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Bolivia: The US Assistant Secretary of State for Western Hemisphere Affairs, Arturo Valenzuela, paid his first official visit to La Paz on 1 June where he met Bolivia's foreign secretary David Choquehuanca. The meeting was aimed at repairing bilateral relations which have been suspended since September 2008 after both ambassadors were ejected following spying allegations involving the-then US envoy to Bolivia, Philip Goldberg. Choquehuanca said after the meeting that a new bilateral framework agreement was “99% there".  It is worth noting however that he made similar positive noises following his visit to Washington in late October 2009, which failed to yield any further results.

Caribbean: The US announced last week it had set aside US$37m for the financial year 2010 to support the Caribbean Regional Security Cooperation Initiative (CBSI), a new initiative first floated by President Barack Obama in April 2009 at the Fifth Summit of the Americas in Trinidad & Tobago. The regional initiative is in response to concerns expressed by the Caribbean Community over the negative spillover effect of regional initiatives such as the Mérida Plan, the multi-year programme to combat organized crime in Mexico and Central America, and the goes beyond security and law enforcement to include strengthening and reform of the institutions of the judiciary, prosecution and prisons as well as social justice. The Obama administration's FY 2011 request for CBSI is US$79m.

Cuba: On 2 June PJ Crowley, a US state department spokesman, said that the US government “continues to hope that prisoners of conscience will be released rather than just relocated, and as soon as possible". Crowley was asked for the US reaction to Cuba's transfers earlier this week of political prisoners to prisons closer to their families, following negotiations with the Cuban government and the Roman Catholic church in Havana. On 2 June the Democrat chairman of the House of Representatives Foreign Affairs Subcommittee on the Western Hemisphere, Eliot Rangel, was dismissive of the move, saying it was “insignificant_.it's like moving chairs on the Titanic", he quipped. A Republican Florida congresswoman,  Ileana Ros-Lehtinen, called the prisoner transfer “a farce" and said that the Cuban government “deserved neither praise nor credit".
 
Peru: On 1 June US President Barack Obama met his Peruvian peer, Alan Garcí­a during Garcí­a's official four-day visit to the US. The agenda for the meeting was inter-regional cooperation and the implementation of a bilateral free trade agreement (FTA), signed in 2007. The presidents also reached an agreement that will aid the implementation of the FTA. The agreement is based on greater technology-related investment. The tougher topics of immigration and narco-trafficking were only briefly mentioned during the press conference. These areas are likely to form a major part of US Secretary of State Hilary Clinton's visit to Lima for the Organization of American States (OAS) meeting, on 6-8 June.
 
Mexico: On 27 May the Mexican state newsagency, Notimex, reported that the US Department of Justice (DOJ) was close to finalising its application to the US Supreme Court to overturn the controversial Arizona immigration law, SB1070. The DOJ, which refused to comment on the Notimex story, is reportedly going to base its case on the argument that the Arizona law is unconstitutional because it infringes upon the prerogatives of the federal government. The law, which does not come into force until the end of July, requires the police, “when practicable" and if they have reasonable suspicion, to check the immigration status of people they stop, detain or arrest for another reason. According to Notimex, anonymous DOJ officials made the point that under the US constitution only the federal government is responsible for border security. Two US newspapers, The Arizona Republic and The Los Angeles Times, have reported that the DOJ may also argue that the law is unconstitutional because it constitutes 'racial profiling', and would thus infringe the rights of Latinos living legally in Arizona. Matthew Miller, a DOJ spokesman, yesterday said that he could not confirm whether any DOJ decision was imminent.

The Week Ahead

Friday

Peru: Final day of the 35th meeting of the Energy Working Group of the Asia-Pacific Economic Cooperation (APEC).

Dominican Republic: 13 leaders from the region will take part in the 20th Summit of Heads of State of the Rio Group.

Cuba: European development commissioner Louis Michel will meet Cuba's foreign minister, Felipe Pérez Roque, during his trip to the island.

Saturday

Nicaragua: The ruling Frente Sandinista Liberación Nacional (FSLN) will hold elections to pick candidates for the municipal elections in the north of the country.

Ecuador: The Organisation of American States (OAS) will send a delegation to Ecuador to discuss the current crisis between Colombia and Ecuador.

Sunday

Nicaragua: The ruling FSLN will hold elections to pick candidates for the municipal elections in the Pacific region.

Panama: The ruling Partido Revolucionario Democrático (PRD) will pick its national executive committee.

Wednesday

Costa Rica: Presidents of Central America will meet to discuss the Association Agreement with the European Union.

Thursday

Haiti: Laura Bush will visit an AIDs clinic in Haiti to promote the battle against AIDs.

The Policí­a Nacional Civil (PNC) in El Salvador will start to train a special investigative unit to deal exclusively with the growing problem of extortion in the eastern department of San Miguel, the director of the PNC, Rodrigo Avila, revealed after meeting a group of businessmen and shop owners from the department. 

