All Categories

Evo Morales was the first off the mark when congress set the date for the gubernatorial elections. On 14 April he announced that his party, the Movimiento al Socialismo (MAS), will be fielding candidates in all of Bolivia's departments, building on its victories in last year's municipal elections [WR-04-48].

In that contest the MAS emerged as the only strong survivor among the established political parties - but that only added up to attracting 15% of the vote countrywide. Still, it did mark a breakthrough for the MAS in that it appeared no longer confined to the coca-growing areas of Cochabamba, but as a party capable of winning second place in important cities countrywide.

Morales's plan is to seek out partners in each region among social movements, indigenous organisations and even business circles so as to be able to pick candidates 'according to the particularity of each department'. For the formal launch of his campaign, on 9 May, he has scheduled a party convention in the lion's den: Santa Cruz, birthplace of the pro-autonomy movement whose hallmark is a pro-business stance in which Morales is the embodiment of the enemy.

The MAS has also launched a parallel move which is at least partly aimed at neutralising an important rival, former president Jorge Quiroga (2001-02), who left the Acción Democrática Nacionalista (ADN) to seek a new powerbase among the 'citizen organisations' which emerged as the winners in last year's municipal elections. The MAS has announced that it will be filing before the public prosecution service charges against Quiroga, Gonzalo Sánchez de Lozada and even Carlos Mesa for having failed to seek congressional approval for the contracts they signed with oil and gas companies - a constitutional requirement reaffirmed days ago by the constitutional tribunal [WR-05-14].

Crucial legislative elections are still just under a year away, but the Partido Revolucionario Democrático (PRD) is in the grip of something close to panic at the prospect of losing its commanding position in congress. Voters appear to have deserted the PRD in droves, partly because it is seen as responsible for the country's economic downturn, but also because its current stable of leaders is unappealing.

A survey with impeccable academic credentials, the Primera Radiografí­a Sociopolí­tica de la República Dominicana, conducted by the Centro de Investigaciones y Estudios Sociales (CIES) in conjunction with the Universidad Iberoamericana, showed only 10.3% of respondents inclined to vote for a PRD candidate - even though almost 15% said the PRD was their party of choice.

The PRD currently has 73 of the 150 seats in the lower chamber of congress, and 29 of the 32 seats in the senate. At the next elections, the lower chamber will have an additional 28 seats, reflecting the increase in the population. For the same reason, there will be an additional 17 mayoral posts at stake in the simultaneous municipal elections. 

Legislative elections have been out of synch since former president Joaquí­n Balaguer's term of office was halved to end in 1996, following widespread fraud in his election in 1994. The PRD has tried several times to re-synchronise them, most recently in a bid to extend the lifespan of its current congressional majority [WR-05-17].

 

Chile has a serious problem of social inequality about which it is doing nothing - the result of 'complicity' between the country's economic and political élites. This diagnosis does not come, as might be expected, from some member of the Chilean left, but from a prominent member of one of the two 'complicit' élites.

Felipe Lamarca, who has just turned down an offer from one of the rightwing parties to run for a seat in the senate, has served as president of Sofofa, the umbrella industrialists' association, and for 20 years (until six months ago) was president of Empresas Codec, one of Chile's biggest business conglomerates.

In an interview granted last week to the newspaper La Tercera Lamarca was scathing about the country's ruling élites. 'The economic élite,' he says, 'heaps praise on the political élite and the politicians say: "What a good economic élite we have!"' This translates, he adds, into inaction on the social front. 'Within this more democratic [post-Cold War] culture the issue of inequality is a major one. And in Chile's case the problem is extremely severe and inequality will become ever more critical [...] Here the country grows at 6%, but how much has your employment grown; how much has your salary grown?'

The market, he argues, has not done its job because monopolies and oligopolies have virtually eliminated competition - and he sees no willingness to change among Chile's entrepreneurs. He calls for 'no more mergers [...] a very strong anti-monopolies commission [and] a very powerful defender of consumers' rights'. If nothing is done, he says, the situation will explode. Chile, he notes, is not where Argentina was just before the social explosion of 2001: 'We are far from that but one move could bring us closer to many things of that type.'

