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Development: On 20 July the military agreed to help the government investigate cases of human rights abuses that fall outside the "Ley Caducidad", which pardons crimes committed during the 1973-1985 dictatorship.

Significance: The military initially reacted angrily to a decision by the leftwing Encuentro Progresista-Frente Amplio government to start investigating crimes committed by the armed forces before 1973 when the amnesty comes into effect. The head of the army, General Angel Bertolotti, accused President Tabaré Vázquez of breaking his word. However, perhaps conscious that the government might seek to circumvent the Ley Caducidad if it proves to be too inflexible, the military has now decided to play ball.

Vázquez has also cleared the way for legal action in certain cases that occurred within this period, including the political murders of Zelmar Michelini, former secretary of education, and Héctor Gutiérrez Ruí­z, former president of the House of Representatives, who were allegedly murdered by a combined Argentine-Uruguayan death squad in Buenos Aires in 1976.

Development: On 23 August President Ricardo Lagos set out his version of the government's conduct in what appears to be a smear campaign targeting the centre-right presidential candidate, Sebastian Piñera.

Significance: On 21 August the rightwing daily El Mercurio published an article on police investigations into Piñera's purchase of 140,000 hectares of land on the island of Chiloé. Piñera, candidate of the Renovación Nacional (RN) party, claimed the paper was trying to damage his presidential prospects and linked the journalist behind the story, Paula Afani, to the campaign of his opponent Joaquí­n Laví­n of the Unión Demócrata Independiente (UDI).

Two questions arose when the story broke: was the police investigation itself politically motivated and how did Afani know about it? As regards the first question the government has not handled itself well. The interior minister, Francisco Vidal, received a dressing-down from the president after publicly apologising to Piñera. Lagos said the government had nothing to apologise for and although Piñera was not suspected of any wrongdoing, the police investigation was entirely legitimate.

Afani's knowledge of the case is more suspect. Up until a few months ago Afani was working on Laví­n's presidential campaign but had to leave after writing a report prejudicial to Michelle Bachelet, the candidate of the ruling Concertación coalition. Afani is thought to have gleaned the information about Piñera through her partner, Rómulo Aitken, a former investigative police functionary who is currently being indicted for withholding key evidence against a drug trafficker. Piñera has also accused 'El Mercurio' of misleading the public over the nature of the investigations to make it look as if he has done something criminal.

Laví­n has attempted to downplay the incident. "Sebastián," he said, "don't jump to conclusions. Let's not divide the rightist Alianza por Chile, let's not fight. The person we should be fighting is Michelle Bachelet, that's what this election is about." Considering this is the first election the Alianza has fielded two candidates, both of whom are lagging a long way behind Bachelet, it is questionable as to whether the alliance still exists in any meaningful fashion.

Development: On 26 September Brazilian police seized a ship carrying a tonne of cocaine off the northern city of Fortaleza. The ship was en route from Suriname to Senegal.

Significance: This latest bust provides further evidence of Suriname's growing role in the trafficking of drugs across the Atlantic. Over the weekend of 24-25 September police in Suriname seized 248 kilos of cocaine in the Saramacca district as it was being moved across the country. This was Suriname's second-biggest haul this year after 440 kilos of cocaine were seized in May.

The identities of the drug smugglers in both Saramacca and Fortaleza indicate the various nationalities involved in ferrying drugs through Suriname and on to Europe. The Suriname police are searching for two Brazilians and two Venezuelans who were overseeing the Saramacca delivery, while Brazilian police arrested two Chinese men, a Colombian, and a South Korean on board the vessel bound for Senegal.

Development: Arturo Núñez Jiménez, a prominent opponent of Roberto Madrazo, a former president of the Partido Revolucionario Institucional, dismissed Madrazo as morally bankrupt on 30 October.

Significance: Núñez is a longstanding anti-Madracista and a prominent former prií­sta: he had been a deputy interior minister. His comments on Madrazo followed the latter's promise to publish a statement of his assets as part of his campaign to win the nomination as the PRI's presidential candidate. The PRI primary election ends with a nationwide poll on 13 November.

A month ago Núñez joined the campaign of Andrés Manuel López Obrador, the former mayor of Mexico City and opinion poll front-runner. Núñez appears to know a lot of detail about how Madrazo managed the accounts of the oil-rich state of Tabasco, which he governed from 1995 to 2001. According to Núñez, Madrazo abolished the principle of monthly accounts in the state government so that he could hide what he was doing more easily.

