by the administration of President Felipe Calderón upon taking office in December 2006) have been formally charged or tried.

Deaths attributed to inter-cartel wars

*President Felipe Calderón took office in December 2006.

Hot spots in 2009

The 10 states that account for 91.2% of all fatalities

*81% in Ciudad Juárez.

Source: Own elaboration of data from El Universal.

Development: On 24 February in Havana, Cuba, Brazil's President Lula da Silva said he “profoundly lamented" the death of the political prisoner Orlando Zapata Tamayo.

Significance:   Only months after the Honduran coup crisis, this case puts the spotlight firmly back on Lula's foreign policy and his ambitions to consolidate Brazil as a regional (and global) leader. An editorial in Spain's leading daily “El Paí­s" today demands that Lula use his powerful and highly symbolic position as the much feted leader of the 'New Left' in Latin America - and the example of Brazil's very successful democracy   -   to   address once and for all the region's relationship with the “myth" of the Cuban Revolution.  

“Lula has the opportunity to show that the growing international role of Brazil does not have to result in the sacrifice of the main political capital he has sown: the option of a Left capable of offering progress and wellbeing through the strengthening and management of institutions and democratic processes" it declares.

Yesterday Lula's foreign policy advisor, the former radical leftist Marco Aurélio Garcí­a, refused to be drawn on the Cuban case, stating, “there are human rights problems all over the world." Aurélio Garcí­a argues that engagement and dialogue, as well Brazil's traditional strict respect for sovereignty, forms the core basis of Lula's foreign policy. Lula's policy towards Cuba has been to re-integrate it back into the region.

Conservative rightwing critics in Brazil, however, have long flagged up what they see as dangerous ambiguities in Lula's foreign policy that undermine his ambitions. These critics argue that Lula simply can't have his cake and eat it.   His principled stand on Honduras (which provoked a rift with the US over its more pragmatic approach), his engagement with Iran, Russia and China and other so-called rogue states in Africa and elsewhere have all raised eyebrows.

Brazil: Inflation in March was 0.52%, down from 0.78% in February, according to the official statistics agency, Ibge.

Chile:The official inflation rate for March was 0.1%, but the government has been criticised for excluding the two regions worst hit by the 27 February earthquake from the calculation.

Mexico:Inflation was 0.71%, bringing the 12 month rate to 4.97%.

Venezuela:Inflation in March was 2.4%, bringing the 12 month rate to 26.2%.

Development: On 18 May the six leading Colombian candidates for the 30 May presidential election expressed their support for Juan Manuel Santos, the former minister of defence (2006-2009) and presidential candidate for the ruling Partido de la U, over a criminal case against him in the Ecuadorean province of Sucumbí­os for the extraterritorial bombing of a Fuerzas Armadas Revolucionarias de Colombia (Farc) camp on 1 March, 2008.

Significance: The cross-party agreement underlines the firm Colombian unity over defence of members of any administration when they carry out government-sanctioned decisions, such as the attack on the 'Raúl Reyes' camp. Germán Vargas Lleras, the candidate for the centre-left Partido Cambio Radical, proposed that all candidates sign a declaration rejecting “the interventions of foreign leaders" in the Colombian electoral debate, which they did.

Late April comments by Ecuador's President Rafael Correa and Venezuela's Hugo Chávez , warning that if Santos were to be elected president he could start a war, were interpreted in Colombia as foreign intervention in domestic politics and were denounced by the candidates as scaremongering.

The joint declaration by the candidates came after President Alvaro Uribe and Correa had a clear disagreement over Santos' prosecution during the VI EU-Latin America and the Caribbean Summit in Madrid, Spain (See main briefing). Correa stated that “this is not the persecution of Juan Manuel Santos...the justice [system] has the duty to investigate crimes. Crimes are pursued and investigated." Uribe immediately rebuffed Correa, stating that the Colombian government “cannot abandon those who combat terrorism", adding that 'Reyes' “kidnapped and killed Colombians".

Correa emphasised that Ecuadorean courts are independent institutions and that he did not have the power to stop or start a criminal proceeding against anyone. The case has continuously served as a hiccup in the Colombian-Ecuadorean process to re-establish full diplomatic relations, which were severed following the 2008 raid.

Development: On 3 August the state government claimed that the murder rate in Rio de Janeiro in the second quarter of 2010 was down by 21% on the first quarter.

