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Handal pre-empts party convention to counteract Arena's perceived attempt to frighten the voters.

The opposition Frente Farabundo Martí­ para la Liberación Nacional (FMLN), favourite in the polls to win the first round of the elections due in March next year, has chosen an unusual way of putting together its government plan: first the presidential candidate, 72-year-old Schafik Handal, tells the foreign press what it will contain; next, on 31 August, it will be discussed and, they hope, approved by delegates to the FMLN's national convention; and finally, it will be presented to `various sectors' of Salvadorean society to see if they have anything to add.

Phase I took place on 21 August in San Salvador. Handal said the plan would include:

- Economic & social policy aimed at job creation, and based on increased productivity and expansion of exports. - Fiscal reform. - Renegotiation of the external debt. - Review of norms governing privatised public services - and the contracts already signed. - Reintroduction of the colón, to circulate alongside the US dollar. - Greater allocation of public funds to municipal governments. - Revival of the IRA, the agency which until 1989 controlled the prices of basic foodstuffs. - Establishment of diplomatic relations with everyone, including Cuba, China, Vietnam and the Palestinian Authority. - Maintenance of `friendly relations' with the US, `based on cooperation and mutual respect'.

Much of this had already been heralded by the FMLN, though several items have clearly been toned down. Handal appeared to suggest that this preview of the FMLN's policy package was a response to the ruling Arena's launch of an `early electoral campaign' based on fostering fear of what the FMLN might do if elected.

A month after he launched his `firm hand' campaign against the gangs known as maras (WR-03-30), President Francisco Flores has been unable to persuade the legislative assembly to pass laws criminalising membership of a mara, imposing stiffer prison sentences and lowering the age of criminal responsibility.

Since 23 July, the police and army have arrested 1,270 mareros - only to have to release about 80% of them because they could not charge them with any criminal offence. Had the Flores law been in place, the majority would have been charged with membership of a mara. The police argue that the case for the law is self-evident: in the past month, they say, the number of reported crimes in the 38 districts targeted by `firm hand' has fallen by 60%. However, the country's chief prosecutor, Belisario Artiga, last week stated, `It is not with tougher laws that we will solve this problem. We must bet on prevention and a real policy on crime.'

It would appear that President Hipólito Mejí­a has not yet found time in his agenda to fit in the PRD presidium meeting that is meant to rule on his bid for reelection [WR-03-32]. On 19 August he openly launched his campaign to seek a second term in the elections due next year. The event, a tour of Santo Domingo neighbourhoods, did not augur well for his wishes: despite the efforts of his organisers, he was often mobbed by people protesting against the high cost of food and the constant power outages.

Joint development of crossborder resources are welcomed; the gas pipeline to Cuba is viewed more critically.

The memorandum of understanding signed in early August by prime minister Patrick Manning and visiting Venezuelan President Hugo Chávez , on cooperation in the oil and gas sector, has triggered an animated debate in Trinidad & Tobago. Only one of the three main features of the agreement appears to have earned universal approval: the decision to engage in joint production and marketing of crossborder oil and gas resources - meaning those of the shared Plataforma Deltana field, reckoned to contain up to 40 trillion cubic feet of gas, or more even than Trinidad's probable reserves.

Chávez 's proposal for a partnership in a natural gas pipeline through the Caribbean has been received less enthusiastically. Critics note that this is not just a matter of extending the scheme entertained by Manning, of a duct through the Eastern Caribbean up to Guadeloupe, and taking it to Puerto Rico (already a buyer of Trinidad's LNG) and Cuba. The latter is seen as a geopolitical gamble by Chávez , which is unlikely to go unopposed by the US.

The third Chávez proposal, of a grand strategic alliance of regional state oil companies under the banner of Petroamérica, has been greeted, as almost everywhere else in the region, with polite scepticism.

CARIBBEAN BASIN | Panama's FTA with Taiwan seen as model. Last week Panama and Taiwan signed a free-trade agreement designed to remove within a decade the tariffs on 95% of the products they exchange. Two-way trade between them has been running close to US$600m a year. Beyond its intrinsic value, the agreement is seen in Taipei as a model for future deals with the Caribbean Basin countries with which it continues to enjoy diplomatic relations: Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama and the Dominican Republic - all of which were represented at a summit held in Taipei on 21 August.

