All Categories

The Vice-President and justice minister, Laura Chinchilla, said this week that Costa Rica had become "a country living in fear" over the last few years due to a growing crime rate and the increased threat posed by youth gangs. Chinchilla said that the government had designed a new programme targeting youths, ''Puentes de luz'' ("Bridges of light"), which seeks to provide job opportunities for adolescents from disadvantaged family backgrounds; reduce school desertion; and provide better sporting and recreational facilities in underprivileged communities.

Chinchilla said that solutions implemented to tackle violent crime so far, such as increasing the maximum prison sentence from 25 to 50 years, had failed to address the root causes of the problem and more emphasis would now be placed on prevention rather than repression. She said that a ministerial study into crime and the youth gang culture showed that there were some 25 youth gangs in Costa Rica with about 350 members but their numbers were being bolstered by factors such as social exclusion. Chinchilla added that 62% of gang members had been brought up by just single mothers, with many caught up in the drug underworld. 

Chinchilla said that a pilot scheme of ''Puentes de Luz'' had been launched in Quepos, Costa Rica's main fishing town, with some 11,000 inhabitants, located in the central Pacific province of Puntarenas. She said that the number of crimes against tourists was down 25% in the first half of the year compared with the same period in 2006. The government will hope for a similar success rate when the plan is launched nationwide but Chinchilla stressed that the main challenge for the government was to act now before the youth gangs take the decisive step towards becoming "maras" and getting involved in organised crime. The maras are a major component of the security problems in El Salvador, Guatemala and Honduras.

Increase in crime
The justice minister, Laura Chinchilla, said that two statistics had jumped off the page from the ministerial study into the growing threat of crime in Costa Rica. She said that the study showed that crime had increased by 121% between 1990 and 2005 and that 72% of Costa Ricans apparently fear being attacked on the streets now.

President Michelle Bachelet celebrated a key agreement with the opposition coalition, Alianza por Chile, on public security this week. It follows another bipartisan deal on education reform. The opposition made a big show of pointing out its part in "saving" the government. It stopped short of bailing it out over financing Transantiago, however, after both chambers of congress humiliated Bachelet last week by rejecting her administration's proposals for funding the inefficient metropolitan transport system [WR-07-46]. 

The leaders of each of the constituent parties in the ruling Concertación and the Alianza signed the agreement in the La Moneda presidential palace. As such it should pass through congress without a hitch. The most eye-catching reform is that the civil police forces and the uniformed police (carabineros) will no longer fall under the remit of the defence ministry. They will now answer to the newly named interior and public security ministry. This reverses a decision taken by General Augusto Pinochet in 1974. The UN human rights commission had long complained that the continued subordination of the police to the defence ministry meant that the competence of military jurisdiction remained excessively broad.

Other noteworthy measures include a department for crime prevention; an agency to provide support for victims of crime and to carry out social rehabilitation programmes; tighter legislation on the possession of arms; and a government commitment to transparency - the interior minister will go before congress in January to report on objectives and results. 

Joaquí­n Laví­n, the former president of the Unión Demócrata Independiente (UDI), was instrumental in brokering the deal and was even singled out by the interior minister, Belisario Velasco, for praise. This prompted criticism from within the Alianza, especially from the Renovación Nacional (RN), which downplayed Laví­n's role and claimed it had been working on the proposals for the last two years. 

Laví­n is now turning his attention to Transantiago and another bipartisan deal. This will be more complicated. For all that Bachelet lauded the agreement as a fine example of "the capacity of political parties to agree on important issues […] in a spirit of compromise and patriotism", the Alianza has no intention of giving her an easy ride over Transantiago. 

Carlos Larraí­n and Hernán Larraí­n, the presidents of the RN and the UDI respectively, snubbed the minister for the presidency, José Antonio Viera-Gallo, this week when he proposed a similar pact over Transantiago. They released a joint statement saying that the Alianza hoped the government would release a new bill within the next four months with a complete diagnosis of the problems afflicting the transport system. They said this should include clear delineation of responsibilities; a redesign of the system guaranteeing users an efficient service; and a significant reduction of the operational deficit. They said the Alianza would be prepared to discuss it but only in congress. In the meantime, they suggested the government use the discretionary funds written into the constitution (the equivalent of 2% of the budget) to cover the current deficit. 

Worth noting: The fallout from the Senate vote on Transantiago last week is starting to be felt. The president of Democracia Cristiana (DC), Soledad Alvear, announced that the party leadership had appealed to its disciplinary committee, or supreme tribunal, to suspend dissident Senator Adolfo Zaldí­var. 

Concertación infighting

The president of Democracia Cristiana (DC), Soledad Alvear, said that it had been a very difficult decision to recommend that the party's disciplinary committee suspend Senator Adolfo Zaldí­var. She said that Zaldí­var had not only broken the party line by voting against a financing package for Transantiago, he had also signed an agreement with the opposition pledging to do so. She said that Zaldí­var himself, through his actions, had decided that he no longer wanted to belong to the DC.

Iván Rí­os, ranked sixth in the Farc high command, or secretariat, was killed on 7 March. The manner of his death provided a lurid illustration of the disarray reigning in the Fuerzas Armadas Revolucionarias de Colombia (Farc) in the wake of the March 1 surgical strike by the Colombian military on Ecuadorean soil, which took out the Farc number two, Raúl Reyes. Rí­os was killed by his bodyguard, Pablo Montoya, "Rojas", who cut off Rí­os's right-hand to present to the authorities in the hope of claiming the US$2.5m reward that the government was offering for his capture.

The Farc has downplayed Reyes' death, publishing a statement paying tribute to his revolutionary zeal; blaming the government for sabotaging the hostage release; and appointing a senior commander in his place. However, Rí­os' murder lends credence to the government conviction that morale among the guerrillas has reached its nadir and demobilisation is increasing. Rojas, who handed himself in to the eighth army brigade after killing Rí­os in Albania in the Aguadas mountains, told the press that his action was a direct consequence of Reyes' killing. He said that the Farc felt encircled by the military and desperate for lack of food. He presented the military with a passport and Rí­os' personal laptop, in addition to the more macabre evidence of his death.

Despite recent claims by the Defence Minister, Juan Manuel Santos, that the Farc is at "breaking point", it would be a mistake to underestimate the group's ability to adapt, as proven over the course of the 44-year conflict. The Farc is clearly feeling the pressure of five years of unremitting military offensives under the Uribe administration's Democratic Security Policy (DSP). When President Uribe came to power in 2002, the Farc had an estimated 19,000 fighters deployed on 70 fronts; now it is believed to have only half that number, fighting on just 45 fronts. Many are isolated and cut off, hampering coordination. The recent targeting of increasingly senior leaders, culminating in the strike against Reyes, is also sapping the morale of the guerrillas, according to military intelligence gleaned from infiltrators and radio interceptions.

With Guatemala's two main political parties, the Unidad Nacional de la Esperanza (UNE) and rightwing opposition Partido Patriota (PP) still reeling from the repercussions of a recent financial scandal [WR-08-25], two new political movements have emerged in recent weeks. These new groupings underscore the notorious fluidity and instability of the country's party-political system.

On 21 June around 500 people attended a ceremony marking the creation of a new political movement, Victoria, the brainchild of Abraham Rivera Sagastume, who left the PP in May because of differences and failing to “respect party agreements", according to PP leader Otto Pérez Molina. Rivera told the local press that the ideology of his new party is social-Christian and based on promoting decentralisation, so that essential services such as health and education reach those who most need it.

Headed by Rivera, Victoria will also feature his sons, Juan Carlos and Abraham Rivera Estévez, who both recently left the PP too. The new group is currently gathering the 25,000 signatures needed to register as a political party with the supreme electoral court (TSE) and expects to hold departmental assemblies by November.

The creation of Victoria also followed the official presentation on 11 June of another new political party, the Frente de Convergencia Nacional (FCN), which is now registered with the TSE. The FCN general secretary is Roberto Pirri Cruz, a businessman, sports journalist and former member of the now-defunct Democracia Cristiana Guatemalteca (DCG). Cruz stood as DCG pre-presidential candidate on two occasions.