ARGENTINA: The trade surplus increased in October to US$916m,. In October 2004 it was US$854m,

BOLIVIA: Inflation for the past 12 months came to 4.96% at the end of November.

PARAGUAY: Inflation for the first 11 months 10.5% bring the 12 month rate to 12.3%. The central bank had hoped for inflation of between 5% and 7.5% in 2005.

VENEZUELA: Inflation in November was 1.1% bringing the rate for the first 11 months to 13.5%.

BRAZIL: Industrial output in November 2005 rose 0.6% year-on-year and month-on-month according to statistics agency Ibge.

BRAZIL: Statistics agency Ibge stated on 13 January that its main consumer price index (IPCA) increased 0.36% in December 2005, giving full-year inflation of 5.69% in 2005.

BRAZIL: The number of bankruptcies in Brazil totalled 2,876 in 2005, down 17.8% year-on-year, according to the local credit analysts firm Serasa.

COLOMBIA: Imports rose 28% on year to US$14.99BNin the first 11 months of 2005.

MEXICO: Remittances increased 20.43% year-on-year to US$18.28bn for the period from January to November 2005 according to the central bank.

MEXICO: Gross fixed investment in Mexico increased 7.3% year-on-year for the period from January to October 2005, according to the ministry of finance.

PARAGUAY: Remittances to Paraguay totalled US$204m in 2005, according to the central bank.

Development: President Nicanor Duarte Frutos won a crushing victory over Osvaldo Domí­nguez Dibb in the leadership election for the ruling Partido Colorado on 19 February.

Significance: Duarte's victory means that he is another step closer to standing for re-election as president. The supreme court has yet to rule whether Duarte can be both president and the leader of a political party. Duarte argues that in most developed democracies presidents are also party leaders and Paraguay should follow suit. Political commentators now expect Duarte to move to reform the constitution so that he will be able to stand for re-election in 2008.

The 1992 constitution forbids re-election, fearful of another strongman re-establishing himself as Alfredo Stroessner had done from 1954 until his overthrow, by his son-in-law, in 1989. Duarte did little to reassure Paraguayans that he believed in the rotation of power: just after his win, Duarte forecast that the Partido Colorado would remain in power not just for another "five years but for 40, 50, 70 or 100 years."

Local political commentators see Duarte's call for Colorados to take a tougher line against the informal economy, piracy, smuggling and tax evasion as the start of a government investigation into the business affairs of Domí­nguez Dibb and his principal supporters, the Stroessner family.

According to the Partido Colorado, Duarte's victory was comprehensive: 63.35% to 31.87%. Domí­nguez, however, does not accept the result, claiming that Duarte presided over a major fraud. Only about half (53%) of the 1.5m Colorado party members voted, even though, for the first time, electronic voting was available. There were problems with the machines: in some polling stations voters had to whisper their choice to election officials who then entered in the data.

The 19 February election was the second time that Duarte has defeated Domí­nguez: he also defeated him in 2003 for the Partido Colorado's presidential nomination. Domí­nguez, a rich businessman with interests in tobacco, real estate and the media, is close to the Stroessner family: the name at the top of his party list is Alfredo "Goli" Stroessner, the former dictator's grandson, who was duly elected to the Colorado's national executive.

Domí­nguez does not accept the result. He argues that Duarte should not have been allowed to stand, because Duarte is already president. In mid-January the electoral court rejected an appeal by the stronista faction that Duarte could not run for the party presidency on the grounds that the constitution did not bar him from running for another post: he can get himself elected and then, as he did in 2003, step aside in favour of one of the party vice-presidents. Domí­nguez claimed that he had won and that he would use all the legal options at his disposal to validate his victory. "Goli" Stroessner said that he would not take up his seat on the national executive because this would endorse Duarte's "fraud".

Besides electing the party president, the elections also picked the 90-person national committee for the party. Of the 90, 38 were elected nationally while 52 were elected regionally. Duarte won in all the electoral districts, according to the official figures, but Domí­nguez scored most heavily in the two most populous areas, Asunción and Central. Domí­nguez has campaigned strongly against Duarte arguing that the president was corrupt.

