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The Proyecto Demócrata Cubano faults the European Union for failing to act as a `balancing force' between the US and Cuba.

Another Cuban dissident organisation, the Proyecto Demócrata Cubano (PDC) has lashed out against the Bush administration's policies towards their country. It describes these as `punitive, disrespectful and interventionist.' The outburst was not actually addressed to the US, but to the recent congress of the Organización Demócrata Cristiana de América (ODCA), the regional organisation of Christian Democrat parties — as part of a harsh critique of the European Union's stance.

The EU, says Proyecto coordinator-general Rafael León, `should be expected to act as a balancing force in the confrontation between Cuba and the US.' But, it goes one, `it decided instead to support the US policies, betting on the isolation of the Cuban régime, which also means isolating Cuba and, indirectly, justifying the strategy of blockading the island and the interventionist and aggressive US policies.' The PDC, which is usually described as `moderate', asked the ODCA to endorse the `Charter of Fundamental Rights and Duties of the Cubans' which it has been promoting together with other Cuban opposition groups as `an instrument for the establishment of the rule of law in Cuba.'

President Enrique Bolaños is accusing the opposition Sandinistas of holding the government to ransom -- literally. he says the price the Sandinista legislators are demanding for voting in favour of economic measures agreed with the IMF, and therefore crucial to the debt reduction the government seeks, is US$16m.

More precisely, the Sandinistas have demanded that a 25% share in nine companies privatised in 1991 should be given to Sandinista workers, who were granted an option to buy. Bolaños, who calculates that this is worth US$16m, has refused, even if this costs Nicaragua its eligibility for the highly indebted poor country (HIPC) scheme, which would cut its external debt by 80%.

The stance adopted by the Sandinistas has caused a minor political miracle: the two warring factions of the ruling Liberal party have decided to join forces in support of the IMF-agreed legislation the approval of which Bolaños is seeking, the law on public indebtedness.

COSTA RICA | Depositors insist on preferring dollars. The government's hopes of reducing the amount of dollar-denominated loans being granted is running up against the depositors' preference for the US dollar as a store of value. At the beginning of September, the amount held in dollar-denominated accounts by both state-owned and private banks reached US$2.8bn, virtually matching the volume held in colones. This leads the banks to maintain a similar proportion in lending, so as to avoid exchange risk.

GUATEMALA | Uproar over electoral shutdown. Business associations as well as opposition politicians are in an uproar over a full-speed amendment of the labour code which bans all productive activities during the six days leading up to general elections. The amendment was passed on the strength of the votes cast by the ruling Frente Republicano Guatemalteco (FRG). Its rationale: it will reduce abstentions and prevent businessmen from keeping their employees from voting.

PANAMA | Banking on 3% growth. When the books are closed this year the Panamanian economy will be seen to have grown by 3%, predicts deputy economy minister Domingo Latorraca. He says the last three quarters have shown `very clear signs of recovery' on most sectors of activity. Latorraca expects economic growth to continue at about the same rate over the coming two years.

DOMINICAN REPUBLIC | Selling off state's stake in electricity. President Hipólito Mejí­a has set up a special commission to review the legislation governing the electricity sector and the reform of state enterprises. 

His aim is to remove obstacles to the privatisation of at least 75% of all electricity companies, including Edenorte and Edesur. He wants to keep only the hydroelectric power plants in state hands.

JAMAICA | Tourism target in sight. With the numbers of stopovers up by 6.3% and of cruise visitors by 35%, the Jamaica Tourist Board reckons that it will achieve its target for this year of 2.4m visitors (1.3m stopovers plus 1.1m cruise visitors). Tourism director Paul Pennicook is even venturing that a target of 3m for 2004/05 is achievable, and that the figure could rise to 5m soon.

His first target is the land-invading MST; they will be given a voice in determining agrarian policy.

Newly installed President Carlos Mesa has begun to move fast to defuse the latent threat that peasant protests may resurface after the brief `truces' announced by their leaders. His government's first target is the movement of landless peasants, MST, which recently staged a series of land invasions that ultimately foundered on the hard response by the Sánchez de Lozada administration.

The new President's education in this matter began when, on 29 October, he went to Santa Cruz to distribute 200 land titles to peasants. Local business leaders were quick to point out that only a few kilometres away, militant squatters were still occupying a 50,000-hectare farm. The argument put forward by the businessmen was that legal ownership should prevail, regardless of whether, as the squatters claimed, the land was lying idle.

The government's response came the following day, through Jorge Cortés, minister for sustainable development. He announced that the government would not tolerate land invasions, adding that he was convening the Comisión Agraria Nacional (CAN), the highest policymaking body on agricultural matters — into which he would be incorporating the MST.

He also said that the agrarian reform institute, INRA, had been ordered to speed up the processing of backlogged land-titling requests.

In a response to the demands heard in Santa Cruz, Cortés said that just as there were `just' demands of landless peasants, `there are some landowners making ill use of their land' and `abusing' what they had received from the state by letting it lie idle.