Somewhat obliquely, Cruz told the national newspaper Prensa Libre that the party did not have a defined ideology, explaining that “we are not of the left, the right or the centre, we work for the government". Comprised of low level military officials and civilians who lack previous affiliation to other political parties, Cruz added that the party will focus on “security, justice and development".

• Colom decrees another “state of prevention"

President Alvaro Colom declared a “state of prevention" in the municipality of San Juan Sacatepéquez, in the northwest of Guatemala City, on 22 June. The decree - which lasts two weeks and restricts the right of citizens to take part in public protests and carry arms - harks back to the time of military rule in its curtailment of civil rights. It is the second time in less than two months that Colom has invoked the measure; in early May a “state of prevention" was declared in response to a national strike by transport workers [WR-08-19]. Colom issued the decree after protests by the indigenous community in San Juan Sacatepéquez over the construction of a cement manufacturing plant by Cementos Progreso got out of hand last week: four people were taken hostage by local protesters and one, identified as community leader Francisco Tepeu, died.
   Since declaring the decree on 22 June, at least 40 people have been arrested in San Juan Sacatepéquez after 500 police officials and soldiers arrived in the municipality. The circumstances surrounding Tepeu's death have yet to be clarified although the other three hostages were subsequently released. Since 2007 some 10 indigenous communities have opposed the construction of the plant citing fears that it will cause air and water pollution and lead to the eviction of local communities.

• New chief of prisons

Gustavo Gaytán has taken over as head of the prison service after his predecessor Alvaro Arriza, resigned on 6 June claiming that the budget was insufficient to make necessary changes to the prison system. Gaytán, a lawyer who has specialised in indigenous law and ethnicity as well as having served as a justice of the peace, has his work cut out. A recent report by the human rights ombudsman warned that the prison system was on the verge of collapse, with serious levels of overcrowding in at least 19 prisons.

The Fuerzas Armadas Revolucionarias de Colombia (Farc) is planning to create a people's political party, spend up to US$6m on military equipment, acquire missiles, infiltrate the army, plant more land mines, and strengthen ties with the Ejército de Liberación Nacional (ELN) in a bid to combat President Alvaro Uribe's democratic security policy (DSP). This, according to an email reputedly written by the guerrilla group's leader, Alfonso Cano, to other members of the secretariat, the details of which were published by the national daily, El Espectador , on 28 September.
  
Cano outlines the Farc's new strategy in a three-page email consisting of 14 points designed to avoid “a climate of progressive defeat of the Farc". Cano accepts that the Farc has lost ground in both the military and political arenas. He argues that the best way to counter the military advance is through land mines, “the only thing that stops and intimidates them"; the best way to recover lost political ground, to forge closer ties with “the friends of (Venezuela's) President (Hugo) Chávez " and to create a people's party with the assistance of Senator Piedad Córdoba, who was involved with Chávez in the ill-fated mediation between the Farc and the government last year.

The authenticity of the email, dated 16 August, was confirmed by the commander of the armed forces, General Freddy Padilla, although Córdoba, who is currently being investigated for links to the Farc, said it served as a convenient distraction from the parapolitical scandal, which is once again rearing its head. Last week a former paramilitary leader known as HH testified that the government had pressured him to conceal the truth about his ties to a Colombian ambassador and a retired general. HH's claims imply that the government is attempting to frustrate the judiciary's parapolitical investigations just as Uribe has accused the supreme court of “trafficking in false witnesses" [WR-08-34].

• Marulanda bust
  The Colombian foreign ministry released a statement this week expressing its “indignation" at the unveiling of a bust to the deceased Farc leader Manuel Marulanda, who also had a square named after him, in Caracas. The homage to Marulanda, who died six months ago, was organised by the Coordinadora Continental Bolivariana, a regional umbrella organisation that counts the Farc among its members. Tension between Venezuela and Colombia was also sharpened last week by claims made by a Farc defector, Ví­ctor Antonio Leones, on Colombian radio. Leones said that entire Farc fronts habitually melt across the border into Venezuela.
  

Trade unions and landless associations have started to increase the pressure on the government of President Lula da Silva, as the Brazilian economy slows down. The agitation could have not come at a worse time for the government, which is desperately trying to shore up employment and incomes - as well as maintain the political centre-ground - ahead of the general elections in 2010.

Industrial and agricultural workers have always been the grassroots supporters of the Lula administration. Lula himself started his political career as a trade union leader in the late 1970s, while his Partido dos Trabalhadores (PT) aligned itself closely with the landless, defending a reform of Brazil's “almost feudal" land system. However, the government's economic success allowed Lula to move to the political centre-ground in order to broaden alliances, with most of his PT colleagues following suit. The move muted the grassroots. But, as the economy struggles, government relations with its grassroots are bound to become testier - just as its new middle class supporters may look for a political change in 2010.

Brazil's trade unions agreed on a pact this week to defend jobs in the face of the economic downturn. They called on the government to oblige businesses to offer additional social guarantees to employees, including a guarantee that they will not be laid off, in addition to loans and tax exemptions. The document also called for higher unemployment benefits and other social welfare measures, as well as demanding the central bank cut interest rates by at least two percentage points, to 11.75% annually. Just to ram home their point, unions organised a mass protest outside the central bank as it convened its latest monetary policy meeting.  

Unemployment and land reform
Data from the labour ministry showed that over 650,000 workers lost their jobs in December alone. This was the worst result since the latest new series began in 1999. Although the same research also reported that 1.45m jobs were created in the whole of 2008, the figure was well below the government's 2m target and was down 10% on the 2007 figure. The sector that dismissed most workers in December was industry, with 270,000 jobs cut.

The agricultural sector followed the trend, cutting than 134,000 jobs in December. This added a new dimension to the already difficult relations between the government and landless movements. As a sign of the deterioration in relations, Brazil's largest landless movement, the Movimento dos Sem Terra (MST), celebrated its 25th anniversary this week without inviting a single government official. MST leaders said the snub was caused by their “frustration" with the Lula administration.

“Our many talks with the Lula administration have not translated into an actual increase in the number of landless settled by the government, as we thought it would," one of the MST's national coordinators João Paulo Rodrigues told the newspaper Folha de São Paulo. The Lula administration claims it settled 520,000 landless families in the past six years. But the MST contests the official figures. It claims a large share of the official figure is made up of existing settlements only just “recognised" by the government. The MST says the Lula administration has only settled 163,000 families, which is less than 30% of the target set in the PT's land reform plans.

• Lula washes his hands

President Lula decided not to abandon plans to coordinate the elections for the presidencies of both chambers of congress, following a rebellion from the Partido do Movimento Democratico Brasileiro (PMDB). Lula had hoped the PMDB would support PT Senator Tião Viana, for the presidency of the senate, but was informed the PMDB would launch the candidacy of senator José Sarney instead. This may undermine the candidacy of deputy Michel Temer of the PMDB in the lower chamber, although PT leaders said that the party would comply with a previous agreement and continue to support Temer.

Nicaragua this week signed up to the US security plan, the Merida Initiative, through which it will receive US$1.5m. The move exposes President Daniel Ortega's anti-US rhetoric as posturing: unlike his Venezuelan ally President Hugo Chávez , Ortega had made no overture to US President Barack Obama at the Summit of the Americas, other than not holding him responsible for the 1961 Bay of Pigs Invasion [WR-09-16]. The IMF representative in Nicaragua also described relations between Nicaragua and the IMF -  an organisation often slammed by Ortega as an “instrument of imperialism" - as “excellent".

At the Summit of the Americas, Ortega played a different game to Chávez , who not only told Obama that he wanted to be his “friend" but also said he was prepared to restore diplomatic ties. Instead, Ortega, speaking in his capacity as the president of the Central American Integration System (SICA) spoke for 50 minutes, 40 more than his allotted slot, during which he criticised the US for its actions against Cuba and read portions of the declaration inked at a preceding summit of the Venezuela-led trade initiative, Alba.

Obama deflected Ortega's accusations, remarking ironically that he was “grateful President Ortega did not blame me for things that happened when I was three months old," in reference to the Bay of Pigs Invasion. Other Central American leaders were less good humoured. Costa Rica's President Oscar Arias complained that Ortega not only broke with protocol by extending his speech but also spoke in the name not of Sica but Alba, evidence once again of regional divisions which have emerged in recent weeks [WR-09-14].