EL SALVADOR | Slower growth of remittances. El Salvador's central bank reports that in the first seven months of this year, remittances by expatriates totalled US$1.18bn, or 4.5% more than in the same period of 2002. This has been taken as confirmation of the widespread expectation that remittances would not continue to grow as fast as during the past decade [WR-03-32].

COSTA RICA | Pineapple overtakes coffee as top earner. This year Costa Rica's pineapple exports will earn the country about US$210m, or 38% more than last year. This will move it up the country's export-earning table to sixth place, overtaking coffee, which is expected to bring in US$180m (almost 9% more than in 2002, despite the dismal state of the coffee market). Costa Rica now supplies 90% of the pineapple consumed in the US, according to the agriculture ministry in San José.

CUBA | Tourism to fall just short of target. The target of attracting 2m tourists to the island is proving as elusive as the 10m tonnes of sugar of yesteryear. Tourism minister Ibrahim Ferradaz is now predicting 1.9m arrivals, or 12.6% more than last year. In the first half of the year, when tourism peaks, arrivals totalled 1m, up 16% on the same period of 2002.

US Defense Secretary Donald Rumsfeld last week reminded Latin Americans (and not a few of his own nationals) that the US military pullout from Panama just over a decade ago did not mark the end of US military presence in the region. As part of a swift tour of the Central American countries that had been among the few regional participants in the US-led `coalition of the willing' against Iraq - and who are now sending troops to help alleviate the US burden there - he dropped into Soto Cano airbase, 80 kilometres north of Tegucigalpa, in Honduras. This is the seat of a small (500-strong) US military unit drawn from the three armed services, Joint Task Force Bravo. Its remit is to conduct training, counternartcotics and humanitarian operations in Central America and the Caribbean.

Addressing about 100 members of that unit, Rumsfeld told them that they were part of a `truly global struggle' against terrorism. `In this region,' he said, `we know there are terrorists, there are hostage-takers, there are drug-traffickers. Sometimes it's the same people doing all three things, and it poses a very serious threat.' He said that both Central and South America share some of the features that have allowed terrorist groups to flourish in Central Asia and the Persian Gulf, such as ungoverned areas and unguarded borders. `Terrorists,' he said, `use those seams to their advantage.'

Regional disarmament

Later on in Tegucigalpa, Rumsfeld said that he had discussed the disarmament of the region with President Ricardo Maduro. While reiterating that the US would support the Central American countries in this, it was up to them to take the decision (this came in the wake of the collapse of subregional talks on the subject). The US is particularly interested in the decommissioning of some 2,000 SAM-7 missiles held in Nicaragua's arsenals, but Managua will only agree to this if Honduras matches the gesture by decommissioning its fleet of 11 F-5s. On the day of Rumsfeld's visit, Maduro repeated the official line that the F-5s were defensive, and Honduras had no intention of using them offensively.

Truth commission's findings risk being obscured by an estimate that almost doubles the number killed in 1980-2000.

It had been known for weeks that the Comisión de la Verdad y la Reconciliación (CVR), the `truth commission' reviewing the armed conflict of 1980-2000, would come up with a casualty estimate that was far higher than any previous one. The report was presented to President Alejandro Toledo on 28 August, and the estimate has been confirmed: 69,000 dead, rather than the 25-30,000 range that had been officially accepted.

Inevitably, critics of the report, particularly those with axes of their own to grind, have pounced upon that figure to discredit the report as a whole. Already, this narrowly focused debate is obscuring what the full report says, in its nine volumes built on interviews with about 17,000 witnesses over a period of 22 months.

The chief finding is that the crimes committed in 1980-2000 `were not isolated acts attributable to perverse individuals, but a massive perpetration of crimes, sometimes by institutions [...] a systematically foreseen annihilation.' Its apportioning of blame is not surprising: roughly half the killings are attributed to the Sendero Luminoso (SL) guerrillas, and another third to the security forces. The remainder is divided, not too precisely, between the Movimiento Revolucionario Tupac Amaru (MRTA, the second-largest guerrilla group), the rondas campesinas (`self-defence' groups set up by the military to assist in the counter-insurgency campaign) and unknown perpetrators.