MST leader Angel Durán publicly welcomed the announcements and said he was willing to attend the CAN sessions. He said the MST had instructed its members to honour the `truce' granted to the new government — `but we also say that we will assess within three months if it is truly moving on land titling and the reversion of land which is not fulfilling its social function.' This was a clear allusion to the agrarian reform provisions which render liable to expropriation any land deemed not to fulfil a `social function'.

CNE notes that authorities there are due to be renewed in July, so trying to revoke mandates would be redundant.

Venezuela's electoral calendar has been somewhat simplified by a ruling of the CNE, the electoral council: instead of 96 mandate-revocation referendums, there will be — if all prior requirements are met — only 78.

The CNE decided last week to disallow the referendums requested for seven state governors and the chief mayor of Caracas (as well as others in the pipeline for a number of mayors and town councillors). Its rationale was simple: elections for all those posts are due in July next year; if any of the incumbents were to seek reelection they would have to resign before then; and if they were to resign it would not make any sense to try to revoke their mandate.

The opposition had been arguing that the pro-government camp was working hard to delay the referendums precisely so they would clash with the July state and municipal elections, placing competing demands on the opposition's campaigning resources.

Now that the clash has been removed, though, it has adopted a new tack. The CNE decision, it claims, is the result of a government manoeuvre to avoid contests (the disallowed referendums) that it would not be able to stage, let alone win. The implication is that the CNE is simply doing the government's bidding.

However, the CNE's decision was also faulted by a leading pro-government politician, William Lara, former president of the national assembly. He said, `We do not endorse the CNE's ruling because we believe we have the right to hold those referendums -- but we are not about to indulge in diatribes with the electoral power, and we will abide by its decision.'

What is left
Still in the works are the referendums on the mandates of President Hugo Chávez and 77 federal legislators (of which 39 have been requested by the opposition and 38 by the pro-government camp). If all hurdles are cleared, these should start taking place in March-April next year.

There is, of course, an outside chance that the supreme court will rule in favour of a suit filed by opposition representative Gerardo Blyde, seeking the annulment of the referendums on legislators' mandates. So far, the supreme court has been bouncing back suits such as this one, on the grounds that decisions on these matters are up to the CNE.

Lara has pounced on the Blyde lawsuit to turn the opposition's arguments against them. `Blyde turned to the supreme court,' he said, `because he knows we have the capacity to collect the signatures and have their mandates revoked.'

One recent ruling by the supreme court has favoured Chávez 's chances. It said that it will not be enough for the opposition to muster at least as many votes as the 3.8m Chávez got in the presidential elections of 2002 -- the minimum laid down in the constitution for a mandate to be revoked. The opposition must also get more votes than the pro-Chávez camp. This may seem an academic distinction, but given the fact that opinion polls have been showing a resurgence of support for Chávez , and that about 12m Venezuelans will be voting in a highly polarised contest, it just might matter.

Gathering in Mexico expands the definition of `security' to include an array of problems, but sidesteps the review of the Rio Treaty and US plans for an enhanced Inter-American Defence Board.

The Declaration on Security in the Americas, signed by representatives of the 34 members of the OAS in Mexico on 29 October, was effusively praised by Mexican foreign minister Luis Ernesto Derbez because, he said, it `leaves behind the doctrinaire logic of the Cold War.' This was what Mexico had been seeking from the encounter — but this is not what emerged from it.

The two issues that would have entailed a movement in the direction desired by Mexico (and other Latin American governments) — a review of the Inter-American Treaty of Reciprocal Assistance, or Rio Treaty, and a decision on the US scheme to enhance the role of the Inter-American Defence Board — were not discussed (though there was a recommendation to look into the former). Instead, the participants vied with each other to expand the definition of `security'.

The final document said that the hemisphere's `traditional concept and approach [to security] must be expanded to embrace new and non-traditional threats, including political, economic, social, health, and environmental aspects.' 

This did not only include the oldish `new' threats the hemisphere has been endorsing for years at the urging of the US (terrorism, organised crime, money-laundering, drugs, corruption), but also an impressive additional array: natural disasters, AIDS and other contagious diseases, environmental degradation, cybercrime, transport and disposal of hazardous materials. The conference came very close to falling into the trap security experts have been insistently warning about: stating that `everything is security'.

The US conceded that all these things influenced security, but insisted, through Roger Noriega, Assistant Secretary of State for the Western Hemisphere, that its `prime concern' is terrorism — a problem which in recent years has afflicted the US and, depending on whose definition is used, also Colombia. As to the Rio Treaty, Undersecretary of State Marc Grossman said that it `remains an essential component of our security architecture.'

The final declaration also included commitments to contain defence spending and reduce conventional arsenals (which many OAS members, starting with the US, have no immediate plans of doing), keeping the region free of weapons of mass destruction (apparently not applicable to the US, which is the only country in the hemisphere that has them), freeing the region of mines (another issue on which the US has begged off), and to privilege multilateralism and the quest for peaceful resolutions of situations threatening with conflict (which does not seem to fit with the approach the US has been following).