Significance: The government is trying to emphasise the improvement in the state's crime statistics. In the first half of 2010, there were 3,514 violent deaths in the state of Rio de Janeiro: of these 2,558 were murders. The murder figure was 14.4% down on the same period of 2009.

In June the number of premeditated murders at 347 was the lowest for any June since 1991, the state government added. The number of latrocinios (robberies involving murder) were down from 83 in the four months of March, April, May and June 2009 to 50 in the same period of this year.

Even so, Rio is still suffering an average of 426 murders a month. The figures are a bit inflated by the police's trigger-happiness: so far this year 506 alleged criminals have been killed by the police who have themselves suffered eight deaths on active service.

Honduras: The International Monetary Fund (IMF) agreed an 18-month US$196m contingency loan for Honduras in support of the budget.

Peru: The central bank raised reserve requirements for short-term overseas loans in an effort to cool private sector credit growth and prevent overheating in the local economy. Banks must henceforth hold funds equivalent to 75% of borrowings abroad maturing in less than two year, up from 65% previously.

Venezuela: The government has agreed to compensate the Swiss cement firm Holcim for local assets seized in 2008. Holcim has received an initial US$260m downpayment, with the remaining US$390m to be paid in four equal instalments over the next four years.

Region: The International Press Institute (IPI) reported that 20 journalists were murdered in Latin America in the first eight months of 2010, 10 in Mexico, nine in Honduras and one in Colombia. The IPI claims that the Americas is the most dangerous region in the world for journalists, followed by Asia (with 18 deaths) and then Africa (8 reported deaths).

Development: On 21 October the Costa Rican government sent an official letter of protest to Nicaragua for the alleged violation by Nicaraguan military personnel of Costa Rica's territory.
 
Significance: Tensions could quickly escalate if those Nicaraguan workers and military personnel caught on camera just inside the Costa Rican border are still on the ground when the Costa Rican police forces deployed to secure the area arrive later today. According to Costa Rica's minister of security, José Marí­a Tijerino, the administration of President Laura Chinchilla will take all necessary measures “to guarantee [that] Costa Rican sovereignty is respected".

Adding to the mix are reports (as yet unconfirmed) that six Costa Rican farm labourers were kidnapped by the Nicaraguan forces.

The >Soberaní­a project to dredge the San Juan River, which runs close to (and sometimes demarcates) the border between the two countries, was inaugurated by Nicaragua's President Daniel Ortega earlier in the month. The former Sandinista guerrilla commander Edén Pastora was put in charge of the US$2m project; the Nicaraguan army is in charge of protecting the works.

The first reports of Nicaraguan incursions into Costa Rican territory emerged when Claudio Monje, a deputy for the opposition Partido Acción Ciudadana (PAC), revealed yesterday that he had received complaints from a family that members of the Nicaraguan forces, “wearing uniforms, armed and led by Edén Pastora" had entered their estate on Calero Island in the department of Limón. According to Monje, the Nicaraguans “threatened" the family, “hit the people, the farm labourers, exterminated a herd of pigs with bullets and used other cattle to feed themselves".

The family has fled its estate, which they claim Pastora told them to “sell or sell" to Nicaragua. Allegedly, Nicaragua wants to build a canal through the estate to divert water from the Costa Rican Colorado River into the San Juan River.

The Costa Rican letter of complaint states that “the Costa Rican government has evidence that backs" the accusations, adding that, “apparently Mr. Edén Pastora, in the company of other people, has [led] incursions in the Aragón estate and has even led actions against the inhabitants of the area and their possessions".

Development: On 6 December, President Juan Manuel Santos was the first head of state to address the IX Summit of States Parties to the International Criminal Court (ICC).

Significance: Crucially for the Santos administration, the ICC came down on the side of Colombian institutions in the midst of a public altercation between President Santos and his predecessor and political mentor, Alvaro Uribe (2002-2010). Uribe's claim that former members of his administration do not enjoy judicial guarantees in Colombia appeared to be refuted by Luis Moreno-Ocampo, the ICC prosecutor general, who said, “when the national [justice] system works, I don't have to intervene".

In his speech, Santos reiterated his full commitment to one of the main stated goals of his administration: paying reparations to the victims of Colombia's internal conflict and returning agricultural lands to those displaced from their homes and properties by paramilitaries or guerrillas. “We feel that victims shouldn't and can't wait", said Santos.

