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The campaign against Genaro Garcí­a Luna, the secretary of public security (SSP), reached a new pitch in late January. On 21 January the Instituto Federal de Acceso a la Información Pública (IFAI) reversed its previous position and called for the immediate publication of all police and other agency investigations into allegations made against Garcí­a Luna dating back to 1990.

Garcí­a Luna is hugely unpopular with swathes of Mexico's security establishment. This is because (apparently backed by President Felipe Calderón Hinojosa) he has been bidding to take control of the country's entire law enforcement operation, which is currently split between the SSP, the Procuradurí­a General de la República (PGR), the army, states and municipalities.

Garcí­a Luna's most powerful enemy is the army, and particularly the defence minister, General Guillermo Galván Galván. Galván has let it be known that he had major reservations about Garcí­a Luna's appointment as public security secretary in 2006. Garcí­a Luna has been involved in improving Mexico's security for his whole career. Like so many of President Calderón's top officials, he started in the intelligence agency, the Cisen, but then went on to help establish the Policí­a Federal Preventiva (PFP) and then the Agencia Federal de Investigación (AFI).

What happens to Garcí­a Luna matters because of the growing US concerns about whether Mexico will win Calderón's war against organised crime. Calderón has backed Garcí­a Luna unequivocally, so to lose him would put a major questionmark against the president's judgment.

There is, however, considerable doubt on several criteria about Garcí­a Luna.   These issues range from the highly-paid employment he has consistently given to his sister in a series of appointments in ministries and agencies he headed, to his attitude to the corruption that appears to have riddled the country's anti-organised crime unit, the Subprocuradurí­a de Investigación Especializada en Delincuencia Organizada (Siedo), which technically is part of the PGR.

Garcí­a Luna is also vulnerable because the anti-corruption investigation, Operación Limpieza, which revealed how riddled with corruption the Siedo was, has exposed several people close to him. The most notable is Mario Arturo Velarde Martí­nez, who was arrested on 20 November. Velarde worked as private secretary for Garcí­a Luna for six years when Garcí­a Luna ran the AFI. Velarde was the fifth of Garcí­a Luna's close associates to have been arrested in Operación Limpieza.   The whole saga of Ví­ctor Gerardo Garay Cadena, whom Garcí­a Luna promoted to head the PFP, epitomises the issues and innuendo over Garcí­a Luna. Garay is now in jail, accused of being in the pay of the Beltrán Leyva brothers, who control a faction of the Sinaloa gang.

Garcí­a Luna's vulnerability means that other politicians are using him as a scapegoat. On 20 January the PGR drew further attention to Garcí­a Luna's unfortunate lieutenants by announcing that it would seal the files of all investigations into Garcí­a Luna for 12 years. This decision produced immediate outrage in the Mexican media. The PGR said that it was following guidance from the IFAI, but the PGR also knew that the IFAI was about to reconsider its guidance. Indeed, on 21 January the IFAI unanimously called for the publication of all the investigations launched by the police into alleged criminal behaviour by Garcí­a Luna. The IFAI, which previously had argued that senior officials should enjoy the presumption of a good reputation, now wants all the investigations since 1990 published by the PGR.

Although the media campaign against Garcí­a Luna has created a lot of mud, the main threat to his position is still probably the army. On 21 January, Mexico City newspaper El Universal reported that the army was now, effectively, running the PFP. Technically the PFP should answer to Garcí­a Luna and his appointees at the SSP. El Universal reported that only one of the six PFP Comisarios (senior commanders) appointed by Garcí­a Luna remains in office.

One of these Comisarios, Javier Herrera Valles, was sacked by Garcí­a Luna after Herrera wrote two letters to President Calderón accusing Garcí­a Luna of making questionable decisions. Herrera himself was then arrested on17 November.

The army's growing influence in the SSP became clear on 5 December 2008 when General Javier del Real Magallanes took over as deputy minister for police strategy and intelligence from another of Garcí­a Luna's close associates, Facundo Rosas Rosas. Del Real's appointment effectively keeps Garcí­a Luna out of police intelligence and operations.

• Interpol
  Garcí­a Luna's prominent involvement with Interpol in his career means that the allegations against a former senior Mexican Interpol official, Ricardo Gutiérrez Vargas, also damage Garcí­a Luna. Gutiérrez was arrested on 16 November by the anti-corruption squad, the Siedo, again as part of Operación Limpieza. Gutiérrez was seconded to Interpol from the AFI. Gutiérrez was charged and remanded in custody on 21 January, accused of being in the pay of the Sinaloa gang. Another of Garcí­a Luna's former associates, Rodolfo de la Guardia Garcí­a, was also remanded in custody on the same date. He too is accused of having links to the Sinaloa gang. De La Guardia also worked for the AFI, where he was regional deployment director. He is accused of getting US$10,000 a month from the Sinaloa gang.
  

Immigration: On 26 and 27 March the presidents of the US Senate and the Mexican senate met in Nevada. Manlio Fabio Beltrones, the president of the Mexican senate, reported that Harry Reid, his US counterpart, had promised to devote more of his time to creating a comprehensive immigration reform that would sort out the anomalous legal position of Mexicans working illegally in the US, than to the wars in Iraq and Afghanistan. What makes this statement significant is that the US is demonstrating that although relations between Mexico and the US may be cool at the presidential level, they are warming up at the parliamentary level. Beltrones, a former governor of the border state of Sonora, is a candidate for the PRI presidential nomination in 2012.

No Spring Break: US students shunned Mexico for their traditional Spring Break vacations this year. The decision seems to have been the result of the upsurge in violence in Mexico. In Acapulco, there were only about 1,000 US Spring Breakers. In 2010 there had been 15,000, according to Jesús Radilla, the head of Acapulco's tourist promotion board.  Despite this, Acapulco managed to replace the lost Spring Breakers with domestic tourists.

Nafta costs to Mexico: A recent study by the World Bank pointed out that between 1994, when the North American Free Trade Agreement (Nafta) came into force, and 2010 the Mexican economy (GDP) grew by an average of 2.2% a year. Stripping out population growth reduces the pure rate of GDP growth to about 1.2% a year. This is less than a fifth of the annual rate of India; about 10% of China's rate and less than a quarter of Brazil's rate.

What is shocking is that between 1994 and 2010 Mexico's GDP per capita probably grew by 60% to about US$14,000 a year. Over the same period, US GDP per capita grew 76% to US$47,000. Since Nafta, the economic gap between Mexico and the US has actually increased. In 1994, Mexico GDP per capita was 31% of the US level. In 2010, it had fallen to 29% of the US level.

Lorenzo Meyer, a leading public policy commentator in Mexico, argues that Nafta has been a major disaster for the country. Currently, only one of the prospective presidential candidates for 2012, the radical left-winger Andrés Manuel López Obrador, has suggested changing or even withdrawing from Nafta.

The Jamaica Labour Party (JLP) remains in disarray as it struggles to elect a successor to Edward Seaga following his 30-year domination of the party. The intention was to replace Seaga at the JLP's annual conference on 6 November, but a bitter internal contest between leadership aspirants Pearnel Charles and Bruce Golding which has gone to the courts meant that on 10 November Seaga agreed to stay on for the immediate future.

Charles got an injunction ahead of the conference to prevent the election of a new party leader on the grounds that more than 2,000 names had been illegally added to the delegates' list. The Supreme Court has scheduled 14 December as the date for the start of legal hearings over the disputed list. 

All this is, of course, playing into the hands of the People's National Party (PNP), which has been in power for more than 15 years but which should be vulnerable on such issues as violence given that more than 1,200 people have been murdered since January. 

The economy is also faltering as a result of Hurricane Ivan. GDP growth projections for 2004-05 have been lowered to 2% from 2.6%, while inflation is now expected to be 11% rather than 9% (it was 16% in the 2003-04 fiscal year). The current account deficit is expected to widen to US$757.2m compared with earlier projections for a current account gap of US$722.4m for the current fiscal year.

Hurricane Ivan, which killed at least 19 people in Jamaica in September, caused US$590m in damage, amounting to 8% of GDP.