Metropolitan police says it's unable to contain rising crime because its heavier weaponry hasn't been returned by the military.

President Hugo Chávez has reactivated a national guard outfit demobilised at the end of the 1990s, ostensibly to support the police in its effort to contain a runaway crime rate in Caracas. The 2,000-strong Comando de Seguridad Urbana (CSU) will, according to an official communiqué, `carry out continuous preventive and dissuasive operations' in the capital.

The metropolitan police, only recently removed by court order from military control, complains that it is unable to cope with violent crime because the defence ministry has not returned its submachine-guns and riot guns (the government is invoking legislation that classifies these as `weapons of war', reserved only for military use). The metropolitan police reports to the opposition mayor of Caracas; the national guard, a paramilitary force comparable to Brazil's military police, to the federal government.

In the first seven months of this year there have been 1,609 reported homicides in Caracas, as against 1,435 in the whole of 2002.

BOLIVIA | IMF dangles three-year deal. After a mission led by Eliot Kalter visited La Paz to make a first contact with the new Mesa administration, the IMF said that when another mission goes to Bolivia to conduct the third review of the current standby agreement, it will discuss `a possible three-year programme that could eventually be supported under the Poverty Reduction and Growth Facility.'

The Fund noted that Bolivia's `performance through end-September continued to be broadly in line with the [existing] programme, while normal commercial and financial activity has been rapidly restored following the events of mid-October.'

New finance minister Javier Cuevas reports that, up to September, the economy had been growing at a rate of 2.9%, helped along by a 16% increase in exports. He expects growth next year to reach 2.5% (half a point less than the central bank had forecast in May) and inflation to be in the region of 3% (as against a previously forecast 2.8%). Cuevas has ventured that this year's fiscal deficit will be contained at 7% of GDP.

COLOMBIA | Referendum failure will affect growth. In the absence of the reforms envisaged in President Alvaro Uribe's failed referendum [WR-03-42], Colombia's fiscal deficit will reach 3.8% of GDP, one point above the level agreed with the IMF. The prediction comes from the private-sector think-tank Fedesarrollo, whose director, Mauricio Cárdenas, says the fiscal adjustment will now be `much less traumatic' than it would have been if the referendum had been successful.

Fabio Villegas, president of the association of financial institutions, Anif, says, `What we are hearing [from the government] is a broad menu of tax measures [...] without measuring the impact they will have on the economy.' 

Deputy finance minister Juan Ricardo Ortega has admitted that `the change in the nature of the adjustment could have adverse effects on economic growth, the welfare of households and the country's competitiveness.'

Exchange rates
Local currency per US$1
COUNTRY	CURRENCY	Year ago	Previous	Current
		01.11.02	24.10.03	31.10.03
Argentina	peso	3.49	2.86	2.89
Barbados	dollar	2.00	2.00	2.00
Belize	dollar	2.00	2.00	2.00
Bolivia	boliviano	7.40	7.78	7.79
Brazil	real	3.60	2.87	2.86
Chile	peso	_	638.00	632.00
Colombia	peso	2,779.05	2,872.65	2,884.07
Costa Rica	colón	372.70	411.82	412.54
Cuba	peso	1.00	1.00	1.00
Dominican Rep.	peso	20.30	35.84	37.67
Ecuador	dollar	1.00	1.00	1.00
El Salvador	colón	8.75	8.75	8.75
Grenada	EC dollar	2.70	2.70	2.70
Guatemala	quetzal	7.68	8.13	8.13
Honduras	lempira	16.97	17.82	17.84
Mexico	nuevo peso	10.31	11.23	11.12
Nicaragua	córdoba oro	14.53	15.55	15.58
Panama	balboa	1.00	1.00	1.00
Paraguay	guaraní­	6,680.00	6,200.00	6,210.00
Peru	nuevo sol	_	3.48	3.47
Uruguay	nuevo peso	28.00	29.05	29.00
Venezuela	bolí­var	1,435.50	1,600.00	1,600.00
Sources: EFE; Bank of America.

Inflation in the region
Country	Source	July	August	September	Last 12m	Jan-Dec 2002
Argentina	Indec	0.40	0.00	0.00	3.50	41.00
Bolivia	INE	0.60	0.64	0.23	3.62	2.45
Brazil	FGV	-0.20	0.62	1.05	20.13	26.41
Chile	INE	-0.10	0.20	0.20	2.20	2.80
Colombia	Dane	-0.14	0.31	0.22	7.11	6.99
Costa Rica	DGEC	0.80	0.70	0.13	8.36	9.68
Ecuador	Inec	0.03	0.06	0.73	7.54	9.36
El Salvador	Min.Ec.	-0.40	0.30	0.10	2.10	2.80
Guatemala	BCG	0.27	0.28	0.42	5.68	6.33
Honduras	BCH	0.40	0.90	0.40	7.90	8.10
Mexico	Bco.Mx.	0.14	-0.07	0.60	4.04	5.70
Nicaragua	BCN	-0.08	0.30	0.22	4.97	3.87
Paraguay	BCP	-0.70	-0.20	0.20	8.10	14.60
Peru	INE	0.15	0.01	0.56	1.89	1.52
Uruguay	DGEC	0.50	1.16	0.80	11.63	25.94
Venezuela	BCV	1.80	1.30	1.30	26.60	31.20
US	DOL	0.10	0.40	0.30	2.30	1.60
Previous: WR-03-42