 

URUGUAY | No 'separate FTA' with the US. Just under a fortnight ago Economy Minister Danilo Astori said that among his top priorities was the liberalisation of trade with the US and China. On 12 January US senator Mel Martí­nez, member of a visiting congressional delegation, said the treaty had already been concluded, and that all that remained pending was its ratification. This provoked a political and diplomatic storm. Senator Martí­nez's claim was refuted by Foreign Minister Reinaldo Gargano (who added that no such deal was possible while the US retained its agricultural subsidies) and the US embassy later stated that he had, in fact, been alluding to the bilateral investment treaty, not an FTA. Brazilian Foreign Minister Celso Amorim said that if Uruguay celebrated a separate FTA with the US it would cease to be a member of Mercosur. The issue appeared to have been set to rest on 12 January when the Assistant Secretary for State for Western Hemisphere affairs, Tom Shannon, stated in Buenos Aires that FTA negotiations with Uruguay were 'not on the agenda'.

PARAGUAY | Remittances rise to cover trade deficit. Remittances by Paraguayan expatriates rose last year to US$204m, a 5.3% increase over the previous year. Remittances have been increasing steadily over the past three years, from US$115m in 2002; they are expected to rise soon to the peak level of US$220m recorded in 1999. Their importance to the external sector of the economy was driven home last week by the central bank's economic research manager, Emilio Ortiz, who noted that in 2005 they were not far off doubling the trade deficit of US$110m.

Unlike the Central American republics, Paraguay's diaspora is not overhelmingly concentrated in the US, but more widely dispersed. Of last year's remittances 38% came from the US, 30% from Spain and 14% from Argentina.

GUATEMALA | Remittances rising at 18%. Remittances by Guatemalan expatriates in March totalled US$278.8m, taking the accumulated total since the beginning of the year to US$782.49m, or 18% more than in the same period of 2005. Last year remittances by Guatemalan expatriates totalled US$2.99bn, equivalent to about 9% of GDP. If the current rate holds, this year's total should be well above US$3bn.

EL SALVADOR | FMLN mayors in 'petro-diplomacy' deal. Sixteen mayors of the opposition Frente Farabundo Martí­ para la Liberación Nacional (FMLN) have set up a firm, Enepasa, which last week entered a partnership with the Venezuelan state oil firm PDVSA called Alba Petróleos de El Salvador (Alba being the acronym for the cooperative'system promoted by Venezuelan president Hugo Chávez as an alternative to the FTAA). PDVSA will sell the new company oil on preferential terms: 60% payable in 90 days at 2% interest, the remainder in 30 years at 1%. APES plans to import about 150,000 barrels of oil a year, equivalent to 25%-30% of overall Salvadorean consumption.

DOMINICAN REPUBLIC | High growth, lower inflation predicted. Central bank governor Héctor Valdez Albizu last week predicted that economic growth this year will be close to 5.5% and that inflation should be lower than last year's 7.4%. The country's inflation rate was brought down sharply last year from the 28.7% recorded in 2004.

The Panamanian government has requested US assistance to investigate the death by poisoning of a leading police officer who was involved in several antidrugs operations, including the disruption in May of the gang led by the Colombian trafficker Pablo Rayo Montaño. This takes place after DEA intelligence led the US to refuse entry to an antidrugs prosecutor from Panama, and precedes the decision by the chief antidrugs prosecutor to resign his post.

ranklin Mauricio Brewster, head of the 'sensitive unit' of the Policí­a Técnica Judicial (PTJ) since 2003, was taken ill with what was initially thought to have been food poisoning. He died in hospital on 19 July and further investigation suggested that his food had been laced with pesticide. The next day the man who had been Brewster's superior in the Rayo Montaño operation, chief antidrugs prosecutor Patricio Candanedo, resigned after a suitcase with explosive materials was found outside his office. He said a 'climate of hostility' and lack of support since the Rayo Montaño case led to the decision.

Days before Brewster's death an investigation was launched into past activities of antidrugs prosecutor Aminta Corro, after the DEA provided the authorities with a dossier which had led to Corro being denied entry to the US on 3 July. Corro has denied any wrongdoing.

ARGENTINA: Provinces gain control of oil and gas. The federal planning minister, Julio de Vido, signed an agreement last week with the governors of hydrocarbon-producing provinces to pass control of the natural resources over to the provinces. They will now be able to levy taxes and renegotiate concessions. The governors of Mendoza, Julio Cobos; Formosa, Gildo Insfrán; La Pampa, Carlos Verna; Rí­o Negro, Miguel Saiz, Santa Cruz, Carlos Sancho; and Tierra del Guego, Hugo Cócarro, attended the ceremony in the Casa Rosada. The initiative must go to congress for approval.