The longstanding border dispute between Honduras and El Salvador was finally resolved on 18 April when Honduran president Manuel Zelaya met his Salvadorean counterpart Tony Saca in a ceremony in the small border hamlet of El Poy to ratify the border between the two countries.

The ceremony formally brought to an end a border dispute dating back to the infamous "Soccer War" between the two countries in 1969. The International Court of Justice at The Hague ruled on the delimitation of bolsones (disputed areas) along the border in 1992, but despite intervention from the Organization of American States and a further ICJ ruling in 2003, the final 10.5km of the 374.5km border were not defined until this year. 

The ICJ awarded Honduras 300.1 sq km of the (mostly rural and mountainous) disputed territory; El Salvador, 137.7 sq km. Saca said that the border dispute was now consigned to the past while Zelaya said that the next step was to improve integration in Central America as a whole. Border disputes in Central America have traditionally put paid to long-standing efforts to forge a bona fide customs union in the sub-region.

The government's second round of talks with the IMF concluded on 11 May. The IMF delegation was led by Vikram Haksar who said that the aim of the agreement was to reduce poverty.  

Bayardo Arce, the government's economic adviser, said that the IMF considered the government's economic strategy to be solid and consistent, though he admitted that the IMF would like to see some revisions in some numbers on health, housing and education because of its doubts that the government actually had the money to commit. Arce said that he expected a third, and probably final, round of negotiations before the end of June. 

Inflation: In April inflation was 1.01%. This brought the rate for the first four months of 2007 to 4.26%. The rate for the past 12 months was 9.20% above the 2006 rate of 8.5%.

On 16 August Leonel Fernández was sworn in for his second consecutive (and third total) term as president of the Dominican Republic. In his inauguration speech, Fernández urged an end to “all forms of injustice, and inequality", criticising what he termed “casino capitalism" which has turned the markets into “giant betting salons whose actions affect the prices of goods in the real economy". However, while warning of tough times ahead due to global food and fuel prices, he was also careful to reassure the private sector, with an emphasis on the need to attract direct foreign investment, seek new export markets and generally build confidence in the economy.

Despite intense rains as a result of tropical storm Fay, which led some officials to cancel their visits, Fernández's inauguration ceremony was attended by figures such as Presidents Alvaro Uribe of Colombia, Michelle Bachelet of Chile, Manuel Zelaya of Honduras, Ma Ying-jeou of Taiwan, and René Préval of Haiti, as well as Prince Felipe de Borbón of Spain. This is perhaps a sign of how the Dominican Republic's standing in the region has been boosted by its hosting of the pivotal Rí­o Group Summit on 7 March [RC-08-03].

As well as making various promises of social investment in his inauguration speech - which lasted nearly two hours - Fernández was quick to flag up his economic achievements. He promised continuity with policies already underway (as also suggested by the relatively few changes introduced in his new cabinet). He stressed that unemployment fell from 19.7% in 2004 to 14% in April of this year, and that GDP growth (at 7.5% in the first half) has been strong, as has direct foreign investment so far this year. Pledging to try and keep annual GDP growth at 6%, inflation within single figures, and to bring the current account deficit down to 2.3% of GDP by 2012, Fernández also announced a new deal with the IMF - a move likely to be well received by the private sector.

While recognising the “desolate" global economic outlook, Fernández said that this could represent "the great opportunity [the Dominican Republic] has been waiting for_to promote the development of the national agricultural sector" - a statement accompanied by promises of loans and other measures to help farmers.

In addition, President Fernández announced plans to reform certain aspects of the Dominican constitution in order to introduce simultaneous congressional and presidential elections, and to reduce presidential powers.

• New cabinet

New appointments include: General Pedro Peña Antonio (head of the armed forces); César Pina Toribio (minister for the presidency); Francisco Javier Garcí­a (tourism); Jaime David Fernández (environment); Max Puig (labour); Franklin Rodrí­guez (youth). Other changes include Melanio Paredes (transferred from trade to education); Alejandrina German (from education to women) and José Ramón Fadul (from labour to trade).  Those remaining in their posts include: security (Franklin Almeida); foreign relations (Carlos Morales Troncoso); economy (Temí­stocles Montás); treasury (Vicente Bengoa); agriculture (Salvador Jiménez); attorney general (Radhamés Jiménez); health (Bautista Rojas Gómez) and public works (Ví­ctor Dí­az Rúa).

 

 

When US President Barack Obama addressed the Fifth Summit of the Americas in Trinidad on 17 April he pledged an era of equal partnership and a new chapter of engagement with the region that reflected his stated preference for multilateralism in regional affairs. Seven months later, the administration's patience with multilateralism appeared to have already worn thin, amid the failure of the efforts led by the main hemispheric Organization of American States (OAS) to bring about a resolution to the Honduras coup crisis. Obama has moved to re-assert the US as the ultimate arbiter in Latin America, probably out of sheer frustration, but also at the cost of principle and in doing so has provoked a fresh rift with the region. Unless the US and OAS can row back in step with each other in coming weeks, this will have strong regional implications and may undermine his administration's standing and influence in Latin America.

US pragmatism vs. OAS principles?
Caving into growing regional calls for more concerted intervention, the US state department, which had desperately sought to remain on the multilateral/OAS track over Honduras, finally took matters into its own hands in late October, in what was a clear effort to deal in a politically pragmatic manner with the complex 'sui generis' nature of the Honduran crisis, which is probably best described as a constitutional coup by the supreme court and congress against the president.

The Tegucigalpa-San José Accord signed by the ousted president Manuel Zelaya and his de facto successor Roberto Micheletti on 30 October came about only after the direct unilateral intervention of the US, in the form of the (now former) US assistant secretary of state for Western Hemisphere Affairs, Tom Shannon. The agreement contemplates the establishment of a national unity government, a congressional vote on Zelaya's restitution (taking into account the 'opinion' of the supreme court), along with full recognition of the scheduled 29 November general elections. Zelaya took this to mean that he would be reinstated to head a national unity government before the elections, as did the OAS.

The US made it patently clear that it was firmly focused on the scheduled elections as the definitive way out of this nearly five-month old crisis, with Zelaya's position now secondary. Shannon said in a widely distributed TV interview on 3 November that the US had explicitly agreed upon the signature of the accord that it would 'accompany' the election process. When pressed, he explained that the US would recognise the outcome of the elections with or without Zelaya's restitution, stressing that the agreement made the restitution question an internal matter, and effectively cast it as separate from the elections, which was the argument put forward by the de facto authorities.

That, however, removed all incentives for the de facto administration and the other Honduran institutions to act in good faith, with the result that Zelaya on 5 November declared the agreement “dead letter" after Micheletti attempted to form a unity government without him and congress (in recess ahead of elections) dallied over the timetabling of a restitution vote.

It is hard to know whether Shannon was simply naí¯ve in thinking that Micheletti, congress and the supreme court would stick to the spirit of the agreement, or whether he just felt that his solution was the most politically pragmatic. Certainly, the US shift was partially dictated by domestic political concerns, including opposition Republican party pressure. Either way, Micheletti, perhaps the most underestimated player throughout this crisis, was subsequently able to provoke a damaging public split between the OAS and the US.

On 10 November a state department spokesman, PJ Crowley, stressed, “_what's first and foremost important is that you get to a new election on November 29 that is free and fair, that's effectively monitored by the international community. As part of the [Tegucigalpa-San José] agreement, the existing institutions within Honduras will determine how to implement that accord. We continue to encourage." With regard to Zelaya, Crowley added, “It's not about any one person. It's about a return of democratic processes and democratic government in Honduras."

In contrast, the OAS position remains that Zelaya's restitution at the head of a unity government prior to the elections is a sine qua non of the agreement. On 6 November, the OAS secretary general, José Miguel Insulza, called for implementation of the accord “without further subterfuges" adding that Zelaya, should “naturally" preside over the national unity cabinet. On 10 November, amid continued dallying on the part of the de facto authorities and congress, Insulza warned that the OAS could “not even consider" sending election observers as things stood. The OAS and the other main regional body, the Brazil-led Rio Group, also stressed that their recognition of the election might still depend on Zelaya's reinstatement.