The stockmarket in figures
Market	Index	24.10.03	31.10.03	Variation (%)
Buenos Aires	Merval	923.73	929.89	0.67
São Paulo	Bovespa	17813.91	17982.49	0.95
Santiago	IPSA	1551.21	1515.96	-2.27
Bogotá	IGBC	2172.94	2158.21	-0.68
San José	BCT	12892.83	12469.94	-3.28
Quito & Guayaquil	Interinvest	71.68	67.51	-5.82
Mexico	BMV	7842.86	8064.83	2.83
Lima	ISVBL	2084.69	2109.18	1.17
Caracas	BC	20273.32	20413.00	0.69
Source: Daily market reports.

"The real survey will not take place until 21 March 2004."

Schafik Handal, presidential candidate of El Salvador's FMLN, after his standing in the polls plummeted.


"Bogotá will not be an independent republic. I'm willing to do anything that serves peace, but on that matter it is the President who has the initiative."

Lucho Garzón, leftwing mayor-elect of Bogotá.


"This is an act of regression in the country's political life."

Andrés Manuel López Obrador, mayor of Mexico city, on the PAN-PRI deal that excluded his party from the selection of the new electoral council.

Berger's lead has shrunk and Rí­os Montt's support has increased as the count has moved from the cities to the countryside; the big question is whether the former dictator will be in the run-off.

Caution may be advisable regarding the outcome of the presidential elections held in Guatemala on 9 November. Hopes that a final count might have been ready by the end of the following day were dashed, and by the time of writing official results from only 64% of the polling stations were available. The emerging lineup was almost, but not quite, the same as the one that had created much excitement on Monday.

Leading the pack was rightwing businessman Oscar Berger of the Gran Alianza Nacional (Gana) with 38.4% of the vote, almost 10 points down from earlier results that had put him only a whisker away from a first-round victory. Next came Alvaro Colom, of the left-of-centre Unidad Nacional de la Esperanza (UNE), with 27.6%. Third was former dictator Efraí­n Rí­os Montt, of the ruling Frente Republicano Guatemalteco (FRG), with 16.95%. Compared with the earlier counts, Colom has gained slightly, while Rí­os Montt was up by more than five points.

These changes reflect the fact that the early results come from the cities, where Berger and Colom are strongest, while the later ones come from the rural areas where Rí­os Montt has his greatest following. Ahead of the final count, FRG campaign managers have been claiming that they have won in most of of their 22 `core' areas, and they still expect to be in the second round. (Rí­os Montt himself has been saying he expects to end up leading the first-round vote.)

The outlook for the second round, to be held on 28 December, will depend on who remains in the runoff. If it is Berger vs Colom, the odds are on a Berger victory, as the FRG vote is considered likely to tilt his way. If it is Berger vs Rí­os Montt the result is not a foregone conclusion: though many of those who have voted for Colom would prefer almost anyone to the former dictator, the turnout could be lower than the estimated 60%-plus of the first round, and in those circumstances the FRG might have an advantage. The turnout in the last general elections, in 1999, was 53.7%.

The elections were not entirely peaceful. A congressional candidate of Colom's UNE ended up in hospital with a gunshot wound, three people were killed in a rush on a polling station, and serious rioting forced the suspension of the vote in two municipalities. However, in the light of the predictions of widespread violence and an announced boycott by former members of the civilian self-defence patrols, these incidents were written off by most observers as minimal.

More than 40 attacks on police targets in a single week give Brazil's biggest city the sensation of being at war.

São Paulo, Brazil's most populous city, came under sustained attack - bombings, arson, drive-by shootings - throughout most of last week. This was not just the sum of disconnected acts of violence, but a concerted campaign launched by one of the country's biggest criminal gangs, the Primeiro Comando da Capital (PCC). The target was the police: police stations, police cars, homes of policemen.

In all, by 8 November the state's public security secretariat had reported 40 separate attacks, which had claimed the lives of three policemen and injured at least 10 people. It could have been worse: several firebombs and explosive devices failed to go off, and a bomb planted at the Guarulhos international airport was detected in time.

Belated counterattack  
The first wave of attacks caught the police completely off balance. It fell back upon itself, cutting off road access to police stations and reinforcing patrols. In midweek a visibly distraught Saulo de Castro Abreu, state secretary of public security, could only lash out at foreigners. 'We are not guerrillas, murderers or bandits,' he said; `criminals have invaded our territory.'

