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ARGENTINA | Deadline set for debt offer. The IMF has demanded that Argentina make a `firm' restructuring offer to its creditors by end-January at the latest (so far what the creditors have received is an outline based on a 75% `haircut'). The Fund's intervention was influential in the bondholders' decision to hold a meeting last week in New York which they had been about to postpone due to persisting disagreements within their ranks. What emerged from that meeting was a proposal by the Argentina Bondholders' Committee (ABC) based on a `haircut' of only 35%.

Finance secretary Guillermo Nielsen implicitly rejected this when, the following day, he said that `any debt restructuring can only be considered successful if the renegotiated obligations can be met with the debtor's payment capacity.' Even non-governmental sources in Argentina consider the 75% `haircut' the outer limit of what Argentina is able to pay. One important group of creditors, the association of Argentine pension fund administrators (who jointly hold 20% of the defaulted bonds), has told the government that it is willing to negotiate. Others are threatening legal action: the first attempt to seize Argentine assets is due to take place in February — which reinforces the IMF deadline.

PARAGUAY | Dramatic rise in fiscal revenues. Paraguayan government employees have been told that, for the first time in years, they will be collecting their aguinaldo (thirteenth salary) on time. This is because tax receipts have shot up in the last three-and-a-half months, registering year-on-year increases of 32% in August, 36% in September, 53% in October and 39% in November. In all, the state coffers have received G/410bn (US$68m) more than expected — a sum equivalent to just over a third of the fiscal deficit projected for year-end. This has happened as a result of a tightening of collection procedures, but as yet without the assistance of tougher legislation drafted by the government.

BRAZIL | Auto industry shows nature of upturn. In the first eleven months of the year, Brazil's auto industry produced 1.67m vehicles, just 1.1% more than in the same period of 2002. This is largely the result of greater sales abroad, which generated a 38.9% increase in earnings — while sales on the domestic market were down by 6.8%. Actually, manufacturers are relieved that the government's decision to lower taxes on smaller cars prevented the domestic slump from being steeper by encouraging an upturn in sales in November.

Three of the four Central American and Caribbean countries that sent troops to Iraq have been having second thoughts after the bases of two of them came under attack in areas that had been considered `safe'. El Salvador, the Dominican Republic, Honduras and Nicaragua — the only Latin American countries apart from Colombia to join the `coalition of the willing' against Iraq — provided a battalion each last August to serve for six months in the Plus Ultra multinational brigade, under overall Spanish command.

The Tegucigalpa base in Najaf, where 369 Honduran troops are stationed, came under mortar fire on 2 December, fortunately suffering only material damage. Their commander, Colonel Carlos Andino, has said that they returned fire. This was the second occasion on which they came under fire: in mid-September they were attacked with grenade launchers and assault rifles. So far their only casualty was a soldier who hurt his foot in a road accident.

On 3 December the Santo Domingo base, in Diwaniya, came under mortar fire, which injured three Iraqi civilians but left the 300 Dominican soldiers unscathed. For the Dominicans too this was the second attack: their base had come under fire in August.

Honduran defence minister Federico Brevé Travieso, who visited the Tegucigalpa base in mid-November, has said that if the Honduran soldiers come to be at great risk, the government will consider pulling them out.

General José Miguel Soto, the Dominican armed forces minister, announced on 4 December that the return of the contingent from Iraq, scheduled for February, would `possibly take place earlier'. Three days later he was contradicted by President Hipólito Mejí­a, who said the troops would serve out their allotted time — but refrained from saying whether they would be replaced.

Nicaraguan foreign minister Norman Caldera has said that his country's contingent of 115 army engineers and medics are unlikely to be replaced because of lack of funds. The despatch of the present contingent was made possible by a donation of US$700,000 from a deliberately unidentified friendly country. Caldera has said that the attack on the Honduran base is `a cause for concern; we want out boys and girls to return safe and sound.' Defence minister José Adán Guerra has postponed the trip to visit the troops which he had scheduled for last week.

El Salvador is the only country in this group that remains unambiguously gung-ho. The government has already announced that its 300-strong contingent will be replaced by another when the current tour ends in February.

The Triple Border between Paraguay, Brazil and Argentina has been declared free of terrorist activity by the latest meeting of the `3+1' — an ad hoc arrangement which since December 2002 has incorporated the US in the Tripartite Commission for the Triple Border, set up by the other three countries in 1998.

Investigating alleged terrorist fundraising for Hizbollah and Hamas was at the top of the `3+1' agenda for this year. At their meeting in Asunción the group `ratified that no operational terrorist activities have been detected in the Triple Border, according to the information currently available.' The wording leaves room for some speculation that funding, as distinct from `operational activities' may be taking place.