Amid such a public rift between the two main international mediators, Micheletti and the other state actors continued to pay lip service to the agreement. Tactically, Micheletti and the state institutions will do just enough to keep the US onside. From day one, Micheletti's main focus has always been on legitimising the elections (and preventing Zelaya's return).

As we went to press Zelaya's best bet, aside from the OAS, looked to be the efforts by the rump of his domestic supporters to boycott and otherwise disrupt the electoral process.

Ironically, the OAS will draw most support for its 'principled' position vis a vis the US by pointing out that a failure to secure a 'correct' outcome in Honduras will only inflame the anti-US regional sentiment led by Venezuela's radical leftist President Hugo Chávez .   But neither does the OAS emerge from this crisis unblemished; its behaviour before and after 28 June underscores the need for urgent reform of its own institutional mechanisms for dealing with the oft cited 'excess of presidentialism' in Latin America. Some analysts argue, and not without reason, that the OAS response to the Honduras crisis amounted to external interference in a constitutional dispute on one side of the argument (i.e. the presidential side) without giving any weight to the constitutional credentials of the other disputants (congress and the judiciary).

• Valenzuela takes office

On 10 November the new US assistant secretary of state for Western Hemisphere Affairs, Arturo Valenzuela, was sworn in. Valenzuela's senate ratification had been blocked by a conservative Republican senator, Jim DeMint, over the Honduras crisis. DeMint lifted his block on 5 November, telling reporters that he had received personal assurances from both Valenzuela's predecessor Tom Shannon and Hillary Clinton, the US Secretary of State, that US recognition of the elections was now “guaranteed".

President Fernández also dismissed his finance minister Vicente Bengoa in his mini cabinet reshuffle, bringing in economist Daniel Toribio in his place. Bengoa replaces Toribio as head of the state-owned Banco de Reservas. Toribio will preside over more belt-tightening. Fernández claimed during his state-of-the-nation address that the government reduced public spending by RD$40bn (just over US$1bn) in the second half of 2010 in order to maintain economic stability.
    Toribio will also lead efforts to recruit foreign governments to a “great global crusade" to confront financial speculation over oil and food. Fernández blamed international speculators and the futures contracts for the rising costs on international markets. “That is the great shame of our times. It is an immoral and unacceptable act," he said. In his Independence Day speech, President Fernández insisted that the country remained on an even keel despite public sector foreign debt creeping up to 36% of GDP, or some US$18.2bn. “At present, the Dominican Republic is not facing a devaluation or a loss of confidence in its currency," he said. “In fact, in 2010 bonds were placed on the international market at the lowest interest rate," he said. Fernández added that the country had attracted capital investment of US$2.9bn last year, and that tourism had generated foreign exchange of US$4.2bn, up US$160m on 2009.

The government of President Néstor Kirchner presented a proposal for the comprehensive reform of the education sector in May. The most striking feature of the proposal is the government's plan to do away with the military's role in education. 

At present there are nine military secondary boarding schools in seven provinces in Argentina - Buenos Aires, Mendoza, Córdoba, Comodoro Rivadavia, Tucumán, Misiones and Santa Fe - and the Capital Federal. The first military college, General San Martí­n, was founded in 1938 in Buenos Aires. There is an emphasis on discipline and physical education, including some military training. More than 9,000 pupils attend the various colleges and when they leave they are awarded the rank of second lieutenant in the reserves. The defence minister, Nilda Garré, said that the colleges were outdated and there should be a far greater focus on the humanities and inculcating a vision of democratic and human rights. "We do not believe in military education at that age," she said.

The timing of the government's proposal is also revealing. It will be opened to a public debate over the course of the next six months before a draft bill is sent to congress early in 2007, shortly before Kirchner is expected to stand for re-election. Kirchner said that education had to be considered a "national priority". He wants to replace the 1993 federal education act, under which Argentina's school system was decentralised, passing responsibility for financing and the content of syllabuses to the provinces. 

Kirchner claimed that the government had been inspired by the actions of the teachers' union Confederación de Trabajadores de la Educación de la República Argentina, Ctera, which erected a "white tent of dignity" in front of congress between April 1997 and December 1999 to demand education reform.

Both GDP growth and foreign direct investment (FDI) are rising. This combination, coupled with an inflation rate that, although rising is still well inside the government's 4.5% target, suggests that the economy is well set. 

Foreign direct investment in August was nearly twice the rate of August 2006 at US$2.04bn. The central bank said that foreign direct investment in the first half of September was US$950m and should reach US$1.3bn by the end of the month. What is striking, however, is the surge in foreign direct investment: the gross figure for the first seven months of 2007 was US$31.8bn, almost twice the US$16.4bn recorded in the same period of 2006.

The central bank now prefers to look at the net figure for FDI, after withdrawals. What is significant is that withdrawals are steady at just over US$1bn a month even though fresh investments are surging. The central bank has raised its forecast for (net) foreign direct investment in 2007 to US$32bn, its previous estimate was US$25bn. The strength of FDI suggests that the economy is becoming more competitive and is well placed to withstand any slowdown in the world economy. In the second quarter, output was 0.8% up on the first. This means that in the 12 months to June, the economy grew by 4.8%, pretty close to the government targets of 5%. 

The resilience of exports, despite the strength of the Real against the dollar, underlines the competitiveness of Brazilian products. Exports are running 16% higher in the first eight months of the 2007, compared with 2006. Export revenues in the 12 months to August topped US$151bn and should hit US$160bn this year. Imports are rising faster, by almost 28% in the first eight months, and are now over US$107bn for the 12 months to August. 

Growth in the second quarter was led by the strength of domestic demand. This was up by 5.7%. This strength was reflected in the increase in imports. In the second quarter the import bill, at US$27.2bn, was significantly above the first quarter bill of US$24.1bn. The surge in domestic demand is not only pulling in imports: it is also increasing demand for domestic goods. Industrial output was up by 6.8% between April and June. The consensus in Brazil is now that the central bank will probably not cut interest rates at its next meeting in October, despite the aggressive action by the US Federal Reserve Board. 

• Selic Rate
  At the beginning of September Copom announced a 0.25% cut in the benchmark Selic rate which brought it down to 11.25%.

He waited more than seven months but in late March Paraguay's President Fernando Lugo received his first foreign head of state since his investiture on 15 August last year. Ecuador's President Rafael Correa conducted a two-day visit to Paraguay. He was effusive in his praise of Lugo, who he described as an honorary Ecuadorean for his past work on liberation theology programmes in Ecuador's Andean highlands. Correa will have irked Brazil by expressing his support for Paraguay's demand to revise the terms of its Itaipú hydroelectric dam contract, even speaking for Brazil's President Lula da Silva.

Correa said that Paraguay had every right to seek to change the Itaipú contract with Brazil, one of Lugo's main campaign promises. He added that he had discussed the matter “tangentially" with Lula, who had told him that he was “quite open to all these revisions". The official line from Brasí­lia is that the terms of the contract are not up for discussion.

His indiscreet comments on Itaipú and some token bilateral agreements apart, Correa made clear that the purpose of his visit to Paraguay was to deepen Latin American integration. He discussed the drift leftwards in Latin America and insisted that there had never been a better time to deepen regional integration, “break out of the neoliberal mould and replace it with a new system based on cooperation and social solidarity."

In particular, Correa mentioned the Banco del Sur, a regional bank which has failed to get off the ground two years after its inception, and the (remote) possibility of a regional common currency. Correa has denied that he intends to reverse dollarisation in Ecuador but equally he has made his dissatisfaction with the currency, because it precludes monetary policy changes, very clear.

• Chávez
  Venezuela's President Hugo Chávez will personally appeal to Paraguayan senators to approve Venezuela's entry into Mercosur, according to Paraguay's foreign minister Alejandro Hamed. He did not say whether Chávez intended to visit Paraguay or to phone. “We are losing money leaving Venezuela outside Mercosur," Hamed said, “because it has a huge market for our products." The bill to welcome Venezuela into Mercosur has been mired in congress since August 2007. Indeed, it has not made it beyond the senate foreign relations committee. The opposition Partido Colorado heads a narrow majority in the senate (28 out of 45) which objects strenuously to Venezuela's inclusion on the grounds that Chávez is a “dictator".
  