A cooler appraisal and some belated intelligence work identified the imprisoned leaders of the PCC - very much a homegrown phenomenon - as the organisers of the attacks. The PCC is renowned for having staged, in February 2001, Brazil's biggest-ever prison uprising, in which 21 inmates were killed. PCC leaders are currently confined in three maximum-security prisons (Presidente Bernardes, Avaré and Taubaté) under a severe régime: isolated, barred from receiving 'intimate' visits and corresponding with the outside, and limited to an hour a day in the open air.

Last week's attacks are seen as part of the PCC's attempt to intimidate the authorities into easing this régime. The police believe the orders were conveyed to PCC lieutenants outside by the jailed leaders' lawyers.

By 8 November the São Paulo police had collected itself enough to launch a counteroffensive. About 7,200 members of the military police were mobilised against almost a thousand targets throughout the city. The result: 44 suspected participants in the blitz were arrested.

Police offensive in Rio  
On 3 November, the day after the São Paulo attacks began, the government of Rio de Janeiro launched a massive operation codenamed Pressão Máxima ('Maximum Pressure'), devised to ferret out criminals. As put by Anthony Garotinho, the state's security secretary, 'Previously the police launched incursions and raids after some violent act. Now we are going to seek out the bandits wherever they may be.' Actually, mobilisation of the police began in response to a shootout between drug gangs in one of Rio's favelas, where at least 12 people had been killed (nine of them in a single group 'execution').

More than 800 police have been deployed for Pressão Máxima, which is meant to continue for a full month. The authorities have singled out 600 targets within the 20 areas that sport the highest crime rate in Rio. The starting point was the favela of Morro do Dende, where the murder rate is three times the state's annual average of 50 per 100,000 inhabitants -- itself among the highest in the world. Initial raids turned up a network of tunnels and a clandestine barracks with bunk beds for the drug gangs' gunmen.

By 8 November the Rio police had reported 78 arrests and seizures of marijuana, cocaine and assorted weapons and munitions. Rio's leading drug gang, the Comando Vermelho, is also led from inside the prison system. Its top leader, known as Fernandinho Beira Mar, is in a maximum-security establishment, but this has not stopped him from launching attacks like those of last carnival, targeting some of the city's main tourist spots. Fernandinho was captured in Colombia, where he was engaged in a drugsfor- arms deal with the guerrillas of the Fuerzas Armadas Revolucionarias de Colombia (Farc). Interceptions of drug shipments from Colombia to São Paulo suggest similar links there.

Celso Amorim goes to Washington seeking to dispel 'misconceptions' about Brazil's negotiating stance.

'Flexibility' was the catchphrase taken by Brazilian foreign minister Celso Amorim to Washington this last weekend for the emergency meeting convened by US Trade Representative Robert Zoellick, with the aim of seeking some common ground for the next FTAA meeting, to be held later this month in Miami.

Amorim held prior meetings with both Zoellick and US Secretary of State Colin Powell, at which one of his aims was to dispel the impression that Brazil was intent on wrecking the negotiations. He has also been trying to correct the widely held view that the Cancún WTO talks collapsed because of the stance taken by what was then the G-22. 'Had it been up to the G20- plus,' he says, 'the message would have been to go on negotiating.' The collapse, he argues, was produced by the stance taken by a much broader group of developing countries against US and European intransigence over agricultural subsidies.

The Brazilian minister has also been pointing out that, despite the impression given by press reports and statements by officials, the FTAA in Washington will not broach the more contentious issues, such as agricultural trade. 'Rather,' says Amorim, 'we have been discussing the architecture of the FTAA, because it has become evident that we must adjust the agenda for future talks.' It is this respect that he has been advocating flexibility without destroying the nature of the FTAA.

'In some areas we must show flexibility,' he says. 'Nonetheless, understanding the other side's problems does not necessarily mean accepting the solutions they offer.' For Brazil in particular, he says, the main thing is to achieve viable solutions to trade problems,'and for this reason we are continuing to talks within the WTO, which should benefit the FTAA.' Just as the US wants to leave out the issue of agricultural subsidies and support mechanisms, Brazil would prefer to leave out such items as services, investment, intellectual property and government procurement.

Kirchner's family threatened after he accuses police of involvement in the escalating kidnap-for-ransom business.

Argentina's cities may not have come as literally under siege as Brazil's (see page 2), but the threat posed by increasingly brazen criminal gangs became equally worrying when President Nestor Kirchner's family received death threats intended to deter him from the campaign he has launched against kidnap rings. Indeed, the problem Kirchner has identified may be worse than Brazil's: in Argentina some of the criminals are the police.

A particularly gruesome case of kidnap for ransom (the abduction of the student Pablo Belluscio) prompted Argentines to take to the streets on 31 October in the kind of pot-banging protest usually reserved for major political and economic grievances. They wanted immediate action.