This year (2010) marks the fifth anniversary of Colombia's implementation of the so-called Justice and Peace Law. The ICC's invitation to Santos to deliver the keynote speech was in recognition of Colombia's innovative approach to peace building, in which it is implementing post-conflict policies whilst still fighting illegal armed groups.

According to Moreno-Ocampo, the Justice and Peace Law is “a complex idea, because it is a combination of carrying out justice without interfering with peace, and making peace without interfering with justice...[its] concept is interesting...unique."

Though far from perfect, the initiative has been hailed as a potential template for other conflict zones. “Colombia has learned, and it seems to me it can teach", said Moreno-Ocampo in an interview with the Bogotá daily El Tiempo

Development: On 26 January three members of Ecuador's national assembly resigned from President Rafael Correa's ruling Alianza PAí­S (AP) party.

Significance: The three assembly members objected to the proposed 10 question referendum to amend sections of the 2008 constitution. Correa is due to defend the referendum before the constitutional court later today and an opinion poll, published on 26 January, found that 57% of Ecuadoreans supported the referendum.

Key points: 

The AP does not have a majority in the national assembly, though it has recently been able to get legislation approved by striking deals with smaller, often more radical, parties and assembly members. None of the three AP defectors said that they would also quit the national assembly. At least one said that the constitutional reforms proposed by Correa were aimed at destroying the national assembly.

César Grací­a, one of the three, said that the referendum, whose main objective is judicial reform, was usurping powers that belong to the national assembly under Correa's 2008 constitution. Grací­a was a member of the constituent assembly which met in 2007 and 2008 and wrote the 2008 constitution.

Correa, perhaps intemperately, dismissed Betty Amores, the first national assembly member to quit the AP over the referendum, by claiming that “every revolution has its traitors". The third assembly member to resign from the AP is Washington Cruz.

The opinion poll is by Correa's favourite pollster, Santiago Pérez Investigación y Estudios, so it may be misleading. The poll reported that 75% of Ecuadoreans said that they expected to vote in the referendum.

Development: On 16 March a judge formally accused Colonel Robert Miguel Valdez, a former head of Interpol in Santa Cruz, of narco-trafficking and ordered that he be placed in preventative custody in Palmasola prison.

Significance: Valdez is the latest high level official to be implicated in drug trafficking, pointing to further signs of institutional corruption in the wake of the scandal surrounding René Sanabria, a top security advisor and former head of the Bolivia's counter-narcotics force, Felcn, who is facing charges in the US of drug smuggling.

Key points:

Valdez, who maintains his innocence, was accused after cocaine was detected in his car. He had served as head of Interpol in Santa Cruz for the last three months of 2010. According to a local daily, La Razón, the authorities are investigating links between Valdez and Sanabria, who was accused by a Florida court of heading up a criminal gang which sold cocaine to “purported members of a Colombian drug trafficking organization that claimed to want to distribute cocaine in the Miami, Florida area and other parts of the United States".

The latest suggestion of police corruption comes as President Evo Morales is seeking to overhaul the police in a bid to restore credibility to the institution. On 11 March, he named Colonel Ciro Oscar Farfán Medina as the new chief of police, to replace Oscar Nina. Farfán has been given 90 days to eradicate corruption from within the force.

The Bolivian authorities yesterday (16 March) announced the arrest of four Colombians in relation to two 'mega' drugs laboratories recently dismantled in Santa Cruz. According to the Felcn, the mega-labs, which had been functioning for the past three months, were capable of manufacturing 400 kilos of cocaine a week. The authorities are currently investigating links to the Colombia's Norte del Valle cartel, whose presence in Bolivia Morales acknowledged last month.

Rafael Rey was Peru's defence minister under Alan Garcí­a (in 2009-2010) and minister for production (in 2006-2008). His term ended on 15 September 2010, amid a scandal caused by Legislative Decree 1097, an amnesty law benefitting soldiers accused and convicted of human rights violations during the internal armed conflict (1980-2000). He joined Keiko Fujimori's electoral plank as her vice-presidential candidate in the 2011 general election and won a seat in the Andean Parliament (Parladino) in the 10 April vote. In 1992 he founded Renovación Nacional and got a seat in the 1992 constituent assembly following Alberto Fujimori's 'autogolpe'. In 1995 he was re-elected to congress, broke with Fujimori and returned to the opposition, but continued to support Fujimori's economic policies and a controversial 1995 amnesty law, which gave amnesty to those responsible for human rights violations during the conflict period. This included the Colina Group, responsible for the massacres of Barrios Altos and La Cantuta. Alberto Fujimori's direction of the Colina Group resulted in his 25 year prison sentence, which was handed down in 2009. Rey is a life-long member of Opus Dei.

