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Development: The Fuerzas Armadas Revolucionarias de Colombia (Farc) carried out two attacks over the weekend of 13-14 January, killing 12 members of the security forces.

Significance: The two attacks, carried out at opposite ends of the country, are the most serious so far this year and indicate that there will be no let-up in the Farc's offensive against government forces in the near future.

The first attack took place on 13 January in the rural area of Tame in the northeastern department of Arauca. One officer and six soldiers were killed when they entered a mine field during what the army has described as a major offensive against leftwing guerrillas in the department.

The second attack occurred in the southern department of Putumayo on 14 January. Five policemen were killed by a roadside bombing near the border with Ecuador. Local police said that the Farc is doing all it can to disrupt coca eradication projects in the area, which authorities claim are putting a pinch on the group's finances.

Development: Politicians both from the opposition and the ruling coalition have called for a new legislative election following the arrest of six congressmen last week for their links to the Autodefensas Unidas de Colombia (AUC).

Significance: The last legislative election was held less than a year ago, in March 2006. Parties loyal to President Alvaro Uribe gained a comfortable majority in congress, with the result that Uribe was expected to exert even greater control over congress than he did in his first term.

However, congress's reputation has since been dragged through the mire. The supreme court and the public prosecutor have initiated criminal proceedings against a number of legislators over their links to paramilitaries in what has become known as the parapolitical scandal. The overwhelming majority of those who have been implicated belonged to the pro-Uribe parties.

Following the arrest of six congressmen on 15 February, Gustavo Petro, a leftwing senator from the opposition Polo Democrático Alternativo, demanded a new legislative election. Petro, who is fast becoming the opposition's leading critic of Uribe, said on 18 February that a new election is an urgent necessity to ensure that the paramilitaries do not take control of Colombian politics. During the previous (2002-2006) congress, Salvatore Mancuso, a prominent AUC leader boasted that the AUC controlled a third of the chamber.

What is surprising is that Uribe's former defence minister, Marta Lucí­a Ramí­rez, backed Petro's call. As well as serving in the president's first administration, Ramí­rez also represents the leading pro-Uribe party, the Partido de la Unidad Nacional (Partido de la U), in the senate.

"Congress's credibility in the eyes of the public is fatally wounded by this scandal, and as a result we have to reach an agreement over calling new elections," Ramí­rez declared. "Moreover, there should be consequences for those who allow undesirables to run on their ticket at elections: the parties responsible should lose their seats and their leaders should be punished," she added.

The interior and justice minister, Carlos Holguí­n Sardi, ruled out the possibility of revoking congress's current mandate. However, he did say that the government was examining ways to punish parties with links to the paramilitaries.

Neither Petro nor Ramí­rez even has the full support of their party in calling for new elections. Dilian Francisca Toro, president of congress and a senior member of the Partido de la U, said it would be unfair on the majority of legislators who do not have links to the paramilitaries. Toro added that dissolving congress would turn Colombia into a dictatorship, a concern echoed by senator Jorge Enrique Robledo of the PDA.

A greater headache for the government might be a proposal by the Partido Liberal to delay regional elections scheduled for October. The opposition party said that the elections for governors, mayors, and local legislators should not take place this year because the paramilitary influence on local politics was even stronger than it was at a national level.

Uribe responded furiously to the suggestion. "Don't come to me with this talk of delaying elections. Don't come to me with this talk of shattering institutions," the president declared, adding: "This government will do all it can to ensure the elections in October are exemplary." It is, however, less than a year since Uribe was equally sure that paramilitaries would not gain influence at the congressional election, a confidence which has proven misplaced.

Development: On 23 March President Evo Morales removed Manuel Morales Olivera from his position as head of the state-owned oil company YPFB after only two months in the job, and appointed his successor, Guillermo Aruquipa.