Avila did not divulge any details on the size of the new unit or exactly how and where it will operate but its creation was forced on the government in response to a threat from the Cámara de Comercio e Industria de El Salvador (CCIES) in San Miguel to go on strike, stage protest marches and even stop paying value-added tax - to channel these resources into private security - unless the authorities take steps to end the extortion racket, run by mara gangs. The CCIES claims that some 80% of businesses in San Miguel are at the mercy of mara extortionists. René Aparicio, the president of CCIES, calculates that some businesses are paying out as much as US$1,200 to US$1,400 a month in protection money.

There has even been some talk of the revival of shadowy death squads such as "Sombra Negra" to carry out extrajudicial killings of criminals involved in extortion. The CCIES is certainly not in the mood to negotiate with the extortionists. Businesses reacted furiously to a suggestion by the mayor of San Miguel, Wilfredo Salgado, that he sign a "peace accord" with a gang of mara extortionists for the next six months. The CCIES said this was tantamount to condoning the actions of the maras and refused to allow Salgado to negotiate in their name. They argued that they needed a permanent solution not a six-month truce. They also accused Salgado of politicising the issue; of trying to win their favour so that he can build up a support base for a tilt at the presidency for the rightwing Partido de Conciliación Nacional (PCN).

Transport unions in San Miguel joined businesses in condemning the government's failure to crack down on extortion. They claim that their members are losing up to US$500,000 a month in protection money paid to the mara gangs. "Extortion [and] the destruction of company property by mara gangs is the order of the day_ and what is most serious is that they (the maras) are threatening the physical integrity of people by means of extortion; we must put an end to this climate of fear," Catalino Miranda, the president of the Federación de Cooperativas de Transporte (Fecotrans), said.

According to Fecotrans, the biggest union of public minibuses, mareros from the Mara Salvatrucha (MS) and Mara-18 exact a "daily tax" of between US$3 and US$5 a day on most of the microbus routes as protection money. Some bus companies are paying up to US$500,000 a month and the authorities are doing nothing about it, the president of the Asociación de Empresarios de Autobuses Salvadoreños (AEAS), Genaro Ramí­rez, said.

The complaints about the actions of the maras, coupled with steadily rising homicide figures, suggest that the government's high-profile Mano Dura and Super Mano Dura campaigns against the maras have failed to have any tangible effect. The interior minister, René Figueroa, remained upbeat, however. "We have been able to foil bands of criminals in other departments, and we are going to do it in San Miguel, but we need people to make denunciations," he said.

The party of former president Mireya Moscoso, the Partido Arnulfista, which suffered a heavy defeat in the presidential elections on 2 May, is no longer even the main opposition in Panama. A new political coalition has shunted the Arnulfistas into third in the pecking order. Meanwhile, the electoral tribunal is considering the legality of a petition drive headed by former legislator and 2004 Panama City mayoral candidate Marco Ameglio to call a special convention of the Arnulfistas. The movement, which has signed up most of the party's convention delegates, aims to replace Moscoso and her supporters in the Arnulfista leadership.

The new opposition coalition, Coordinadora Nacional de Oposición (CNO), which has 19 seats in the 78-seat legislative assembly, eclipses the Partido Arnulfista, which has 16 seats in terms of legislative representation. The CNO is composed of the Movimiento Liberal Republicano Nacionalista (Molirena), which has four seats; Partido Solidaridad (PS), nine seats; Partido Liberal Nacional (PLN), three seats, and Cambio Democrático (CD), three seats. The ruling coalition, which is made up of the Partido Revolucionario Democrático, with 42 seats, and its small ally, the Partido Popular, which has two seats, retains a majority in the legislative assembly. 

The CNO roundly condemned the first 100 days of President Martí­n Torrijos's mandate. It said in December that the most notable features of his rule to date were secrecy and a lack of consultation. It is doubtful whether such a disparate coalition as the CNO will stay together for long. The candidate for the CD in the last elections, Ricardo Martinelli, for instance, was strident in his criticism of marriages of convenience after the elections. The PS had pretensions to surplant the Arnulfistas as the main opposition party itself. However, the PS lost its way in June 2004 when former president Guillermo Endara, who ran on the PS ticket in the presidential elections - finishing runner-up to Martí­n Torrijos, split from the party after falling out with the leadership committee. Endara applied to the electoral tribunal on 24 November for permission to set up a new party: Vanguardia Moral de la Patria. He said that he wanted to give Panamanians a party without owners. 

Ditching Moscoso
The move to replace Moscoso and her closest associates is picking up momentum. Her government has become linked to a growing number of scandals as the Torrijos administration carries out its electoral promise to root out corruption. The rumour mill has it that Ameglio is receiving support from a number of old hands in the Partido Arnulfista, who feel that dropping Moscoso is the only way to distance the party from the damaging corruption scandals.

PEOPLE PROFILE is published every Tuesday and describes the professional background of key people emerging in the political and economic scenario.

Who is Carmen Argibay?
She is one of Argentina's most renowned jurists. She is president of the International Women's Association of Judges (Argentina), and now she has been nominated for the supreme court of justice by President Néstor Kirchner.

Why watch her?
If she is appointed to the supreme court she will be the first woman to sit on the country's top tribunal since the restoration of democracy. Argibay is left-leaning, very pugnacious, and is a strong supporter of abortion in a country in which the Roman Catholic Church remains very influential.