The armed forces are accused of `systematic violations of human rights' and Peru's political class is indicted as responsible for failing, `by action or omission', to avert the tragedy.

The evidence compiled by the commission has been conveyed to the state prosecution service, and the executive has been urged to compensate the victims of rights violations. Action on both these fronts will have to be based on verified events, not on the estimated casualty total.

Political discomfort
To understand the vehemence of some reactions from politicians, it is necessary to keep in mind that the conflict spanned three governments; those of Fernando Belaúnde (1980-85), Alan Garcí­a (1985-90) and Alberto Fujimori (1990-2000) - all of which emerge as participants in the state's share of the atrocities. This ensures a measure of discomfort across a broad ideological spectrum.

From the right, Rafael Rey of the Unidad Nacional (UN) coalition, dismissed the report as `an insult to those who defended the people from terrorism'. The casualty figure, he said, was an arbitrary projection arrived at with the assistance of foreign advisers ignorant of Peruvian reality. His colleague José Barba said the report was `partial, ideologised and a vindication of Sendero Luminoso.' This was mild language compared with what came from those currently working for a comeback of fugitive former President Fujimori.

From somewhere closer the centre, Jorge del Castillo, of the Partido Aprista Peruano (PAP, the party of former President Garcí­a), also concentrated his criticism on the casualty figure, which he described as `a projection which must be considered with reservations.' His colleague Mercedes Cabanillas, more cautiously, queried the adequacy of the methodology used, and said the figure demanded `verification and investigation'.

The suspect projection
The figure cited in the report is indeed a projection made with the assistance of a US-based Human Rights Data Analysis Group (HRDAG), affiliated with the American Association for the Advancement of Science (AAAS). The method employed was used earlier in Guatemala and Kosovo.  

One line of criticism is that, unlike these two conflicts, there has been considerably more information available throughout the Peruvian one, particularly on factors such as displacement and migration, so estimating is less necessary. Another is that insufficient allowance has been made for the dispersion of the population in Peru's highlands.

While a lively debate is already being conducted online between scholars on the technical adequacy of the method, in the public arena it has not advanced much beyond name-calling. This said, the casualty projection has emerged as the most vulnerable aspect of the report, made all the starker by the fact that two other highly praised truth commission reports in South America, those of Argentina and Chile, preferred the safer route of citing minimums based on what hard evidence they had been able to collect.

Neither he nor the opposition PRI can prevail in congress without striking tactical alliances.

At this time of year, media attention in Mexico tends to be ritually focused on the President's annual informe, or state-of-the-nation address. This time round, though, special circumstances demand attention, not so much to the government's policies but to the chances of seeing them implemented. The ruling Partido Acción Nacional (PAN) cannot do anything on its own: in the wake of the midterm legislative elections it has at best 153 seats in the 500-seat lower chamber of congress (4 seats have yet to be finally assigned), and 53 seats in the 128-seat senate.

For that matter, nor can the opposition Partido Revolucionario Institucional (PRI) dictate on its own: it is just short of a majority in the lower chamber, and well short of one in the senate (where it has 53 seats). The PRI has publicly blown hot and cold on support for the reform legislation the government has been proposing - dominated by an overhaul of the taxation system and plans for a greater opening to private participation in the electricity and hydrocarbons sectors. The signal coming through is that the PRI will support the reforms if the government ostensibly makes concessions that the PRI can turn into political capital.

There is always, of course, the chance that on certain issues the PRI (or, less probably, the PAN) might join forces with the leftist Partido de la Revolución Democrática (PRD) - which has also been signalling that its support to either party would have to conform to its own agenda. The PRD has said that it will decidedly not back anything that might be construed as leading to the privatisation of the electricity or hydrocarbons sectors or, in the area of taxation, that might extend the scope of the value-added tax (IVA) to currently exempt socially sensitive items, like foodstuffs and medicines.

Both the PRI and the PRD have said that they want to see measures designed to reactivate the economy. The PRI's Elba Esther Gordillo has explicitly rejected the government's line of blaming the shortcomings in this area on an adverse international environment. Other countries, particularly in Asia, she says, have been showing sustained growth rates.