Latin American Newsletters (LAN): What are your views on the election? The second round between Keiko and Humala - what does it mean for Fuerza 2011?

Rafael Rey (RR): I'm not a party member, I was an invitee for this election. Generally and personally, I think that winning the election is not going to be easy. Lamentably there is too much resentment and fear in many sectors of the population, even if this isn't reflected by the candidates themselves, you can see it at the level of followers. At the very least there are going to be strong verbal confrontations. We went through this in [the] 1990 election between Vargas Llosa and Fujimori and we will see more of the same now. This influences the population. We feel an enormous responsibility to win this election...to prevent the country from falling into the alternative's trap. Any of the other [electoral] alternatives would not have worried me as much as the one we currently face. Because there is no doubt that this would mean a regression.

LAN: The other parties are holding back from making firm alliances - preferring to dip their toes in the water - does this worry you?

RR: This doesn't worry me.   Today, not even the Partido Aprista Peruano can say they manage their voters, although they may do so again in the future.

LAN: They can promise - but the question is: can they deliver?

RR: They behave as if they were the owners of the parties. They are not.

LAN: What has been the effect of Fuerza 2011's decision not to enter into alliances - in both the first and second rounds?

RR: The Peruvian electorate doesn't like alliances. They see them as a sign of weakness, precisely because the groups don't think themselves sufficiently strong to win alone. Moreover, in this election we have seen how PPK [Pedro Pablo Kuczynski] lost, in spite of the alliances he made. His parties didn't help him one little bit. Yehude Simón was meant to help him win Lambayeque...well, they lost there; if César Acuña [mayor of Trujillo] was meant to help him in the North and Trujillo...well, they lost there too. We will not make alliances, but that does not mean we have closed our doors. We want to include valuable people, who are already identifying themselves to us.

LAN: What is the strategy that is being drawn up to tackle the second round? There is a very clear national voting pattern: Keiko won much of the North and Humala the South, effectively dividing the country, but neither won in Lima. However, the second round is effectively a separate election, a battle for Lima, how will Fuerza 2011 tackle this?

RR: I don't like using the phrase strategy, even though evidently that is what we do, because it sounds like we are trying to hoodwink the population into believing in us. I think instead it is our duty to help people begin to believe in us. This has to be done through concrete policies, policies that relate to political liberties. Fujimorismo has been stigmatised. Whatever Fujimorista alternative comes in the future, it will be a 'dictator' a 'thief', 'dishonest', 'against human rights' etc. It is not the moment, nor will it be easy to try and prove that many of these accusations are not objectively true. That there have been all these kinds of cases, of course there have been. Fujimori was a dictator who broke with the constitution; there can be no doubt about that. Going forward, we have to give out a clear message that this will not happen again.

LAN: How is Fuerza 2011 going to do that? Can you give me three concrete examples of how this could be achieved?

RR: I would say that the discourse will stay the same, unlike that of Mr. Humala. We will continue to explain, that fear of us is more emotional than rational. We have named technocrats who will, as debates get underway, explain in further detail exactly what we intend to do. Although it seems that there will not be many opportunities to do this. For us, questions and fear will not be reduced through debates...rather we will win confidence through our politics. It is difficult to say how exactly we will do this. But if some of the media want to objectively help us to disperse our message, because it is important to repeat, and repeat, and repeat the same message, then we welcome that. We will have to make some big gestures: Keiko swearing that she won't pardon her father [Alberto Fujimori] has won us the support of many people.
Humala has to explain many things, and we will continue to pressure him to do so. He needs to explain presenting a manifesto and then saying it is just for the first round. Humala is someone people should distrust. Gana Perú's manifesto is written with the mentality that they have. Gana Perú ranks are filled with radical Marxists.   But now, given the mistrust that his campaign has generated, he is changing his line for strategic reasons.

LAN: Can you give me three concrete social policies that Fuerza 2011 is going to implement if it gets into power?

RR: there are several. In the sierra there are two programmes. The 'Sierra Verde' is the use of pre-Inca water management to transform dry parts of the highlands into agriculturally productive zones. It sounds unbelievable but I have seen it. They are concentric circular walls that maintain a constant supply of water inside the mountains, maintaining the water table, reducing the likelihood of landslides, flooding. It would enable greater productivity, greater access to water for agriculture and domestic use. Secondly, making the 'Sierra Productiva', a policy that has been in place for some years, more efficient. These two complimentary policies will help reduce poverty in the highlands.

