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Central America has had its fill of abuses of parliamentary immunity, particularly - but not exclusively - the headline-grabbing ones at the regional parliament, Parlacen. In late July Guatemala removed the immunity enjoyed by Parlacen legislators, and Honduras went a step further, eliminating also that enjoyed by members of the national congress and high-ranking government officials.

In Guatemala it was the constitutional court, when ruling on a suit filed by two lawyers, that declared unconstitutional not only the immunity enjoyed by Parlacen deputies but also the ex-officio seats granted to former Presidents and Vice-Presidents. Former President Alfonso Portillo (2000-04) had used both prerogatives to shield himself from prosecution on corruption charges (he fled Guatemala last February, a day before the constitutional court temporarily lifted the Parlacen immunities). The new ruling stripped former Vice-President Francisco Reyes López of his seat and allowed his arrest and prosecution.

In Honduras it was congress that amended the constitution to remove the immunity from prosecution enjoyed by a broad range of officials, including Parlacen deputies, members of the national congress, members of the electoral tribunal, supreme-court justices, law officers, diplomats, the President and his three vice-presidents.

All these officials had been granted immunity from prosecution by the 1982 constitution, adopted after the return to elected rule following almost 20 years of military government. Jurists long argued that these immunities made sense, those of legislators for their utterances in the legislature, and those of government officials while they held their posts for what they did in pursuance of their duties - in both cases removable by impeachment anyway. However, the extension of immunities beyond their original scope has now swung the pendulum in the opposite direction.

In the case of Parlacen, the lifting of immunity is seen by many as a first step towards a thorough overhaul, or even the dissolution, of a body that has become little more than a talking shop with virtually no powers.

• Drought triggers starvation alert in Honduras. Emergencies have been declared in 18 municipalities spread out over four of Honduras's departments (Francisco Morazán, Choluteca, Valle and El Paraí­so), where severe drought has led to extensive crop failure and the threat of starvation. Also affected are La Paz, Intibucá, Gracias a Dios and Ocotepeque. About 40,000 families (close to 2.4% of the population) are reportedly at risk. On 29 July the government, together with the World Food Programme, set in motion a plan to distribute immediately basic foodstuffs, provide farm inputs and carry out irrigation works costed at about US$160,000.
  
  Agriculture minister Mariano Jiménez has announced a scheme to promote the planting of sorghum and a strain of bean adapted to dry terrain which yields a harvest in as little as 40 days. The US$770,000 emergency plan, to be coordinated by a multi-agency drought committee, will remain in force for three months. 
  
  Media and politicians have started to debate the need for preventive action - chiefly a more extensive network of irrigation works - against what must be recognised as a pattern of 'recurrent drought'.

BRAZIL | Industry fearful of second-half upset. Industrial production in May was 1.3% higher than in April, taking the five-month total up to a level 4.7% higher than that of the same period of 2004. However, the national confederation of industrialists, CNI, has sent out a warning of disturbing trends. Sales in the first five months, it said, were running 2.2% lower than in the comparable period of last year, creating 'an unusual situation, which had not occurred in 18 months'. The CNI suggests that for the time being industries have been accumulating 'unwanted stocks', but that this may not last. There has also been a contraction in the utilisation of installed capacity, partly attributed to the 'maturing of investments made in 2003 and 2004'.

The car industry reported a first-half 15.7% year-on-year increase in production, and one of 36.6% in export earnings. The industry association, Anfavea, said it was not altering its forecasts for the year as a whole: one of a 5.4% increase in production (setting a new record) and of 7% in export earnings. The reason: 'There is a possibility of great variations in the second half, which could be very volatile due to movements of interest rates, the exchange rate and the economy as a whole,' said Anfavea President Rogélio Golfarb.

An interesting trend on the domestic market has been the growing acceptance of 'flex fuel' vehicles, which can run on either petrol or gasohol. In June these vehicles accounted for 51.9% of domestic sales, overtaking for the first time the petrol-only cars.