In the Greater Buenos Aires area, which includes the federal capital and a ring of municipalities in the province of Buenos Aires, there have been 207 reported kidnap cases in the first half of this year: 95% of the national total and 25% more than in the same period of last year.

Kirchner took up the challenge, and publicly accused members of the Buenos Aires provincial police of involvement in kidnapping and other criminal activities. There were two responses to this. One was a distinct cooling of relations between the President and Felipe Solá, governor of Buenos Aires province, which prompted a top-level meeting between Kirchner and former President Eduardo Duhalde, political overlord of the province and the man who had marshalled the votes for Kirchner's election. Rumours soon flew about a serious Kirchner-Duhalde rift, which took Duhalde some time to dispel. The other response was the death threat against Kirchner's family.

Charge proven?  
Governor Solá, whose government is already investigating two dozen highranking officers of his provincial police for suspected corruption, rushed to show that he was as concerned as the President about the situation: he took policemen off desk jobs in order to deploy a force of 3,300 additional officers on patrols in the areas with the highest crime rates. Neighbours have been given the cellphone numbers of the patrols, in order to ensure rapid response to reports of crimes.

The President's public accusations of police involvement soon appeared to be borne out by events: on 7 November the authorities reported that an officer in an investigations brigade of the Buenos Aires police had been arrested on suspicion of having played a role in the Belluscio kidnapping. He was accused of having kept the kidnappers informed of the progress being made by the police investigating the case.

Kirchner reacted to the death threats in a belligerent mode. 'I will not remain silent,' he said. 'I am saying this to the uniformed brothers of the Buenos Aires police, who are surely working men in whom we wish to trust.' He then addressed 'all the police forces in Argentina' with the message that 'it is time to end this business of seeing the men to whom we give a uniform and a pistol to defend the public involved in crimes.' He followed this up, later, with the creation of a special anti-kidnap unit, headed by a prestigious federal police officer, intended to act as an 'instant response' team with the power to deploy anywhere in the country.

Londoño loses his job after revealing that the President had even considered calling early elections if his 'Plan B' tax package were to fail.

A political crisis which cost interior minister Fernando Londoño his job has highlighted the extent to which President Alvaro Uribe actually believed that the failure of his reform referendum would render Colombia 'ungovernable'. He had reached the point of considering the celebration of early elections - a course fraught with constitutional obstacles - if the Conservative party, hitherto his allies, denied their support to his 'Plan B' tax proposals (see page 9).

This became public knowledge on 5 November when Londoño mentioned it to a group of fellow-Conservative legislators, in what he thought was a closed-doors meeting, though the proceedings were being relayed by the speaker system to journalists assembled in another room. As Londoño tells it, he only became aware of this when President Uribe phoned him - apparently displeased by what he had heard on the radio.

Londoño claimed that he was quoted out of context; that he was referring to a hypothetical case of gridlock which right now does not prevail - with most of congress, in his view, backing Uribe.

The next day Londoño announced that he was leaving his post (he had already submitted his resignation together with the rest of the cabinet in the wake of the referendum fiasco). He was promptly replaced with Sabas Pretelt de la Vega, another Conservative; an economist who for the past 14 years has been president of Fenalco, the merchants' federation. In the political arena he has served as member of the national conciliation commission, standing out as one of the business leaders who has put most effort into seeking peace with the armed groups.

Londoño was the second highly opinionated minister to leave Uribe's cabinet. The other was finance minister Roberto Junguito. (A third minister, Juan Luis Londoño de la Cuesta, of social protection, was killed in an air accident in February.)

Trying again through congress  
Apart from the tax package that picks up several of the referendum proposals, a bill has been submitted to the senate incorporating several of the political reform provisions. Sponsored by Liberal senator Andrés González, a former justice minister, it includes such things as the reduction of the number of legislators, the 'political death' of officials found guilty of corruption, the freezing of public-sector salaries and pensions, the introduction of a new regionalisation system, the criminalisation of drug possession for personal use, and the overhaul of the CNT, the television regulator.

Support for the González bill has already been voiced by the Conservative bloc in the senate and by Uribistas from several political parties. Opposition does not appear to be as strong as in the case of the tax measures, but there are those who have vowed to challenge the bill on the grounds that its provisions have already been rejected by the electorate. This poses an interesting constitutional problem, and may end up in the courts.

Mapuche militants last week launched a wave of land invasions in the central-southern IX Region and the province of Valdivia. In Panguipulli (X Region) their hand was seen behind the torching of a house belonging to the logger and former economy minister, Fernando Léniz.

Léniz has a series of longstanding land disputes with local indigenous communities, and his lands have been invaded on several occasions - most recently last April. The timber corporation, Corma (a body which Léniz once presided), has condemned the arson attack as 'one more instance of the escalation of terrorist violence affecting regions IX and X for some years now, which has entailed the torching of houses, depots, vehicles, crops and plantations.'