Both opposition parties also want to be seen as promoting the amendment of the indigenous rights legislation of 2001, which has so signally failed to satisfy the Zapatistas [WR-03-33].

Fox looks better than the parties
Though the ruling PAN did not fare at all well in the midterm legislative elections, President Vicente Fox himself is not arriving in bad shape to the midpoint of his sexenio. Two opinion surveys published last week show that this approval rating has fallen slightly, but its still very high. The poll published by the newspaper Reforma shows Fox's rating falling seven points since June, to 57%; the one run by El Universal shows a smaller, one-point decline, to 62%.

Mexico's poor economic performance has not hurt Fox too much. Indeed, the polls suggest that opinion pro and con is roughly balanced (39% think he has done a good job managing the economy; 31% that he has not). On the other hand, the areas where he is seen as least effective are the elimination of poverty, crime and unemployment. In his informe Fox did little to fuel enthusiasm in any of these areas: the most he came up with was a reiteration of using the formalisation of the informal sector, and some US$25bn in loans to small and medium-sized firms, to boost the domestic market.

On balance, Fox has emerged looking better than all political parties, not just his own. The most distinctive feature of the July legislative elections was the high rate of abstention (59%), which most analysts have read as a gauge of the scant trust in the parties represented in congress.

The question, of course, is what Fox might be able to do with his high personal approval rating, now that he is so dependent on opposition votes in congress to secure passage of his initiatives. There had been much speculation about his using his standing as a springboard for the presidential ambitions of his wife, Marta Sahagún [WR-03-30]. Recently, though, the leader of the PAN congressional bloc, Francisco Barrio, publicly stated that it would be `imprudent' for Sahagún to seek nomination as a presidential candidate. She promptly responded by announcing that she had no intention of running in 2006.

She has thus become the second of the early putative presidenciables to disclaim any intention of competing; the first was the PRD's Andrés Manuel López Obrador [WR-03-28].

UN agency and high official criticise concession to paramilitary groups as conveying an assurance of impunity.

President Alvaro Uribe's policy of offering `alternatives to prison' to surrendering members of paramilitary organisations [WR-03-28] has elicited strong criticism from both the office in Bogotá of the UN High Commissioner for Human Rights and the outgoing national ombudsman, Eduardo Cifuentes.

The UN office issued a statement saying that `it is the obligation of the state to avoid that any proposal to offer penal benefits to the authors of atrocious crimes may convey the perception that one may continue to commit crimes in the certainty that such actions will not be duly punished.' It also notes that the bill submitted to congress by the executive `does not make manifest the state's obligations in the area of human rights.'

Ombudsman Cifuentes (who is leaving to become the director of Unesco's human rights office) describes the bill as a `disguised amnesty'. He says, `This completely devalues human rights, because these groups can perpetrate massacres, go on kidnapping and destroying, without becoming the object of any kind of sanction - which establishes in the country an unrestricted franchise.'

The government's peace commissioner, Luis Carlos Restrepo, continues to insist that the `alternatives to prison' are not tantamount to impunity. `Though at first sight disagreeable,' he said last week, `this is a necessary instrument to seek peace [...] We have only just begun a pedagogic process to make [the public] understand that the alternative is not simply to take revenge on these people, inflict pain on them and throw them in prison.'

Uribe's chances of getting his reforms approved rely on a turnout of at least a quarter of the electorate.

With a little under two months left until Colombians vote on President Alvaro Uribe's reform referendum [WR-03-27], the Liberal party, Uribe's political launchpad and the country's biggest, in terms of congressional representation, believes it has found the way to oppose him. The formula has been named `active abstention'.

Fearing, on the strength of opinion polls, that Uribe's reform proposals stand a good chance of being approved, the Liberals are gambling on a legal proviso according to which the referendum will only be valid if at least 25% of the electorate - some 6m voters - turn out to cast a ballot. Colombia is traditionally a low-turnout country, with half or fewer regularly voting.

The Liberals' main argument is that the government's pro-referendum propaganda is a `smokescreen' designed to hide the fact that it will represent a blow to wages and pensions. The government responds with two claims: rejection of the proposals would compromise governability and `deal a hard blow to the struggle against corruption, terrorism and drug trafficking.' It also says that rejection would spell more taxes, as it would deny the government the wherewithal to cope with the fiscal deficit.