Ortega's continued his anti-US rhetoric during a subsequent visit to Cuba, where he accused the US embassy of conspiring against his government. His ongoing criticism of the US, however, disguises the fact that cooperation is continuing. The US might have suspended US$64m under the Millennium Challenge Corporation (MCC) programme in light of transparency concerns after November's municipal elections but on 24 April, the US embassy signed an agreement with the Nicaraguan government implementing the Merida Initiative, a multi-year regional effort to combat organised crime, gangs, and the trafficking of narcotics and firearms.

Under the agreement, Nicaragua will receive some US$1.5m in bilateral assistance for fiscal year 2008 through participating in three US-government-funded projects: Central American Fingerprint Exchange; Central American Vetted and Sensitive Investigative Units (SIU); and Improved Policing and Police Equipment. This funding is not out of step with the rest of the region given that the security problem is far more acute in the Northern Triangle countries of El Salvador, Guatemala and Honduras. So far this year, under the Merida Initiative, El Salvador has received US$4m; Honduras, US$3.6m and Guatemala US$3.6m, as well as an additional US$550,000 assigned to the International Commission Against Impunity in Guatemala (Cicig). Panama has received US$2m and Belize US$1m.

The agreement is not the only sign of ongoing cooperation with the US. Two days earlier, the IMF representative in Nicaragua, Humberto Arbulú-Neira, said relations between the IMF and the government were “excellent": the IMF is due to review its ongoing agreement with Nicaragua over the next few weeks. The World Bank recently announced it would continue with a loan of US$280m. Nicaragua's congress has also approved a US$20m loan from the Inter-American Development Bank to finance agro-food programmes. The US has done nothing to obstruct either of these multilateral loans. 

• Armed groups

Church leaders recently warned that armed groups were now operating in some rural areas, unhappy with the government. The warning follows a statement by the “Comando de Justicia Nacional Rigoberto López Pérez" declaring it had taken up arms against the “bi-party dictatorship" of President Ortega and former president Arnoldo Alemán. Both Nicaragua's army and the police deny the existence of armed groups. The group claims to have been around since October 2007. It is named after Rigoberto López Pérez, the assassin of the dictator, Anastasio Somoza. López Pérez was declared a national hero by the first Sandinista government. 

President Rafael Correa was inaugurated on 10 August under the new constitution, for a second term, only 31 months after his first term began. He promised to construct an “inclusive, mutually binding and fair" society, elevating human capital over financial capital, fighting corruption, and reforming the structures of state. He also, once again, expressed his determination to use his position as pro tempore president of the Union of South American Nations (Unasur) to seek action against “media terrorism".

Correa took office on the bicentenary of Ecuador's independence, and he sought to capitalise on the symbolic opportunities the day afforded. “We won political independence then," Correa said, “but we have still not won independence from tremendously unjust structures that have crushed our people." He promised a “new and definitive independence" through the radicalisation of his 'citizen's revolution'. It is not entirely clear what he means by this in practice. More investment in health, education and anti-poverty programmes, certainly, but these could simply be defined as social-democratic policies. Reforming the structures of state to allow greater citizen participation, maybe, but his 'citizen's revolution' appears to be more about style of government than anything else.

Correa has endeavoured to present his government as different from corrupt administrations of the past. His credibility, however, took a knock after the emergence in June of allegations of influence-peddling involving his brother Fabricio [WR-09-25]. Correa said during his inaugural speech that this “one case of corruption" in his government had been a bitter pill to swallow but had been “investigated".

It is difficult to get a reliable gauge on the public reaction to the scandal through opinion polls. The pollster Market said Correa's approval rating had fallen by as much as 19 points to 40% between May and July, but this company is run by a businessman critical of Correa and was only conducted in Guayaquil and Quito. Another poll, by Santiago Pérez, gave Correa 66% support, only eight points less than when he took office in January 2007, but this did not take into account the east of the country, where he fared comparatively poorly in April's elections. What is clear is that Correa enjoys a level of popularity of which every previous president in the 30 years since the return to democracy could only dream.

Correa said that under the new constitution another kind of generalised corruption - “the collusion between the media and financial powers" would cease. He said the media had been his most serious political adversary since he came to power - “playing a clear political role but with no democratic legitimacy" - echoing the recent sentiments of Venezuela's President Hugo Chávez [WR-09-31]. He said he believed in a free independent and critical media but “not the supplanting of public opinion by private interests".

The local media is currently taking issue with Correa's calm assurance that Ecuador is over the worst of the international financial crisis and will grow this year. It also argues that while the price of oil is increasing it is insufficient to sustain the social investment he is promising. If the media is still Correa's main rival, congress is likely to be pliant from now on. Although the ruling Acuerdo Paí­s (AP) fell four seats short of a majority in the 124-seat congress, it has stitched up a deal with smaller parties and this week secured the presidency of at least nine of the 13 legislative commissions.

MEXICO | Public Relations. The interior ministry criticised a US magazine, Forbes, on 12 November for putting a Mexican drug gangster 41st in the magazine's ranking of the world's 67 most powerful people. The interior ministry spokesman, Luis Estrada, accused Forbes of poking fun at the government's costly (over 5,500 people killed this year alone) struggle to defeat organised crime. Forbes ranked Joaquí­n “El Chapo" (shorty) Guzmán above figures such as the presidents of Russia, France and Venezuela. Earlier this year, when Forbes included Guzmán on its Rich List, the government criticised the magazine's methodology. Guzmán runs one of the main factions of the Sinaloa gang.

The only other Mexican on the Forbes Most Powerful list is Carlos Slim Helú, a telecoms magnate who ranks sixth. Only the presidents of the US and China and the prime minister of Russia, the chairman of the US Federal Reserve Board and Larry Page, the founder of Google, rank above Slim.

There are growing signs that human rights activists in Mexico may force a change in the government's traditionally repressive and arbitrary use of the army and police. The clearest sign that human rights activists, who maintain that the end never justifies the means, are in the ascendancy is the decision by the supreme court to consider the case of two indigenous women who had been arrested and convicted for “kidnapping six policemen and holding them hostage".

The supreme court's involvement in the cases of Teresa González and Alberta Alcántara, who were jailed for 21 years in 2006 for kidnapping the police officers, is hugely significantly. Amnesty International (AI), a human rights watchdog, declared the women prisoners of conscience in 2009. The case is now politically significant because Manlio Fabio Beltrones, the leader of the Partido Revolucionario Institucional (PRI) in the senate has called for the senate to set up a committee to investigate the case. 

The reasons why the supreme court has taken up the case are also significant. The court said that it was acting because of public interest. It said that the case involved contentious issues such as discrimination, women's rights and indigenous rights.

Teresa González and Alberta Alcántara (along with Jacinta Francisco), were street traders in San Juan del Rí­o, in the state of Querétaro. They were all caught up in a drugs and counterfeit goods sweep mounted by officers from the now defunct Agencia Federal de Investigaciones (AFI). The AFI claimed that six officers were kidnapped by the women and held hostage until the AFI returned the goods it had impounded from them. Francisco has been released from prison, after lobbying from AI and a local Mexican human rights NGO, the Centro de Derechos Humanos Miguel Agustí­n Pro Juárez.

The human rights lobbyists argued that the police had lied, fabricated evidence, abused the judicial process and discriminated against the women on gender and race grounds. The women are Otomis. The supreme court is also reviewing the conviction of Ignacio del Valle, a peasant leader who led protests in San Salvador Atenco in the Estado, and was jailed for 112 years in 2006. 

• Mobile phones

The government is trying to force all mobile phones to be registered. It claims that this is an anti-crime initiative. By 15 March, however, only 38.9m of the 83.5m mobile phone numbers in the country had been registered. The government is threatening to cut off people who do not register with the Registro Nacional de Usuarios de Telefoní­a Móvil (Renaut) by 10 April.

Uruguay and Paraguay, small countries by Latin American standards, have made a major impact on the international stage by advancing to the quarter finals of the football World Cup in South Africa. It is a remarkable achievement for two countries which have a combined population of fewer than 10m people.