CHILE: Unemployment falls to eight-year low. Unemployment fell to 7.9% in the third quarter, the lowest figure for this period since 1998, the national statistics agency (INE) revealed. The government seized on the statistics to show that the economy was creating more jobs. However, the fall can be attributed in part to the workforce contracting by 0.7% from a year earlier. While 84,610 new jobs were created, 49,210 workers withdrew from the job market.

The Bush administration describes its Andean anti-drug strategy as a "three-legged stool" of eradication, military assistance, and alternative development. The stool now looks very lopsided. The increasing financial demands of the Iraq war prompted the Bush administration to slash its assistance to Bolivia, Peru and Ecuador in its 2007/08 budget proposal, and eliminate altogether its assistance to Venezuela. Only Colombia escaped the cuts, ensuring that military aid remains by far the longest leg of the stool.

The Bush administration proposed a 41% cut in its budget for the Andean Regional Initiative (ARI) to US$443m. The biggest loser is Peru (down 37% to US$36.8m), followed by Bolivia (down 30% to US$30m) and Ecuador (down 16% to US$7m). The US abolished the US$2.2m assistance it had been providing to Venezuela and the US$44m earmarked for aerial interdiction among other things. Colombia will receive US$367m, 83% of the ARI budget. 

Total US government aid to Colombia will come to US$705m in 2007/08, the bulk of this in funds assigned to the US State Department. In a token gesture to the Democrat-controlled congress, the proposal cuts direct US military aid by US$11m to US$78m, money which will go into alternative agricultural programmes instead but there was no real change of emphasis. As in previous years, 80% of the aid is for counter-insurgency and counter-narcotics and only 20% for alternative development and the strengthening of the justice system.

The only genuine change (although not of emphasis) was in the diplomatic field. William Brownfield, the US ambassador to Caracas, looks set to pick up the post in Colombia vacated by William Wood, who is off to Afghanistan. Wood's move was savaged by The New York Times in an editorial entitled "Wrong model for Afghanistan" on 4 February. It criticised comments by General Peter Pace, the chairman of the joint chiefs of staff, that Wood was the man to oversee a "Plan Afghanistan", when neither illegal coca crops nor the insurgency have been eradicated in Colombia.

Quotes of the week

“We either get to work or we will witness the coronation of Hugo I, the first king Venezuelan society will have."
The main leader of Venezuela's opposition, Manuel Rosales.

“Those who burned down the palace of justice with money from drug-trafficking simply took off their camouflage, put on a suit and came to congress to give a lecture on morality to the country."
Colombia's President Alvaro Uribe hits out at Senator Gustavo Petro, a former member of the M-19, who is driving the parapolitical investigations.

“So the decisions of Honduras are sovereign but those of Nicaragua are not?"
Nicaragua's President Daniel Ortega reacts angrily to the US line on the country's Sam-7 missiles.

One of President Rafael Correa's closest allies, Ricardo Patiño, the economy minister, is being investigated by the attorney general after a video came to light showing him discussing the advantages of scaring the markets with a former economy minister, Armando Rodas, and two securities brokers from the US firm Abadi, in a Quito hotel. The video, recorded in early February, was leaked to the press by Patiño's former adviser, Quinto Pazmiño.

Patiño claims he decided to record a number of videos to "demonstrate how international companies amass fortunes" as part of a personal investigation that he intended to show the country at an opportune moment. He said the brokers had tried to persuade him to manipulate the bond market to save Ecuador money in debt renegotiations but that he had rejected the proposal.

Dismissing calls from the opposition for him to resign, Patiño insisted that the video be shown in its entirety on 24 May. He is yet to provide a convincing explanation, however, for why -days after the video was recorded- he had threatened not to pay a US$135m payment on a bond due on 15 February, asking for a 30-day grace period. Two days later he paid. This fuelled comment at the time with then-legislator Gloria Gallardo, of the opposition Prian, calling for an investigation. In January Patiño told a meeting of bondholders that a key part of his debt policy was to reduce interest payments on bonds by 40%.