Conspiring against the Liberal party's campaign is the fact that two Liberal former Presidents - Julio César Turbay (1978-82) and Ernesto Samper (1994-98) - have urged the party faithful to vote, in order to `find peaceful and institutional ways out of the armed conflict that is exsanguinating us.'

Shadily elected CTV has requested a parallel referendum on its standing versus a new pro-government body.

The real launch of the recall referendum process in Venezuela began on 27 August, when the new national electoral council (CNE) appointed by the supreme court took office. The court made judicious use of the agreements already reached by the government and opposition in the assembly, so the new CNE has two pro-government members (Oscar Battaglini and Jorge Rodrí­guez), two for the opposition (Ezequiel Zamora and Sobella Mejí­as), and the `fifth man' picked by the court as the independent tie-breaker: Francisco Carrasquero, a former judge and dean of Zulia university's law school. Carrasquero was once active in the left-of-centre Movimiento al Socialismo (MAS), which has had an on-off relationship with President Hugo Chávez .

With this problem out of the way, another has arisen. The umbrella labour confederation, CTV, is requesting a parallel referendum (provided for by law) to determine whether itself or the new pro-government Unión Nacional de Trabajadores (Unete) is entitled to negotiate collective wage agreements. The CTV has a problem of its own in this: it has so far failed to deliver to the CNE the data proving that its own leadership elections, in October 2000, were above-board. At the time it only provided data for about half the polling stations.

Arms and ammunition thefts have been a fairly regular occurrence over the past few years.

When army-issue machineguns were found last week by the police in a clandestine arms cache (together with 4,000 blocks of pentolite, 40mm grenades and assorted other arms and munitions), Ecuador's military establishment went into high-denial gear. Present and former military commanders rushed to state publicly that there was no serious involvement of members of the military in stealing for gunrunners, least of all those supplying the Colombian guerrillas.

What the military write off as sporadic pilfering includes, since 1999, a theft of 40,000 rounds of ammunition; another of a batch of FAL rifles; a haul of pentolite, mortar shells and grenades; and one of 2,000 rounds of FAL ammo. Ecuadorean military intelligence does not deny the existence of an arms conduit to Colombia; it even knows the main routes and says that in many cases payment for armament is made in drugs. Former defence minister José Gallardo, while denying the existence of an organised arms theft ring within the armed services, acknowledges that there are security flaws that `facilitate the theft of military weaponry.'

COLOMBIA | For a change, businessmen are optimistic. Businessmen in Colombia's four biggest cities expect the economy to grow by 2.6% this year and 3.1% in 2004. This emerges from the latest survey conducted by the Banco de la República.

The government's growth target for this year is 2%. The latest official figures show first-half GDP growth reaching 2.93%, with the greatest push coming from the construction sector - but with a decelerating trend: the rate for the second quarter was down to 1.95%.

This seems to be continuing: unemployment in the main cities in July reached 17.8%, almost one percentage point more than in June.

PERU | New partnerships with Mercosur and Bolivia. Last week Peru signed a `partial economic complementation agreement' with Mercosur, under which it becomes that trading bloc's third associate, joining Chile and Bolivia. The deal is seen as a first step towards a broader deal between the entire Andean Community and Mercosur. Peru also signed eight bilateral integration agreements with Brazil (its biggest trading partner within Mercosur).

Separately, Peru and Bolivia have opened talks aimed at establishing a bilateral common market. Their target is to launch the new bloc in a year's time.

BOLIVIA | Privatisation review may be toned down. The demand to review all privatisations under Bolivia's `capitalisation' scheme, which is shared by the co-ruling MIR and the opposition, appears to be changing direction. At a seminar organised by the American Chamber of Commerce in La Paz last week, businessmen and government officials laid the emphasis on the positive results of the policy. The line adopted by the minister of the presidency (chief of staff), Guillermo Justiniano was that `on the whole, it has been positive; there are some things than can be improved [so that privatised companies] can produce more and generate more profits for themselves and the country.'

HARD CURRENCY | Remittances from abroad hit two records. Remittances home by Mexican expatriates reached US$3.39bn in the second quarter of the year, taking the accumulated first-half total up to US$6.13bn - both figures being the highest of their kind on record.