Significance: The beleaguered YPFB has now had four different presidents in the past 14 months. Morales Olivera, who was an unpopular choice due to his lack of experience in the hydrocarbons sector, fell further from grace due to errors in the 44 contracts signed with foreign energy companies, which have delayed the nationalisation process and lost the state considerable tax revenue.

His replacement, Aruquipa, will not face the accusation of inexperience levelled at Morales Olivera; his previous position was vice-minister of exploration and production at the hydrocarbons ministry. A member of the ruling Movimiento al Socialismo, his name was mentioned in January as a candidate for head of the YPFB, but Morales Olivera, a close friend of President Morales (no relation) was chosen instead. During demonstrations in February in Camiri, a town 1000km south east of La Paz, by protesters demanding faster nationalisation, Aruquipa agreed to protesters' demands to open local YPFB headquarters in the town. 

Aruquipa also has the advantage of being untainted by the scandal which broke when YPFB employees were photographed on the beach with tropical drinks in Cuba as part of a conference delegation led by Morales Olivera. At Aruquipa's swearing-in ceremony President Morales accepted responsibility for Morales Olivera's errors and promised to learn from them.

Development: Four separate events on 27, 28 and 29 April suggest that the Washington-based multilaterals involved in the region face radical changes in the way they work. 

Significance: Leftwing governments, led by President Hugo Chávez of Venezuela, are moving on from their hostility to the IMF and the World Bank to spurning other Washington-based multilateral agencies and arrangements. So far only Chávez has threatened to leave the Organization of American States (OAS), but his allies are unlikely to be far behind. Cuba is the only Latin American country outside the OAS. On 29 April the four Alba countries (Bolivia, Cuba, Nicaragua and Venezuela) announced that they were withdrawing from the World Bank's International Center for Settlement of Investment Disputes (ICSID). 

The growing antipathy, particularly in South America, to the World Bank and the IMF prompted Tom Shannon, the top US policymaker on Latin America, to say on 27 April that the IDB and the World Bank have to improve the way they work. This chiding has come too late for the World Bank and Ecuador: President Rafael Correa declared Eduardo Somensato, the World Bank's representative in Ecuador, persona non grata after Correa accused Somensato of being responsible for the World Bank's decision to cancel US$100m of a loan agreed in 2005 when Correa was finance minister. 

Shannon who was speaking in Asunción , Paraguay, said that the Venezuela-inspired Banco del Sur was popular because “the existing financial institutions [the World Bank; IDB and IMF] were not working in a good way." Shannon, US Assistant Secretary for Western Hemisphere Affairs, said that what was happening with the Banco del Sur was unclear. Venezuela wants to capitalise the Banco del Sur at US$7bn and use it as a development lender. What was urgent, Shannon said, was that the World Bank and the IDB became more efficient and effective. 

Arguably, the most substantial development of the four was the Alba countries' withdrawal from the ICSID. Argentina, which has been the butt of a lot of adverse judgments by the ICSID, will be tempted to follow. The decision by Bolivia has major implications for Brazil. Brazil is in the anomalous position of having Brazilian foreign investments in countries such as Bolivia protected by the ICSID while not allowing foreign investors in Brazil the same protection. The ICSID, according to its critics, prevents countries changing in the terms on which foreign investments were made when, for example, a commodity market moves in the investors' favour. 

Chávez 's threat over the OAS is a reaction to his government's decision to close down RCTV, an opposition TV station. In 2002 the OAS and Venezuela's neighbours played a decisive international role in denouncing the attempted coup against him and his elected government. RCTV's licence expires on 27 May 2007.

Development: President Tabaré Vázquez told his cabinet and journalists on 4 June that he will not seek re-election in 2009.

Significance: Vázquez put an end to speculations about his plans when he declared that he “would not accept" any proposal to amend Uruguay's constitution to allow the re-election of a president. Vázquez, who was elected in 2004 with 51% of the vote and is still very popular, leads a coalition of leftwing parties which has majority in congress. In effect, this would allow him to amend the constitution, which currently states that a president can only serve one five-year term in office.