Among the standout diplomatic cables released by WikiLeaks in late November was one sent to the US State Department by the US ambassador to Honduras, Hugo Llorens, stating unequivocally that the former president Manuel Zelaya (2006-2009) was illegally removed in a coup d'état on 28 June 2009. The timing of the WikiLeaks release is a perfect gift for the 12-member Union of South American Nations (Unasur), which has just approved the addition of a new democratic charter to its 2008 constitutive treaty empowering the new regional organisation to impose political and commercial sanctions against member nations for breaches of the democratic order.

The most remarkable thing about the leaked cable, sent to the top US Latin American policymakers and the White House less than a month after the coup, is its clarity and unambiguity - which stands in stark contrast to the public obfuscation, mesmerising ambiguity and continual wriggling by the State Department in the months after the coup, which ultimately culminated in unconditional US support for elections under a de facto regime in November 2009 as the most practicable solution to the Honduran political crisis.

The exiled Zelaya immediately said the cable evidenced the “complicity" of the US in the coup. It certainly paints the US in a weak light.   It has the potential to deepen the continuing rift between the US and much of the region over Honduras. It will definitely give the radical anti-US regional movement led by Venezuela's President Hugo Chávez plenty of fuel - he called on the US secretary of state Hillary Clinton to resign.

The new Unasur democratic clause is a direct response to the September 2010 police rebellion in Ecuador - which the Quito government, heavily backed by the other Unasur members, claimed was an attempted coup. It is also obviously a reaction to the Honduran coup - nine of the 12 Unasur states, including the heavyweights Brazil, Argentina, Venezuela and Ecuador, still refuse to recognise the Honduran government led by Porfirio Lobo, elected in November 2009.

The handy confluence of the WikiLeaks cable with the approval of the democratic clause allows Unasur (and particularly Brazil, which really stuck its neck out over Honduras) to maintain the principled high moral ground over both the US and the main hemispheric Organization of American States (OAS), which fumbled both in the run-up to the coup and afterwards (and as result badly damaged its reputation, particularly in the Southern Cone).

The new protocol on the 'Commitment to Democracy' was adopted at Unasur's fourth heads of state summit, in Georgetown, Guyana, on 26 November. Under the 'Georgetown Declaration' the summiteers formalised the earlier 'Declaration of Buenos Aires', issued on 1 October following an unprecedented emergency presidential summit in response to the uprising in Ecuador, affirming that "member states shall not tolerate any challenge to the institutional authority or any attempted coup against the legitimately constituted civil powers and that they shall adopt concrete and immediate measures in the event of violations of the constitutional order."   As per the Declaration of Buenos Aires, these include border closures, the suspension of trade, air traffic and the provision of energy, services and other supplies.

This is all worthy stuff. With such a strong statement the Unasur is clearly trying to differentiate itself from the US-dominated OAS. The OAS's (non binding) Inter American Democratic Charter (IADC), adopted unanimously in 2001, nominally gives the OAS the power under international law to take diplomatic 'action' against breaches of the democratic order.   In practice this, at its worst, amounts to suspension from the OAS, which then legally requires a freeze on multilateral funding from the likes of the Inter American Development Bank (IBD). Despite the IADC, the OAS has been fairly mealy mouthed and reactive. The put-upon OAS secretary general, José Miguel Insulza, wants the IADC reformed to give him/the OAS more authority to take 'pre-emptive' action in cases like the Honduran internal crisis, which was simmering for months ahead of the coup, but the OAS members, which cling tightly to the principle of non-intervention, are loathe to contemplate any such reform.  

The question then is whether Unasur would do any better. As Latin News has often pointed out, the Unasur is a very political creation. Brazil's President Lula da Silva shaped it after appropriating the concept from Venezuela's Hugo Chávez . The US, while welcoming the new group as a tool for dialogue and regional integration, is slightly suspicious of the strength of the left-wing current led by President Chávez within the group.

Unasur's main diplomatic successes to date have been in Bolivia in September 2008, amidst signs of an opposition uprising against the government of Evo Morales, and again in September 2009, when relations between Colombia and Venezuela reached a nadir. Arguably, however, in both cases Lula himself was the real power. In Ecuador, the entire region was mindful of Honduras and Unasur was determined to prove itself vs. the OAS.   To his credit, the inaugural Unasur secretary general, Argentina's former president Néstor Kirchner (2003-2007), who had only taken up the post on 4 May, directed that effort (Lula was busy ensuring the election of his successor) and the democratic clause was framed as his legacy in Georgetown.

It's also worth mentioning that within the group, Colombia, Peru and Chile have now recognised Honduras. Chile's President Sebastian Piñera was one of the most vocal supporters of Ecuador's Rafael Correa in September but was not in Georgetown.  Piñera has also distinguished himself from his Southern Cone counterparts (not least Lula) in his outspoken criticism of the Cuban regime. Peru's foreign minister José Garcí­a Belaúnde attended in lieu of President Alan Garcí­a. Garcí­a seems hell bent on using Unasur (and any other regional integration projects) to push for a reduction in regional arms spending - clearly a function of the Peru-Chile rivalry. Colombia's Juan Manuel Santos, who is keen to reintegrate an isolated Colombia back into the region, was in Georgetown, where he secured the re-establishment of full diplomatic relations with Ecuador's President Correa.

It's patently clear that the region doesn't need yet another talking shop with no real authority. The overlapping list already includes the Brazil-founded Rio Group - comprising the 12 Unasur members, the six Central American states, Cuba, the Dominican Republic and Mexico, and the brand new 33-member Community of Latin American and Caribbean States (Celac), which groups the Rio Group and the 15-member Caribbean Community (Caricom), excluding only Canada and the US.   Founded in Cancún, Mexico, on February 23 2010, the Celac is envisaged as the successor to the Rio Group and the Latin American and Caribbean Summit on Integration and Development (Calc).

Then there is Mercosur (the Southern Cone Common Market, comprising Argentina, Brazil, Paraguay and Uruguay as full members, with Bolivia, Chile, Colombia, Ecuador and Peru as associates, and Venezuela pending full membership), which already has a democratic clause in place. Ironically, legislators in Paraguay (and previously also in Brazil), cite the Mercosur democratic clause as a reason not to approve Venezuelan membership.

To have a life beyond the terms of the current presidents - Lula, Chávez , Correa et al - and to be taken seriously by the likes of the US, Unasur needs to be institutionalised.   Despite all the platitudes in Georgetown, poor, English-speaking Guyana, which has now taken over from Ecuador the (alphabetically rotating) pro tempore presidency of the group, can hardly be expected to get this underway. (Notably, Brazil is dispatching two permanent advisors to Georgetown to assist the Bharrat Jagdeo government for the year it will hold the Unasur presidency.) More positively, as we went to press, Uruguay became the ninth country to ratify the May 2008 Unasur constitutive treaty, thereby allowing it to become an officially recognised institution. Included among the remaining laggards is Brazil itself (along with Colombia and Paraguay).

More telling of Unasur's embryonic status are the pleas from the other member states for Lula himself to take up the vacant Unasur secretary general's chair, empty following the recent death of Néstor Kirchner. Lula has insisted he doesn't want the position, although Paraguay's President Fernando Lugo insists that there should be a push to make him change his mind. The only other formal candidate is Uruguay's former president Tabaré Vázquez (2005-2010).

Kirchner's Unasur legacy
Upon taking up the role of Unasur secretary general in May 2010, Néstor Kirchner expressed hopes that the bloc would be able to “create profound policies in the region" without conflicting with the two regional trade groups, Mercosur and the Andean Community (CAN). Brazil's President Lula da Silva has always envisaged a regional political and economic integration project akin to the European Union - whereby the Unasur would eventually encompass and replace the CAN and Mercosur (adding in Suriname and Guyana). Kirchner was of the view that the existing frameworks put in place over the years for the CAN and Mercosur should be used to construct Unasur's institutional infrastructure, which will include a South American parliament. Following consultations with Ecuador, Kirchner was also pushing for the employment of independent specialists to manage the activities of the secretariat and the different councils. This work is currently handled by the various ministers of the country holding the rotating chair - presumably meaning that the Unasur workload gets left in their in-trays.   The Unasur website (www.pptunasur.com ) is definitely a work in progress.