Congress, which has long been deemed corrupt by the executive, revelled in the opportunity to get it's own back. "Does this not resemble in large part what [Vladimiro] Montesinos did in Peru?" the former presidential candidate of the Partido Social Cristiano (PSC), Cinthya Viteri, asked rhetorically about the 'patiñovideos'. "He recorded illicit material involving him to use later as a form of blackmail," she said. Former president León Roldós alleged that "Venezuelan bankers, apparently close to the government, won tens of millions speculating on a possible non-payment." Every party except the Dignidad Nacional bloc, comprised of the alternates who replaced some of the 57 legislators dismissed by the supreme electoral tribunal (TSE), called for Patiño to appear before congress.

Correa is standing by his man. He said Patiño was "an honest man" and that the video was a plot to destabilise his government. He added that he had asked Patiño to fire Pazmiño two weeks ago because he suspected him of corruption. He argued that the "mutilated videos" were part of Pazmiño's revenge. 

 

• Central bank chief resigns
  The general manager of the central bank, Mauricio Pareja, resigned this week over differences with the government over the autonomy of the bank. He accused the government of eroding the bank's independence and expressed his doubts about the viability and sustainability of the government's economic policy in the long term. He criticised the failure to use Ecuador's resources efficiently, citing the US$3bn of annual remittances, some 8% of GDP, which he said could be used to reactivate the economy.
  

MEXICO | The economy. The finance ministry reported on 16 August that GDP growth in the second quarter was 2.8%, year-on-year. This brought growth for the first half of the year to 2.7%, year-on-year, well shy of the government's target of 3.5% growth for 2007. The big problem is manufacturing, which was up by just 0.5% on the second quarter of 2006. The most buoyant sectors in the economy are services (up 3.7%, year-on-year) and agriculture (up 3.8%).
The finance ministry pointed out that 24 of the 49 industries covered by the manufacturing output index registered growth, year-on-year. These include major industries such as the motor industry. The worry must be that the slowdown in the US economy will further diminish US demand for Mexican manufactured goods, such as cars, and depress Mexican manufacturing output further.

MEXICO | Aeroméxico. Alberto and Moisés Saba, (father and son, with separate business careers and companies) bid M$1.09bn (US$99m) for 100% of the national airline, Aeroméxico, which the government is privatising. The Sabas say that their bid is good until 18 September. The government has a controlling (60%) stake in Aeroméxico. Grupo Aeroméxico controls Aeroví­as de México and Aerolitoral as well as various ground service companies working at Mexican airports. At the end of 2005, the government sold the country's other main airline, Mexicana de Aviación to Grupo Posadas for US$166m.

MEXICO | Hydroelectric Project halted. A judge granted an injunction to peasant groups opposed to the construction of the huge hydro-electric dam, La Parota, in the southern state of Guerrero. The injunction was granted on 14 August in Acapulco, but was only announced on 22 August. The injunction challenges the environmental approval to the project granted by the federal environment industry; the Comisión Nacional de Agua and the Comisión Federal de Electricidad. The peasants successfully argued before the judge that the project infringed Articles 14 and 16 of the federal constitution which specify that no citizen should be deprived of property, possessions or rights without a court judgment. Astrid Puentes, the legal director of the Asociación Interamericana para la Defensa del Ambiente, said that the next target for the alliance between environmentalists and peasants is to stop the project completely. The dam for the project would flood 17,000 hectares and force 25,000 people to move.

At the time of writing, on 29 November, the constituent assembly is poised to meet for the first time in the purpose-built facility in Montecristi and begin drafting a new constitution. On the eve of the assembly's inauguration congress voted to go into recess for one month. Legislators had previously decided not to go into recess in order to fight the imminent dissolution of congress by the constituent assembly. Assembly delegates representing the government's majority bloc, Acuerdo Paí­s, met to discuss the agenda for the first day. They did not reach an agreement over when to disband congress.

In a vitriolic speech the president of congress, Jorge Cevallos, said that "any excess by the constituent assembly or individual delegates would constitute the rupture of the constitutional order to be punished sooner rather than later." He said the assembly could become a multiple dictatorship with 130 heads but that he trusted that when confronted with "breaking democracy", the hands of all the delegates would "tremble". 

In the days leading up to the assembly's inauguration delegates from Acuerdo Paí­s, had insisted that congress would be dissolved on the opening day and a legislative commission established to replace it while the assembly deliberates. 

The president of the assembly, Alberto Acosta, said that congressional deputies would be compelled to go home because the assembly would not permit the state to keep paying their salaries. However, delegates have yet to define the legal basis on which they will close congress and it looks more likely that they will opt to fudge things by declaring an "indefinite recess" for six months.