An opinion poll published last month revealed that 58% of Uruguayans support the re-election mechanism. This has worried the Uruguayan opposition, as well as those in the governing coalition who want to present their candidacies to replace Vázquez. Indeed, local commentators say that if Vázquez really decides not to run again two of his ministers are likely to compete in the primaries to win a nomination: José Mujica, the agriculture and livestock minister, and Danilo Astori, the economy and finance minister.

Development: President Hugo Chávez appointed a new defence minister during a military ceremony on 6 July.

Significance: Chávez promoted the commander of the reservists, General Gustavo Rangel, to head the defence ministry. According to an official statement, Chávez decided to change the head of the defence ministry because the incumbent, General Raúl Baudel, had "completed his eligible term". Yet although Chávez frequently rotates his cabinet, Baudel's substitution probably has more to do with the publication of nude photos - allegedly portraying him - on the internet. It is suggested that the photos may have originated within the armed forces as a campaign to personally discredit Baudel, who has headed the defence ministry since July last year.

Under Rangel, the reserve has grown considerably. This development followed Chávez 's warnings that Venezuelans should be prepared for an eventual US military attack, a charge Washington vehemently denies. There are currently 150,000 reservists in Venezuela. There are 100,000 regulars.

Chávez has been pushing for an overhaul in the Venezuelan armed forces because of disquiet in the ranks prompted by a change to the pledge of allegiance made by all army recruits. Just days before the announced change in the defence ministry he promoted 319 military officers and told them their promotion entailed greater commitment to the revolutionary cause. The promotion followed a 30% increase in military pay, granted last month.

Development: On 7 August the Fuerzas Armadas Revolucionarias de Colombia (Farc) rejected the government's offer of an exchange of prisoners.

Significance: The rejection, issued by Farc spokesman Raúl Reyes, is no surprise. The group maintains that it will only release its hostages after negotiations with the government in a demilitarised zone; last week President Alvaro Uribe offered to talk to the rebels only after they had released their hostages, and almost certainly not in a demilitarised zone.

There appears no end in sight to the hostage crisis, especially after Reyes demanded that two Farc fighters (Simón Trinidad and Sonia) who have been convicted in US courts be included in any exchange. Meanwhile, also on 7 August, it emerged that a junior officer being held by the Farc had died in captivity. Jesús Alberto Sol Rivera, 41, was captured in March in the department of Valle.

Development: On 11 September Brazilian newspapers reported that there was enough support to impeach the president of the senate (and congress), Senator Renan Calheiros.

Significance: Calheiros' prospective impeachment tomorrow (13 September) will be a victory for the Brazilian press, which has not allowed the cloud of scandal surrounding Calheiros to dissipate for the past three months. Newspapers were accused of dirty tricks, lies and of being biased towards the Right because of their coverage of scandals involving members and allies of the Lula administration. However, the media has been vital in pressuring Brazil's political and judicial establishment to confront white-collar crime.

The senate will send a clear message that it is serious about punishing corruption, as it claims, if Calheiros is impeached. The vote will be carried out in secrecy, but the Brazilian press has published the names of senators who declared they would vote to impeach Calheiros. According to newspapers, 41 senators will vote against him. Of the 30 senators from the main opposition parties, 28 declared they would against Calheiros. Several leftwing government-allies also declared publicly they would vote to impeach him. The pressure is now on the ruling Partido Trabalhadores, which has allowed its senators "to vote according to their conscience".

Evidence suggests Calheiros accepted bribes and then used fake documents in an attempt to defend himself. The government tried to save him, but everyone now seems to agree Calheiros is a lame duck. Calheiros has been a faithful ally of President Lula da Silva, not least because Lula offered positions and advantages to Calheiros's allies in exchange for his support. Lula, however, believes that Calheiros can no longer remain as president of both the senate and congress.