Uruguay has some pedigree having won the very first World Cup in 1930 and a second in 1950, when far fewer countries entered the tournament, but Paraguay has never reached the last eight. It got there by defeating Japan after a tense penalty shootout. Uruguay triumphed over South Korea 2-1. The irony is that Latin America is often compared unfavourably to the four Asian tigers (of which South Korea is one), who managed to combine rapid growth and industrialisation between the 1960s and 1990s, let alone economic superpowers like Japan, but in football it is outperforming the rest of the world. Impressive victories for Argentina and Brazil mean that four of the final eight places in the competition have gone to Southern Cone nations.

Latin American governments have long sought to benefit from footballing success for nationalistic purposes and even social transformation, although beyond the obvious “feelgood factor" its exact effects are never easy to gauge. Paraguay's President Fernando Lugo praised the grit and determination of the national team in overcoming Japan and called on the nation to show similar cohesive qualities. “From football, we've learnt that 'yes, you can'", he said.

Lugo, who was keen to fly to South Africa but has to prepare his annual state-of-the-nation address to congress for 1 July, has long bemoaned Paraguay's poor international image bequeathed to him by the long-ruling Partido Colorado, complaining that the country is best known abroad for its lamentable performance in the annual corruption perceptions index produced by the NGO Transparency International. Paraguay is in the international spotlight for more positive reasons now. The victory also came a day after the finance ministry announced that it expected the economy to bounce back to post (almost Tiger-like) growth of more than 6% in 2010 after a contraction of 3.8% in 2009. The agriculture sector drove record GDP growth of 10.9% in the first quarter.

Uruguay's President José Mujica was prevented from flying to South Africa by his wife, Senator Lucí­a Topolansky, who announced that his health would not permit him to have all the necessary vaccinations. Instead, he will continue phoning all the players after each match. Uruguay will face Ghana in the quarter finals; Paraguay will take on Spain.

• Brazil

Brazil's President Lula da Silva is banking on his country reaching the final of the World Cup. He was invited to attend the game on 11 July because Brazil will host the World Cup in 2014. Lula will conduct a state visit to South Africa as part of a mini tour of Africa which will also take him to Cape Verde, Guinea-Bissau, Equatorial Guinea, Kenya, Tanzania and Zambia (but surprisingly not Angola or Mozambique) between 3 and 11 July.

Impeachment is a word that President Fernando Lugo has become increasingly used to since coming to power in August 2008. The opposition-controlled congress has chosen to leave it hanging in the air as a permanent threat, though it is unlikely to act on it. Lugo's battle with cancer is causing additional tension between his government and congress and this burst into the open when Vice-President Federico Franco, who assumed the presidency of the country while Lugo was away in Brazil for emergency treatment on 4 and 5 October, claimed the constitution was violated in his absence.

The lower chamber of congress issued a statement on 21 October rejecting “energetically" the procedures adopted for a round of changes involving senior positions in the military while Lugo was out of the country. It said there were “causes for impeachment". Franco had appeared before congress twice to explain that, in Lugo's absence, he was officially the president and commander-in-chief of the armed forces and so should have been consulted about any changes. He said he was appearing before congress not “to seek revenge" but simply to explain what had happened. He said that neither the defence minister Cecilio Pérez nor the military high command had informed him about the changes. He complained that he had been “unjustly marginalised by the president".

When Lugo returned from Brazil he claimed he had left a verbal command to carry out the changes, but Franco argued that this too was unconstitutional. Retired General Lino Oviedo, the leader of the opposition Unión Nacional de Ciudadanos Éticos (Unace), backed Franco, saying that Lugo was not authorised to give commands even verbally because he was not officially exercising his functions while out of the country.

The whole episode is a storm in a teacup. Underlying it, of course, is Franco's longstanding enmity with Lugo and the determination of congress to exploit every opportunity it is given to try and assert its primacy, particularly at a time when it perceives Lugo to be more of a lame duck than ever. On top of this, military changes are already a sore point with congress, which is critical of Lugo's frequent replacement of the top brass. It accuses him of damaging morale in the armed forces.

• Oviedo
  Retired General Lino Oviedo announced this week that he would run for president in the next elections even though they are not due until 2013. Oviedo also took the opportunity to announce that he did not favour the impeachment of President Lugo - an issue on which he has not been consistent - and to praise some of the early achievements of the former long-ruling dictator Alfredo Stroessner.

The admission last week by President Evo Morales and other top level officials that Colombia's Norte del Valle cartel is operating in Bolivia served as the latest reminder of international drug gang activity in the country. It also coincided with a visit by Brazil's deputy justice minister, Luiz Paulo Barreto to La Paz, where, together with Bolivia's chief anti-drugs minister, Felipe Cáceres, he announced preparations were underway for a “new phase" of bilateral anti-drugs cooperation. The prospect of improved cooperation, which has gathered pace since Bolivia's ejection of the US Drug Enforcement Administration (DEA) in 2008, highlights how security is fast replacing gas as the driving force behind Brazil's interest in its neighbour.

Barreto's three-day visit to La Paz yielded several announcements. One was that an Israeli-built unmanned aerial aircraft (UAV), bought by Brazil from Israel, would be piloted next month and up and running by August or September, to monitor the joint border as part of anti-drug efforts. A further two UAV aircraft have been purchased for the same purpose. Barreto and Cáceres also unveiled plans to establish a police training centre in Bolivia and to cooperate on anti-money laundering efforts. The most significant aspect of Barreto's visit was to lay the groundwork for a meeting of the Bolivia-Brazil joint commission on drugs, scheduled for 28-29 March in La Paz. The meeting, which will be attended by Brazil's justice minister José Eduardo Cardozo and Bolivia's interior minister, Sacha Llorenti, will see the launch of the “new phase" of joint cooperation.

Brazil remains key to Bolivia as its main export market (largely as a result of gas sales), accounting for US$1.106bn of the total US$3.201bn exports in the first half of 2010, according to Bolivia's central bank. This relationship has, however, become increasingly focused on security, a process which accelerated with Bolivia's ejection of the DEA in November 2008 following a major (and unresolved) diplomatic spat with the US [WR-08-24] and saw a new joint plan, “Bra-Bo",  launched in January 2009.

While the latest information from Washington's Office of National Drug Control Policy (ONDCP) released in December 2010 suggests Bolivia's potential production capacity of pure cocaine remained stable at 195 tonnes in 2009, and the most recent report by the UN Office on Drugs and Crime (UNODC) showed a 1% increase in net coca cultivation for Bolivia for 2009 on 2008 (to 30,900 hectares), Brazil has stepped up its efforts amid growing evidence of an international drug gang presence in Bolivia. The admission that the Norte del Valle was operating in the country follows Cáceres' unprecedented acknowledgement in July 2010 that there were links between Bolivia's drug clans and foreign gangs such as Brazil's Primeiro Comando da Capital (PCC) as well as Mexico's Los Zetas [WR-10-32]. The threat posed to Brazil as a result of Bolivia's porous borders made a brief appearance in the Brazilian electoral campaigning period last year when José Serra, the candidate for the opposition Partido da Social Democracia Brasileira (PSD), said that “80% to 90% of all cocaine entering Brazil comes via Bolivia", and accused the Bolivian government of being “complicit" in increased trafficking to Brazil.

Morales himself has highlighted the need to strengthen 'territorial integrity', not only in response to drug-trafficking concerns but also contraband - currently a major priority for his government given food and fuel shortages. Closer cooperation has already taken the form of heightened border controls in response to both issues. In October 2010, Bolivian troops were sent to the border in the eastern Media Luna departments of Santa Cruz and Beni to clamp down on illegal gold mining [WR-10-41]. This was followed two months later by the deployment of more Bolivian troops to the border in response to a major operation by the Brazilian authorities against drug gangs in northern Rio de Janeiro. These efforts look set to continue with another major ongoing anti-drugs operation, Operação Sentinela, launched by the Brazilians in March last year which, among other areas, targets five states which border Bolivia - Amazonas; Mato Grosso do Sul; Acre, Rondônia and Mato Grosso.