LAN: When you said a week ago to the press that there were going to be “re-touches" to the current economic model, what did you mean?

RR: I'm not a technical expert on this subject, but in Lima for example, I do think that there has to be greater revenue collection. Not through an increase in taxes, rather through greater efficiency of collection. We are giving assurances that we will work towards reducing taxes, and eventually towards a different type of tax system that incentivises better salaries. The current modifications of the tax system are meant to assist the millions of micro-businesses which want to formalise themselves. This has not yet happened. In micro-industry we have a massive untapped revenue stream. Finally, one of the country's greatest problems is bureaucratic red tape that prevents investment and development.  

LAN: I wanted to ask you a bit about the long-standing issue of political protest and the social environmental conflicts often caused or exacerbated by the activities of extractive industries. Fuerza 2011's two key policies are economic continuity and greater security. The economic model in Peru is overly dependent on the extractive industries. Are these two policies going to produce even more confrontation, violence and difficulties for companies that operate in this sector?

RR: I see this issue as the most difficult task facing the next government, whoever wins. And I think that there will have to be a series of initiatives to resolve real conflicts. I don't really have it clear exactly how we will deal with conflicts that are based more on ideology and politics than real social and environmental complaints. Ultimately, finding a solution depends on the attitude of the local authorities with the assistance of the media. For example, if a decree is issued, such as those legislative decrees relating to the jungle [that resulted in 35 fatalities in Bagua in clashed between protestors and the police] and there are people from NGOs, unions, [the] media who transmit falsehoods then we have a escalation. For example, it was said via radio networks that the land [decreed concessions] was going to be taken and given to Chilean farmers. The government needs to act. The most logical and efficient way for a government to explain its position, its intentions, or specific programmatic points is via the media. However, if those media outlets go as far as to manipulate the government's message they are doing the population a great disservice. The press does not realise this is necessary to show that there are two views on the same issue, and ultimately they cannot be both correct. The authorities need to ask, with humility, sincerity and calmly, for the media's assistance in this.   If there is no Environmental Impact Assessment [on large scale investments] then of course there are likely to be protests. People have lost confidence in the arbitrating capacity of the government. We have to recuperate this.

LAN: Fuerza 2011 won in San Martí­n, which is a region that has supposedly benefited from the coca-substitution policies. However, both it, and the Vrae [Valles de los rí­os Apurí­mac y Ene], remain a centre of coca cultivation for production of cocaine paste. What is Fuerza 2011's policy towards narco-trafficking?

RR: We have to be very clear about a few things. You've just mentioned the example of San Martí­n: successful substitution policies require access to markets. It boils down to roads and communications. I think that if the government had the political will, substitution could work better. Instead, the government has opted for international support from the US in the form of an annual US$80m, 90% of which go to pay the employees of the DEA that they have contracted. This kind of long-standing assistance has been diminishing over time and has had some successes; however, these cannot be attributed to the assistance given. We need to have the political will to ask those countries where most consumption of cocaine takes place too, with a small amount of their budget that is currently being spent fighting drug-trafficking in their own countries, they could revolutionise the current situation, through roads and communications, in the producing countries. That way you cut the problem at the root. There is no other way.

LAN: New data on drug-trafficking shows that Peru might be on its way to overtaking Colombia as the number one producer of cocaine.

RR: Colombia's current situation is a result of the type of assistance they have received and the way that the government of [President Alvaro] Uribe tackled the [Fuerzas Armadas Revolucionarias de Colombia] Farc and drug-trafficking. In Colombia's case, politics and narco-trafficking are truly intertwined. In Peru we are seeing the 'balloon effect'. In Peru we will have to fight both our own [narco] growth, and the effect of Colombia's fight against drug-trafficking.

LAN: There has been lots of speculation over the state of Fujimorismo within Fuerza 2011. They removed a few spokespeople and there seems to be a difference of opinion on some issues within the grouping. There has been a significant vote for Kenji Fujimori in congress whilst other long-established Fujimoristas have been deprived of their congressional seats. What is going on?