Last month a court used antiterrorist legislation to imprison two Mapuche loncos (headmen), Aniceto Norí­n and Pascual Pichún, for issuing 'terrorist threats'. An accompanying charge of 'terrorist arson' was dropped for lack of evidence. A Mapuche organisation is taking their case to the Inter-American Human Rights Commission (WR-03-42).

ARGENTINA | IMF rebuts creditors. John Dodsworth, head of the IMF mission reviewing the performance targets Argentina has agreed with the IMF, has come out against the creditors' demand for a public savings target of 4.5% of GDP, rather than the 3% agreed with the IMF - on the grounds that the economy looks likely to grow this year by 6.5% instead of the initially projected 3.5%. This, of course, is part of their rationale for rejecting Argentina's offer of a 75% cut on the defaulted portion of its external debt.

Dodsworth said the IMF-agreed target was 'appropriate', and commended the Argentine authorities for their 'very serious' attitude regarding negotiations with the largely foreign-owned utilities.

BRAZIL | IMF standby to be increased 'preventively'. The IMF management has welcomed Brazil's request to extend for one year the current standby agreement (under which it still has US$8bn available) and increase it 'preventively' and 'as part of its strategy to exit from Fund support', by US$6bn. This has been confirmed by IMF deputy managing director Anne Krueger.

Brazil has agreed to maintain its primary fiscal surplus target of 4.25% of GDP; in the first nine months of this year it posted a surplus of 5.08%, well above the target. The announcement of a new deal with the IMF has been criticised by members of the ruling Partido Dos Trabalhadores (PT) - and not only by the more radical group - and by its allies of the Partido Popular Socialista (PPS); the former because they see it prolonging policy commitments that have depressed growth this year, the latter complaining that they were not consulted.

CHILE | Business optimism about 2004. An overwhelming 98% of businessmen surveyed in a poll commissioned by the Spanish chamber of commerce in Chile believe that 2004 will be a good year; 78% believe exports will increase (against only 1% foreseeing a decline). Central bank president Vittorio Corbo has ventured that the economy could grow next year by 4% to 5%.

Former President calls openly for a coalition to block the ascent of Evo Morales and Felipe Quispe; a risky gamble with political polarisation.

The first thing that draws attention in Bolivia is how quiet everything has gone: belligerency has receded in the hot spot of El Alto, political and business leaders in eastern Santa Cruz and southern Tarija are no longer talking about 'isolating' the fractious highlands around La Paz, the landless peasants have drastically scaled down land seizures, and there is talk that President Carlos Mesa's honeymoon period may last until 'after Carnival' - towards the end of the first quarter, when schools reopen.

What may prove more important, though, is what is happening in the background in the political arena. Despite his high-profile role in the protests that unseated President Gonzalo Sánchez de Lozada, Evo Morales has not emerged as the most promising candidate to the presidency in 2007. An opinion poll released just over a week ago, shows the lead going to former President Jorge Quiroga, just back from a brief 'sabbatical' abroad. Quiroga attracted 20% of voter preferences, as against 16% for Morales. No other politician mustered even 10%. In Bolivian terms, this is high polarisation - and Quiroga, commonly alluded to by his nickname, Tuto, seems determined to polarise the scene even further. His main message is that all established political parties are in crisis, including his own Acción Democrática Nacionalista (ADN). He is appealing for the formation of a new broad electoral alliance with one overbearing aim: to block the ascent of Morales and Felipe Quispe. In this he is giving voice to what many have been suggesting in private.

Adding to polarisation  
Morales appears to sense that this is the biggest challenge he will have to face, and has lost no time in mounting a campaign designed solely to erode Quiroga's standing. He describes Tuto as the man picked by the US to succeed Sánchez de Lozada; an attempt to play on anti-US sentiment as well as associate Quiroga with the former president, who currently enjoys a 96% disapproval rating. Morales also insists on reminding everyone that it was under Quiroga that the Bolivian government got involved in the project to export natural gas to the US - the ostensible banner for the recent protest movement.

This also puts Morales on a polarising track. If either succeeds, they might achieve that long-desired aim of political reformers: to overcome the atomisation of Bolivia's political system, seen as the factor that has most constrained governments' ability to govern.

This particular polarisation, though, is a highly dangerous one, in that it builds upon a divide that is both ethnic and regional: the indigenous highlands pitted against the agricultural eastern lowlands and the gas-rich south - sometimes caricatured as the coca producers against the producers of 'real' wealth. If exacerbated, it could reverse one of the positive trends of the past month or so: an opinion shift in Santa Cruz and Tarija, away from regional confrontation and towards seeking a new régime of regional autonomies in the constituent assembly Mesa has promised to convene.

Wild cards  
There are several wild cards in play as well. One is the emergence of Roberto de la Cruz, journalist and head of the regional labour confederation in El Alto, as a key player in the protests that led to Goni Sánchez de Lozada's resignation. He seems intent on capitalising on this to become a top-league actor. De la Cruz has been trying to whip up support for a revised and expanded version of the October demands: refusal to pay the external debt, annulment of all oil contracts, reversal of all privatisations, jailing Goni, cutting legislators' salaries and granting pensions to the relatives of all the victims of the October clashes. This package seems designed to put President Mesa in an impossible situation.