More border issues
As Bolivia and Brazil firm up ties, President Morales is facing the prospect of border tension with another neighbour - Paraguay. Earlier this month, President Fernando Lugo announced plans to invest US$2m in reactivating four military outposts in the Chaco border area, a sensitive issue given the legacy of the Bolivia-Paraguay Chaco war (1932-35). 
   Lugo (who is ideologically aligned with Morales) insists that the move is part of an infrastructural plan to improve conditions for soldiers. However the Paraguayan opposition, currently fanning tensions over the recent authorization of political asylum to Bolivia's Mario Cossí­o, the opposition governor of Tarija [WR-11-04], linked the move to reports of increased military spending by the Bolivians. The Bolivian press is reporting that Bolivia's defence budget increased 123% between 2001 and 2011: the purchases attracting special attention are those of six MI-17v5 Russian helicopters and six K-8 Chinese ground-attack (or training) aircraft. The Chinese aircraft are due to arrive in April, but it is not clear when the Russian helicopters will come. 
 The Bolivian government denied that is was involved in an arms race, but it is worth noting that unlike in 2009, when Bolivia's military spending first triggered a reaction from Paraguay after its intention to buy Russian armaments first came to light [WR-09-35], the Lugo government has yet to raise the issue directly; back in September 2009, Paraguay's foreign ministry had demanded an explanation from Morales regarding his intentions with regard to the proposed purchase of weapons, and his response - that it was for the war on drugs and in response to natural disasters - was accepted.

• Chile

President Evo Morales called on his Chilean counterpart Sebastián Piñera to come up with a “concrete proposal" regarding Bolivia's demand of access to the Pacific by the deadline of 23 March, Bolivia's annual “Sea Day," (which marks the loss of territory following the 1879-1884 Pacific War). His demand, which received the curt response from Chilean foreign minister Alfredo Moreno that Chile was working for “results" rather than “deadlines", followed the highest level meeting to date earlier in the month to discuss the bilateral agenda [WR-11-06].

JUAREZ MURDERS |Turf wars & more reports. The murders of women in Ciudad Juárez have become the focus of local and international political attention, triggering turf battles between different branches of Mexico's public security system and a spate of competing studies from public and private institutions.

The chief prosecutor's office, the PGR, has not only publicly disputed the right of federal commissioner Guadalupe Morfí­n to examine the dossiers of the murders, but has also been taken over a growing number of investigations, on the grounds that they involve federal crimes. Morfí­n, for her part, has praised the Chihuahua state government for its cooperation and announced that she will review 224 dossiers, not in a `prosecutorial' role (a reply to the PGR's objections) but with a view to drawing lessons from them that may lead to an improved preventive response. The commissioner has said that the moment she finds that she is not supported at cabinet level, she will resign. Apart from her, a special commission of the federal congress has been formed to follow the Juárez cases.

A team of six experts from the UN who recently delivered their analysis to the UN and the Mexican government for observations couldn't wait until its official release, and announced in early December, `Our opinion is that there has been an institutional collapse, that is, a failure of the judicial system in its entirety.' Mexico's human rights commission also publicly previewed its report on the Juárez killings, due for publication this month, saying that it would highlight the negligence manifest in the investigations. More can be expected.


DRUGS | Prosecutors to consider legalisation. State prosecutors meeting this month in Tamaulipas will be discussing an initiative on drug legalisation that has been receiving attention in the capital. Mexico city's security and prosecution cabinet has been pondering the pros and cons of gradually legalising the use of drugs, starting with controlled distribution in prisons and later moving on to other areas where narcomenudeo (small-scale trafficking) takes place. 

The chief state prosecutor in the capital, Bernardo Bátiz, acknowledges that any changes in the attitude towards narcomenudeo would require amending the constitution, the penal code, and health legislation, but he believes the benefit of free supply would be a sharp lowering of street prices, which would neutralise the appeal of `pushing'. [The proposed changes would also clash with international antinarcotics convention, not to mention the opposition they would encounter from the US.]

Recent official figures show that the age of initiation into drug use in Mexico city has fallen to 11-12. There has also been a marked shift in the drugs of choice, with the numbers of adolescents using cocaine and heroin trebling between 1993 and 2000.

`DIRTY WAR' | Old habits die hard. In late November Mexicans received a nasty reminder of the days when dissidents were `disappeared' and secretly killed, often after torture. Horacio Barrientos, a man who had been testifying before the prosecutor investigating crimes committed during the `dirty war' period of the 1960s and 1970s, was found murdered, his body bearing signs of torture, by a roadside in Guerrero.

This happened just after the special prosecutor, Ignacio Carrillo, had issued the first arrest warrant arising from his investigations, against a former police commissioner from the state of Guerrero — where the notorious death squad known as the `Blood Brigade' operated.

COLOMBIA | Report highlights flaws in demobilisation. In early September Amnesty International (AI) published a report exposing the first, much-heralded demobilisation of the Bloque Cacique Nutibara (BCN) as a charade. Entitled Colombia: the Paramilitaries in Medellí­n: Demobilisation or Legalization?, the report documents the demobilisation of Medellí­n's BCN since November 2003 and reveals that paramilitaries continue to operate as a military force, to kill and threaten human rights defenders and local community activists, to recruit and to act jointly with the security forces. The residual BCN, it says, no longer operates in large, heavily-armed and uniformed groups as they did in the past, they are now increasingly cloaking their activities by posing as members of private security firms or by acting as informants for the security forces. Paramilitaries are still in control in many parts of the city, especially in the poor neighbourhoods, and while killings in Medellí­n have fallen over the last few years, the security of civilians still often depends on the whims of local paramilitary commanders.

AI says this has been made possible by the legal framework for the demobilisation process. It says that thousands of possible human rights abusers have already benefited from de facto amnesties, while those responsible for backing and funding paramilitarism, including members of the security forces, are unlikely ever to be exposed and brought to justice. A follow-up AI communiqué in mid-September was prompted by the government's announcement that the first beneficiaries of the controversial 'justice and peace' law would not be demobilised paramilitary fighters, but 38 unnamed members of the Farc who had surrendered individually rather than demobilised as a result of negotiations. AI noted, 'The names of the 38 [beneficiaries] have not been revealed. This lack of transparency means their identities cannot be fully verified nor their possible role in human rights abuses open to public scrutiny [...] In addition, the application of this law to several Farc prisoners will not guarantee the demobilisation of the Farc as a whole nor that the Farc will adhere to international humanitarian law.'

PERU | 'Resurgence' of terrorism divides government. Prime minister Pedro Pablo Kuczynski provoked an angry reaction from within the government when he stated to CPN Radio on 17 September that Peru was facing a 'more acute problem of terrorism than four years ago' and that he had hard evidence to prove it. He did not expound on the matter beyond saying he had seen reports of activity by the Sendero Luminoso (SL) guerrillas and drug-trafficking gangs and adding that he would be urgently convening a meeting of the national defence council.

President Alejandro Toledo was the first to react, saying, 'There is no resurgence of terrorism here; the prime minister must have been misunderstood.' Defence minister Marciano Rengifo followed suit, claiming that 'the terrorist remnants' operating in the jungles of the Upper Huallaga valley and the departments of Ayacucho and Juní­n 'are under control'. Interior minister Rómulo Pizarro and labour minister Juan Sheput also flatly denied that terrorism was on the rise. Rengifo's claim was promptly disputed in the media, as there has been no known change in the situation since the government announced that the two remaining 'columns' of SL were contained within the jungle areas in which they have long been operating. Neither have the guerrillas engaged in hostilities nor have the security forces launched any incursion. The congressional defence committee has summoned Kuczynski, Rengifo and Pizarro to explain their conflicting accounts. Committee president Luis Ibérico says confusion on this issue is unacceptable with elections due in April 2006.

More than 20,000 people turned out on 14 June to commemorate the anniversary of the uprising which held Oaxaca in its grip for almost five months in 2006 and left a toll of at least 12 dead [SSR-06-12]. The organisers vowed to go on campaigning for the ouster of governor Ulises Ruiz and the release of the rebels still in jail, but the memorial march and rally were peaceful and orderly. One qualified observer, though, believes that the calm is deceptive, and that guerrilla organisations which had operated on the margins of the uprising are preparing to launch something big in Oaxaca.

Diego Enrique Osorno covered last year's events in Oaxaca for the newspaper Milenio. He is renowned for his expertise on social movements and armed groups, as well as for his straightforward and blunt reporting. The week of the anniversary he launched a book, Oaxaca sitiada: La primera insurrección del siglo XXI ('Oaxaca Besieged: The First Insurrection of the 21st Century'), a compilation of his reports on the uprising.  