Unasur councils
 South American Defence Council (CEED-CDS)
 South American Council on Economy and Finance
 South American Council of Education, Culture, Science and Innovation (COSECCTI)
 South American Council on Energy
 South American Council on Health
 South American Council for Social Development
 South American Council on the World Drug Problem
 South American Council for Infrastructure and Planning   (COSIPLAN)
 Consultative Council on Justice (proposed)

• Home at Mitad del Mundo

The permanent Unasur headquarters will be located in the community of Mitad del Mundo, located near Quito, Ecuador. Work on the new complex is due to begin in 2011.  

• Scepticism

A former Brazilian ambassador to the US, Rubens Barbossa, maintains that Unasur not only duplicates some Mercosur functions but weakens Brazilian leadership aspirations. “Unasur is divided. It's not working and it will never work", he says. Others argue that it is born of a regional inferiority complex vis-í -vis the US and is nothing but “political tourism at taxpayers' expense". Arguing against the new Celac, the conservative Brazilian daily O Estado warned (on 25 February this year) of “the illusion that snubbing the United States will do for Latin American integration what 200 years of history failed to do".

Peru's anti-drug police scored a series of notable victories over international drug-traffickers in February and March. It has now impounded nearly 4,000 kilos of pure cocaine since the turn of the year and dismantled a number of gangs. However, these successes have been somewhat overshadowed by two recent revelations: one, coca plantation outstripped eradication in 2004; two, the local drugs industry is no longer involved solely with the early stages of processing, but is moving ahead with the production of pure cocaine.

On 3 March, Peruvian police seized 550 kilos of cocaine from a refrigerator truck that was seized in the port of Callao, just north of Lima. This followed days after a massive drug bust in Lima on 28 February when police arrested 26 people, seized 875 kilos of cocaine hydrochloride ready to be shipped abroad, plus 817 kilos of cocaine base, 57 tonnes of paste and 3.5t of coca leaf. The gang, which was made up of Colombians, Mexicans and Peruvians was apparently linked to the Tijuana cartel.

Rather than trumpeting the successes the anti-narcotics agency, Devida, sombrely pointed out that the war on drugs is not going so well on other fronts. Nils Ericsson, head of Devida, said on 11 February that 17,000 hectares of coca had been planted in the central highlands and the south of the country, bringing Peru's total volume of coca plantations to 48,600 hectares. This time last year Ericsson buoyantly announced that Peru had less coca than at any other time over the last 20 years. He said then that Peru had 31,150 hectares of coca crops. If this figure was accurate, and Peru eradicated 10,400 hectares in 2004, as Ericsson now claims, then more than 27,000 hectares of coca were planted last year.

Ericsson added that the government was concerned that Peruvian coca growers had started to produce cocaine in the last three years, meaning that they no longer had to send coca to Colombia to be processed. He appeared to be vindicated weeks later after the Lima drug seizure when the head of the police anti-drug unit, General Eduardo Montero, announced that 45 cocaine processing labs had been discovered in the north-central department of San Martí­n, from where the base, paste and leaf had been collected. This discovery seemed to confirm the suspicion that the intense anti-drug campaign in Colombia has led to some operations setting up in Peru instead. It also raised questions about why Washington decided in February to announce that it would be cutting anti-narcotics aid to Peru from US$50m to US$32m in 2006.

Coca protests
The government's uneasy truce with coca growers was also broken on 21 February when the coca growers of Tocache province in San Martí­n launched an 'indefinite strike' against alleged fumigation of their plantations by the police. They were soon joined by other coca growers from Huánuco and Ucayali.

The government reacted by trying to discredit the national coca organisation, Confederación Nacional de Productores Agropecuarios de las Cuencas Cocaleras del Perú. The prime minister, Carlos Ferrero, released a video on 27 February in which Nancy Obregón, the leader of CONPACCP, which is based in Tocache, said that coca in Peru goes "directly or indirectly" to maceration pits, used for the production of coca paste. Obregón added: "this is something that the government, the police, mayors, we all know." The government plans to eradicate 8,000 hectares of coca in 2005. With its coca-eradication policy exposed as ineffectual, it might decide to focus more on supporting economic and social development in rural areas.

The economy should benefit from the new oil contracts with the foreign energy companies. The government claims that the new contracts, which take the tax and royalty rate on foreign energy companies' operations in Bolivia up from 50% to 82% of profits, will virtually double the government's oil revenues by 2010. In the first eight months of this year the government's tax income jumped by 46% to US$1.71bn, following the increase in tax revenues pushed through by the previous government. The previous government's increase took the rate up from as little as 18% to 50%.

Foreign investment: The main business lobby, Concainco, which is based in Santa Cruz, is modifying its criticism of the government's economic policy. In the first half of the year it had played up the negative flow of foreign investment in 2005. Now, after the inflow has turned positive again, Concainco argues that at around US$250m, the inflow is far too little to do much to reduce poverty levels in the country. On official figures 58% of Bolivians live in poverty.

After another month of stalled talks and failed truces, the government moved one tentative step closer towards approving the new constitution when congress approved legislation setting 4 May as the date for two referenda. The new laws - which also rendered illegal plans underway in the opposition eastern regions of Santa Cruz, Tarija, Pando, Beni, Cochabamba and Chuquisaca to hold their own regional referenda on the issue of autonomy - has inevitably met with resistance from the prefects.

Temporary truce

After a revival of hostilities at the end of January between the government and opposition prefects after the government's implementation of its pension plan [RA-08-02] both sides declared a "truce" two weeks later in light of the flood crisis caused by the La Niña weather phenomenon. The floods, which have left 67 people dead and displaced 74,000 families since last November prompted President Evo Morales to declare a national disaster on 12 February and urge both parties to "prioritise national over regional or individual interests".

However, the "truce" proved untenable after the so-called national democratic council (Conalde, an entity formed by the opposition prefects) presented Morales with an ultimatum. This comprised a list of demands which went far beyond the three topics flagged up for discussion in the previous month of dialogue - namely the new constitution, the government's pension plan which involved using profits from the direct hydrocarbons tax (IDH) and the prefects' bid for autonomy.

The demands presented by Conalde on this occasion included: rejecting the use of IDH funds to pay for pensions; the election of a new regional prefect in Sucre, the capital of Chuquisaca; and official recognition of the autonomy referendum proposals of Santa Cruz and three other regions - proposals which would grant so much power to the prefects that even the opposition party, Podemos, had been openly sceptical of them.

The prefects also demanded that the constituent assembly process be taken back to 15 August, the day the issue of the country's capital was struck off the constituent assembly's agenda [RA-07-09]. Chuquisaca continues to demand that Sucre be made the national capital and wants a national referendum to decide the location of the legislative and executive branches, an issue omitted by the draft constitution.

Congress sets dates

In light of Conalde's demands, which would have been almost impossible for the government to accept, the idea of referenda to determine these contentious issues fast emerged as the only way out of the crisis.

On 25 February presidential spokesperson Alex Contreras announced that congress would discuss plebiscites on the issues of autonomy and the new constitution, while also up for discussion was a referendum on whether land ownership should be capped at 5,000 or 10,000 hectares. The provision had failed to garner the two-thirds vote in the constituent assembly, hence the need for a separate vote.

Three days later, in a joint session of both houses of congress, a proposal was approved by a two thirds majority of those present which called for two national referendums to take place on 4 May - one on the draft constitution and the other on land reform.

As well as setting the date for the two plebiscites, congress also voted that only the legislature (comprising the MAS-led lower chamber and opposition-led senate) was authorised to call regional plebiscites. If this view is upheld by the supreme court, the plans underway in the opposition regions to hold their own regional referenda on the issue of autonomy will become illegal.

Prefects respond

As was the case with the approval of the draft constitution [RA-08-01], the opposition and prefects protested the manner in which the legislation was passed. Many opposition legislators were reportedly blocked from entering the congressional building by flag-waving supporters of Morales and miners in hardhats. Meanwhile the proposal itself was reportedly approved in under an hour with almost no formal debate.

The opposition prefects - who reject the four levels of autonomy outlined in the draft constitution (departmental, provincial, municipal and indigenous) - then announced their refusal to recognise the new legislation and their plans to press ahead with regional autonomy votes. This effectively represents a boycott of the institutional process and signals increasing polarization within the country.