The government is moving behind the scenes to find a cooperative replacement for Calheiros. According to reports, the government's favourite is Senator José Sarney. The opposition, however, has already signalled it would not accept him: Sarney, like Calheiros, is a career politician who's been in the senate for many year and is seen as a throwback to the "old order".

Development: On 12 October President Néstor Kirchner warned banks that he would "take action" if they did not lower interest rates.

Significance: Kirchner's belief that interest rates are too high is linked to his conviction that inflation is not running as high as many economists suggest. With two weeks to go before the 28 October presidential election, at which his wife Cristina is running to replace him, Kirchner is determined to end any suggestion that inflation is higher than the government has targeted.

Kirchner entrusted internal commerce secretary, Guillermo Moreno, with his battle against the banks. Moreno told senior representatives of the banking sector that the government wants banks to lend to producers and consumers at 9%, rather than the banks' current interest rates of 12% and higher.

The problem for the government is that banks simply do not believe the government's inflation figures, which indicate that prices rose just 5.8% in the first nine months of this year. The government maintains that inflation is on target to come between 7% and 11% in line with the budget for this year, but many economists believe that prices are rising at higher than 1% per month. As a result, banks have to lend at 12% or higher in order to avoid negative interest rates.

According to all opinion polls Cristina will win the presidential election in the first round on 28 October. Her support rate ranges from 36.8% to 46.4%. Under Argentine electoral laws a candidate is declared winner in the presidential race if he or she wins 45% of the total votes or 40% of the total vote if the actual number of votes cast for him of her is 10% superior to the number of votes cast to the second-placed candidate. Support for Elisa Carrio, the second best-positioned candidate in the polls, range from 14.9% to 16.2%.

Development: The president of the Paris Club, Xavier Musca, said on 13 November that Argentina has yet to offer to repay its US$6.1bn debt to the creditor group.

Significance: Argentina's president-elect, Cristina Fernández de Kirchner, said in October that she intends to pay off her government's debt to the Paris Club, a sentiment echoed by the current finance secretary, Sergio Chodos, on 31 October. However, Musca revealed that the creditor organization "hasn't yet received any proposal from Argentina to reimburse its debt".

The Paris Club will be hoping that Argentina will put forward a proposal for the repayment or (more likely) renegotiation of its debt on the sidelines of the 17-18 November meeting of finance ministers and central bankers from the G-20, which is taking place in South Africa. Argentina will be represented at the meeting by Chodos and chief advisor for the economy ministry, Javier Alvaredo, but the economy minister, Miguel Peirano, is unlikely to attend and government sources have recently suggested that the Paris Club debt will not be on the agenda.

A potentially key aspect to the Paris Club negotiations will be what, if any, role there will be for the IMF. The new head of the IMF, Dominique Strauss-Kahn, said in early November that it will be up to the Paris Club whether it demands that Argentina take part in a formal IMF programme as part of its debt obligations. Argentina's relations with the IMF are going through a bad patch due to the latter's insistence that inflation is a problem, and it is unlikely that Cristina would welcome the prospect of renewed IMF involvement in Argentina.

Meanwhile, the economy ministry announced on 13 November that it will issue at least US$250m of 10-year bonds today (15 November). The bonds, called Bonar X, will pay an interest rate of 7%.

Development: The Mercosur heads of state summit in Montevideo ended on 18 December with little concrete action taken to speed up South American integration.

Significance: The current Mercosur limbo could be exemplified by the words of Uruguay's President, Tabaré Vázquez, who said "integration requires concrete deeds more than rhetoric; good will alone is not enough". Vázquez's words were mirrored by those of his Mercosur counterparts, Argentina's Cristina Fernández, Brazil's Lula da Silva, and Paraguay's Nicanor Duarte, all of whom mentioned in their speeches problems that have prevented further integration for many years but that have so far not been appropriately dealt with.