Osorno took advantage of the launch to issue a warning that the tension in Oaxaca has not been dispelled, and could be used by guerrilla groups to fuel an armed uprising. He does not expect this to happen immediately: "There is no evidence that a mobilisation will take place in the short term, but it is certain that in Oaxaca the guerrilla groups are engaged in preparing something more than a simple insurrection."

Guerrilla involvement

According to Osorno, three guerrilla groups were 'marginally' involved in last year's uprising: the Partido Democrático Popular Revolucionario-Ejército Popular Revolucionario (PDPR-EPR), Tendencia Democrática Revolucionaria-Ejército del Pueblo (TDR-EP) and Fuerzas Armadas Revolucionarias del Pueblo (FARP).Their most ostensible participation, as Osorno reported at the time, was a series of appeals addressed directly to the local branch of the SNTE, the teachers' union whose protest actions and the subsequent repression they suffered were the triggers of the 2006 uprising. Sympathy for the guerrilla groups has long been strong among teachers, particularly those posted to rural areas, where they are first-hand witnesses of the situation in which the peasant and indigenous communities live.

But there was more than that. Members of the guerrilla groups lent their support to the protesters out on the streets of Oaxaca. “For these groups," says Osorno, "Oaxaca was a laboratory. Without having fired a shot, they learnt how to take control of the city, how to besiege it, how to seize the television station and broadcast from it.' Also, he says, they took advantage of the situation to carry out 'an unprecedented recruiting campaign."

It is worth noting that the government of Oaxaca state had blamed the uprising on an "armed group" which turned out to have been a fabrication. In late August 2006 Lizbeth Caña, the Oaxaca state procurator, claimed that the seizure of radio stations, blockading of roads and highways and "destabilising actions" were part of an "urban guerrilla strategy". Federal chief prosecutor Daniel Cabeza de Vaca contradicted her, stating that no evidence had been found "suggesting the participation of subversive groups or others which might be classified as destabilising". All his office had found, he said, was "some criminal activity, mostly within the purview of the state authorities". [ SSR-06-11]

Rival groups reuniting?

Osorno notes that though the three guerrilla groups involved in the Oaxaca uprising had been at loggerheads, "over the past few weeks they have joined forces, issuing public messages of solidarity with each other." This is no minor event: as recently as October-November last year, as the Oaxaca uprising was coming to an end, the EPR and TDR-EP were blaming each other for several assassinations of their militants.  

The appeal of the guerrilla groups has been enhanced by the frustration of those members of the Asamblea Popular de los Pueblos de Oaxaca (APPO) - the hodge-podge coalition which led the Oaxaca uprising - who were vetoed from running as candidates for the Partido de la Revolución Democrática (PRD) in the July 2006 elections because the party leadership feared they would project a negative radical image that would scare away middle-of-the-road voters.

The PDPR-EPR came into being in 1996, as a second stage in the merger of two existing armed groups: the Oaxaca-based Partido Revolucionario Obrero Clandestino Unión del Pueblo (PROCUP) and the Guerrero-based Partido de los Pobres. Three years later a faction largely drawn from the Partido de los Pobres broke away to form the TDR-EP. It was not the first split in the ranks of the EPR; in 1998 a splinter created the Ejército Revolucionario del Pueblo Insurgente (ERPI, active in Guerrero and Morelos) and the FARP was formed, sprouting active units in Mexico city and Puebla. Nor would it be the last: all told, defectors from the EPR created 15 separate armed groups.

Verdict on the uprising

On 24 May, three weeks before the anniversary of the uprising, the official Comisión Nacional de Derechos Humanos (CNDH, the human rights watchdog) issued its final report on the events. The national government, then headed by President Vicente Fox, was sharply criticised for having "unjustifiably delayed [...] complying with its constitutional duty to help restore order and peace in Oaxaca." It tallied 12 fatalities as a result of the uprising. Only one killing was explicitly attributed to the federal police belatedly sent in by Fox to restore order; most of the others were killings of protesters by unidentified gunmen - whom the protesters and much of the media had described as off-duty state police acting on the governor's orders.

The report did not only heap blame on the authorities. "It is important," it said, "to point out that excesses were committed by both parties to the confrontation. Both the protesters and agents of the state committed aggression."

The CNDH calls for an end to the army's practice of holding detainees incommunicado on military premises. It also urges a constitutional amendment which would force the federal authorities to respond more promptly to situations endangering state or local governments. At present, federal intervention must be requested by the state government and depends on the determination that local law enforcement has been overwhelmed. On the eve of the anniversary the authorities were still holding 12 people detained during the uprising. The APPO has criticised the CNDH report as "insufficient, contradictory, incomplete and disingenuous".

Just after the anniversary, on 16 June, the government of Oaxaca state issued a statement apologising for the police action during the uprising which resulted in the death of the journalist Brad Will, a US national. Three days earlier a local journalist investigating Will's death, Misael Sánchez Sarmiento, narrowly escaped an attempt on his own life, but received gunshot wounds in his jaw and leg.

BOLIVIA | Another US diplomat expelled. On 27 February, President Evo Morales accused US diplomat Francisco Martí­nez of acting as the CIA 'handler' of former police captain Rodrigo Carrasco, dismissed days earlier from his post as commercial manager of the state oil company YPFB. Morales had claimed that Carrasco was a CIA agent, citing as evidence for this the fact that between 1990 and 2004 Carrasco had attended 21 training courses and seminars provided by the US government, of which 16 in the US. He said that Martí­nez had been meeting regularly with Carrasco. Morales has blamed the CIA for 'trapping' YPFB president Santos Ramí­rez in a corruption scandal for which Ramí­rez has been jailed. The US embassy has denied that Martí­nez worked for the CIA, noting that he was a career diplomat serving as 2nd secretary at the embassy in La Paz.

On 9 March the Bolivian government gave Martí­nez 72 hours to leave the country. Last September Bolivia expelled the US ambassador, Philip Goldberg, claiming that he had been involved in a conspiracy against Morales. Washington responded by expelling the Bolivian ambassador, Gustavo Guzmán.

On 14 March, Morales announced that he had ordered an investigation to determine whether the CIA had infiltrated the armed forces and the police. The following day, the interior minister, Alfredo Rada, announced that the police officers  providing security to the US embassy would be transferred elsewhere because they had been irregularly kept on the job far longer that the usual two-year tour of duty, becoming 'virtual members of the embassy staff'.

BOLIVIA | Investigating Sendero Luminoso. On 4 March, President Evo Morales ordered an investigation to determine whether the Peruvian guerrilla organisation Sendero Luminoso (SL) was behind a string of holdups the previous week in La Paz. Vice-President Álvaro Garcí­a Linera said, 'For the time being this is only a hypothesis; we are not yet certain about anything.' The allegation that SL is operating in Bolivia was repeated in a story published by the La Paz newspaper La Razón on 6 March that cites anonymous police sources.

This has coincided with the publication of a report by a Peruvian congressional commission according to which the so-called Casas del Alba were instruments of Venezuelan and Bolivian interference in Peru's internal affairs (see below). This had been emphatically denied by the Bolivian government. Garcí­a Linera, however, defended the Casas del Alba saying, 'It is clear that what [they] have done is not interfere in the political life of any country but benefit the citizens.'

PERU | 'Interference' seen via Casas del Alba. The congressional commission investigating the Venezuela-linked Casas del Alba published its findings on 2 March. It mentions 31 instances of what it describes as interference by Venezuela and Bolivia in Peru's internal affairs via the Casas del Alba, and recommends that they be shut down. 'The categorical conclusion,' said commission chairman Walter Menchola, 'is that there is influence, planning, a geopolitical strategy that is being implemented using as an instrument the so-called support or social diplomacy.'

The commission says it found links between the Casas del Alba and recent social unrest in Loreto, San Martí­n, Puno and Cusco, and claims that 'Bolivian citizens' were present in protest actions in Sicuani.

Apart from the closure of the Casas del Alba, the commission has urged the government to send a formal diplomatic protest to Venezuela, and to declare persona non grata the Venezuelan diplomat Virly Torres, identified as the liaison with the Casas del Alba. The Bolivian government has conveyed its 'concern' about the commission's fact-finding visit to Bolivia.