The file

Born: 15 June 1939

Place of birth: Buenos Aires, Argentina.

Education: Law, Universidad de Buenos Aires.

Public life: An upwardly mobile lawyer who has served at almost every level of the judiciary in Argentina and is currently a judge on the UN's international criminal court.

Timeline:

1960 - 1976: Starts her career in correctional law.
1976: Arrested under the military dictatorship. She is released without charge. Works privately.
1983: Appointed first appeals judge in correctional law.
1994-1996: Member of the International Association of Penal Law, the International Society of Social Defence, and founder of the International Women's Association of Judges (Argentina).
2000: Sat on the Tokyo tribunal for war crimes against women committed by the Japanese military.
2001: Appointed to the UN's international criminal court.
2004: Nominated for Argentina's supreme court by President Néstor Kirchner.

Strong points:
She is a lawyer of international repute. She will work closely with recently nominated supreme court judge Eugenio Zaffaroni, with whom she will have the task of cleaning up the dreadful image of the Argentine justice system after 13 years of being manipulated by former presidents Carlos Menem and Fernando De La Rúa.

Weak points:
She is probably too liberal for a conservative country. Her liberal stance on abortion, for instance, means that she is liable to face frequent run-ins with the Roman Catholic Church.

Prospects:
She faces another 40 days of congressional hearings before she is confirmed as a supreme court judge. Argibay will be immune to criticism from the national government. She is a fierce defender of the independence of the judiciary.

Who is he? Velásquez Quesquen is Peru's new prime minister.

Why watch him? Velásquez Quesquen comes from the ruling Partido Aprista Peruano (PAP) and represents the end of President Alan Garcí­a's attempt to broaden his government's base by bringing in independents. The prime example of this was Velásquez Quesquen's predecessor as prime minister, Yehude Simon.

Date of Birth: 12 March 1960.

Education: Law graduate from the Universidad Nacional Pedro Ruis Gallo de Lambayeque. He holds a master's degree in constitutional law at the Pontificia Universidad Católica de Lima. He taught constitutional law at the Universidad San Martí­n de Porres in Lima.

Public life: He comes from a strong Aprista family. His father distributed the Aprista newspaper, La Tribuna. His mother, Olga Quesquen, was a Mochica Indian and Velásquez Quesquen claims to be purely indigenous. In Mochica, Quesquen means “strong". The Mochica Indians live north of Lima around Chiclayo and Lambayeque. They are one of the few indigenous groups not to have protested much against the government.

Time Line:

1980: Joins the PAP.

1986: Number two in the Lambayeque university's PAP.

1992: Secretary general of the Lambayeque departmental executive.

1994: Mysterious incident in which he claims to have been attacked by terrorists.

1995: Elected to federal congress as a representative from Lambayeque.

2001: Re-elected to congress.

2002-2004: President of the audit and investigation committee in congress.

2006: Re-elected to congress and spokesman for the Apra bloc.

2008/09: President of congress.

11 July 2009: Sworn in as prime minister.

Strengths: Velásquez Quesquén's only qualifications for the premiership are that he comes from the Apra and follows Garcí­a's orders.

Weaknesses: He is something of a party hack. During his presidency of congress he has been accused of increasing the legislature's payroll by 292. The majority of those hired have Apra membership cards. The other big problem he has is over his credibility. He turned an incident in 1994 (a police checkpoint opened fire on him when his car failed to stop) into a terrorist attack.

Prospects: Uncertain. Velásquez Quesquen is less popular than President Garcí­a. Velásquez Quesquen's opinion polls rating is 16% while Garcí­a is on 21%. The social and political unrest in the country shows little sign of diminishing and there must be some doubt over whether the new government, with its more party political hue, can negotiate an end to it.

The only non-Aprista politicians in the new cabinet are Martí­n Pérez, a congressman from the right-of-centre Unidad Nacional (UN), and Rafael Rey Rey, the new defence minister, who is also from the UN but served in the first Garcí­a cabinet. The only senior non-Aprista in the cabinet is the new interior minister, Octavio Salazar. Salazar is a controversial former national police chief forced to resign by Remigio Hernani Meloni, who came in with Simon as an independent interior minister in October 2008 but only lasted until February 2009. Salazar's appointment was immediately condemned by Fernando Rospigliosi, an interior minister under the former president Alejandro Toledo (2001-2006) and now a leading political commentator. Rospigliosi said that Salazar's appointment would lead to more political persecution. He also noted that when he was police chief, Salazar veered from “heavy-handedness to paralysis".

"The collective Caricom [Caribbean Community] political leadership has permitted a ‘mood of gloom' to descend upon the wider integration movement". This was just one of many criticisms by regional leaders preceding the 32nd Caricom annual summit held this week in St Kitts & Nevis. While yielding some signs of closer regional cooperation, the summit arguably served to expose the dearth of progress since the 2010 meeting, which had seen Caricom forced to defend its very existence.