Chávez and Uribe attend

The Presidents of Venezuela and Colombia, Hugo Chávez and Alvaro Uribe, confirmed their attendance in Montecristi on 30 November. Given the fierce words exchanged between the two over the course of the last week, the Ecuadorean authorities will be at pains to keep them apart.

 

Last week the ruling Partido Revolucionario Democrático (PRD) elected its national executive committee (CEN) in a vote which will determine not just the party leadership but also possible candidates for the presidential elections due to be held in 2009. The outcome represented a victory for President Martí­n Torrijos as well as housing minister Balbina Herrera, who was selected as party president.

With 69% of the vote, Herrera defeated a former President of Panama, Ernesto Pérez Balladares, to become PRD president. Despite winning the party presidency, Herrera has so far maintained that her political ambitions are limited to the Panama City mayoral elections rather than standing as a pre-presidential candidate for the party. Nevertheless, the most recent survey by pollster Dichter & Neira, published on 24 February showed her to be the second most popular choice for president, with 21.6% of the vote, after Ricardo Martinelli, president of Cambio Democrático, who led with 26.3%.

With rumours of internal splits within the party - between different factions led by Torrijos and Herrera - the PRD elections also undeniably represented a triumph for the President, who was re-elected party general secretary. Five of his allies feature on the new nine-member CEN. These include Juan Carlos Navarro, current mayor of Panama City, who was chosen as first undersecretary. Navarro is expected to announce his bid to stand as PRD pre-presidential candidate in the next few days and was shown in third place with 13.5% of the vote in the Dichter & Neira poll.

The new CEN also includes controversial congress leader Pedro Miguel González, who will serve as third under-secretary (see sidebar), an ally of Herrera. His appointment is unlikely to please the US, who has been lobbying for him to step down as congress leader and wants him prosecuted for his (alleged) part in the murder of a US sergeant, Zak Hernández. US congressman Charles Rangel has repeatedly reiterated that González has proved the major obstacle in the free trade treaty between the two countries.

• González rejects re-election

While his appointment to the PRD national executive committee represents a political victory of sorts, Pedro Miguel González told the local daily, La Prensa, that he would not stand for re-election as congress leader for the next period, which begins on 1 September, in light of all the problems with the US caused by his appointment. However, he added that he would not step down before his term expires on 31 August.

CHILE | Bachelet on energy mission. President Michelle Bachelet carried out a tour to Canada and the west coast of the US last week to try and drum up investment for alternative energy production. Chile aims to generate 15% of its energy needs from renewable sources and reduce its dependency on gas imports from Argentina and ever-more-expensive oil. Bachelet, who recently advocated harnessing Chile's geographical assets, such as geothermal energy from the volcanic spine in the south and solar energy from the sun-drenched Atacama desert in the north, visited a 64MW thermoelectric solar power plant in the Nevada desert which covers 120 hectares.

Meanwhile, the state copper giant, Codelco, announced a US$70m biofuel project to use methane gas from decomposing fruit from the opuntia ficus cactus plant to help power its Ventanas copper smelter in the central province of Valparaí­so. By the end of 2009, Codelco hopes that this will replace 5% of its natural-gas requirements, increasing to 30% in the medium-term. The cacti grow on land unsuitable for agriculture.

Ecuador's President Rafael Correa consolidated his grip on power with a decisive victory for the “yes" vote in the referendum on the new constitution. The stage is now set for him to win fresh presidential elections and for his party Alianza Paí­s (AP) to win a majority in the new congress when elections are held, if he has his way, next February. The only real blemish on the day for Correa was the narrow victory for the “no" vote in Guayaquil, the stronghold of his only credible political rival, Jaime Nebot, but even this could be seen as a blessing in disguise. The eastern province of Napo also emphatically rejected the constitution.

Just under 64% of voters backed the new constitution, drafted by the AP-dominated constituent assembly; just over 28% opposed it. It was an emphatic victory for Correa, who had travelled the length and breadth of the country, calling on voters to help him break “the old structures" and usher in a new “citizens' revolution". It was tarnished only by the results in Guayaquil and Napo.

Nebot had threatened not to stand for re-election as mayor if a majority of Guayaquileños approved the constitution, and to ignore the constitution if it conflicted with his “model of development" [WR-08-36]. Correa - who had accused Nebot of harbouring separatist tendencies and warned that Guayaquil could become a permanent source of instability if the 'no' vote won there - might be quite glad that he still has an opponent of some stature, however, as it will enable him to assign blame for future failings elsewhere.