The thaw in Colombian-Venezuelan relations that began when presidents Juan Manuel Santos and Hugo Chávez restored ambassadorial relations last August has been proceeding apace. Venezuela is handing over Fuerzas Armadas Revolucionarias de Colombia (Farc) guerrillas, paying accumulated debts, agreeing to joint anti-drugs and anti-kidnap efforts. Colombia is reciprocating by clamping down of gold smuggling from Venezuela and agreeing to extradite a suspected Venezuelan drug kingpin — a man Chávez is keen to get hold of for political reasons involving the US.

In mid-November Venezuela announced the deportation to Colombia of three Colombians identified as members of the Farc and the Ejército de Liberación Nacional (ELN), wanted for a number of crimes. Another three Colombians, also suspected guerrillas, were committed to trial in Venezuela. This was followed by the announcement that Cadivi, the Venezuelan exchange authority, had authorised the payment of some US$336m owed to Colombian airlines and exporters and was on its way to approving the release of another US$149m.

According to Colombian trade minister Sergio Dí­az-Granados, this amounts to almost half of the total debt accumulated with Colombian businesses during the 'freezing' of bilateral relations ordered by Chávez in July 2009.

On a separate track, on 13 November, Venezuelan police intercepted in the central state of Carabobo an overland shipment of three tonnes of marijuana sourced back to Colombia. This raised to 57t the total of drugs of all kinds seized since the beginning of the year, only 3t shy of the 60t seized in the whole of 2009. The national anti-drugs agency, ONA, took advantage of the occasion to underline that over the past year more than 8,000 suspected traffickers had been arrested in Venezuela, among them 17 considered capos or ringleaders.

On 19 November, at a meeting in Cartagena de Indias, Colombia, Venezuela's interior minister, Tarek El Aissami, and Colombian Defence Minister Rodrigo Rivera worked out a draft agreement on cooperation in the anti-drugs effort, the repression of kidnapping and the mutual repatriation of  convicts. It envisages the creation of a common intelligence platform and the conduct of coordinated and simultaneous operations. When asked by journalists, El Aissami said that Venezuela would 'of course' hand over to Colombia any Farc leaders arrested on its territory.

Colombia also emphasised that it was doing its bit by playing up the fact that its police had just intercepted near Pamplona, Norte de Santander, an overland shipment of 12 gold ingots valued at almost US$700,000, believed to have been smuggled out of Venezuela. This was described as the biggest-ever seizure of smuggled gold in Colombia; Venezuela has long been trying to clamp down on the illegal mining and shipment of gold abroad.

The Makled case
Far more important, though, was President Santos's confirmation in Bogotá of a promise he had made to Chávez that Colombia would extradite to Venezuela the businessman and suspected drug kingpin, Walid Makled, arrested last August in Cúcuta in an operation conducted by the police with the Drugs Enforcement Administration (DEA)'s assistance.

In Venezuela Makled faces charges of drug trafficking, money laundering, criminal conspiracy and homicide, but Chávez is particularly interested in Makled, a Venezuelan of Syrian extraction, for political reasons, given that Makled has openly claimed that he contributed US$2m to the 2007 referendum campaign in which Chávez sought to secure the possibility of indefinite reelection. He has also claimed he has had personal experience of the involvement of Venezuelan government officials and members of the military in bribery and corruption.

In early November Chávez had accused the US of trying to 'mount another operation' against him by using Makled's claims to discredit his government. 'The empire's game,' he said, is to offer this man who knows how many benefits, even protection, for him to start vomiting whatever he wants against Venezuela so that the empire can then try to manipulate all those lies this man may say [...]' Makled himself said he had all the information 'needed for the US to intervene [in Venezuela] as it did in Panama to remove Noriega.'

The Colombian ambassador to the US, Gabriel Silva, revealed on 21 November that US authorities would be granted access to Makled while he was awaiting extradition.

According to Chávez , Washington's aim is to use Makled's claims to have him brought before 'an international criminal court' or to include Venezuela in a list of countries promoting drug trafficking or terrorism. Hence the emphasis he has been placing on Venezuela's record in its anti-drugs effort and his willingness to act jointly with Colombia, Washington's main ally in the region, in this area.

Typically, he has also been pursuing a means of portraying the US as a country that harbours terrorists. Venezuela's public prosecution service has requested the extradition from the US of two Venezuelans, Johan Peña and Pedro Lander, charged with participating in the 2004 bombing that killed prosecutor Danilo Andersen, who was investigating some 300 people suspected of involvement in the April 2002 coup that briefly deposed Chávez . The prosecutor in charge of the Andersen investigation says he has acted on information that Peña and Lander are currently in the US.

Military angle
Colombian officials have appeared unsure of how to interpret one recent Venezuelan undertaking. On 2 November, as Santos and Chávez were discussing rapprochement in Caracas, away in the western border state of Táchira General Henry Rangel Silva, chief of the armed forces operational strategic command, announced that 15,000 troops would be deployed along the 2,219-kilometre border with Colombia under Plan Escudo ('Shield Plan').

Their declared mission will be to 'strengthen constant patrolling of the border in order to control violence and fight efficiently against the groups engaging in drug trafficking, kidnapping, extortion and other crimes'. General Rangel did not say when Plan Escudo will be launched.

There are 12 state gubernatorial elections in 2010 and state congress or municipal elections in four other states. The Instituto Federal Electoral (IFE) calculates that the elections will determine the state governors for 31m of the 107m people that live in Mexico. Hidalgo, unusually, has cut its governor's term to four years. Until the Partido Acción Nacional (PAN) decided to go into some “Stop the Partido Revolucionario Institucional" tactical alliances in key states the PRI had looked as though it would not only hold the nine states it already runs, but win the other three as well.

Most of the elections are on 4 July. The first election, however, is in Yucatán on 16 May and is for the state congress and municipalities. Yucatán is an interesting state politically. The state capital Mérida is a long standing bastion of the PAN and the party had used this base to win the governorship. But the PRI recovered the state in 2007 delivering a nasty blow to President Felipe Calderón's credibility. The two other non-gubernatorial elections in 2010 are in Baja California and Chiapas.
 
This heavy election year is followed by another important electoral year in 2011. Elections in 2011 are dominated by the race to become governor of the Estado de México, the most populous and richest state in the country. Besides the Estado, there are gubernatorial elections in sx other states in 2011.

In 2012 the country goes to the polls to elect a new president, senate and house of representatives.

Of the 12 states holding gubernatorial elections in 2010 nine (Chihuahua, Durango, Hidalgo, Oaxaca, Puebla, Quintana Roo, Sinaloa, Tamaulipas and Veracruz) are run by the PRI. Two (Aguascalientes and Tlaxcala) are run by the PAN and one, Zacatecas, is held by the Partido de la Revolución Democrática (PRD).

Currently the PRI, which, effectively, has a majority in both houses of congress, runs 20 of the country's 32 states. The PAN and the PRD run six states each.

The big questions this year are whether the uncomfortable tactical alliances between the PAN and various leftwing parties in states such as Durango, Hidalgo, Oaxaca and Puebla will first hold together and second defeat the PRI incumbents. The anti-PRI alliance is even more complicated in Zacatecas, where the PRI is in alliance with the Partido del Trabajo (PRD) which is dominated in Zacatecas by Ricardo Monreal and his family. Monreal is a former PRD governor of the state and is a close ally of the rabble-rousing Andrés Manuel López Obrador, a former president of the PRD and the party's (and the broad Left's) presidential candidate in 2006.

As President Calderón's PAN did poorly in mid-term congressional elections in 2009, a better performance in 2010 is imperative for both. Failure will mean that the PRI will be even shorter odds-on to recover the presidency in 2012. The real fight will then start inside the PRI over the presidential nomination and the losing candidates may suddenly find that they have more in common with either López Obrador or a Panista.

The big danger for Calderón is that another round of defeats for the PAN will mean that he will become a lameduck, even in the PAN's own eyes, and therefore have little or no influence on whom the party will nominate in 2012. The same fate befell Calderón's predecessor Vicente Fox, who preferred Santiago Creel, his interior minister, to Calderón.