RR: Firstly, Keiko, from the very beginning, decided to unify the different Fujirmorista parties. But in addition, so that she would not be dependent on any of those “leaders" [RR indicated the inverted comas with his hands], she realised that if she wanted to lead, she would have to create a new group and unify the others around that [group]...a group that would depend on her. Secondly, to make plain that the same mistakes and abuses of power would not be repeated, she decided to opt for people who were new and who she trusted. To show that even more, the top spots would be given to those less-known than the established Fujimorista factions. Obviously, in whatever institution or party, to lose one's leadership is difficult. But the leadership of Keiko is totally obvious. I don't think that there is a fragmentation within the party, unlike that of Humala or Apra.

Latin American Newsletters interviewed Mr Rey in his office in Lima on 20 April 2011.

AsiaInt Economic Intelligence Review, April 2005

Click here for full text:
http://www.asiaint.com/arl/arl5914.asp - 1,578 words

One of the most prominent features of India's economic development over the last five years has been the massive growth in its foreign exchange reserves. At the beginning of April 2005 they had reached an all-time high of over US$140bn, the sixth-largest in the world after Japan, China, Taiwan, South Korea and the Euro zone. Now, in a move that has alarmed bodies such as the International Monetary Fund, the government has said that forex reserves could be used to fund infrastructure projects. It is worth examining the background to India's policy, and whether the government is right to ignore the IMF's warnings_

US ELECTIONS: Two Hispanic senators elected

URUGUAY: US congratulate Vázquez on presidential victory

CUBA: UN condemn US blockade for the thirteenth time

FRUCTOSE: US producers break off talks with Mexico

FOREIGN DIRECT INVESTMENT: Mexican maquiladora operators happy with US FDI

US ELECTIONS
The 2 November congressional elections strengthened the Republicans' control of both houses of congress. The GOP won three senate seats from the Democrats with two more races too close to call. The Republicans now have at least 54 seats in the senate compared with 51 in the previous congress. In the House of Representatives the GOP won four more seats, taking them to 228. The Democrats have 206 and five races were still undecided. One development was that voters in two states elected the country's first two Hispanic senators since 1997. Mel Martí­nez , a Cuban-American Republican, narrowly won a seat in Florida, while Ken Salazar, a Democrat, won in Colorado, beating the brewery magnate, Pete Coors. Martí­nez and Salazar will be the fourth and fifth Hispanic senators but the first to represent any state other than New Mexico. According to the US census, 13.8% of the US population is Hispanic. Martí­nez, who enjoys the support of President George W Bush and his brother Jeb Bush, who is governor of Florida, said that he intends to speak out for Hispanics. Early in the Bush administration he served as secretary of housing.

URUGUAY
US State Department spokesman Adam Ereli congratulated Uruguay's Tabaré Vázquez on his victory in the presidential elections on 31 October. He dismissed speculation that relations between Washington and Montevideo would deteriorate in the wake of the election of Uruguay's first-ever leftist president. 'We have a long and positive relationship with Uruguay. We have many shared interests including combating trans-national threats to security, promoting good governance and human rights and extending economic opportunity. We have a good record of bilateral cooperation in these areas and we have every expectation that it will continue', Ereli said. In an article entitled, 'Cambio a la Uruguaya: Another Domino Falls in the Wrong Direction' the Washington-based thinktank The Council on Hemispheric Affairs (Coha), argues that 'Concerning relations with Washington, Vázquez will abandon the 'privileged' ties that the current administration has sought with the United States and instead forge closer links with like-minded governments in Argentina, Brazil, Chile, and Venezuela.'

CUBA
For the thirteenth consecutive time the UN General Assembly passed a resolution condemning the US blockade of Cuba and calling for an end to controversial extra-territorial legislation such as the Helms-Burton Act. Apart from the US, only three countries voted against the UN anti-embargo resolution: Israel, the Marshall Islands and Palau. One abstained: Micronesia. US State Department area adviser Oliver Garza argued unsuccessfully, 'The United States trade embargo against Cuba is a bilateral issue that should not come before the General Assembly. The resolution is an attempt to blame the communist regime's failed economic policies on the United States and to divert attention from its human-rights record.'

FRUCTOSE
US fructose producers broke off talks with Mexican sugar producers on 2 November. The fructose producers are increasingly confident that the World Trade Organization will outlaw Mexico's 20% IEPS tax on softdrinks sweetened with sugar. This tax, introduced in 2001, pushed softdrinks producers to use sugar as a sweetener. Mexican sugar producers say that if the WTO rules against them the industry could collapse. The softdrinks industry currently takes 1.5m t of sugar (out of Mexico's total production of around 5m t a year). They say an adverse decision could cost them US$500m a year. The WTO decision is expected in December. The US fructose industry rejected the Mexican offer of waiving the IEPS tax provided there was a minimum 85% sugar content in softdrinks.