Caricom's failure to achieve implementation in full of the Caricom Single Market and Economy (CSME) and the free movement of all nationals between member states – two key aims – was cited last year as evidence of the ineffectiveness of the 38-year old 15-member grouping, stemming from its lack of implementation mechanisms and fuelling calls for a structural overhaul [WR-10-27]. Driven by economic concerns (the UN Commission for Latin America and the Caribbean put growth for the sub-region for 2010 at 0.5%, below 6.6% for South America) and the security crisis (see sidebar), these criticisms of what was widely dubbed the "implementation deficit" have yet to be addressed a year later, despite pledges to do so.

The Jamaica Gleaner blames this continued resistance in part on political and economic heavyweights, Jamaica and Trinidad & Tobago: the former still carries scars from its central role in the break-up of the West Indies Federation; the latter, Caricom's strongest economy, is concerned that it will be "overrun by poor neighbours". The problem has been compounded, however, by the current leadership vacuum. Caricom has yet to appoint a permanent successor to Edwin Carrington, who stepped down as Secretary General in December 2010 after 18 years in the job.

Yet, the summit did produce some hints of closer cooperation. As well as the launch of the Caribbean Public Health Agency (CARPHA), the summit featured a brief appearance from Haiti's new President Michel Martelly, who made a bid for closer cooperation with Caricom, urging leaders to remove the visa requirements for Haitians and invest in the country (which has received some US$35m in pledges for reconstruction). It was also notable for the presence of Colombia's President Juan Manuel Santos as part of his efforts to enhance Colombia's international profile. Following his key role in resolving the Honduran crisis [WR-11-12] and presence at the Central American security summit [WR-11-26], Santos underlined Colombia's readiness to cooperate with the Caribbean, hitherto a sphere of influence of his Venezuelan peer Hugo Chávez through the regional discount oil scheme, Petrocaribe.

• Security – a unifying force?
  

Like Central America, the Caribbean has been afflicted by the increase in organised crime and violence, with the May 2010 crisis in Jamaica over the extradition of Christopher ‘Dudus' Coke to the US, serving as a stark example of the problem [WR-10-21]. The need for regional cooperation against crime was highlighted by US Secretary of State Hillary Clinton in a recent visit to Jamaica in which she announced that the US had budgeted US$77m in the 2011 fiscal year for the Caribbean Basin Security Initiative (CBSI), a regional scheme launched by the US in May 2010 with an initial sum of US$45m.

Development: On 27 June the internal political situation in Venezuela remained fragile.

Significance: The leadership vacuum in Venezuela is becoming acute and the political situation is lurching. The opposition and the government alike appear directionless. Both sides have relied very heavily on President Hugo Chávez for over a decade. Both now desperately want him back.

Key points:

• The reaction of the Venezuelan opposition to the president's continued absence is very telling of its interminable fragmentation. Yesterday, the main opposition  pre-presidential candidate for 2012, Henrique Capriles Radonski, made his first comment on the president's illness, saying he wanted him back  and fully recovered as soon as possible so he could defeat him legitimately at the ballot box.  On some recent polls, Capriles Radonski, the state governor of Miranda, is the most popular politician in the country and the only one who stands a chance of defeating Chávez in 2012.

• In contrast, the secretary general of Patria para Todos, José Albornoz, sought to play up the dislocation in the government and the rumoured strains within the ruling Partido Unido Socialista de Venezuela. Quoting the late ‘Chavista' general and presidential mentor Alberto Müller Rojas, he warned that a "nest of scorpions" had taken over the presidential palace, Miraflores, and demanded more information as to the president's condition. Some in the opposition suggest that Chávez's absence is all a PR stunt to underline his importance to the county's stability.

• Elsewhere, another potential 2012 opposition candidate, the right-winger María Corina Machado, had tear gas canisters thrown at her while making a speech at the Universidad Central de Venezuela. Radical left-wing groups previously kept in check by Chávez may feel emboldened by the president's absence.

• If Chávez does appear in public, as expected, on 5 July, he will need to be seen to be fit. If he looks frail or ill, there is a risk that his tight central grip will weaken.

Development: On 3 May, Uruguay's armed forces commander, General Jorge Rosales, officially dismissed General Luis Pérez, allegedly following a personal dispute.

Significance: Pérez is Uruguay's most senior general, who until now was in charge of the army's First Division, the country's largest. His unexpected dismissal ahead of the Uruguayan army's bicentennial celebrations exacerbates the institutional crisis in the forces following the controversy over the imminent repeal by congress of the ‘Ley de Caducidad' (due for a final vote in the chamber of deputies on 19 May).
  
Key Points:

• Initially, local media reported that Rosales had dismissed Pérez over comments he made about the government's support for repealing the controversial amnesty law. Press reports quoting unnamed military sources said that upon learning of Perez's criticisms, Rosales asked him to submit a formal transcription of his comments. Subsequently, Rosales issued an order to relieve Pérez from his duties and called for his immediate arrest.  

• However, this version of events was quickly denied by the army in a statement explaining that Pérez's dismissal answered to "service reasons". The latest press version is that Pérez had long had a problematic relationship with Rosales. Rosales's decision not to put Pérez in charge of the upcoming 18 May parade to commemorate the army's bicentennial prompted Pérez to remark that under Rosales the army acted with "a lack of authority and a lack of responsibility".