Santa Cruz and Beni have already set 4 May and 1 June respectively as dates for plebiscites while Pando, Chuquisaca, Tarija and La Paz are currently discussing plans. The situation in La Paz is a significant blow for Morales; La Paz prefect José Luis Paredes had been independent - neither pro-Morales nor pro-opposition - but has become increasingly critical of the federal government, accusing it of neglecting his region and failing to provide the necessary resources to develop infrastructure. Unlike Santa Cruz and Beni, La Paz voted overwhelmingly (73.4%) against autonomy in a referendum on the issue in July 2006.

So far Morales - who has cancelled all his trips abroad in the immediate future in order to concentrate on the crisis - continues to promote the idea of dialogue with the prefects; two days after the congressional sessions he offered to "correct" the draft of the new Magna Carta to incorporate their autonomy demands. Vce-President Álvaro Garcí­a Linera meanwhile expressed hopes that the opposition prefects would "change their attitudes".

• CEPB deals blow to pro-autonomists

On 28 February Gabriel Dabdoub, the newly elected president of Bolivia's private entrepreneurs confederation (CEPB, which represents virtually all the country's private sector organisations), declared that regional autonomy statutes had to be in line with the new constitution. Dabdoub, a businessman from Santa Cruz who is an opponent of President Evo Morales, said that "one doesn't function without the other; an autonomy statute needs a political constitution".

• Iran

The US has also expressed concern over increasing cooperation between Iran and Bolivia. This was most recently evinced in an offer by Iran to fund a new TV station to be based in the rural, coca-growing region of Chapare. The two countries established ties last September and at the time, President Evo Morales and his Iranian counterpart Mahmoud Ahmadinejad signed accords amounting to US$1,100m pertaining to the hydrocarbons, energy, agriculture and industry sectors.

President Alan Garcí­a delivered his third state-of-the-nation speech to congress on 28 July. He ducked several key issues, in particular negotiations with indigenous groups in the wake of the violent clashes in the Amazon in June, and offered little new on others, most notably the internal conflict with the guerrilla group, Sendero Luminoso. He also aired one controversial proposal: a popular referendum related to electoral term limits - specifically the introduction of mid-term elections to renew half of congress. By far the most interesting thing he had to say, however, was about decentralisation.

“I have two big objectives this year: defending the rule of democracy and saving Peru from the global crisis by strengthening social programmes," Garcí­a said. This seems to consist of providing more social assistance in the Apurí­mac and Ene river valley (Vrae) - the epicentre of the conflict with Sendero - on the medical and health fronts as well as alternative development schemes to replace coca growing.

These are hardly new promises so it was no great surprise that the opposition was unconvinced by Garcí­a's strategies for meeting his objectives. Various opposition deputies singled out his failure to offer “anything new" as regards the conflict with Sendero and narco-terrorism. The opposition Partido Nacionalista Peruano (PNP), of Ollanta Humala, was also critical of Garcí­a for avoiding any mention of the progress of talks with the indigenous organisations behind the violent clashes with the police in Bagua in June [RA-09-06]. The outcome will have ramifications for the government's handling of future social unrest in Peru's provinces.

When the new prime minister, Javier Velásquez Quesquén, appeared before congress a week later to receive the habitual “vote of confidence" from deputies, he provided little additional detail on either matter, simply echoing Garcí­a's words that “strengthening democratic stability and social inclusion" were the government's priorities. Unsatisfied, the PNP voted against him. Various deputies from Unión por el Perú (UPP), Alianza Parlamentaria and Bloque Popular abstained from voting.

Velásquez Quesquén did win the approval of congress, however, thanks to the backing of the ruling Partido Aprista Peruano (PAP) and the fujimorista Alianza por el Futuro (AF), although the latter was given begrudgingly. The spokesman for the AF, Carlos Raffo, said his party was not fully convinced by Velásquez but would support the government for the sake of democratic stability.

Corruption
One issue on which Velásquez Quesquén did elaborate was corruption, the spectre of which continues to stalk the Garcí­a administration. During his state-of-the-nation address, Garcí­a seemed to skirt around the issue. On the one hand, he proposed a draconian punishment for those found guilty of corruption: a work camp in the jungle. On the other hand, he did not announce any preventative measures, which are essential as a deterrent.

Velásquez Quesquén was slightly more forthcoming. He promised to work with congress to create an anti-corruption plan, including stricter enforcement of the penal code and an integral protection system for whistleblowers.

Electoral reform
Velásquez also revisited a controversial issue, given the origin of the constitutional crisis in Honduras, raised by Garcí­a during his address: electoral reform. Garcí­a had argued that mid-term congressional elections to renew half of congress would “reduce tension that gathers during the five-year term". He said the reform could be approved by means of a referendum, with the collection of 1.5m signatures.

Velásquez took a different tack. He called on congress to give priority to the debate to install mid-term elections. Congress has actually been debating the issue for several months but it has made no headway as deputies are understandably loath to curtail their own (future) mandates.

Garcí­a made the case for the electoral reform on the grounds that the overwhelmingly negative public image of congress should improve if voters were presented with the opportunity to effect a change halfway through the congressional term. What he fails to see is that the negative regard in which congress is held is far less to do with the actual elected deputies than it is with the perceived corruption, inefficiency and, ultimately, powerlessness of congress.

What is more, the public would almost certainly prefer to have the option of replacing the president halfway through his term by means of a recall referendum (something for which the opposition PNP has long been pushing) but Garcí­a unsurprisingly did not suggest this. There is no provision in the constitution for a recall referendum along the lines of that introduced by Venezuela's President Hugo Chávez .

Decentralisation, with a difference
Garcí­a did mimic Chávez in another way, however, although it was inadvertent. Garcí­a called for “popular decentralisation" which, while he would be at pains to deny it, bears no small resemblance to the structures put in place by Chávez in Venezuela.

Garcí­a defined “popular decentralisation" as a means of deepening the regional decentralisation process. He proposed forming what he described as “executive nuclei", comprising four people, including a president and a treasurer, from local communities across Peru. These would be made up of campesinos and social organisations requiring funding for a specific local project.

Garcí­a said that disbursing state finance in this way - for infrastructure and public works projects selected by the public - would not just cut through the layers of bureaucracy preventing government funds from reaching the poorest and neediest but would also help to avert social protests in the provinces, where Garcí­a's government is notoriously unpopular and Humala has his powerbase.

The “executive nuclei" proposed by Garcí­a would be accredited by the regional governments and national ministries, which would approve the funding for the specific projects. Garcí­a said that the objective for 2009 was to channel 5% of the remaining investment budget for the regions, some NS$1bn (US$334,000), to these accredited local groups. He maintained that there were some 30,000 small, low-tech projects being demanded by local communities, which would cost an average of just NS$300,000 (US$100,000) to complete.

Garcí­a is well aware that one of the most enduring criticisms of his government is its failure to transfer the benefits of years of impressive growth to the poor. He argues that the new nuclei will involve millions of Peruvians who are currently only passive spectators. He is laying himself open to the charge that he is creating an alternative form of decentralisation because the PAP only controls two of the 25 regional governments and just 250 of the 1,900 municipalities. Chávez also claimed to be reinterpreting the meaning of “decentralisation" to transfer power to the people in March this year. He said that national funding would go straight to local community councils to carry out social projects rather than states or municipalities.

• Second stage

Javier Velásquez Quesquén told congress that he was starting the “second stage" of the government of President Alan Garcí­a, who has a little under two years of his term to run. This neatly overlooked the fact that he is in fact the third prime minister, after Jorge del Castillo and Yehude Simon, to serve under Garcí­a since he took office in 2006.

• Regional elections

President Alan Garcí­a also called for the introduction of a second round of regional elections to define the 25 regional presidents and councils in Peru. At the moment regional authorities in Peru's 25 departments are elected after just one round of voting. Garcí­a said that if regional presidents required an absolute majority it would confer greater legitimacy on the victor. The opposition argued that the extra election would simply be an unnecessary drain on public finances.