CHILE | Economic activity rises to expectations. In May, economic activity as measured by the Imacec index was 0.1% up on April and 6.4% up on the same month of 2004; the greatest year-on-year rise recorded so far this year. Private forecasts had put May year-on-year growth somewhere between 5.8% and 6.5%.

A maverick Catholic bishop's hunger strike has forced the government to review its plans to siphon water from the 2,700-kilometre São Francisco river to arid areas in the northeast of the country. Despite opposition from his fellow bishops and even the Vatican, Bishop Luiz Flávio Cappio (of Barra, Bahia) stuck to his guns for 11 days, only lifting the strike after President Lula da Silva sent him a letter acceding to his demands.

Promoters of the scheme say it will only take 1.4% of the river's waters, delivering 26,000 litres a second to irrigate an area with 12m inhabitants, creating 5,000 jobs and ensuring the water supply for 250 municipalities. Critics, the bishop among them, say it will only benefit big farmers and the shrimping industry, ignoring the plight of those who live along the river who have seen the fish disappear as a result of pollution and have suffered the effects of long-lasting drought.

Lula promised Bishop Cappio that he would take the necessary steps to protect the riverside environment and to provide economic assistance to the peasants affected by the drought. The São Francisco runs through the states of Minas Gerais, Bahia, Pernambuco, Sergipe and Alagoas and its basin, which includes 168 tributaries, covers 634 square kilometres. The government's plan is to dig canals that will feed 'intermittent' rivers and 24 reservoirs in the country's most arid region, afflicted by frequent droughts.

MEXICO-US | Quest for deal on farm products. In March, economy minister Sergio Alejandro Garcí­a de Alba and agriculture minister Francisco Mayorga will be travelling to the US to discuss with their opposite numbers the possibility of an extra-Nafta arrangement on the most sensitive agricultural products: maize, beans and sugar. Mexico had wanted a review of Nafta's agricultural chapter before full liberalisation in 2008, but both of its partners rejected this. Garcí­a de Alba was confronted last week by delegates of the Confederación Nacional Campesina (CNC), which represents small farmers. They said that as a result of Nafta rice production was at risk of disappearing, and that last year about 70% of the crop was damaged by adverse weather conditions.

MEXICO | Warning on state of dams. The national water commission last week issued a warning that about 500 of Mexico's dams had exceeded their useful life and that only rarely has more than one a year been rehabilitated. This has prevented the extension of irrigation to about 2.3m hectares of land. Countrywide, the irrigated surface has remained unchanged at 5m ha, instead of increasing towards the target of 10m ha.

MEXICO | Pemex tries out co-generation. The state oil company Pemex is about to test the feasibility of power co-generation at its Nuevo Pemex gas processing centre in Tabasco. It expects that this scheme, by producing for its own needs and selling the surplus to the state power utility CFE it could save about US$50m a year. Pemex currently generates enough electricity to satisfy 80% of its own needs and buys the rest from the CFE at a price 250% higher than the rate for industries. The oil company reckons that it has a potential generating capacity of 1,400MW, or about 40% more than it currently consumes.

None of Mexico's leading presidential candidates have concrete proposals to deal with major problems such as public insecurity, the impunity of criminals and corruption. This sweeping verdict comes from José Luis Soberanes, president of the Comisión Nacional de Derechos Humanos (CNDH), an official body which acts as a rights ombudsman's office.

On 4 April Soberanes said that he had sent his rights agenda for 2006 to all candidates, in which he lists the main risks and threats Mexico faces in this area. At the top of the list are public insecurity, shortcomings of the penal system, victims' rights, neglect of the presumption of innocence, arbitrary detention, torture and ill treatment of detainees.

He has yet to receive their comments, but is forthcoming about what he concludes from their public statements so far: 'The candidates have been talking a lot about what [they will do], but very little about how they intend to put into practice their campaign promises. Moreover, they have hardly been heard at all on the fundamental issues of public security and the administration of justice.'