For Mercopress, a Uruguayan newspaper that follows developments regarding the South American customs union, the "summit's main challenge [was] how not to deepen differences" between member countries. Among the main issues that still need to be dealt with by the Mercosur are the existing trade asymmetries which are detrimental to Paraguay and Uruguay; the double-billing of the common external tariff; and the drafting of the Customs Code. All of these problems have remained unresolved, despite repeated pledges from the member governments.

As expected, very little was accomplished during the presidential meeting - perhaps the shortest in Mercosur's history. The mood, however, was pleasant. Indeed, Vázquez handed over the Mercosur's six-month rotating presidency to Fernández and both refrained from mentioning the controversy over the pulp mill in the Uruguayan town of Fray Bentos. The mill is opposed by the Argentines in Gualeguaychú, on the other side of the shared River Uruguay. The issue has soured bilateral relations between the two countries and has spilled over into the Mercosur, whose institutions were unable to come up with a solution.

Another thorny issue which was not openly discussed was Venezuela's membership in the Mercosur, which is being delayed by the Brazilian and Paraguayan congresses. Unusually, President Hugo Chávez of Venezuela refrained from fuelling controversy and instead had only words of praise. He said that "the destiny of South America depends on the destiny of Mercosur", restating his intention of becoming a member. This was a long way away from his declaration earlier this year that Venezuela "can live without the Mercosur".

There was one concrete result of the summit, however: the Mercosur's signing of a free trade deal with Israel. This is the first such agreement between the Mercosur and a third party outside Latin America. The agreement gives new hope that the Mercosur can reach an agreement with the European Union, which the South American bloc is modelled on. Negotiations with the Europeans have been going on for years. According to official statements, they will resume in May next year.

Development: The government was forced on 29 January to request the ombudsman to investigate claims that a second cabinet minister misused his corporate credit card to pay for personal expenses when not performing official work.

Significance: The request is highly embarrassing for President Lula da Silva's leftwing Partido dos Trabalhadores (PT). Before coming to power, the PT always criticised the privileges of Brazil's governing elite. Once in power, however, party members appear to have embraced the same privileges they once censured.

The second cabinet member to be investigated is Altemir Gregolim, the fishery minister. He is accused by the Public Ethics Committee of charging R$23,000 (US$12,500) to his corporate credit card to pay for personal expenses not related to his official functions last year. The amount, however, is very small compared to the R$171,500 (US$93,200) allegedly spent - or "burned" as put by the Brazilian press - by the racial equality minister, Matilde Ribeiro, in the same situation. The ombudsman opened an enquiry into her expenses on 28 January.

Both ministers, who are members of the PT, deny any wrongdoing. The president of the Public Ethics Committee, Marcilio Marques Moreira, however, says that the case is "very serious", as it could be seen as embezzlement. In any case, Moreira claimed that the ministers' behaviour is in "the grey zone between what is legal and what is ethical". Moreira said that "it is about time to end this argument that 'this has always been done'. We cannot accept this sort of behaviour [from government officials] anymore".

Nicaragua: Nicaraguan exports grew 40.1% in the first two months of 2008 compared to the same period the previous year, totalling US$270.4m

Development: Following initial 7 April talks between the three main cement companies operating in Venezuela, including Mexico's Cemex, it emerged that the government of President Hugo Chávez intends to take at least a 60% stake in the sector, along with operational and administrative control. The private firms will retain a minority ownership stake.

Significance: Prior to the talks, Cemex said it was "willing to engage in a dialogue with the authorities to find a mutually satisfactory solution". The Mexican foreign ministry had previously expressed strong concern about the Chávez government's intentions, saying it "would do everything within its reach to protect the interests of Mexican companies operating abroad".

President Chávez ordered the nationalisation of the cement industry on 3 April in an effort to ensure supplies for the domestic housing market, including the government's low-income housing programmes. Venezuela has a housing deficit of around 1.68m homes and the cost of construction materials has shot up in line with rising demand for new homes.