Watched by 14m Peruvians, over three quarters of the electorate, the final televised presidential debate on 3 April was billed as the “big fight", as the five leading candidates, who are running neck and neck in the polls ahead of the 10 April first round (the top three on a technical tie), sought to shine. Yet, on the night, the candidates seemed wary of losing their tightly fought positions. They sparred but were unable to land any lethal punches. It's unlikely that the large proportion of undecided voters (roughly 20%-30% of the electorate) were swayed by the performances. All five played a relatively defensive game, bar Alejandro Toledo and Keiko Fujimori, who gave their rivals a dressing down. In the absence of much policy debate, what ultimately emerged from the debate was a firmer idea of who each candidate sees as their main challenger.

The first round exit polls, which will be the first legally allowable polls in a week (since 3 April) will be much scrutinised for clues as to who will take the reins in Peru. The top three candidates, Ollanta Humala, a leftist nationalist heading up Gana Perú, the centrist former president Alejandro Toledo (2000-2006), of Perú Posible, and Keiko Fujimori, of Fuerza 2011, are tied ahead of the first round vote, if the error margin is taken into account (See sidebar and table below). Moreover, there will be all to play for ahead of the expected second round on 5 June. That gives plenty of time for horse trading, which promises to be particularly intense amid a fragmented new congress [RA-11-03].

Depending on which two candidates manage to squeeze past the others into the second round, new allegiances will be forged to back the main contenders or indeed to block them. No party yet wants to admit to casting about for potential partners. Shared political affinities obviously make some combinations more natural than others [WR-11-13]. Yet, as evidenced in 2006, these electoral alliances rarely survive infancy, never mind evolve into governing coalitions.

The Big Fight
“Do not take a leap into the unknown", Toledo warned voters in the aftermath of the debate, as he urged Peruvians to vote responsibly for economic continuity. The problem for Toledo, who peaked early in the campaign before losing ground to his rivals, is that all three centre-right and liberal candidates - himself, Keiko Fujimori and his former economy minister and prime minister, Pedro Pablo Kuczynski (PPK) - are offering more of the same and there is very little to distinguish between their platforms. This partly explains Toledo's belated shift to the Left, with initiatives such as a mining windfall tax apparently designed to capture those centre-left voters still unconvinced by the nationalist (and defeated 2006 runner) Ollanta Humala's newly moderate stance.

Toledo took pop shots at everyone - but aside from Humala, whose popularity soared late in the campaign as his own dipped, he had his sights most clearly trained on Keiko Fujimori, the former congresswoman and daughter of the imprisoned former president Alberto Fujimori (1990-2000). All three have a significant vote overlap.

Assigning the candidates nicknames -'Mister Kuzcynski' and 'Commander Humala', and chiding Fujimori for “papi's economic legacy"-, Toledo injected a bit of humour into an otherwise lacklustre debate. However, his politically savvy and often aggressive questions failed to unnerve his opponents and his performance was not deemed good enough by pollsters to reverse his drop in voting intentions. According to one local polling firm, Ipsos Apoyo, Toledo dropped 2.9 points between 27 March and 3 April, while Humala and PPK continued to gain.

In her discourse, Keiko Fujimori sought to remind voters of the economic and security boons for Peru under her father. Alberto Fujimori's involvement in his daughter's campaign has become more visible in its latter stages- both in terms of advice and in terms of how she couched her policies. Clearly, however, he is also a problem for her. She was forced to abandon a local campaign stop (in Loreto), amid violent protests against her and her father.

Ollanta Humala stuck to his script, much to the disappointment of the other candidates - who had hoped to trip him up - and some of his own supporters, who felt he should have fought harder. He played a defensive game, responding to the other candidate's goading questions by firing other questions back at them. This 'play safe' strategy may not have lost him votes, but it won't have advanced him much either. His main challenge in the final week was to consolidate his poll ascent.

In the final 3 April Ipsos Apoyo poll, released prior to the debate that evening, Humala scored highest among respondents because “[he] understands the problems of the average Peruvian" and “has a vision for Peru". However, he also had the highest rejection rate, with 41% of respondents saying they would never vote for him. Keiko Fujimori's rejection rate was 40%.

Changing the constitution
The uppermost question in many voters' (and investors') minds will be Humala's promise to change the constitution. Since the outset of his campaign, this has been his rallying call to those Peruvians deeply unsatisfied with the way the country is run. This group may run to as much 30%-40% of the population, according to local electoral analysts. Moreover, an additional 20% of the electorate, potentially more moderate, also feel that some adjustments need to be made. If Humala can convince this section, then he could be onto a winner.

In the debate, Humala described the changes he wants to achieve in Peru as “a gradual and persistent transformation, which will not be accompanied by destabilizing pressures".

Afterwards, in an interview with the TV programme Cuarto Poder, he elaborated. He explained his project, contained in a 198-page manifesto, in moderate and nuanced terms, in a clear effort to refute his 'radical' tag and to convince undecided voters. Denying claims by his rivals that he would seek to impose reform, potentially by recourse to direct public referendums in the style of Venezuela's Hugo Chávez , Humala insisted that any constitutional reform would be a broad political project backed by a cross party pact in congress and respecting the judicial and constitutional process.

Much has been made of Humala's proposed constitutional overhaul, with his opponents deliberately scaremongering. In reality however, what he is proposing is not unprecedented. In Peru the constitution has been altered by public referendum before - under Fujimori in 1993. More recently, a national referendum was successfully held alongside the 3 October 2010 regional and municipal elections on the issue of the Fondo Nacional de Vivienda (Fonavi) - where an overwhelming 'Yes' vote obliged the government to pay back worker contributions to a social fund (collected between 1978 and 1998), that had never been disbursed.

	Ollanta Humala	Alejandro Toledo	Keiko Fujimori	PP Kuczynski	Luis Castañeda	Error margin/Sample
Ipsos Apoyo
03-Apr	25.1	17.1	18.9	16.7	11.8	2.2% / 2000
27-Mar	21	20	19	15	14	2.2% / 1986
20-Mar	17	23	19	14	14	2.2% / 1882
13-Mar	15	26	19	9	17	2.2% /2000
28-Feb	14	28	21	6	17	2.2% / 2000
12-Feb	12	28	22	6	18	2.2% / 2000
Datum
03-Apr	29.7	18.7	21.8	18.7	11.4	2.2% / 2200
01-Apr	21.4	17.4	16.4	17.5	12.6	2.8%/1211
25-Mar	17.6	19.4	16.1	17.5	15.5	2.8% /1214
20-Mar	18.5	20.2	17	12.7	15.5	2.2% /2010
05-Mar	13	29	18	7	18	2.8% / 1,213
15-Feb	11	28	19	5	19	2.2% / 2008
07-Feb	10	30	20	5	19	2.2% / 1205
14-Jan	10	27	20	4	22	2.8% /1202
IOP-PUCP
31-Mar	24.3	18.8	18.4	16.8	12	2.3% / 1800
15-Mar	16	27	19	11	17	2.47% / 1570
10-Feb	12	29	20	4	18	2.47% / 1570
02-Dec	9	22	20	1	25	279% / 1515
CPI
03-Apr	28.7	19.6	19.1	17.8	14	2.1% / 2000
27-Mar	21	19	19	16	16	2.8% / 2050
21-Mar	16	21	20	15	17	1.96% / 2500
01-Mar	13	28	19	6	20	2.2% / 1995
08-Feb	10	30	18	4	20	2.3 % / 1800
16-Jan	12	25	19	5	22	2.3% / 1769
IMASEN
03-Mar	25.1	20.4	18.1	16.3	11.9	1.9% / 2688
04-Mar	14	30	19	20	6	2.3% / 1878
01-Feb	12	31	20	21	5	2.1% / 1868

• Second round poll scenarios:

Fujimori v Humala = Fujimori
Humala v Toledo = Toledo
Toledo v Fujimori = Toledo
Humala v PPK = PPK
*Most pollsters put the difference at 1-2 points, except for Humala v PPK, which averages a 5 point margin in favour of Humala.