Indeed, the candidates have recently been spending much of their time attacking and seeking to discredit each other. Front-runner Andrés Manuel López Obrador, accused of being a 'populist' backed by Venezuelan President Hugo Chávez , is clearly feeling the impact. On 4 April, complaining that his rivals are waging a 'dirty war' against him, he offered President Vicente Fox a 'unilateral truce', promising not to make any more references to Fox 'for the common good and the health of the republic'.

López Obrador has reason for concern. Several recent opinion polls suggest that both Felipe Calderón and Roberto Madrazo have been eating away at the lead he had been enjoying, again threatening to turn the contest into a three-sided race. One survey, conducted by GEA-ISA, even shows López Obrador falling into second place behind Calderón.

Bolivia has been celebrating a breakthrough in its relations with Chile: the latter's explicit acceptance that the bilateral agenda will include discussion of Bolivia's demand for sovereign access to the Pacific. Whether this will move on from gesture to a genuine search for solutions is still very unclear.

On 18 July, after two days of talks in La Paz, the deputy foreign ministers of Bolivia and Chile, Mauricio Dorfler and Alberto Van Klaveren, respectively, announced that the maritime issue had been included in an agenda which also lists other issues such as border integration, freedom of movement, physical integration, economic complementation and water resources as matters for discussion (the latter also a thorny problem involving sovereignty).

Van Klaveren could not have been clearer: 'We want to talk about the maritime issue with Bolivia. We know of its relevance for Bolivia.'

Confounding a prediction by the Bolivian foreign minister, David Choquehuanca, one issue that did not get included in the agenda was energy, specifically the possibility of a trade-off between access to the sea for Bolivia and access to Bolivian gas for Chile. Van Klaveren disposed of this the very moment of his arrival in La Paz: 'We are not contemplating this at all; it has been dismissed. We have said it before and repeat it now: we dismiss it [...] We have an energy relationship with Argentina. We do not have an energy relationship with Bolivia, nor do we have any aspiration to establish one.'

It will be recalled that in its new contract with Argentina, apart from increasing the price of its gas exports, Bolivia included a padlock clause, barring the use of gas imports from Bolivia to increase Argentine exports to Chile. Argentina is committed to supplying Chile with 22m cubic metres daily, but has been falling short of the mark in recent years because of a domestic deficit.

On 21 July President Evo Morales hailed the agreement reached by the deputy foreign ministers as 'very important'. He added: 'I would like to say that in face of such openhandedness there will also be total openhandedness from our government and our people.'

He went on, however, to act as if he had not heard what Van Klaveren had said, stating in an interview granted to the Chilean newspaper La Tercera: 'Personally, I am very willing to sell gas to Chile, once we have solved the historic, social and structural problems [...] What could be better than to find a regional market instead of seeking the market up north, which surely has significant costs attached.' 

Quite clearly Morales was insisting on the sea-for-gas trade-off and dismissing any attempt to revive the idea of a corridor over which Bolivia would not have sovereignty. He said: 'Previous Chilean governments offered an outlet to the sea without sovereignty. That is not a solution. That is why Bolivia's problems have deepened.'

Chile wrested its access to the Pacific from Bolivia, and adjoining territories from Peru, during the War of the Pacific in the late 19th century. Peru opposes concession of a Bolivian corridor through what used to be Peruvian territory.

The poor north-eastern province of Misiones provided the setting for an election on 29 October which could, for once, resonate on a national level. Governor Carlos Rovira, who has run Misiones like a personal fiefdom, was thwarted in his efforts to secure indefinite election by a disparate opposition coalition led by an octogenarian bishop, Joaquí­n Piña. 