FOREIGN DIRECT INVESTMENT
Mexican maquiladora operators claim that they are getting more than their fair share of US foreign direct investment. They admit that China may be getting four or five times as much as Mexico gets, but they point out that China has a population which is 13 or 14 times the size of Mexico's. US FDI in Mexico increased by 12.7% to US$4.93bn in the first half of 2004. This was still almost twice as much as the US FDI in China which came to US$2.39bn. This was a record for US FDI in China and 4.4 times as much as the US invested in China in the first half of 2003.

Cuba: On 31 March figures from charter airlines showed that the number of flights between the US and Cuba have increased by between 150% and 200% in the first quarter of 2010 compared with the same period of 2008. The increase is a result of the lifting of restrictions last year on travel, between Cuba and the US. The main beneficiaries of this surging trade are the eight US-based charter flight companies who operate the only flights allowed from the US. The charter companies say direct flights are up by 36%, year-on-year, after increasing by 70% in 2009. The charter companies say direct flights by Cuban Americans increased again by 36% so far this year on top of 70% growth for 2009. Cuban officials recently said about 250,000 Cuban exiles visited the island from the US in 2009, up from an estimated 170,000 in 2008 when direct flights were barred.

El Salvador: President Barack Obama's appointment of Mari Carmen Aponte, a lawyer and former president of the Hispanic National Bar Association, as US ambassador to El Salvador remains stalled in the senate. She was not one of President Barack Obama's recent 15 recess appointments, which sidestep the need for senatorial approval. Aponte's drawback is her relationship with a Cuban, Robert Tamayo, who had ties to the Cuban intelligence agency, DGI, which attracted the attention of the FBI. Aponte appeared before the senate foreign relations committee on 17 March and testified that she had been involved romantically with Tamayo between 1982 and 1994; that he had "some contacts" with the Cuban diplomatic mission to the US. She said that they met "on occasion" with Cuban officials but underlined that the contact was purely social. In 1993 Aponte was visited by the FBI who wanted to discuss the relationship. She cooperated fully until they asked her to take a polygraph test which she refused although she did agree to set up a meeting between agents and Tamayo.

Nicaragua: President Daniel Ortega has appointed Francisco Campbell as the next ambassador to the US. A native of the southern Caribbean port town of Bluefields and a member of the educated “Creole elite", Campbell served as ambassador to various African countries under the first Ortega administration (1979-1990). He is married to Miriam Hooker, the executive director of the Centre for Human, Citizen and Autonomous Rights (Cedehca) which was founded in 1995 to strengthen the autonomy process on the Caribbean Coast. The appointment, which would fill a year-long vacancy, has to be ratified by the US and Nicaragua's congress.

Ecuador: On 31 March President Rafael Correa told the US embassy in Quito that he did not have time to meet Arturo Valenzuela, the US Assistant Secretary of State for Western Hemisphere Affairs. Valenzuela had wanted to meet Correa during his visit on 4 and 5 April, instead Valenzuela will see Ricardo Patiño, Ecuador's foreign minister. On 5 April Valenzuela is due to talk about the US's policy towards Latin America at a Facultad Latinoamerica de Ciencias Sociales (Flacso) event in Ecuador.

ECUADOR: Ecuadorian president Rafael Correa meets Joseph Stiglitz, 2001 Nobel Prize Laureate for Economics, in Quito.

COLOMBIA: Melting down of weapons belonging to former members of the AUC (Autodefensas Unidas de Colombia) paramilitary group, attended by Colombian president Álvaro Uribe and José Miguel Insulza, secretary general of the OAS (Organisation of American States).

ARGENTINA: Reading of the verdict of the trial of ex-naval commander Héctor Febres for crimes against humanity committed in ESMA, Argentina's political prison during the 1976-1983 Dirty War.

SUNDAY

BOLIVIA: President of Bolivia Evo Morales, president of Chile Michelle Bachelet, and president of Brazil Luiz Inácio Lula Da Silva, announce a timetable for creating a bioceanic corridor that will join the three countries.

PARAGUAY: Elections within the governing Partido Colorado to choose candidates for presidency, vice presidency, and Congress for the elections on 20 April 2008.