Correa also drew some of the sting from accusations by the fragmented opposition that he plans to institute an authoritarian, hyperpresidential regime. He magnanimously agreed to hold talks with Nebot, who accepted provided that they are not just for “show". They are likely to revolve around the degree of autonomy Guayaquil will enjoy and resource distribution, neither of which are made clear in the constitution.

The defeat in Napo was not surprising: Napo is the native province, and powerbase, of former president Lucio Gutiérrez. The governor of Napo, Marcelo Velasco, accused Gutiérrez of buying food for voters and arranging for cars to take them to polling stations. While this cannot be discounted, it is equally plausible that the predominantly indigenous population in Napo would have rejected the constitution anyway. Correa has managed to split Ecuador's main indigenous organisations, but none of them wholeheartedly endorsed the constitution and in the absence of any meaningful opposition on the national stage, they could potentially fulfil this role.

It is also possible that the AP bloc - a loose political coalition of local caudillos, small social movements, intellectuals, and elements of the indigenous movement - could itself split to form a nascent opposition. AP delegates disagreed on a number of issues debated in the assembly, especially over judicial reform, which prompted Correa to accuse 20 of them of breaking party discipline and all but working for the opposition. He threatened to name and shame them after the referendum.

Correa has now turned conciliatory. On the day of the vote, he visited Alberto Acosta, the highly popular former president of the constituent assembly who Correa edged out because he was getting sucked into long debates rather than getting the individual articles of the constitution approved. The visit was astute as it suggests Correa is trying to win over the internal dissenters and try and unify the AP ahead of upcoming legislative elections.

Political limbo
The big challenge for Correa right now is implementing the constitution. The final results of the referendum will be revealed by the Tribunal Supremo Electoral (TSE) on 13 October, when the new constitution will legally replace the old one. However, there will be a confusing hiatus before the new state structure is in place. On 19 and 20 October the constituent assembly will meet, without plenipotentiary powers. It will select a “congresillo", which will reflect the current composition of the assembly but with about half the delegates. The congresillo will complete the legislative duties of congress, but more importantly create a “transition regime", reshaping state institutions, including the judiciary.
 
The congresillo will appoint members of two electoral organisations which will replace the TSE: the Consejo Nacional Electoral (CNE) and the Tribunal Contencioso Electoral (TCE). The CNE will organise elections; the TCE will rule on electoral misdemeanours, such as excessive campaign spending. This means the TCE will acquire some of the powers currently in the hands of the judiciary. Both institutions will be comprised of five members selected, for now, by the congresillo through an open competition. The idea behind this is to increase civic participation and to ensure that unlike the TSE, which is made up of seven spokesmen representing political parties, the CNE and TCE will not be partisan entities.

The congresillo will also appoint a Consejo de Participación Ciudadana y Control Social by means of a public competition. This new institution is the object of much of the opposition's criticism. It argues that as the AP will dominate the congresillo, the Consejo will be stacked with AP party affiliates, enabling the executive to exercise control over all state authorities. The Consejo will have extraordinary powers when it is up and running. It will name the commissions which will select the future CNE and TCE, as well as the attorney general, ombudsman, comptroller general and other supervisory bodies. These appointments would normally be carried out by congress.

Judicial uncertainty
The new constitution will also blur the separation of powers between the executive and judiciary. The CNE will draw lots to select the 21 magistrates to make up the new national court of justice (CNJ), which will replace the current 31-member supreme court, and the nine magistrates to make up the new constitutional court (CC), which will be the state's top legal authority.

The constituent assembly agreed that the magistrates would serve for just six months. Then the independent judicial oversight body, the Consejo Nacional de la Judicatura, which is being restructured by the assembly, will organise an open competition for posts. The problem is the judges on the supreme court are refusing to take part in the lot-drawing process: seven judges on the supreme court have already resigned this year and four more did so after the referendum. This leaves only 21. If any more resign, the country will face a judicial vacuum that could endure for up to six months until magistrates can be appointed on a permanent basis.