Rovira, the first Peronist Governor to offer President Néstor Kirchner support before the 2003 elections, was seeking to gain a majority in a 35-seat constituent assembly for his Frente Renovador (FR) party, which would then rescind article 110 of the provincial constitution to entitle him to run for a third term. His cousin Viviana Rovira headed the FR list but kept a very low profile; Rovira dominated the campaign. Piña, the emeritus bishop of Iguazú, headed the list for the Frente Unidos por la Dignidad (FUD), a hotchpotch of right-wing Peronists and left-wing unions. The FUD took 56.6% of the vote against 43.4% for the FR.

Kirchner had thrown his weight behind Rovira, whose defeat is likely to deter other Governors from seeking to alter provincial constitutions to permit perpetual election. He attended a rally in Posadas, the capital city of Misiones, on 27 September to try and sway voters to back Rovira and sent various officials including his sister Alicia Kirchner, the minister of social development, to support Rovira's campaign. Juan Carlos Blumberg, an anticrime campaigner who has attracted large crowds in Buenos Aires to demand tougher action by the government against crime, turned up in Misiones to support the opposition, as did Adolfo Pérez Esquival, a former Nobel Peace prize winner.

Jorge Brignole, the mayor of Posadas, accused Rovira of misuse of public funds to back his campaign. This extended to handing out food baskets and mini credits in exchange for votes and even concocting a scheme to get Paraguayans to vote with Argentine identity cards without photos. The election was a tense affair: firemen said that the burning of a chapel established by Piña in the small town of Andresito on 26 October was arson; fights broke out in polling stations in Posadas between rival supporters.

Kirchner versus Church
The success of Piña in bringing together such a disparate coalition might prompt the opposition to harness the political potential of the Roman Catholic Church in future elections. Kirchner has had several brushes with the Church since his election, particularly with the Cardinal Archbishop of Buenos Aires, Jorge Bergoglio, who criticised him for dividing Argentina by re-opening human rights trials against former military officers. 

The national opposition will portray the elections as a defeat for Kirchner ahead of presidential elections in October 2007, in which he is expected to seek re-election. It is unlikely, however, that Kirchner's popularity will be unduly affected, at least while the economy keeps growing at its present rate. An opinion poll carried out by Equis in Buenos Aires between 10 and 20 October, shows that 57.2% of 1,250 respondents would vote for Kirchner. Mauricio Macri, of the centre-right Compromiso para el Cambio (CC) was second with 15.1%, followed by Elisa Carrió, of the centre-left Afirmación para una Republica Igualitaria (ARI), with 9.3%, and former economy minister Roberto Lavagna with 8.8%.

The first sustained protest action against the "nationalisation" of the gas industry compelled President Evo Morales to cede ground this week. Protesters from Camiri, in the Chaco region, began on 29 January by blocking the main road from Santa Cruz to Argentina to demand "real" nationalisation. But, on 2 February, they took the protest one step further and forced the shutdown of a natural gas pipeline operated by Transredes, which serves the departments of Santa Cruz and Chuquisaca. Three days later the government met their terms, setting a precedent that radicals to the left of the Morales government could now seek to exploit.

The main demand of the protesters from the Comité Cí­vico of Camiri was that the state energy company, Yacimientos Petrolí­feros Fiscales Bolivianos (YPFB), should become an operator and not just an inactive corporation. The vice-president of the Comité, Mirko Orgaz, said the government agreed to this by promising to restructure YPFB and by establishing its exploration and development office in Camiri. It also agreed to build a US$100m gas-liquid separation plant in Camiri, which was going to be located in Rí­o Grande, Tarija.

The government managed to convince the protesters that Chaco and Andina, the two refineries in the hands of the Brazilian energy company Petrobras, should be recovered by negotiation and by acquiring shares, not expropriation. Morales originally planned to nationalise these last September but backpedalled in the face of fierce international criticism. The concern for the government was that the protest could spread within Santa Cruz department: protesters in a nearby town, Cabezas, had threatened to cut gas supplies to Brazil.