Apart from Cemex, which operates three plants in Venezuela and accounts for just over half the market, France's LaFarge and Switzerland's Holcim also have operations in the country. Together, the three supply over 90% of the local market. Cemex employs around 3,000 people locally.

Chávez said he would pay "to the last cent" in taking over what called a "strategic" industry. Shares in the three companies subsequently rose on the assumption that the government would pay full price to acquire basic control of the sector.

Private analysts put the value of Cemex's operations in Venezuela at around US$1.0bn.

Development: On 12 May Ecuadorean defence minister Javier Ponce admitted that an unauthorized five-day spying operation by military intelligence on constituent assembly members did take place early last December. In the same press conference Ponce also announced that the intelligence unit had been dissolved and an investigation launched.

Significance: Last year's so-called 'Operation Montecristi', despite being an apparently fruitless exercise, shows the degree to which military intelligence units are operating without the full knowledge of the higher authorities, either military or civil, and exposes a generalized lack of accountability in the service. 

It is unclear whether these discoveries support President Rafael Correa's assertions last month that the armed forces have been “completely infiltrated" by the CIA, or whether on the contrary they confirm claims by former president and Partido Sociedad Patriótica (PSP) leader, Lucio Gutiérrez, that Correa's government has been spying on opposition assembly members and journalists.

Defence minister Ponce told the press on 12 May that the spying operation took place last year, when the constituent assembly was first established, between 30 November and 5 December. It was carried out by three members of the Joint Intelligence Group (Grupo de Inteligencia Conjunta, or GIC) whose principal mission was supposedly to ensure the security of the new national body. 

The unit comprised naval Captain Marcelo Bohorquez, Lieutenant Julio Tutasig and first Sergeant Segundo Velasco. All three have been moved to new posts within the armed forces. According to Ponce, they were operating “on their own initiative, unbeknown to the Joint Command and then defence minister, Wellington Sandoval."

The officers reportedly posed as journalists to try and obtain information about the position of some assembly members on the issue of possible reforms to the armed forces. Their success in gathering secret intelligence appears to have been limited, however: they reportedly only managed to collect public press releases.

Ponce denied that assembly members' phones were tapped, calling them “delirious claims by the PSP" and adding that “the armed forces do not have the capability to tap mobile phones - this is one of the many weaknesses we have."

Ponce accused the PSP of stealing the results of the group's investigation (the documents are absent from the military archives) and said these links would be investigated. He announced that a joint civil-military commission has been set up to look into the affair, as well as “what happened to the two pieces of [spying] equipment bought during the administration of Lucio Gutiérrez."

Development: On 17 June Cuban state television broadcast pictures of Fidel Castro alongside his brother, Raúl Castro, and Venezuela's president, Hugo Chávez .

Significance: These were the first pictures of Fidel since the last images of him were recorded on 12 January 2008 alongside the Brazilian president, Lula da Silva. Since Fidel relinquished the presidency to his brother Raúl, Cuba has experienced a succession of liberalising reforms. Pictures of Fidel talking to his brother and his staunchest foreign ally should counteract rumours of the steady dismantling of Fidel's socialist project.

Castro, dressed in his trademark tracksuit and looking thin, remained seated until he stood to say goodbye to Chávez . Though broadcast without sound, Castro appeared to be conversing enthusiastically in the short video segment. Fidel, who is 81 and is recovering from an intestinal illness, has not made a public appearance since July 2006.

According to the Cuban television presenter, the 'intense and productive' meeting between Chávez and the Castro brothers lasted for two and a half hours. The discussion centred on the global food crisis and the 'fundamental battle' to raise agricultural production, climate change, the progress made by the Venezuelan-led regional initiative the Alternativa Bolivariana para las Américas, as well as the state of their collaborative social programmes.

Argentina: Argentina registered a primary fiscal surplus of US$0.86bn in June, 15.1% more than in the same month the previous year.

Region: The United Nations Food and Agriculture Organisation forecasts that production of grains in Latin American and the Caribbean will grow 5.7% this year to total nearly 189m tonnes.