This means that for every US$2 earned by Mexico's oil industry, its expatriate workers send home US$1.50. The remittances total for the first half of the year also overtook, for the first time, the inflow of foreign direct investment, which totalled US$5.22bn (20.8% less than in the comparable period of 2002).

EMPLOYMENT | Steepening jobs decline in manufacturing. The national statistical institute, Inegi, reports that jobs in manufacturing in the first half of this year were 3.4% fewer than in the same period of last year, with a tendency to further shrinkage: the year-on-year decline in June was 4.1%.  

Blue-collar jobs have disappeared twice as fast as white-collar ones. Official figures also estimate the number of people working in the informal sector at 26.9% of the workforce.

The private-sector think-tank Ceesp has used the latest figures to take an oblique swipe at the government. It says that both the remittances from abroad and the growth of the informal sector bring home the need for `structural changes to promote formal employment'. The weakness of the economy that forces companies to reduce their personnel, says Ceesp, drives many workers to seek a source of income in the informal sector and abroad.  

The latter, it says, has had a good effect, as a `safety valve' and a source of hard currency, while the former `generates more spending than income'. It is not hard to discern an allusion to President Vicente Fox's recent positive depiction of the informal sector (WR-03-32).

Maduro is challenged on the streets for water and employment bills designed to obtain a US$1bn credit.

The largest protest demonstration since President Ricardo Maduro took office in January 2002 degenerated, on 27 August, into riots and clashes with the police in Tegucigalpa that left 21 people injured (between protesters, policemen and a television cameraman). About 10,000 people are reckoned to have taken part in the `march for dignity': an attempt by police to prevent marchers from the interior from reaching the capital had been met by the erection of barricades on main highways which brought traffic to a standstill.

The protest, in a country where such events are rare, was against legislation introduced by the government with a view to securing a US$1bn credit from the IMF, which it has been seeking since late last year. Among the main targets were a law approved the previous week authorising the privatisation of municipal water companies, and a bill, still to go before congress, designed to render more `flexible' the country's labour legislation (it includes a freeze on the pay of government-employed professionals and an end to annual pay adjustments for public-sector employees.

The `march for dignity' was organised by the Coordinadora Nacional de Resistencia, an umbrella body that represents more than 100 unions, political groups and civic associations. It was also endorsed by leading churchmen, like Luis Alfonso Santos, the Catholic bishop of Santa Rosa de Copán, who has cricitised Maduro for `leading the country into a dead-end' and warned that `sooner or later the social situation will explode.' According to the bishop, the President should `decide if he is with the majority - or, even better, resign.'

Violent crime undeterred by offensive
Maduro has also come in for heavy criticism for the manner in which he has been conducting his `war on crime', which focuses on the violent street gangs known as maras. Police raids on the gangs are described as media circuses, often presided over by Maduro, clad in a bulletproof vest.

The problem is that criminal violence shows no sign of diminishing. In San Pedro Sula, where Maduro staged a highly publicised raid in early August, there have been since then a massacre of a nine-member family, a double decapitation in a central square and, on 30 August, a hijacking of a rapidito (small urban bus) which ended with 12 people shot dead and 17 injured. In the nearby city of El Progreso, only hours earlier, a holdup outside a fast-food store had ended with one person shot dead and eight injured.

On 7 August the Honduran congress passed legislation that introduces prison terms of up to 12 years for leaders of maras and three years for rank-and-file members, whether or not they are found guilty of committing a crime. [In neighbouring El Salvador, where the government wants similar legislation approved, the police have arrested 1,449 mareros in little over a month - of whom already 512 have had to be released because no charge could be brought against them.]

Their verdict on his performance is overwhelmingly favourable, despite reforms moving slowly and statistics looking grim.

Brazil's economic statistics still look gloomy, and President Lula da Silva's `crucial' reform proposals are moving more slowly than expected through congress, but businessmen and economists are sounding quite optimistic about the prospects for later in the year and, perhaps most surprising of all, the public's `honeymoon' with Lula appears to have been revived.

A survey conducted by Datafolha showed Lula's approval rating at the end of August at 45%. This is two points higher than in July - and the highest for any Brazilian president at the end of his eighth month of office (at least since Datafolha started running these surveys in 1990). It is worth noting that, apart from those expressing outright approval, another 42% considered his performance `middling'.