Reyes returns
Manfred Reyes Villa returned to Cochabamba to take over the reins as prefect once again on 5 February after the violent social unrest of 11 January. He returned from a tour of the US and Europe, where he sought a foreign investigation into the debacle, which he blamed on President Evo Morales. Bolivians seem to think otherwise. A poll published in Los Tiempos on 4 February showed that while Morales had lost popularity in Cochabamba (falling from 65% support in November to 54% now), Reyes Villa's popularity plummeted from 71% to 43% over the same period.

Espinosa's comments, on 14 May, came after Negroponte concluded the final part of his mini-tour of the region in Panama. The Panamanian daily La Estrella speculated that Ecuador's decision to cease leasing Manta, coupled with Peru's refusal to accept a US base, meant that the US would probably try and secure a base in Panama, which from a geostrategic perspective would be perfect for monitoring drug-trafficking in addition to the counter-insurgency and counter-narcotics operations in Colombia. 

After meeting President Martí­n Torrijos, Negroponte emphatically dismissed the suggestion. He said it was not in the plans of the US, nor had he spoken to the Panamanian authorities about it. Panama's foreign minister, Samuel Lewis Navarro, added that discussions in the past about expanding US military presence in Panama had not been raised on this occasion.

• Forward operating locations
  The US Southern Command has two other forward operating locations (FOL) in Latin America in addition to Manta. A "northern drug source zone" FOL is at the Reina Beatrix International Airport in Aruba and the Hato International Airport in Curaçao in the Netherlands Antilles. There is a Central American FOL at the International Airport in Comalapa, El Salvador.
  

COLOMBIA | Exports surge. Total exports in 2007 could eclipse the previous annual record of US$28bn, according to the trade minister, Luis Guillermo Plata. Exports for the first five months of the year stood at US$11.18bn, 17.6% up on the same period in 2006. The exports of non-traditional products were up 20% in this period, although these were driven mainly by huge demand in Venezuela for cars, car parts and livestock. The sale of traditional products (oil, coal, coffee and ferronickel) increased by 15%. Imports for the first six months of the year were US$15.29bn, up 27.1% on the same period in 2006, according to the national statistics agency, Dane.

VENEZUELA | Pdvsa chief punished for maletinazo. Diego Uzcátegui, the president of Venezuela's state-owned oil company Pdvsa in Argentina, resigned on 17 August in what looks like a gesture by President Hugo Chávez to his Argentine counterpart Néstor Kirchner, who had apparently demanded Uzcátegui's removal after the suitcase scandal earlier this month [WR-07-32]. The media has been claiming that it was Uzcátegui's son Daniel who invited Antonini Wilson, the Venezuelan-US citizen carrying a suitcase containing US$790,550 in US$50 notes, onto a flight to Buenos Aires chartered by the Argentine state energy company Enarsa on 3 August. Kirchner had dismissed a senior Argentine official, Claudio Uberti, the right-hand man of federal planning minister Julio de Vido, for chartering the flight. The official Pdvsa statement said that Uzcátegui had stepped down because internal rules were broken. His departure takes some of the heat off the Argentine government ahead of October's presidential elections by making a public show of Venezuela's commitment to fighting corruption. Speaking on his weekly broadcast Aló Presidente, Chávez said he had come under no pressure from the Kirchner administration whatsoever, but that Pdvsa officials had made a mistake and the matter was now in the hands of the judiciary. An Argentine judge issued an international arrest warrant for Antonini Wilson last week.

TRACKING TRENDS

NICARAGUA | Inflation reaches double figures. Accumulated inflation reached 10.71% in the first 10 months of the year, the first time it has gone into double figures since Hurricane Mitch struck in 1998. This exceeded the government's recent target of between 9% and 9.5% inflation for the year. Inflation increased by 2.23 percentage points in October, driven by high food prices - especially bread, poultry, eggs and beans. The government attributed the rise in inflation to mounting fuel costs. Nicaragua has the highest rate of inflation in Central America, although the trend for increasing inflation is the same across the sub-region over the same period: Honduras, 8.3%; Costa Rica, 7.65%; Guatemala, 5.74%; and El Salvador, 5.4%, according to the central banks of the respective countries.