While Duarte waits for the supreme court to rule on whether he can head the party, he will get the national committee to appoint an acting party-president. His slate's easy win in the elections, coupled with "Goli" Stroessner's decision to boycott the national committee, means that one of his placemen will get the job. In theory the Domí­nguez slate should have 11 of the 38 nationally-elected national committee positions.

Development: On 23 March President Evo Morales commemorated the 127th anniversary of Bolivia's loss of its Pacific coastline to Chile by saying he wanted an urgent meeting with the Organization of American States (OAS) to resolve Bolivia's claims.

Significance: The "Dí­a del Mar" is always an emotive day in Bolivia and has been used by previous presidents to stir up nationalistic fervour over Bolivia's Pacific claims. Morales pointedly did not do this. He stressed that the time for confrontation with Chile was past and that "respect and humility" must replace "bitterness and condemnation". What he did do is invite the secretary general of the OAS, José Miguel Insulza, a Chilean Socialist to repeat the "Mar para Bolivia" line to which he claims Chile's former Socialist president Salvador Allende subscribed.

Chile's foreign minister Alejandro Foxley immediately responded to Morales saying that "we will not budge an inch on Chilean foreign policy". He said, in reference to Chile's 1904 treaty with Bolivia, that treaties cannot be modified. "Nationalistic attitudes will not contribute to the dialogue process," he added. Chilean senator Jaime Naranjo said that Morales was mistaken in thinking that Allende had planned to return Bolivia's Pacific coast. He said Morales was "confusing and trying to change the record of history".

Development: President Lula da Silva's prospective contenders in the October presidential election, Geraldo Alckmin and Anthony Garotinho, have been embroiled in irregular campaign financing rows of their own on 27 April.

Significance: The recent allegations of irregularities confirm that all political parties, not just Lula's Partido dos Trabalhadores, are only too happy to take money and not ask questions. Fresh investigations revealed that the state-owned bank Nossa Caixa spent all its 18-month advertising budget of R$28m (US$13m) in the seven months prior to the 2002 elections in which Alckmin ran for re-election for the governorship of São Paulo. Investigations started after a former employee of the bank accused its directors of advertising in media vehicles owned by politicians linked to Alckmin's Partido da Social Democracia Brasileira without prior tendering. Authorities are now trying to establish if the money was used for "electoral purposes".

Garotinho, also, was told yesterday that the federal police was going to investigate the R$400,000 (US$186,000) campaign donation he received from four NGOs which are partners of the state of Rio de Janeiro, where his wife, Rosinha, is now governor. According to the Brazilian press, these NGOs received R$112.5m (US$52.32m) from the state's government to develop their projects. The NGOs were also appointed without prior tendering.

Development: President Alvaro Uribe granted a lengthy interview to the El Tiempo newspaper on 3 June, less than a week after his triumph at the presidential election.

Significance: Uribe's willingness to talk to El Tiempo contrasts markedly with his shunning of the media in the run-up to the presidential vote. Indeed, it is the first time he has spoken to Colombia's leading daily newspaper at length for almost three years: his last in-depth interview was in September 2003.

The president's most interesting comments to a very friendly interviewer regarded his new cabinet. Uribe admitted that choosing this government would be harder than it was four years ago, saying that he would have to take into account the political parties who support him in congress and the people who helped with his presidential campaign when he selected his new team. The president also said that regional factors would impact on his choices.

Uribe said that he expected his new team to be in place and driving legislation through congress by 20 July. The president refused to name any of his new ministers but said that he would have done so had the interview taken place “three or four days later", suggesting that details of the new cabinet could start to emerge this week.

Uribe was also at pains to stress that this would be his last term in office. Shortly before the president was re-elected for another four years on 28 May, Senator Ciro Ramí­rez from the Partido Conservador said he would introduce a bill to congress which would allow Uribe to stand yet again; the president said he completely rejected the idea.

The president was less clear about what the future holds for his relationship with the Fuerzas Armadas Revolucionarias de Colombia (Farc). Prior to the election Uribe promised that in the event that he won, he would present a peace proposal to the Farc the very next day. Although he has so far failed to do so, Uribe again indicated that something might emerge by the end of this week.