• Pragmatism
  President Correa displayed political acumen in burying his differences with the former head of the constituent assembly, Alberto Acosta, and in offering to hold talks with the opposition mayor of Guayaquil, Jaime Nebot. He has shown a similar pragmatism in pursuing an independent foreign policy. He has, at times, been critical of the US, but he has not indulged in gratuitous anti-US rhetoric. He shares some of the ideological ideals of Venezuela's President Hugo Chávez , but he has deliberately refrained from joining Alba, Chávez 's overtly political brainchild for Latin American integration.

The national assembly voted on 14 January in favour of a referendum to amend the constitution to allow continuous re-election for all elected posts, including that of the presidency. The national electoral council (CNE) now has 30 days in which to convene the referendum: 15 February is the most likely date. The text of the referendum approved in the second and final vote in the assembly differed from the text in the first vote on 18 December after President Hugo Chávez proposed that governors, mayors, councillors, and national and regional legislators, should also be able to seek continuous re-election - not just the President.

Chávez explained that he had decided to alter the text of the referendum, to allow continuous re-election to all elected posts, in order to mark “a severance with the old democracy". The principal opposition parties charged that he was merely seeking to look magnanimous because opinion polls suggested he would lose the referendum. They said the revised proposal was even worse than the original as it would entrench “a political caste" in Venezuela, keeping new generations out of power just as in Cuba. They said incumbent politicians would be able to use the financial clout of public office to perpetuate themselves in power. Ricardo Gutiérrez, a deputy for the dissident party, Podemos, said the proposed amendment could pave the way for “the abandonment of democratic methods" and “institutionalise the monopoly of power".

During his annual state of the nation address to the assembly on 13 January, Chávez claimed that defeat in the referendum would not be “a major trauma", although he belied this professed insouciance in the very same sentence by saying that it would amount to “the destruction of what we have built". Chávez said that 437,317 had been lifted out of poverty in 2008, almost bringing poverty down to 30% compared with 75% when he came to power 10 years ago. On the economic front, he stressed that while inflation reached 31% in 2008 this should be compared with inflation of 100% before he came to power.

The president of the central bank, José Manuel Ferrer, was less sanguine. He said that annual inflation - the highest for 12 years and nearly three times the target of 11% - was eroding purchasing power because salaries could not keep pace. Food inflation was 41.3% in 2008 and transport inflation 32.6%. The prediction of 15% inflation in 2009 looks like an overambitious target, especially given the inaccuracy of the prediction of 11% inflation in 2008. Inflation shows no sign of slowing, reaching 2.6% in December.

• No devaluation

The finance minister, Alí­ Rodrí­guez, is not exactly inspiring confidence about the economy. “In the present situation, which is still not clear, we cannot say that we are going to do this or we are going to do that," he said this week in response to a question from the press related to possible new taxes. He did say, however, that he was not planning a devaluation of the currency as Venezuela “imports a lot, especially food, and devaluation would put these costs up," exacerbating inflationary pressure.

Jorge Arrate will run for president in December for the left-wing coalition, Juntos Podemos. Arrate, 68, won party primary elections on 26 April. He quit the ruling Concertación in January, taking members of the Socialistas Allendistas faction of President Michelle Bachelet's party, Partido Socialista (PS), with him. Arrate, who accused the PS of selling out on its Socialist ideals to prop up an increasingly centrist Concertación, said he would form the Socialist government promised but not delivered by Bachelet. His candidacy could deprive the Concertación of key votes in what is shaping up as a tight contest with the opposition coalition, Alianza por Chile.

Arrate defeated Tomás Hirsch, who ran for Juntos Podemos in the 2005 presidential elections. He took 77% of the votes of some 1,500 delegates in a party convention. Hirsch was leader of the Partido Humanista (PH), which left the Concertación more than 15 years ago.

The leader of the Partido Comunista (PC), Guillermo Teillier, pulled out of the contest, but promised to back the winner. Teillier is hoping to run for congress on a joint slate of candidates with the Concertación in the metropolitan region.

Concern that Arrate's defection would undercut its support prompted the Concertación to seek to co-opt Juntos Podemos earlier this year by dangling the prospect of a joint slate of candidates in certain electoral districts. This goes some way towards redressing the party's complaint that it is excluded from power by the binominal system. Juntos Podemos says that the Concertación's electoral offer so far is “insufficient".    