REGION | Joint tourism initiative. Central American nations launched a new joint tourism package "Colonial and volcano route" last week at the World Travel Market in London. The package, coordinated by the Central American integration system (Sica) and the Central American tourism council, is part of an increasingly homogeneous promotion of the sub-region rather than individual countries competing against each other to attract tourists. The itinerary will follow the route of the old Camino Real, built by the Spanish along the indigenous network of paths, which the PanAmerican highway now follows quite closely. It will take in the principal colonial cities of Antigua, Guatemala; Suchitoto, El Salvador; Granada and León, Nicaragua; and Panamá Viejo; as well as the chain of volcanoes that runs the length of the isthmus. The total number of visitors to the region increased by 12% to 3.79m in the first six months of the year compared with the same period in 2006, according to figures released by the tourism ministries.

CHILE | Slow growth. The economy grew by 3.4% in January on the same month in 2007, according to the central bank. This fell one point below expectations. The bank said growth had been affected by an increase in the value of electricity generation and a fall in mining activities: copper production fell 1.4% in January from a year before, reflecting an overall 2% decline in total mine output. Copper broke through the US$4 a pound threshold on the London Metal Exchange on 6 March, the highest ever in nominal terms. The increase in international copper prices means that the Chilean peso hit a 10-year high against the US dollar, prompting the finance minister, Andrés Velasco, to say that while the prices were unprecedented they were "temporary" and did not justify the excessive currency gains. The government has other problems too: inflation was 0.4% in February - the highest in February for five years - bringing 12-month inflation to 8.1%; and President Michelle Bachelet was forced to concede that at some point there might have to be energy rationing. The threat of rationing may have been staved off though: on 11 March the government announced that Argentina had promised to send bigger volumes of natural gas up until May.

ARGENTINA | Inflation. February's much-anticipated inflation figure was 0.5%, according to the national statistics agency, Indec. This was the highest rate for February for three years and even the national daily, La Nación - one of the fiercest critics of the perceived manipulation of the Indec inflation figures by the government - begrudgingly admitted in reference to Indec that "the patient is still in a serious condition but there are small signs of improvement". The increase directly impacted the cost of the basic basket of goods, which went up by 0.4% to Arg$971 (US$308) for a family of four to stay above the poverty line. It increased more steeply (by 0.9% to Arg$450) for a family of four to stay above the indigence line.

MEXICO | Supreme court. The president of the supreme court, Guillermo Ortiz Mayagoitia, ruled on 16 June that the reforms, approved by congress, to the state pensions system for state employees (the ISSSTE) were unconstitutional. He ruled that the reforms retrospectively altered the rights of workers. Rightwing commentators say that the ruling is a nonsense because it could lead to the bankruptcy of the ISSSTE. The ruling underlines the independence of the supreme court.

MEXICO | Tomatoes. On 14 June the US Food and Drug Administration lifted part of its ban on imports of tomatoes from Mexico, allowing in tomatoes from Baja California. The blanket ban on all Mexican tomatoes was imposed after an outbreak of salmonella in the US states of Texas and New Mexico which may have been caused by Mexican tomatoes. The ban has caused major problems for Mexican tomato growers and glutted the local market. The Mexican government is pushing hard for the lifting of the ban, arguing that there was no evidence that Mexican tomatoes contained salmonella.

President Alvaro Colom appointed Guatemala's first-ever female police chief this week. Marlene Raquel Blanco Lapola, former director of the Policí­a Nacional Civil (PNC) crime prevention unit, replaced Isabel Mendoza, who was fired in a series of high level “restructurings" of the PNC. The move follows a shake-up in the presidential security team, following the spying scandal “Guategate" two weeks earlier [WR-08-36] as well as a flurry of changes in the interior and defence ministries after the appointment of interior minister Francisco Jiménez in July.