Development: The leader of the criminal faction Primeiro Comando da Capital (PCC), Marcos Camacho (Marcola), gave a new testimony to the congressional committee investigating gun-trafficking on 8 July.

Significance: Marcola's testimony to congressmen revealed that the PCC is deeply involved in politics. He claimed that the simultaneous prison rebellions and riots, which left over 150 dead in São Paulo in May, were a "political gesture" against the former governor and now presidential candidate, Geraldo Alckmin.

According to Marcola, the PCC carried out the violence which terrorised the population of São Paulo for five days in May in order to undermine Alckmin's candidacy. Before leaving his post the former governor ordered the transfer of PCC-linked criminals to high-security prisons, after intelligence revealed that they managed their businesses from inside their cells. Marcola asserted that the transfer was designed to give Alckmim a boost.

Marcola's testimony is the last in a series of developments showing that Brazilian gangs are interested in the outcome of the general elections in October. In Rio de Janeiro three candidates for the state's governorship were prevented from campaigning in favelas after gang leaders threatened to initiate riots if they did so. Undoubtedly, the gangs prefer President Lula da Silva to Alckmim, since supporters of the later have been shot at every time they tried to campaign near one of the favelas.

Meanwhile, authorities continue to differ over the best way to contain gang power. Some propose tougher measures while others want to free petty criminals to create space in prisons. Their inability to agree led prison officers in São Paulo to refuse working in 45 prisons until they receive safety guarantees from the government.

Development: On 10 August the Unión Por el Perú (UPP) announced that it had severed ties with Ollanta Humala, the defeated nationalist presidential candidate who ran on the UPP ticket in April's elections.

Significance: Humala was expected to use the UPP, the largest party in congress, to provide a stern test of President Alan Garcí­a's credentials; forcing Garcí­a to seek consensus for his legislative agenda to prosper. However, Humala's mishandling of a series of disputes between the UPP and his Partido Nacionalista Peruano (PNP) caused too much friction. The UPP and the PNP have now split: the UPP has 22 seats in the 120-seat congress; the PNP, which stays loyal to Humala, 20 seats. The ruling Partido Aprista Peruano (PAP) is now the largest party in congress with 36 seats.

“We think that it is for the best to conclude our relationship with him (Humala). He will no longer have any presence in our organisation. He will be involved in neither our legislative work nor our party sessions," the president of the UPP, Aldo Estrada, said. “We (the 'upepistas') will have nothing to do with members of the Partido Nacionalista," the president of Humala's bloc in congress, Edgar Reymundo, said. 

It is not the first splinter group to emerge from Humala's bloc. Humala's followers won 45 seats in April's elections but three legislators left almost immediately to form their own independent bloc after a disagreement with Humala. The UPP and Humala's relationship had grown more strained as UPP legislators wanted to provide a moderate opposition to Garcí­a, and was prepared to work with him on some issues; Humala preferred a more obstructive opposition. The UPP also suspected that Humala favoured PNP men for positions on legislative committees. The UPP and PNP had already decided to field separate candidates in November's regional elections.

Development: On 17 September Iran's President Mahmoud Ahmadinejad visited Caracas where he signed 29 bilateral agreements with President Hugo Chávez .

Significance: This was the Iranian president's first trip to Venezuela and follows Chávez 's trip to Tehran last month, his fifth in total. Both leaders took every opportunity to show their affection for one another and to excoriate US “hegemony". Chávez also promised unspecified assistance if the US invaded Iran and backed the Islamic Republic's desire for a peaceful nuclear programme.  

Among the deals signed by the two presidents was a US$1.5bn petrochemical investment agreement. Other areas of cooperation include housing, health and education. Iran will help build a cement factory in the state of Lara as well as a car factory to produce the “Centauro" model. Iran Air and the Venezuelan state airline Conviasa also signed an agreement to launch a Caracas-Tehran route.

Chávez denied that Iran was visiting Caracas in order to purchase Venezuelan uranium. Iran is also backing publicly Chávez 's bid for a seat on the UN Security Council.

Development: On 20 October Colombia's President Alvaro Uribe blamed the Fuerzas Armadas Revolucionarias de Colombia (Farc) for the car-bomb attack on a military college in northern Bogotá and declared that the government was no longer willing to negotiate a prisoner swap with the rebel group.