Mexican gubernatorial elections in 2010
     
4 July
Aguascalientes  Governor
    18 state deputies (first past the post)
    9 state deputes (proportional)
    11 municipalities

Chihuahua  Governor
    22 state deputies (first past the post)
    11 state deputes (proportional)
    67 municipalities

Durango  Governor
    17 state deputies (first past the post)
    13 state deputes (proportional)
    39 municipalities

Hidalgo Governor
  18 state deputies (all first past the post)
  84 municipalities

Oaxaca  Governor
    25 state deputies (first past the post)
    17 state deputes (proportional)
    570 municipalities

Puebla  Governor
    26 state deputies (first past the post)
    15 state deputes (proportional)
    217 municipalities

Quintana Roo   Governor
   15 state deputies (first past the post)
   10 state deputies (proportional0
   9 municipalities

Tlaxcala  Governor
    19 state deputies (first past the post)
    13 state deputes (proportional)
   60 municipalities

Veracruz  Governor  
    30 state deputies (first past the post)
  20 state deputes (proportional)
    212 muncipalities   
      
Zacatecas  Governor
    18 state deputies (first past the post)
    12 state deputes (proportional)
    58 municipalities

10 October
Sinaloa  Governor
    24 state deputies (first past the post)
    16 state deputes (proportional)
    18 municipalities

14 November
Tamaulipas  Governor  
    22 state deputies (first past the post)
    14 state deputes (proportional)
    43 municipalities
      

Mexican policymakers' fears about the ability of the US economy to withstand high oil prices are well-founded. Although US consumption of oil is running at record levels and is actually increasing, despite the high crude oil price, there are growing signs that the rest of the US economy is spluttering. This is bad news for Mexican exporters.

Oil prices closed at new records on 8 October. The key benchmark crude for Mexico, West Texas Intermediate, closed at US$53.31 a barrel. This brought the price for Mexico's mix of export crudes up to US$38.19 a barrel. Mexican crude trades at a discount to WTI because it is mostly heavy (Maya) crude. Oil prices rose by 6% in the first full week of October. 

Oil prices were pushed over US$50 a barrel by the effect hurricanes had on oil production in the Gulf of Mexico and (justified) fears that US inventories of oil would continue to fall. The US Mineral Management Service reckons that the hurricanes which have swept across the Gulf cut oil production by 26.7% and gas production by 14%. 

The dilemma for Mexico's economic policymakers is that although the government benefits from higher-than-expected oil prices, the rest of the economy suffers from wilting US demand. Mexico had budgeted on an oil price of US$20 a barrel for 2004. It is budgeting on a price of US$23 a barrel in 2005.

Oil revenues, from both domestic sales and exports, provide the government with over 35% of its income.

Fiscal balances buoyant
The strength of the oil price has meant that the government was in fiscal surplus to the tune of M$71.9bn (US$6.2bn) for the first eight months of the year. In the same period of 2003 the fiscal surplus was M$46.6bn. The finance ministry pointed out that the primary surplus (ie ignoring payments on the public debt) was 14% higher, at M$222bn, for the eight months to August. 

The finance ministry reported that budgeted revenues were up by 5% in real terms at M$1.17trillion in the first eight months. This was largely because of a 14% surge in oil revenues to M$407bn. These revenues are composed of: Pemex revenues; oil royalties and duties and the special tax on petrol, diesel and other fuels. Non-oil revenues were up by just 1.2%. This was largely down to a 6% jump in VAT revenues: income tax revenues actually fell by 0.6% in the first eight months of this year compared with the same period of 2003. 

There are a couple of large slices of government income which come from the state's business activities: non-oil, non tax revenues (ie fees for state services) came to M$72.4bn while the income from state-owned companies other than Pemex came to M$196.2bn. 

The government has kept a firm grip on spending: this is up by only 3% in real terms at M$1.1bn. This figure includes anticipated transfers to the two funds to handle windfall oil revenues: one is a trust for states to spend on infrastructure projects; the other is the long-established Fondo para la Establización de los Ingresos Petroleros (Fiep). This has taken in M$4.1bn so far this year while the states' fund has taken in M$8.2bn. The Fiep is funded by the amount by which the actual oil revenues exceed budgeted oil revenues. 

What is clear is that the government is trying to get states and municipalities to do more spending. Transfers to states and municipalities were up by 5.7% in real terms at M$168bn. The government's debt service costs were down by a marginal 2% at M$142bn, even though the public sector debt had risen by US$3bn to US$80bn. 

Inflation
Mexican policymakers' big concern is over inflation. The central bank has tightened monetary policy six times this year, by raising the corto. The most recent tightening was on 24 September. Some poor inflation figures for September suggest that the bank may have to raise the corto again. The rate for September was 0.83%, the highest for any September since 2001. The August rate was 0.62%.

The surge in inflation in September has put the lagging 12-month rate back over 5% again. The rate to September is now 5.06%, while to the end of August it had been 4.82%. The central bank tried to put a positive gloss on the poor figures by claiming that perishables such as food and vegetables had provided most of the inflationary impetus in the month. Heavy rain was to blame for shortages, the bank said. The bank claimed that underlying inflation, which strips out volatile fresh food prices, was on track.

The deputy governor of the central bank, Everardo Elizondo, admitted that inflation was clearly a problem and that it was still above target. The central bank is hoping for a rate of around 3.5% this year and certainly one that is lower than the 3.92% recorded in 2003. Elizondo gave a broad hint that the central bank would continue to tighten monetary policy until well into next year. Local central-bank watchers reckon that the bank will tighten monetary policy at least twice more this year. Elizondo said that the increase in energy prices had still to feed through the world economy. The central bank has already tightened monetary policy six times this year, most recently on 24 September, by raising the corto and thus restricting the amount of money it supplies to the banking system. The yield on the benchmark 28-day cetes hit 7.65% this week, the highest for 17 months. 

Demand still strong
It looks as though the central bank will have to push interest rates up quite a bit higher to get inflation under control. Domestic demand is strong. The latest GDP growth figures for the second quarter showed the economy growing at a 3.9% clip. Retail sales have been rising at an annual rate of 10%. The September index of leading indicators, stood at 96.8. This is 1.3 percentage points up on August, but 0.4 of a percentage point down on September 2003. 

The Instituto Nacional de Estadí­stica, Geografí­a e Informática said that two of the five indicators were down, two were up and one was unchanged on last year. The indicator which was unchanged was whether people were willing to make a major purchase of a consumer durable: they were just as likely to buy now as they were a year ago. Strangely people were more optimistic about the future but less happy with their current circumstances. 

THE BUDGET: Economic commentators pointed out that the M$1.74 trillion (US$152bn) budget for 2005 means that the government intends to spend M$16,609 (US$1,444) per person next year. This is equivalent to M$75,000 per average family. The bulk of the money, however, goes on employing officials: 2.88m people work for the federal government. In addition state governments, municipalities and autonomous institutions, such as the Universidad Nacional Autónoma de Mexico and parastatal companies, such as Petróleos Mexicanos also have sizeable payrolls. A growing problem for the government is the state pension system: between 2000 and 2005, the cost of paying pensions increased from M$130.6bn to MS$171.1bn. As the public sector workforce ages, the burden of the largely unfunded, public sector pensions are likely to increase. The most recent figures for the burden of public sector pensions show that unfunded liabilities now come to 116% of GDP. 

TRADE: The country's trade deficit in the first eight months of the year came to US$2.8bn, 7% up on the comparable figure for the same period of 2003. In the year to August, exports were up by 15%, thanks to a 20% jump in oil exports. In August there was a 36% year-on-year jump in oil exports and a 26% jump in non-oil exports. Imports in August were up by 27%, while for the year so far they were up by 15%. There was a 16% increase in imports of inputs, a 15% increase in imports of consumer goods and a 9% increase in imports of capital goods. 

UNEMPLOYMENT: The government has been boasting about how many jobs it has created this year. The finance minister, Franciso Gil Dí­az, claims 406,000 between 15 January and 15 September and bases his calculations data from the social security agency, IMSS. Yet the central bank governor, and former finance minister, Guillermo Ortiz, said on 20 September that since the government took office at the end of 2000 it had not created any new jobs. The official unemployment figure, from the official statistical agency, bears out Ortiz: Inegi reported that in August the unemployment rate was 4.5%, the highest since 1997. The key factor in the unemployment figures is that around 800,000 Mexicans should join the workforce each year. What is clear is that the domestic economy is not finding jobs for them. This means that emigration will continue.