• Referendums

In Ecuador and Bolivia, public referendums in favour of constitutional reform have helped reassert the state's sovereignty over natural resources. However, a switch to 'service provision' contracts still tacitly acknowledges the need for foreign investment in order to improve innovation and boost productivity. In Ecuador, the creation of a constituent assembly via referendum in 2007 was backed by 80% of the population. Subsequent elections showed continued support for the reformist project led by President Rafael Correa. However, Correa's upcoming 7 May referendum to reform parts of the judiciary and the penal code has proved much more controversial.

En las elecciones locales, los votantes evitaron a los dos partidos tradicionales; Bogotá tiene su primer alcalde de izquierda, el lí­der sindical Lucho Garzón, a quien muchos comparan con Lula da Silva.

Si el Presidente Alvaro Uribe tiene un Plan B para hacer frente al fracaso de su acariciado referéndum sobre reformas, lo mantuvo bien oculto -pero es probable que lo revele en los próximos dí­as. Nadie pensó que hablaba en serio al predecir que la 'gobernabilidad' zozobrarí­a si fracasaba el referéndum. El veredicto del electorado colombiano el 26 de octubre, poco más o menos, fue que las propuestas de reformas no valí­an la molestia de concurrir a votar.

En las dos ciudades más populosas, Bogotá y Cali, la abstención llegó a 57% y 64%, respectivamente. Al escribir este informe aún no habí­a emergido un conteo final; las cifras provisionales disponibles no muestran que ni una sola de las 15 preguntas haya atraí­do el umbral de 6,2m votos requeridos para dar validez al resultado (unas pocas llegaron muy cerca). El mejor resumen fue la frase atribuida a Uribe por la revista Semana, en una reunión social el dí­a después de la votación: 'Esposa, partamos, porque esto está perdido.'

El 23 de octubre, cuando se realizaron las elecciones locales y regionales, el electorado dio otro veredicto: ellos desean cambios, pero no lo esperan de los dos partidos tradicionales, el Liberal y el Conservador. Juntos, ambos apenas ganaron la mitad de las gobernaciones. Las principales ciudades fueron a otros partidos, algunos de ellos alejados de la corriente principal.

El resultado que más llamó la atención fue el de la alcaldí­a de Bogotá, ganada por Luis Eduardo (Lucho) Garzón, del izquierdista Polo Democrático Independiente (PDI). Es el primer izquierdista en ganar la alcaldí­a de Bogotá, considerado el segundo más importante cargo electo en el paí­s. Hijo ilegí­timo de una criada que cuando adolescente trabajó como caddie en el club de golf más exclusivo de Bogotá, luego se destacó como sindicalista, en una carrera que culminó con su elección como lí­der de la Confederación Unitaria de Trabajadores (CUT), una de las más grandes organizaciones obreras.

Los comentaristas locales ya han comenzado a buscarle parecido con Lula da Silva de Brasil. En verdad, luego de su elección comenzó a adoptar el semblante de un estadista, asegurando a Uribe: 'Presidente no deje que le vendan el cuento que somos el cuco. Esté seguro que trabajaremos juntos.' En beneficio de sus seguidores, agregó: 'Alguna cohabitación es posible porque ambas partes se benefician.' Garzón es opuesto a la polí­tica de 'seguridad democrática' de Uribe y de su beligerante enfoque del conflicto interno de Colombia.

Luego de haber actuado en conjunto con éxito en Monterrey, Brasil y Argentina decidieron avanzar en su asociación en polí­tica exterior. En una decisión sin precedente, Brasil ha ofrecido incorporar un diplomático argentino a su equipo cuando se convierta en miembro no permanente del Consejo de Seguridad de la ONU, y Argentina reciprocará cuando llegue su turno. Por ahora, se unieron en una campaña para 'evitar el aislamiento' de cualquier paí­s de América del Sur: significa oponerse a todo intento de condenar al ostracismo a Venezuela.

Este fue uno de los mensajes que el Presidente Néstor Kirchner, de Argentina, transmitió al Presidente de EU, George Bush cuando se reunieron en Monterrey: que Argentina y Brasil resistirí­an cualquier presión para aislar a Hugo Chávez . Aparentemente fue persuasivo.

El canciller de Argentina, Rafael Bielsa, dijo que Bush le expresó a Kirchner: 'Le voy a pedir a usted, Presidente Kirchner, lo mismo que le pedí­ al Presidente Luis Ignacio da Silva, de Brasil, que transmita al Presidente de Venezuela, Hugo Chávez el mensaje que si Chávez gana legalmente el plebiscito, él continuará gobernando Venezuela legalmente.'

Luego de la cumbre de Monterrey, el principal asesor de Lula en polí­tica exterior, Marco Aurélio Garcí­a, explicó públicamente la polí­tica conjunta: 'No queremos aislar a ningún paí­s en América del Sur. Creemos que eso es malo para la estabilidad de la región sudamericana.' Sin embargo, dejó en claro que los dos no tení­an intención de ser cooptados por Chávez , que ha comenzado a hablar de un 'eje Venezuela-Brasil-Argentina' en sintoní­a con su ideologí­a 'Bolivariana', y que el 15 de enero indicó que eso serí­a consolidado cuando él sea anfitrión de Lula y Kirchner en Caracas, el 1 de marzo.

Garcí­a dijo que la única reunión programada entre los tres tendrá lugar cuando se realice la cumbre del G-15 en Puerto Ordaz, Venezuela, el 25-28 de febrero. Y agregó que el propósito de la reunión no es criticar a EU, sino para concentrarse en asuntos económicos, y particularmente en el interés de Venezuela en una asociación con Mercosur.

[El G-15, que en realidad ahora tiene 19 miembros, es un grupo creado en 1989 para promover la cooperación mutua y actuar como foro consultivo regular. Sus miembros son Argelia, Argentina, Brasil, Chile, Colombia, Egipto, Jamaica, Kenya, India, Indonesia, Irán, Malasia, México, Perú, Senegal, Sri Lanka, Venezuela y Zimbabwe -una superposición con el G-22, ahora disminuido, que emergió de la reciente reunión de comercio en Cancún.]

En el Consejo de Seguridad
Brasil se incorporó al Consejo de Seguridad de la ONU como miembro no permanente, reemplazando a México, el 1 de enero, y permanecerá hasta 2006. El acuerdo para incorporar un diplomático argentino a su equipo durarí­a hasta 2004, porque -como no hay otros candidatos de América Latina y el Caribe- es probable que Argentina se vuelva miembro no permanente del consejo en 2005. Si ese es el caso, recién en 2007, cuando expira el mandato de Brasil, se unirá un diplomático brasileño al equipo argentino en el Consejo de Seguridad.

Hubo cierto alivio cuando se dijo a los bolivianos que el atentado suicida en el congreso, el 30 de marzo fue un acto solitario, no el comienzo de una ola de terrorismo recientemente predicha por un fiscal especial. Pero el alivio duró poco: tres dí­as después, la policí­a encontró un escondite con 1,6 toneladas de dinamita en La Paz, junto con 30 bolsas de nitrato de amonio -una combinación capaz de producir devastadoras bombas.

Las autoridades investigan las ramificaciones posibles; por ahora el dueño de la casa donde se halló el escondite, fue acusado sólo de manejar explosivos de manera ilegal y de poner en peligro al vecindario.

El hallazgo, sin embargo, se produce luego de la reciente declaración del fiscal especial, René Arzabe, anticipando un informe de la investigación lanzada en abril del año pasado, afirmando que 'el terrorismo, existe en el paí­s y está creciendo más fuerte cada dí­a.' Citó como evidencia recientes incautaciones de armas y municiones, algunas de contrabando desde el exterior, otras robadas en arsenales militares en Bolivia; escondites de armas hallados en El Alto, cerca de La Paz; e informes de conexiones entre activistas productores de coca y 'grupos con bases en el extranjero, que tratan de extender su ideologí­a.' Esto último fue tomado con reservas, pues Arzabe dijo que los lazos eran con el Ejército de Liberación Nacional (ELN) de Colombia y el Movimiento Revolucionario Tupac Amaru (MRTA) de Perú; el primero muy golpeado por los paramilitares, y el último inactivo desde hace tiempo. Como Arzabe también citó la conexión con las drogas, el lí­der opositor Evo Morales dice que es un montaje para justificar la intervención militar en áreas de cultivo de coca, e tal vez hasta un golpe.