• After issuing the orders, Rosales immediately informed Defence Minister Luis Rosadilla and President José Mujica of his decision and explained that he had taken it "because there was a situation of disloyalty and lack of respect for the chain of command". President Mujica accepted Rosales's decision but ordered him to scratch the arrest order, on the grounds that it went beyond what was required. The government has been criticised by the opposition, which claims that it should have been consulted before any decision was taken.

• Pérez, who had at least two more years left in service, admitted to longstanding differences with Rosales but was adamant that "the issue was not political, nor did it answer to the ‘Ley de Caducidad'". "I am going home and he [Rosales] will remain commander for five months until he leaves", he stated, in apparent allusion to rumours that the repeal of the amnesty law could prompt Rosales's resignation, creating an even bigger leadership crisis in the forces.

Index variation and % change 25 July '03 - 01 August '03 

Buenos Aires (Merval): 
733.76 - 747.78 (1.91) 

São Paulo (Bovespa): 
13750.36 - 13129.81 (-4.51) 

Santiago (IPSA): 
1301.84 - 1333.51 (2.43) 

Bogotá (IGBC): 
2174.67 - 2123.12 (-2.37) 

San José (BCT): 
12174.16 - 12239.19 (0.53) 

Quito & Guayaquil (Interinvest): 
74.77 - 74.93 (0.21) 

Mexico (BMV): 
7349.96 - 7320.41 (-0.4) 

Lima (ISVBL): 
1855.95 - 1853.31 (-0.14) 

Caracas (BC): 
14132.84 - 13953.48 (-1.27) 

Source: Daily market reports.

He wants assured votes in congress and a boost for next year's municipal elections. PT leaders acknowledge that this means ceding ministries.

The number of Brazilians who see President Lula da Silva leaning heavily towards the right - 38%, according to a recent poll (WR-03-34) - may well increase after two developments last week. The first was Lula's explicit offer of an alliance with the right-of-centre Partido do Movimento Democrático Brasileiro (PMDB); the second, the dismissal of Marcelo Resende as head of the agrarian reform institute.

The overture to the PMDB was made at a meeting between Lula and PMDB leaders on 2 September. On offer are some (as yet unspecified) ministries and a coalition for next year's municipal elections. The PMDB had already entered a loose arrangement to support the government's pension and tax reforms in congress, but the recent high-pressure horsetrading which led to substantial amendments of the original proposals [WR-03-31] has convinced Lula that he needs to tie in the PMDB more firmly.

What is at stake
The PMDB has the second-largest bloc in the lower chamber of congress and the largest in the senate. So far, its leaders had held back from a closer relationship with Lula because they wanted to retain independence for next year's municipal polls. The PMDB is the party that controls the largest number of municipal governments, and it wants to extend that control further.

Put simply, Lula wants to piggyback on the PMDB's municipal power. This puts him in the position of the supplicant on two fronts - which means that the PMDB is in a position to exact a considerable political price. The experience of the three recent governments in which the PMDB was a partner (Fernando Collor in 1990-92, Itamar Franco in 1992-94, Fernando Henrique Cardoso in 1995-2002) suggests that this is unlikely to be a one-off transaction: the PMDB's style is constant exaction of concessions.

The argument being deployed off the record by PT congressional leaders is that they have no real choice but to go for a `strategic merger [...] even if it costs some ministries.' They say they are just being realistic: `We have a weak base in congress, and apart from the bills we are now pushing, we will need help for future plans in other areas.'

Change of tack on land issue
As Lula was putting his offer to the PMDB, a government spokesman was announcing that Lula had dismissed Marcelo Resende as president of Incra, the agrarian reform institute. It was made abundantly clear that this was due to Resende's refusal to condemn outright the seizure, or `invasion', of farms by the MST, the movement of landless peasants. As Lula put it later, `The government's objective is to promote a peaceful agrarian reform.'

Resende, it must be noted, had been appointed on the recommendation of the MST and the Comissão Pastoral da Terra (CPT), the Catholic church's pastoral commission on land issues. Resende was replaced by the economist Rolf Hackbart, who had been serving as adviser to Aloí­zio Mercadante, the ruling PT's leader in the senate, and had previously acted as adviser on agricultural and land issues to the PT bloc in the lower chamber, when they were in the opposition (1991-2000).

The change was instantly applauded by the militant association of landowners, the União Democrática Ruralista (UDR). Its president, Luiz Antônio Nabhan Garcí­a, said, `[Resende's] departure was an important step towards lowering the radicalisation of the countryside. Resende was a radical.' But he clearly sees this as only a first step. `The government,' he added, `must put an end to political and ideological interference in an area which must be exclusively technical.' He then went on to demand the dismissal of all officials sympathetic to the MST in Incra's regional delegations.

Near the opposite end of the spectrum, Tomás Balduino, bishop of Goiás and president of the CPT, said that the change signalled the victory of those who want a `less democratic' agrarian reform: `It is the reform the IMF wants; the other one, the one intended to serve millions of landless peasants, has been aborted [...] Tension in the countryside will worsen because the social organisations will no longer feel that they are the government's partners in the agrarian reform project.'