Colombians have been celebrating a spate of encouraging statistics on the rollback of crime: kidnapping for ransom has fallen sharply over the past year, Bogotá has rejoined the trend of other major cities in reducing its murder rate to a 21-year low, and manual eradication of coca plantations in the Macarena park has more than met its target in spite of the resistance put up by the Farc guerrillas.

In the first six months of the year the authorities recorded 122 cases of kidnapping for ransom, a fall of 40% from the comparable period of last year. The Farc guerrillas, which last year accounted for 81 such kidnappings (40% of the total), this year were responsible for only 30 (25%). Kidnappings carried out at roadblocks set up by armed groups in highways fell by 75%, from 20 in January-June 2005 to only 5 in the first half of 2006.

This year two northern departments on the border with Venezuela — La Guajira and Arauca — recorded no kidnappings at all. The departments with the highest numbers of reported kidnapping cases were Nariño (on the border with Ecuador), Valle de Cauca (in the southwest) and Antioquia (northwest).

In January-June this year Bogotá was able to reverse the trend of 2005, when the number of murders increased by 5.5% to the equivalent of 23 per 100,000 inhabitants. This year the rate has fallen to 18 per 100,000, just over half the national average (34) and well below those of the cities heading the murder league: Cali (56), Medellí­n (31) and Barranquilla (25).

Also in the first half of the year, the risk-fraught campaign to eradicate manually the coca plantations established in the La Macarena nature reserve reported that it had achieved 55% of its target, uprooting slightly more than 2,700 hectares of the 4,560ha estimated to have been planted with coca by the end of 2005. The Farc guerrillas had gambled on the government's unwillingness to defy public opinion by resorting to eradication by fumigation with glysophate in one of the country's environmental showpieces.

The government chose to mount a manual eradication drive, conducted mainly by some 210 civilian peasants under police and army protection. Codenamed Operación Colombia Verde (Operation Green Colombia), it was launched in mid-January. The security forces had to overcome a series of guerrilla ambushes, clear away mines and booby-trapped bridges and houses, before the drive could pick up speed. They have deactivated and removed about 300 explosive devices. Apart from clearing the plantations, the drive located 21 camps with infrastructure for the processing of coca leaf, and destroyed 65 labs and their stores of chemicals.

The presidential agency for social action, which runs the eradication programme, says the manual eradication campaign in La Macarena has 'notoriously' affected finances of the Farc's eastern 'bloc'.

The honeymoon period of President Martí­n Torrijos was brought to an abrupt end on 12 October when the first significant protest since his inauguration in September broke out. The catalyst for the protest was the mooted privatisation of the social security fund Caja de Seguro Social (CSS).  

The march, which attracted some 5,000 people drawn from the ranks of the newly-created Frente Nacional por la Defensa de la Seguridad Social en este Gobierno (a social organisation set up specifically to address the issue) wound around the Bay of Panama to the presidential Palacio de las Garzas. Protesters demanded that the government maintain the CSS in state hands. Their solution to the cavernous deficit in the CSS (some US$2.5bn) is to inject funds raised from the sale of the former US military bases in the Canal Zone into the institution and, if necessary, place bonds on the international markets.

The director of the CSS, René Luciani smiled nicely before dismissing the idea as 'unrealistic'. He also categorically denied that the government was considering privatising the CSS. 'If only the march were based on facts rather than supposition,' he said. The fact is the government has been very vague about its plans for the CSS. Luciani parroted the official mantra: 'We need to look into a range of options that take into account retirement age and the ways in which pensions are calculated,' he said.  

It is not all that surprising that the government is stalling on coming up with a plan for sorting out the crisis at the CSS. It is, after all, a politically charged issue. When the previous government moved to make changes by sacking the director, Juan Jované, last October it had a riot on its hands as Panamanians sniffed the scent of privatisation on the air.

Widening the Canal
Small farmers opposed to the widening of the Panama Canal also joined in the march. They claim that the widening of the waterway will flood their arable land, which is situated along its banks.The government appears to be moving ahead with the proposed US$4-5bn expansion of the Canal to accommodate post-Panamax ships. The economy and finance minister, Ricaurte Vásquez said on 1 October that the widening initiative could be submitted to a referendum as early as next year, 'If we don't expand the canal it will become obsolete,' Vásquez said. 'It will lower the capacity of the economy to grow because a significant part is tied to transit levels,' he added.