Marlene is the sister of Orlando Blanco, minister for peace and director of the presidential human rights committee. She stressed the need to restore public confidence in the institution. One of her declared priorities is purging the criminal investigation division (Dinc) of corrupt detectives. There are currently two initiatives in congress to get rid of the Dinc altogether, one put forward by the opposition rightwing Partido Patriota, which proposes establishing a Policí­a Técnica de Investigación Criminal under the attorney general's office. The other, favoured by left-leaning deputies such as Nineth Montenegro, of Encuentro por Guatemala, involves establishing a similar unit but under the interior ministry.

Jiménez told the local press that the PNC required “a different leadership" in order to address the problem of endemic corruption in the institution which, with more than 700 police officials fired this year, remains a considerable concern for the government. Only last week, two detectives, Juan José Zeceña and Oscar Morales, were arrested for robbery while on 9 September the human rights ombudsman opened an investigation into various PNC divisions such as the police academy, general directorate and disciplinary tribunals following bribery allegations.

• Colom re-establishes military base

A brigade of 500 kaibiles, Guatemala's notorious special forces unit, resumed operations in Puerto Barrios, Izabal, in the north east of the country on 19 September. This follows the recent announcement by President Alvaro Colom of plans to expand the army from the current 15,500 members to 25,000 [WR-08-35]. 

The military base in Puerto Barrios was closed down five years ago under the Berger administration, along with military headquarters, Justo Rufino Barrios and bases in San Marcos, Quetzaltenango, Playa Grande, Cuilapa, Quiché and Cobán as part of plans to downsize the military.

While the defence ministry has yet to announce formally the re-establishment of other military bases, local media such as Prensa Libre speculate that, with more resources, this could well take place in border areas in the west and north of the country. As was the case with the announcement regarding army expansion, Colom justified re-establishing the base in Izabal in terms of the need to combat organised crime, adding that “numerous mayors" had appealed for military detachments to bolster the PNC.

Once again the general push towards remilitarisation has attracted criticism from human rights activists such as Helen Mack, of the Fundación Myrna Mack, and Iduvina Hernández, of Seguridad en Democracia, who argue that the army lacks the training to offer either citizen or public security, urging the government to expand the PNC rather than the army.

Meanwhile, army spokesman Jorge Ortega told the local press that plans to increase the size of the army to 25,000 members would cost an additional US$48.5m. The defence ministry currently has a budget of US$170.5m.

• Police changes
  The deputy chief of police, Henry López, was also fired. He is replaced by the PNC inspector general Rembert Larios. Both López and the outgoing police chief, Isabel Mendoza, were long-serving officials, having spent 22 years and 36 years respectively in the PNC. The government maintains the changes in the PNC correspond not to personal failings on the part of either official but to more general processes aimed at addressing corruption.
  

Congress began debating the most profound constitutional reform package in the Dominican Republic for a generation this week. The proposed reform, drawn up by the government of President Leonel Fernández, would more than double the length of the constitution from 122 to 273 articles. It advocates, inter alia, an amendment allowing a president who has served two straight terms to stand again after a four-year hiatus, and a thorough shake-up of the judicial system. It also includes recommendations to enlarge both chambers of congress and re-synchronise legislative and presidential elections, which have taken place two years apart since 1996.

It is standard practice in the Dominican Republic, and indeed across Latin America, for governments of all stripes to seek to alter the constitution whenever some provision in it proves “inconvenient". The Dominican Republic has rewritten or amended the constitution nearly once every four years since independence in 1844. This reform, presented by Fernández to congress last September [WR-08-38], is more substantial than most. It was drawn up by a group of 15 experts convened by Fernández, after myriad forums, debates and conferences.