The MST moved more cautiously, especially after Hackbart — no stranger to them — promised that there would be no changes in Incra's regional delegations. The leaders of the MST said that they would only issue a formal statement on Resende's replacement later this week, after a meeting with Hackbart. Occupying the middle ground, Contag, the confederation of agricultural workers, has described Resende's replacement as `inopportune' and warned that it could stall the agrarian reform process.

Hackbart's line is that the Incra needs `strengthening', particularly on the financial side: `All agrarian reform projects need resources; someone has to finance the agrarian reform.'

"Bolivia once had a sea -- and I dream of bathing on a Bolivian beach."

Hugo Chávez , President of Venezuela, triggering a diplomatic row with Chile.

"I am not a very diplomatic diplomat."

Adolfo Aguilar Zí­nser, former Mexican ambassador to the UN, after having been dismissed for saying that the US considered Mexico its `backyard'.

"It is my government's decision never to forsake the poor in the neediest departments of the country [...] because poverty can be a breeding ground for terrorism."

Alejandro Toledo, President of Peru.

Sometime this week Venezuela's electoral authority, the CNE, will have to decide whether the mass of suspect referendum petitions are just `trivial procedural errors', as the opposition claims, or evidence of a `megafraud' plotted by the opposition, as President Hugo Chávez and his followers maintain. At that point, the observers from the OAS and the Carter Center will have to decide whether the CNE decision has been impartial or biased. At the end of last week, the CNE had 213,190 petition forms `under observation'. Of these the bulk, 171,359, were submitted by the opposition; the remaining 83,127 were submitted by the pro-Chávez camp in support of recall initiatives against the opposition.

If the allegations of two detained suspects are proven true, torture is still being practiced in Mexico city - and is being condoned by high-ranking officials. The two men, arrested on suspicion of theft, claim that they were severely beaten by police in the presence of the two top security officials in the city government, Marcelo Ebrard and Gabriel Regino. The city's chief prosecutor has initiated an investigation, but has already said that there seems to be insufficient evidence against Ebrard or Regino.

The two officials have denied the accusations. Ebrard said, `This is outrageous: now the criminals are the victims!' He says the charges are a reaction against his anticrime offensive. His boss, mayor Andrés Manuel López Obrador, concurs.

Fresno, California, was the venue last month for an unusual crossborder gathering to discuss migration - or, as the organisers put it, 'Territory and Mobility'. The 100-or-so participants represented 18 different ethnic groups from both sides of the Mexico-US border.*

The meeting was organised by Pan Valley Institute (PVI) of the American Friends Service Committee (AFCS) and the Frente Indí­gena Oaxaqueño Binacional (FIOB), an organisation of indigenous peoples living in the Mexican state of Oaxaca and in the US. Migration, one of the two issues on the agenda and one of Nafta's major headaches, was broached with a heavy dose of reluctance. Native American participants said that for them the issue of immigration is of scant significance, because borders were created to protect the interests of the whites. For that reason, they said, Native Americans do not consider the indigenous peoples of Mexico as immigrants. If they agreed to discuss immigration issues, it was because they are of vital importance to the thousands of Mixtecs and Zapotecs and members of other indigenous groups emigrating from Mexico to the US.

From the other side, Mirna Valenzuela, a Maya, said that the massive migration of people across the US-Mexico border was the product of an economic model that also severed the link between native peoples and the land. 'Back home in Sonora,' she said, 'the mining industry caused the soil to dry up, and then they left. They left us nothing.' 

Cultural perceptions
This line of argumentation dovetailed with the discussions on the other agenda item, 'Culture and Development'. FIOB member Gaspar Rivera, who teaches at the University of California at Riverside, said, 'To speak about culture and development is to speak about a model of deficiency: the poor are blamed for their lack of development. Third-world countries have to adopt the values of industrialized nations in order to escape from poverty.'

Marta Frausto, from Fresno, elaborated on the notion that some Western concepts don't address the needs or interests of Native Americans and indigenous groups. Take sovereignty, for instance: 'We are called "nations" but in reality we are no longer nations nor do we have the infrastructure characteristic of nations.' Ví­ctor Yellowhawk of Sacramento concurred: 'In the 1930s, the US government granted us sovereignty - the same kind of sovereignty that was given to Iraq. Sovereignty isn't handed out: you either have it or you don't.'

Mention was made of the arrogance of governments on both sides of the border in determining the fate and even the definition of who is considered indigenous. FIOB coordinator Rufino Domí­nguez said, 'Culture is not limited to dressing up in traditional costume and performing traditional dances. Nor do we want to be stereotyped as the "poor little Indian". Marginalised communities, he said, need to create a culture of participation. Native peoples are not respected here or in Mexico, and because of this, I believe that we must join together and take action.' Indigenous leaders present agreed to meet again to work out plans which will be unveiled on 12 October.

*Apache, Catúa, Chipúa, Chumasa, Comanche, Hochuak, Keetowah, Maya, Mixtec, Mono, Náhuatl, Navajo, Orepago, Otomí­, Paiute, Purépecha, Yaki, and Zapotec.

A proposal to incorporate demobilised paramilitary fighters into the regular army has been shot down from both sides - by the human rights organisations which have consistently denounced collusion between military and paramilitary, and by Colombia's two highest-ranking military commanders. The government says it hasn't yet received the proposal.