Development: Cuba's education minister, Ena Elsa Velázquez, announced on 21 August that the controversial 'general integral teachers' (PGI), who teach all subjects in secondary schools and many of whom have not yet completed their own education, will be given more training time to prepare before taking on classes.
 
Significance: Velázquez's announcement of a "new teaching model" follows President Raúl Castro's recent assertions that there will be no more reforms in Cuba for the time being. The change to the education system - previously heralded as one of the revolution's greatest achievements - is a significant recognition by the government of the urgency of the current situation in many Cuban schools.
 
The PGI were introduced by former president Fidel Castro eight years ago as an emergency measure to deal with the lack of teachers. The idea was to replace university-educated teachers with students who had finished secondary school and were given an eight-month teacher training course. The PGI taught groups of 15 students all subjects (except English and Physical Education), and were assisted by televised classes, or 'teleclases' of 45 minutes.
 
Many parents have complained of the results. Televised classes will now be reduced from 45 to 30 minutes, with the rest given over to further explanations from the teacher. In each school, two experienced teachers will train the PGI, who reportedly comprise some 40% of the current staff at primary and secondary level. As of September, they will have two weekly training sessions and each term they will teach one area of their own knowledge, Velázquez said.
 
The Cuban education system has been experiencing problems due to the lack of high-level graduates entering the profession, a large number of teachers leaving schools, and low salaries. Last month (July 2008), Raúl Castro admitted the crisis by calling on retired secondary school teachers to return to the profession; the council of state approved a decree that they should be paid both salary and pension as a motivation. According to Velázquez, more than 4,000 formerly retired teachers will be back in classrooms for the new academic year, due to start in ten days' time.

Development: On 25 September police arrested Guillermo Valencia Cossio, the former chief prosecutor of Medellí­n and brother of the interior and justice minister, Fabio Valencia Cossio.

Significance: The key issue will be whether Fabio Valencia Cossio will be forced to step down. The interior minister is responsible for persuading congress to pass the government's crucial political and judicial reforms which are intended to root out corrupt politicians.

President Alvaro Uribe was quick to back Fabio Valencia Cossio. This suggests that the interior minister will not suffer the fate of Uribe's erstwhile foreign minister, Marí­a Consuelo Araújo, who was forced to resign in February 2007 after her brother and her father were both linked to the parapolitical scandal. However, Fabio Valencia Cossio's credibility and effectiveness will hang on how he is received by congress.

The arrest of Guillermo Valencia Cossio has been likely for the last month. In late August phone taps revealed the prosecutor was in contact with Felipe Sierra, a businessman recently arrested for his close links to Daniel Rendón (alias Don Mario), who is one of Colombia's most wanted drug-traffickers and brother of a former paramilitary leader known El Alemán.

Guillermo, who maintains his innocence, faces five charges including illegal enrichment and conspiracy to commit a crime. One of the phone taps indicated that he accepted a bribe in order to remove the name of one of Don Mario's lieutenants from a most-wanted list.

Development: On 28 October a cabinet minister and the leader of one of the country's biggest political parties resigned.

Significance: The resignation of Soledad Alvear, the leader of the Partido Democracia Cristiana (PDC), is the more important of the two developments. She is carrying the can for the PDC's poor result in the municipal elections on 26 October, when its share of the vote plunged to 15%. Traditionally the PDC has been the country's most popular party. The PDC ended 26 October down 42 mayorships and 300,000 votes. Alvear specifically said that she would not run for the country's presidency in 2009.

The other significant resignation was of the health minister, Marí­a Soledad Barrí­a, who is taking responsibility for a scandal at a hospital in Iquique in which 25 AIDS patients were not told that they had the disease. President Michelle Bachelet said, from Costa Rica, that Barrí­a had offered her resignation before Bachelet started her visit and that the resignation had been accepted. Barrí­a is a doctor and a member of Bachelet's Partido Socialista.