Significance: Uribe's second term as president, like his first, is now likely to be dominated by his efforts to defeat the Farc militarily. As in his first term, this will be a very difficult and expensive exercise. As in his first term, it is not likely to succeed. According to Uribe, however, the government has no alternative.

The president said that authorities had intercepted a communication between the perpetrators of the 19 October attack on the Escuela Superior de Guerra which injured 23 people and the Farc's military chief, Jorge Briceño (alias Mono Jojoy). As far as Uribe is concerned the message proved the Farc's involvement and confirmed that the rebel group cannot be trusted as a negotiating partner.

“The government will not pursue any form of humanitarian exchange with the Farc," Uribe declared in a lengthy, emotional and vitriolic speech at the site of last week's bomb attack. “The only choice that remains to us is for the military and the police to rescue the hostages," the president added.

In ruling out a prisoner swap, Uribe is reversing his avowed policy of the last month or so, during which time he said he was committed to exchanging some 500 rebels for 59 high-profile kidnap victims. On 27 September the president declared he would be willing to demilitarise an area where negotiations with the Farc over an exchange could take place. Soon afterwards Uribe even raised the possibility that those talks might lead to a peace process.

Uribe's conciliatory rhetoric was surprising, given his vehemence towards the Farc during his first term. Also unusual was the manner in which the president was outmanoeuvred by the Farc; Uribe appeared ready to concede more than the rebel group in pursuit of the prisoner swap, perhaps because the government felt pressure to respond to the considerable public desire for an exchange.

The Farc has denied responsibility for the car-bombing and instead blamed the US, saying that it was the work of either the Central Intelligence Agency or the Drug Enforcement Administration. In a statement published on its website on 20 October the group said that no insurgent group could have carried out the attack on the military school given the security around the building and the type of explosives used.

The Farc based its accusations regarding US involvement on the fact that the US embassy warned in late September about a possible terrorist attack in northern Bogotá. The rebel group could just as easily have pointed to the scandal over the security forces allegedly staging terrorist attacks in the capital shortly before Uribe was inaugurated in August.

In September the head of the army, General Mario Montoya, said soldiers, not terrorists, were behind the bombings over the summer. On 10 October the attorney general began a formal investigation into three colonels, a major and two army captains in connection to the scandal.

Whatever the truth behind the latest attack, the result is likely be four more years of war between government forces and the Farc unless the Left makes substantial gains at next year's local elections. During his first term Uribe said that he would only negotiate with the Farc once it had been defeated, but the military's failure to overcome the rebel group in its southern jungle stronghold suggested that this ambition was unfeasible and almost certainly contributed to Uribe's more conciliatory approach during his second term.

If the government is to defeat the Farc, it will need to devote even more men and resources to the struggle than it did in Uribe's fist term. This will be problematic, given that shortly before the terrorist attack former Southcom commander Bantz J Craddock said that the US was preparing to reduce its military aid to Colombia, currently worth some US$700m per year. Government sources have suggested that Uribe will ask Washington to rethink its decision, and also that the president will raise more property tax on Colombia's wealthy to pay for the new campaign.

Development: President Lula da Silva told reporters on 28 November that he will not push for a reform in the social security services. 

Significance: A reform in the federal social security services is deemed “indispensable" by most economic analysts and business leaders. They argue that the government needs to cut expenses with the payment of benefits and pensions so it can invest in productivity without increasing the tax burden. Lula, however, thinks that “the social security deficit is minimum" and that most of the government's deficit is made by the treasury, which pays the salaries of active civil servants. 

Lula is trying to find a way to contain spending without undermining the government's social programmes or dismantling the Brazilian welfare system. Crucially, Lula knows that in order to win support in congress he will need the backing of leftwing parties. Two of these parties, the Partido Democrático Trabalhista and the Partido Verde, made it clear they would only support the government if there were no changes in the welfare system and labour rights. 

Lula also has another difficult matter ahead him, namely pay rise demands from top-level civil servants. Judges are demanding an increase in their pay ceiling, which currently stands at R$22,000 (US$10,000). This is over 60 times the minimum wage of R$350 (US$160). If the pay rise is granted to judges, congressmen will also present a demand for more pay. The bill is actually ready, but congressmen seem afraid to be the first highly paid group to request a pay rise.