The idea was launched by Carlos Alonso Lucio (former M-19 guerrilla, former congressman and current adviser to the Autodefensas Unidas de Colombia, the umbrella paramilitary organisation). He said the state could save a lot of money if the paramilitaries, after retraining by military officers, were enlisted in the army as a special category of soldiers. The uproar this caused among human rights organisations was predictable.

Less so was the response of generals Carlos Ospina (commander of military forces) and Martí­n Orlando Carreño (commander of the army), who arranged to be interviewed jointly on television. Ospina said, 'We want guerrillas and paramilitaries to demobilise and become productive, and we are cooperating in all that. But moving from criminality to authority is quite another matter.' Carreño added that the paramilitary fighters did not have the training to become members of the armed forces.

Interior minister Sabas Pretelt sidestepped a direct response by stating that he had yet to receive a 'formal proposal'. Obliquely, though, he let it be known that the government had other things in mind. 'The trend,' he said, 'is to prioritise the reinsertion [of the fighters] into the Colombian productive system in the countryside - to see these people getting involved in activities related to the countryside, as park rangers or members of collective work teams on farms.'

The Uribe government has been accused by opposition congressmen of tolerating the 'infiltration' of Colombia's institutions by members and associates of the paramilitary organisations. This it hotly denies.

A moment of reckoning has come for the supreme court recently enlarged and filled with new appointees by the slender pro-government majority in congress. Its actions will show whether fears voiced by the opposition at home and abroad about creeping authoritarianism enforced by a compliant judiciary are justified. The first important cases to come before the new supreme court have been inconclusive in this respect, but other controversial cases are on their way.

On 15 April the supreme court's constitutional panel threw out an appeal filed by opposition lawyer Tulio Alvarez against a lower-court conviction for aggravated and continuous defamation against the former president of the national assembly, Willian Lara; this conviction earned him a prison sentence of two years and three months. Alvarez had repeatedly accused Lara of irregularly using assembly funds, with which Lara successfully argued he had nothing to do.

That same day the penal panel of the supreme court overturned an appellate court's acquittal of retired General Carlos Alfonzo, who had been convicted by a lower court of breaching a security zone when, in 2002, he joined an opposition demonstration in front of the national guard's headquarters. The general was on active duty at the time. The supreme court, however, did not confirm the lower court's five-year sentence: it ordered a retrial, releasing the general on his own recognizance until this takes place. This may not be all that good for Alfonzo: a new trial could reconsider charges of rebellion and abandonment of a command post, which the lower court had thrown out.

Likely to reach the supreme court soon is an appeal by the award-winning journalist Patricia Poleo against a conviction for defamation that carried a six-month suspended sentence. The charge had been made by communications minister Jesse Chacón, wrongly identified in a photo published by Poleo as the person who appeared crouching next to a body during the November 1992 coup led by Hugo Chávez against then-president Carlos Andrés Pérez. Chacón had alleged that the misidentification and a biased caption had damaged his reputation.

Further down the line are the proceedings initiated against the prominent lawyer Carlos Ayala Corao, on charges of participation in the abortive April 2002 coup against Chávez . The US-based NGO Human Rights Watch (HRW), which has taken up Ayala's case, says the charges are 'outrageous and would be rejected out of hand in any independent court of law'. Ayala is currently president of the non-governmental Comisión Andina de Juristas (CAJ) and is a former president of the Inter-American Commission on Human Rights.

HRW has noted that during the coup attempt against Chávez , Ayala intervened to protect the rights of a pro-Chávez congressman who had been detained illegally and was being held incommunicado by the security services. The congressman, Tarek William Saab, subsequently thanked Ayala on television for his timely action. A special committee of the national assembly that investigated the events of April 2002 also noted that Ayala waited for five hours outside police headquarters while he was seeking Saab's release. Over the past year, says HRW, the pro-Chávez majority in the Venezuelan legislature has 'severely weakened judicial independence in Venezuela'. It adds that numerous recent newspaper articles indicate that the chief prosecutor general is considering criminal proceedings against more than 200 people for 'politically motivated offences', including involvement in the coup attempt against Chávez .

The competition to succeed Enrique Iglesias as president of the Inter-American Bank (IDB) is already being likened to the recent squabble-ridden election of a new secretary-general of the Organisation of American States (OAS). If anything it is messier as a result of bickering within one of the big voting nations, Mexico, over who selects the country's nominee. The outcome is no minor affair, as the president of the IDB has traditionally been much more than the head of a regional development bank.

The IDB is formidable enough as a financial institution, lending more than US$5bn a year to the region. It also boasts one of the region's best economic think-tanks: its chief economist often sets the tone for policy debate throughout Latin America. Its president also tends to act as a diplomat representing the region before other international organisations and extra-regional governments, and as a mediator in political disputes within the region. Since its creation in 1959, the bank has had only three presidents, all of whom earned themselves reputations as senior statesmen of the region as a whole.