Ideological labelling
One feature of this survey has caught the eye of political analysts: among those respondents who felt they could place Lula in an ideological box, the largest group (38%) identified him as either a rightwinger or right-of-centre. Another 12% placed him in the centre, and 31% saw him as either a leftwinger or left-of-centre.

Given that most Brazilians know that Lula comes from the far left, as an erstwhile radical union leader and as the founding leader of the Partido dos Trabalhadores (PT), this implicitly means that the public perceives him clearly as having shifted towards the right. This is what the more radical elements of the PT have been saying almost since he took office, and they have been portraying this as a very bad thing. However, taken together with Lula's approval rating, the message from the public is that it is a good thing. [For a full examination of this subject in a regionwide context, see our Special Report, Is Latin America shifting to the left? (SR-03-03)]

Progress of reforms
The two key reforms that Lula has nailed to the mast took steps forward last week. The pensions reform was approved in a second reading by the chamber of deputies, and moved on to the senate. Positions regarding this reform package, which has suffered significant modifications along the way [WR-03-31], have not changed all that much - except that the number of abstainers has increased, while both pro and con votes have shrunk slightly.

The package must now undergo two readings in the senate, after which it could be enacted - unless the senators introduce amendments, in which case it will have to go back to the lower chamber for two further readings. In the briefest scenario, it could be finally approved by November.

The tax reform package managed to clear a second committee reading despite the strong opposition put up by the rightwing Partido da Frente Liberal (PFL). The pro-government camp made only one concession: the extension until 2023 (instead of a phaseout in 2013) of the tax exemptions enjoyed by the industrial pole in the Manaus free zone.

This is hardly the end of the matter, as the PFL has vowed to continue to press for changes when the package is debated by the full chamber [WR-03-33]. Still unknown is the stance the state governors will adopt: if they remain unsatisfied with the government's proposal, they too might orchestrate opposition in the full chamber.

Budget as `silhouette'
The government has unveiled its draft budget for next year, which does not seem to have been designed as the instrument for the `growth phase' officials have been heralding, let alone the `zero hunger' drive that was the centrepiece of Lula's campaign. It foresees expenditures of R$402.2bn (US$136.3bn), or 11% more than this year - which is only about enough to cover this year's inflation, if the government succeeds in containing it to the expected 10% or so.

The breakdown does not show any major changes of allocation, even in the `social' brackets, if they are all calculated as percentages of GDP. The budget has been clearly designed to meet the government's self-imposed fiscal surplus target. The president of the chamber of deputies, João Paulo Cunha, of the PT, said ruefully that `the budget is not the face of the government; it is merely the silhouette; a beginning that reflects the scenario of difficulty in the present transition.'

Since mid-May there have been 17 murders and 12 attempted murders of political leaders and activists.

When the UN- and OAS-sponsored investigating commission starts work this month - if it does - it will have its work cut out for it. Never since elected rule was restored in 1986 has the country witnessed a more violent pre-election period, according to the Mirador Electoral 2003, a monitoring body set up by four well-respected local NGOs.*

Since 15 May, when the electoral tribunal issued the formal call for the November elections, there have been 17 murders of political leaders of activists; 12 attempted murders; 13 reported death threats and 11 instances of intimidation. There have also been nine drive-by shootings at the homes or cars of politicians, and three cases of illegal raids on politicians' homes.

In at least one case, the involvement of officialdom was patent: a vehicle with markings of the EMP, the presidential general staff, was used to intimidate members of the Fundación de Antropologí­a Forense de Guatemala, the organisation conducting the exhumation of victims of the internal war that ended in 1996.

On 26 August, the same day the Mirador was releasing its report, the offices of the human rights procurator were raided by persons unknown, who stole computers and documents, and soiled the desks before leaving.

The political violence is taking place against a background of broader social violence. The women's group Madres Angustiadas has reported 160 cases of murders of women since the beginning of the year and 240 cases of exprés kidnappings (in which victims are held only briefly). This prompted the Catholic primate of Guatemala, Archbishop Rodolfo Quezada Toruño, to call on the public to set aside an hour a day to pray for an end to the violence.