That is not to say it does not carry Fernández's fingerprints. The relaxation of the constraints on presidential re-election is tailor made for Fernández, as the current constitution limits presidents to two consecutive terms in power. Both Fernández and the ruling Partido de la Liberación Dominicana (PLD) had previously championed term limits as a necessary check against abuse of power.

The main opposition Partido Revolucionario Dominicano (PRD) is split over the necessity of the reform. A large faction of the PRD insists the reform should be debated in a constituent assembly. It is also very conscious that the PLD enjoys comfortable majorities in both chambers of congress. Congress will start by approving a bill declaring the necessity of the constitutional reform, by 25 February, before moving on to debating the issues within it. For this purpose, the lower chamber and the senate will sit together to form a national assembly. The constitution must be approved by a two-thirds majority, before going to a national referendum.

• Judicial reform

The proposed judicial reform is fuelling controversy. The president of the supreme court, Jorge Subero Isa, said this week that it would jeopardise juridical security and democratic governance by diminishing the authority of the supreme court. His main gripe is the proposal for a new constitutional court to evaluate the legality of government legislation. This court, along with the Tribunal Superior Administrativo (a judicial dispute settlement body), would be independent of the supreme court. Isa says they should fall under the control of the supreme court. 

The commander of the Peruvian army, General Otto Guibovich, argued this week that unless steps are taken to prevent Sendero Luminoso from growing then “before we know it we'll have a Farc on our hands". The suggestion that Sendero could become as formidable as the Fuerzas Armadas Revolucionarias de Colombia runs somewhat counter to the government's persistent claim that it is fighting the remnants of a depleted guerrilla force.

Guibovich made his remark in a long interview with Peru's national daily El Comercio on 19 April: 10 days earlier, 14 soldiers were killed when Sendero ambushed two armed patrols in the Vizcatán region of the Apurí­mac and Ene river valleys (VRAE) [WR-09-15]. Guibovich put the number of armed Sendero fighters at 600. This is twice the number cited by government officials. He also said Sendero was better armed. He did not say how it was obtaining these weapons but he did allude to unconfirmed reports that it was receiving arms from light aircraft, and implied that the Farc could be providing assistance. “We cannot rule out that Sendero has relations with the Farc, since they are employing very similar techniques," he said.

Guibovich said that Sendero fighters were employing different tactics now than in the past. He said that they used to live among the locals more but now dwelt in the jungles where they controlled drug-trafficking routes and maceration pits. He said they had put “a lot of money" into local communities - providing drinking water, building a football pitch or painting a school - to bolster support in the region.

Guibovich's remarks came days after the leader of the Partido Nacionalista Peruano (PNP), Ollanta Humala, claimed that Sendero constituted neither a threat to the state nor a national security problem. “The war is over," Humala said, before advocating that the Policí­a Nacional de Perú (PNP) take over the role of the armed forces in combating Sendero (it already does in the Upper Huallaga region). Humala, whose support is strongest in rural areas, also denounced a lack of political will to resolve the development problems in the VRAE. He said a high commissioner for peace should be appointed to the area.

BRAZIL | GDP forecast. The planning-ministry-linked Instituto de Pesquisa Econômica Aplicada (Ipea) lowered its GDP forecast for 2009 to between 0.2%-1.2%, from a previous estimate of 2%. The Ipea cited the “negative effect" of a poorer-than-expected economic performance in the first quarter. Figures from the official statistics agency, the Ibge, showed that Brazil's industrial activity fell by 13.4% in the first half compared with the same period a year earlier.
Meanwhile, the central bank monetary committee (Copom) signaled it would be “more cautious" with interest rates after cutting the base rate, the Selic, by half a percentage point to 8.75% last week. This was the Selic's lowest level: the bank has slashed it by five points since January. The cuts led to an increase in credit in Brazil, which the government expects will bolster economic activity. The increase in credit, however, has also led to an increase in inflation expectations, although all market projections remain below the central bank's 4.5% target for 2009.