Perhaps none has taken this role so far as Iglesias (known to his staff, and many of his interlocutors, as el Presidente: a title usually delivered in a tone that suggests more than just the presidency of a bank). Iglesias has headed the IDB for 17 years, the longest tenure so far, and he is cutting short his current term to take up a new position as head of the Secretarí­a General Iberoamericana (Segib), the permanent agency sprouted from the regular Ibero-American summits, which will come into being in mid-October when the 15th summit is held in Salamanca, Spain.

Formally, the president had to be elected by both a majority of shareholdings and a majority of the 28 members from Latin America and the Caribbean. The former demands enlisting the big shareholders: the US (which has a crucial 30% stake), Brazil, Mexico and Argentina. The latter, enlisting as many of the smaller countries as possible. The usual form is for agreement to be reached before the formal election. This looks unlikely this time round.

Three candidates have been officially put forward: Colombia's Luis Alberto Moreno (currently serving as his country's ambassador to the UN), Brazil's João Sayad (the IDB's vice-president for finance and administration), and Nicaragua's Mario Alonso (president of his country's central bank).

Other possible contenders have been mentioned: Bolivia's Enrique Garcí­a (president of the Corporación Andina de Fomento, CAF), Peru's Pedro Pablo Kuczyinski (minister of economy) and Argentina's Aldo Ferrer (former economy minister). However, there is little time left for further nominations: the deadline is 16 July.

Colombia's Moreno appeared to be leading the field until last week. Indeed, as early as 29 June Mexican President Vicente Fox and his peers from four Central American countries - Belize, Costa Rica, Guatemala and Panama - agreed that they would back him. Their support was made public last week, to the delight of the pro-Moreno camp which was already predicting that the US, because of its close involvement in Colombia, would soon join them.

Then came a snag. Mexican Finance Minister Francisco Gil issued a communiqué reminding all and sundry that according to the IDB's statutes he, as the governor for Mexico at the bank, was the only Mexican official authorised to speak out on IDB-related matters. He went on to say that Moreno, while 'a person of the highest personal and professional qualities, [is] not the most adequate for the post'. This overt challenge to the president and undiplomatic remark about an high-ranking foreign official could have cost him his job, but Fox opted for compromise.

He announced that Gil was indeed the only one entitled to hold forth on the matter and that Mexico's final decision would be made by the president after hearing what Gil had to say. Needless to say, this drew more regional attention to the contest.

At first sight, as many analysts and commentaros noted, what appeared to be happening was a repetition of the 'north-south divide' that had featured so prominently in the selection of the OAS secretary-general. This, of course, was a simplification then and is so again now: two South American countries sided with Mexico in the OAS contest, and much of Central America (and probably Mexico) are this time siding with a South American candidate against another South American candidate and one from Central America.

Moreno is widely credited with being a skilful operator in Washington, but his critics say he does not have the experience or the stature needed for the 'senior statesman' role that goes with the IDB presidency. The response to this is that all three of the bank's presidents grew into that role after their appointment.

Next: UN reform
Differences between Latin American governments are likely to flare up again soon at the UN. On 11 July Brazil formally submitted a proposal - backed by Germany, India and Japan - to reform the Security Council by adding six new permanent seats without veto power (four for the promoters, two for Africa) and four new non-permanent seats. The word in New York is that the promoters would press for a vote within days.

Brazil's position on this is strongly opposed by two other big Latin American countries: Argentina and Mexico. Argentina has put forward a rival proposal for rotating regional representation on the Security Council, for fixed but renewable terms; Brazil has reluctantly accepted to differ on this matter with its strategic ally.

Brazil's main argument is that none of the other known proposals would correct the current imbalance in the composition of the Council. Not only is this disputed by others within and without Latin America, but even those in the region who are willing to accept it in broad terms say that it does not necessarily follow that Brazil is the representative of the whole region.

 

PANAMA | Canal enlargement attracts massive support. Even though the details of the scheme to enlarge the Panama Canal are not yet known, a survey conducted by PSM-Sigma Dos for the newspaper Crí­tica shows that 62.3% of respondents would vote in favour of the project if the decisive referendum were to be held now. Once approved by the executive and the legislature, the scheme will be put before the electorate in a referendum.

On 6 September President Martí­n Torrijos fended off criticism that the government was being secretive about the scheme, saying that the studies had not yet been completed and that it did not make sense to unveil them 'by stages'. He did reveal, though, that the technological options now being considered will not require the building of huge dams and flooding of extensive tracts of land that had been envisaged at the outset. This initial prospect had attracted criticism from peasant farmers and from environmentalists.

HONDURAS | Oil prices make impact on trade balance. Despite an increase of 17% in Honduras's export earnings in January-July (to US$1.09bn), increased oil prices contributed strongly to an 18.8% increase in imports (to US$2.6bn), resulting in a trade deficit of US$1.5bn. The oil import bill reached US$530.8m, or 20% of all imports. On the export side, much of the push came from increased volumes and the opening of new markets for non-traditional products. The two leading traditional exports, coffee and bananas, accounted for 38% of all export earnings.

In order to mitigate the impact of higher oil prices on the domestic market, prices have been frozen within Honduras since 8 September. President Ricardo Maduro has said the freeze, initially planned to last until mid-October, might be extended until end-November.