• Electoral manifesto

The new Juntos Podemos presidential candidate, Jorge Arrate, outlined details of his electoral manifesto: a new constitution; the “second nationalisation of the copper industry"; greater state involvement in the health, education and pensions sectors; a minimum wage of Ch$250,000 (US$400) a month, nearly 60% more than the current level, as proposed by the president of the bishops' conference, Alejandro Goic, one year ago; and an end to the “militarisation" of the southern Araucaní­a region where the majority of Mapuche Indians live.

COSTA RICA | Cabinet changes. Costa Rica's minister for the presidency, Rodrigo Arias, this week confirmed the resignations of the ministers of justice, treasury and labour (Viviana Martí­n, Guillermo Zúñiga and Francisco Morales, respectively). The three plan to run as legislative deputies for the ruling Partido Liberación Nacional (PLN) and work on the campaign of Laura Chinchilla, the party's presidential candidate, ahead of the February 2010 elections. So far Zúñiga and Morales have been replaced by their deputies while Arias has yet to announce a replacement for Martí­n. The prospect of a Chinchilla victory remains on the cards: the latest survey by pollster Borge y Asociados published in the local media on 27 July put her on 46.5% support, well ahead of Ottón Solí­s, of the leftwing Partido Acción Ciudadana (PAC), who received just 9.5% backing.

NICARAGUA | Exports. Nicaragua's exports reached US$875.4m between January and July 2009, representing an 8.9% decline compared with the same period in 2008, according to Nicaragua's export centre, Cetrex. The decline is attributed to the fall in international prices of products such as coffee, gold, beans and oil derivatives as well as a reduction in cultivated land. Nicaragua's GDP is forecast to grow by up to 0.5% this year, down from the 3.2% registered in 2008.

ECUADOR | China loan. Ecuador has suspended negotiations with China for a US$1bn loan because the conditions it imposed were “unacceptable", the economic policy minister, Diego Borja, said. Borja gave no details, but he said Ecuador would not accept “impositions" from either China or the IMF. He said the decision would not leave Ecuador short of financing next year as the deal had not been included in the 2010 budget. He said Ecuador would seek financing from “friendly multilateral banks", as well as Russia. President Rafael Correa became the first Ecuadorean head of state to visit Russia last month.
The opposition has been arguing for some time that the government's dealings with China lack transparency and are detrimental for the country. In July, it struck an agreement with China for a US$1bn advance payment for 28% of the total value of oil Ecuador had agreed to export to China. Ecuador's export revenues fell sharply in the first half due to low oil prices. It needs alternative financing after a 'selective default' on foreign debt last year [WR-08-50]. On the plus side, the national tax agency is predicting that the tax take will increase by 12% in 2010 to US$7.3bn as a result of a tax reform clamping down on evasion.

ECUADOR | Electricity. Ecuador's electricity minister, Esteban Albornoz, thanked Colombia this week for its “solidarity" in offsetting the shortage caused by the impact of drought on generation at the Paute hydroelectric complex [WR-09-45]. Albornoz said Colombia had even made “certain sacrifices" in terms of its own supply of energy by increasing exports of electricity from 2,651MW daily to 4,129MW daily (10.4% of national demand) over the weekend. Peru also sold 1,200MW daily of electricity to Ecuador. Colombia's gesture complements its efforts to effect a rapprochement with Ecuador. The defence minister, Gabriel Silva, is scheduled to meet his Ecuadorean peer Javier Ponce in Bogotá on 19 November as part of the binational border commission, Combifron.

PERU | GDP growth. The economy grew by 0.04% year-on-year in September.  The government claimed the growth was a sign that the economy had turned the corner. Real GDP contracted 1% year-on-year  in the second quarter after growth of 1.8% in the first. The IMF recently predicted that Peru would be the regional star in 2010 (as it was in 2008) with 5.8% growth, followed by Chile with 4% growth.

“For me it was an honour to share an earthquake with the people of Chile."

-Peru's President Alan Garcí­a after the shaky investiture of Chile's Sebastián Piñera.

“There are weak people who never pick up a book and prefer soap operas to preparing for 21st century socialism."

-Venezuela's President Hugo Chávez calls for courses to be undertaken by the 4,000 candidates of the ruling Partido Socialista Unido de Venezuela (Psuv) seeking to compete in September's congressional elections.

“There were two waitresses with trays carrying glasses of whisky and wine."

-José Félix Lafouire, the campaign adviser of Andrés Felipe Arias, a candidate for Colombia's Partido Conservador, blames the slow count on senior members of the ruling electoral body drinking on the job.