In this effort de la Cruz is struggling against the current in El Alto, where militancy has plunged in the wake of post-protest company closures and threatened withdrawals. Right now he also has to overcome Mesa's extraordinarily high (70%) approval rating.

Another unknown quantity is the promised binding referendum on the export of gas, a subject which is still a major irritant in Tarija. Despite the fact that opposition to exporting the gas was the visible unifying factor in the October protest movement, several soundings of public opinion suggest that a majority countrywide would support exports. This could contribute to further calming the atmosphere in Tarija, but might also trigger suspicions of vote-rigging in other parts of the country.

Then there is the coca issue. As will be recalled, Goni's government had all but admitted that total eradication of 'excess' coca cultivation is impossible to achieve, and that the best that could be hoped for was a 'virtual zero' situation, in which eradication would match new plantings. This displeased the US, though of course its greater displeasure is still reserved for Evo Morales and his coca growers' federation, who are seeking to end eradication. The US can be expected to become more vocal on this issue, and this will feed into the polarisation scenario.

Bartlett and Cárdenas dismiss leaders' assurances and form common front to oppose perceived 'backdoor privatisation' of power sector.

One of the odder sights in Mexican politics was witnessed last week: senator Manuel Bartlett of the Partido Revolucionario Institucional (PRI) and former presidential candidate Cuauhtémoc Cárdenas of the Partido de la Revolución Democrática (PRD) sharing a platform and announcing a 'common front' against something that, ostensibly at least, nobody is proposing: the privatisation of the electricity sector.

Cárdenas broke away from the PRI in 1987 to form the PRD, under whose banner he ran for the presidency the following year. Bartlett, interior minister at the time, was accused by the PRD of having masterminded the rigging of the vote so as to cheat Cárdenas of victory. Since then the two have been arch-enemies. As Cárdenas put it, 'It has not been all that frequent to see together those of us who are sitting at this table.'

His justification: there can be no distinctions along party lines when it comes to 'defending what belongs to the Mexicans.' Also joining in were the PRI governor of Oaxaca, José Murat, and two sectoral union leaders: Rosendo Flores of the Sindicato Mexicano de Electricistas and Francisco Hernández Suárez of the Sindicato de Telefonistas. They all vowed to act jointly to prevent privatisation of the power sector, starting with a mass rally on 27 November.

Arguments technical & political  
Though the rationale of the anti-privatisation front is mainly based on the defence of national sovereignty, they came up with another argument that has not been heard very often: that the main state power utility, the Comisión Federal de Electricidad (CFE), contrary to government claims, is perfectly capable of guaranteeing the supply of power beyond 2009. The CFE, they say, is the fourth-largest power utility in the world and one of the most competitive.

The government has argued the case for reform of the power sector on projections showing that electricity demand will grow by 65% over the coming 10 years, that keeping abreast of that will demand investments of about US$45bn, and that this can only be raised through private participation. The government has formally committed itself not to privatise the two state power utilities (CFE and Luz y Fuerza) and to retain the 'commanding role' of the state in the energy sector. The PRI leadership has produced a blueprint for energy reform that differs in degree from the administration's.

The anti-privatisers say they do not believe these statements of intent. In their view, any further opening of the electricity sector to private participation would be the beginning of privatisation by stealth. 'There are those who claim that this would not be a sellout,' said governor Murat, 'but those are the ones who have stuck with the ideas of the technocrats, and that was what made us lose the last elections.' This is clearly a factional PRI argument: Bartlett is a prominent rival to of the PRI leadership. That, however, does not explain what Cárdenas is after.

An official report on the toll taken by the September-October protests and associated clashes with the police and army has been released by acting 'defender of the people' (public ombudsman) Carmen Beatriz Ruiz. This is the fruit of a two-week investigation, which make it the most comprehensive so far.

The report confirms the deaths of 59 people, including two children. Of the victims, 55 were males, and most were killed by gunfire. Most of the deaths took place in El Alto and La Paz, when the protest movement reached its climax on 12-13 October. Still to be determined is the fate of another 12 people, among whom is a two-month-old baby. Excluded from Ruiz's tally are the three soldiers killed by protesters.

Other tallies, produced more hurriedly have been released by the chief prosecutor's office, which counts 51 dead, and the Asamblea Permanente de Derechos Humanos, which counts 82.

The government of President Carlos Mesa has promised compensation for the families of victims, including reimbursement of medical expenses incurred by an estimated 400 injured. The public ombudsman's report, according to Ruiz, aims to provide an account of 'effects [of the incidents] on the violation of the human rights, health, lives and security of persons, and the manner in which the state is acting to redress these violations.'

The data compiled will serve to help determine the compensations to be paid. it will stop short, though, of apportioning blame for the various 'violations' it identifies.