*Facultad Latinoamericana de Ciencias Sociales, Acción Ciudadana, Instituto Centroamericano de Estudios Polí­ticos, and Centro de Acción Legal en Derechos Humanos.

A year on, Guatemala reneges on agreement to accept mediators' proposals and put them to parallel referendums. 

It is back to the drawing board on Guatemala's longstanding territorial dispute with Belize. Last week the Guatemalan foreign ministry announced that it was rejecting, almost a year after its submission, the solution proposed by OAS mediators Shridath Ramphal and Paul Reichler, which it had previously promised to abide by. The Ramphal-Reichler documents laid down the definitive land boundaries between Guatemala and Belize, as well as their exclusive maritime economic zones and submarine platforms. They also propose the creation of an ecological park stretching from the Zapotillos keys to the coasts of Guatemala and Honduras, and the establishment of a US$200m fund to promote development and alleviate poverty in both countries.

These proposals were delivered on 17 September last year, and both governments had agreed to submit them simultaneously to their electorates for approval in parallel referendums.

Last week Guatemala's foreign ministry said, `After a careful analysis [the government] has concluded that the proposals and recommendations do not show the balance required to identify Guatemala's interests and demands, and for that reason are unacceptable.' We have been unable to find anyone who can explain what that means. 

As to practicalities, the Guatemalan government proposes the continuation of bilateral negotiations and, should these not prove fruitful, submission of the dispute to international arbitration or to an international court.

He changes the selection rules even as he continues to campaign openly for his reelection.

President Hipólito Mejí­a's rivals for the presidential nomination of the ruling Partido Revolucionario Dominicano (PRD) are beginning to feel that he has been leading them on a ride to nowhere while he continues to build up a head of steam behind his reelection bid. Last week he took time off his reelection campaign only to dash off a letter to them which appeared to change the agreed rules of the game.

Mejí­a told them that he would not withdraw from the internal contest if he did not win an outright majority in a first round of voting, but would compete in a run-off. This has revived the opposition of some of the contenders to taking part in any primaries at all with Mejí­a, on the grounds that this would be tantamount, as put by Rafael Flores Estrella, to `accepting that we are a reelectionist party - and that is a matter which should be resolved by a plebiscite.'

The President has also asked all contenders for an agreement not to use the image of the late PRD leader José Francisco Peña Gómez in the nomination contest. This, despite the fact that in his own rallies he has been prominently displaying Peña Gómez's portrait. There is irony apart from cheek in this: Peña Gómez was a firm opponent of reelection.

Display of confidence
One thing Mejí­a does not lack is confidence. At a rally in San Cristóbal on 27 August de dismissed his critics as `parakeet' and predicted that he would win by a landslide, `because the members of the PRD and the people want el guapo de Gurabo [`the tough guy from Gurabo'] to stay on.' Gurabo is, of course, Mejí­a's home town.

As to toughness, Mejí­a's message is that his government has displayed `courage and responsibility' in confronting the economic crisis, and that he would continue to act in the same vein when reelected.

Mejí­a is acting as if time were in his favour. This has been rattling some of his rivals, like Emmanuel Esquea Guerrero, who says that the PRD's chances will be seriously diminished if it has not selected a candidate by end-October. In the meantime, the consensus is that Leonel Fernández of the Partido de la Liberación Dominicana (PLD) continues to be the candidate with the best chances of winning.

Security minister says the government is `hurrying slowly' on bill before parliament since last year.

The government of prime minister PJ Patterson is to push ahead with a controversial bill which would grant some police powers - those of searching and arresting - to the Jamaica Defence Force (JDF). The bill has been sitting around in the House of Representatives since last year. Last week, in an interview, national security minister Peter Phillips said, `Quite frankly, a lot of people have raised concerns, so we are hurrying slowly [...] We have not acted on it yet because we need to do an internal evaluation of the proposal.'

Nonetheless, Phillips believes that the bill is necessary because of the growing use of the military in the government's anti-crime drive. The bill allows members of the JDF to conduct searches and make arrests even in the absence of members of the police. At present, the police presence is mandatory.

Jamaica has often called upon the military to assist in anti-crime campaigns; indeed, it is often cited as an example of the ineffectiveness of the military in a police role.