Development: On 11 January Lucio Gutiérrez, the former president and leader of the Partido Sociedad Patriótica (PSP), announced his party would now support President-elect Rafael Correa's proposal for a constituent assembly.

Significance: Gutiérrez told reporters the PSP, whose 24 members had been part of a 70-member bloc in the 100-seat congress opposed to the initiative, would now "push immediately for a national constituent assembly." This puts the number of deputies in favour of the assembly in the majority for the first time. Correa has promised that his first initiative as president will be to send a proposal for a referendum on the assembly to the supreme electoral court for ratification. Gutiérrez said his party's representative on the seven-member supreme electoral tribunal (TSE) would offer what could be the swing vote to ratify and organize the referendum.

In a move indicative of the fickle, populist nature of the PSP, Gutiérrez's decision comes just days after his own wife, a PSP deputy, was expelled from congress for advocating the same stance. It is not clear whether she, and another PSP deputy who also supported the constituent assembly, will now be reinstated. Gutiérrez said his party's decision to support Correa was not "a change of discourse," but rather a way to offer the new president the means to convoke a national referendum "without violating the constitution." Three out of four Ecuadoreans support the idea of a constituent assembly.

Development: Brazil's largest landless movement, the Movimento dos Sem Terra (MST), occupied twelve farms in the west of São Paulo on 18 February. 

Significance: The MST occupied the farms to demand “urgency" from the government in its land reform programme to “bring attention to the social problems resulting from the expansion of sugar-cane plantations" in the region. In effect, the invasions ended a period of truce between the MST and the government, throwing into doubt the government's plans to promote Brazil as a reliable source of sugar-cane-based ethanol for the global market. 

The twelve farms invaded by the MST correspond to an area of more than 15,000 hectares. They were invaded following the end of the sugar-cane harvest in the region. Over 100,000 peasants are temporally employed during the harvest period, which in São Paulo goes from June to January. After all the sugar-cane is harvested landless peasants become unemployed and have little option but to join the MST's occupations. 

The MST maintains that the twelve farms were deemed “unproductive" by the Institute for Agrarian Reform (Incra). One farm owner, however, said he was just giving the soil “a period of rest to recover its nutrients". The MST says this is a “tactic" used by owners to delay legal expropriation and took the opportunity to accuse Brazilian judges of “conniving with owners". The MST claims judges hold back the Incra and the government's land reform programme.

Development: On 22 March the Consejo Nacional Electoral (CNE) accepted the request for the first stage of a recall referendum on four governors, 20 mayors and four deputies in regional legislatures.

Significance: The CNE, a highly partisan body whose former president, Jorge Rodrí­guez, became the vice-president of the country at the beginning of the year, said that it had received 65 requests and admitted 28. Interestingly, all the governors and 18 of the mayors are pro-Chávez . The recall referendums could be orchestrated by officials from Caracas who want their regional counterparts to demonstrate their total fealty to President Hugo Chávez . One of the governors up for a possible referendum is Didalco Bolí­var, who was criticised by Chávez last week.

The first stage is for electors dissatisfied with their governors or mayors' performance to seek permission to collect signatures to ask for a recall referendum. If 20% of the electorate in each jurisdiction signs up, a recall referendum will take place. In 2004, the opposition collected enough signatures to hold a recall referendum on Chávez , which in the end he won comfortably.

CHILE: The fiscal surplus totalled 2.4% of gross domestic product in the first quarter, or Ch$5.98tr (US$11.3bn).

COLOMBIA: Colombia posted a US$597.6m trade deficit in January to February 2007, versus a surplus of US$258.2m in the year-ago period. Exports rose 2.3% year-on-year to US$1.9bn in February.

MEXICO: The number of people employed in the manufacturing sector increased 1.1% year-on-year in February.

URUGUAY: The unemployment rate rose to 10.2% in February from 9.7% the previous month, according to the national statistics institute.

ARGENTINA: Tax revenue rose 31.5% to Arg$18.88bn (US$6.08bn) in May.

COLOMBIA: Monthly inflation fell to 0.30% in May versus 0.33% in May 2006 and 0.9% in April.

COLOMBIA: Imports rose 30.7% on-year in the first quarter to US$7.39bn.

COSTA RICA: Exports grew 18.3% on-year in the first quarter.

PERU: The government has set a target of 7.0% for economic growth and 1.9% for inflation this year.