This area has been under close scrutiny since a Triple Border connection was suspected in the 1994 bombing of the Amia-Daia Jewish community building in Buenos Aires. Investigations have failed to turn up anything but the brief passage of some Egyptian terrorists, on their way to Uruguay, and the funding of charities linked to Hizbollah.

In August this year the US ambassador to Brazil, Donna Hrinak, publicly stated that no terrorist activity had been detected there, and that most of the known remittances to the Middle East were `legitimate'. This did not deter other US officials from refloating claims that the Triple Border was a hotbed, if not of terrorism, at least of terrorist fundraising.

In late November, in response to warnings about possible terrorist acts in Argentina, that country's defence minister, José Pampuro, cited the Triple Border as one of the areas where security was stepped up.

"With my friend George [Bush Jr], as we would say here, the relationship is excellent, but the results of that relationship, very poor."

Vicente Fox, President of Mexico, roughly echoing what cost a Mexican ambassador his job a week earlier.


"We support democracy here in Ecuador, and the President is the leader elected by the Ecuadorean people."

Otto Reich, special US regional envoy, in Quito to support President Lucio Gutiérrez as he faces charges of having received narco campaign funding.


"They will have to convince me, signature by signature and fingerprint by fingerprint."

Hugo Chávez , President of Venezuela, warning the electoral authority about accepting an opposition petition for a referendum to remove him from office.

LATIN AMERICAN REGIONAL REPORTS: MEXICO & NAFTA - NOW AVAILABLE

This report looks at what the split in the biggest party in congress, the Partido Revolucionario Institucional, may mean. The split is probably the biggest in the party since 1987, when old style politicians led by Cuauhtémoc Cárdenas went off and ended up forming what became the Partido de la Revolución Democrática. The problem for the PRI president, Roberto Madrazo, is that the dissident, Elba Esther Gordillo, still commands over 100 of the PRI's 222 members of the lower chamber, Latin America's biggest union, and the support of President Vicente Fox. We also look at a range of other issues including: the government's plans for privatisation; the prospects for the oil industry; what is going on in the supreme court and whether the governor of the Banco de México will be reappointed. Our Nafta Report analyses the conclusions of the Carnegie Endowment on the first 10 years of Nafta. An annual subscription to Latin American Regional Report: Mexico & NAFTA (12 issues) is priced at US$225 (Discounted rates available to academics/NGOs). For details, please call LAN on +44 (0)20 7251 0012 or email: [email protected]

Latin American Weekly Report (Online) ISSN 1741-7422. Published weekly (50 issues a year) by Latin American Newsletters, 61 Old Street, London EC1V 9HW, UK. Telephone +44 (0)20 7251 0012, Fax +44 (0)20 7253 8193, Email: [email protected]. Website: www.latinnews.com EDITOR: Eduardo Crawley, [email protected]. Subscription rates will be sent on request. COPYRIGHT © 2003 in all countries. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, electrical, chemical, mechanical, optical, photocopying, recording or otherwise, without the prior written permission of the publishers. REFERENCES: Back references and cross-references in the current series will be made thus: WR-03-01 will indicate Latin American Weekly Report, Issue No.1, 2003.

Shortly before it collapsed, the government of President Gonzalo Sanchez de Lozada had acknowledged that, at best, it could hope that the coca eradication programme would neutralise the new plantings: a `virtual zero' instead of the previous target of `zero coca'. Now the government of President Carlos Mesa appears ready to take things a step further, ditching the eradication programme and shifting the emphasis towards the processing of cocaine: instead of `zero coca', the target will be `zero cocaine'.

The first inkling of this change was provided by peasant affairs & agriculture minister Diego Montenegro, when he proclaimed: `Taking into consideration that coca is a traditional legally consumed crop, zero coca is in our view an unachievable aim.'

This comes just after Evo Morales, the coca growers' leader, offered the US `an anti-narcotics pact' based on respecting the rights of Bolivia's coca growers. `I'm awaiting a reply from the ambassador,' he said. `If it doesn't come, I'll start thinking that they are the ones fostering drug trafficking, and that the anti-narcotics effort is a pretext for US domination.' The reply from the embassy, not directed at Morales but rather at the government, was the reiteration of its own slogan: `coca is cocaine'. This is a clear sign that a change of course by Bolivia would leave it open to reprisals in the form of an aid and trade-preferences cutoff.

For some, a more worrying reply came in the form of a statement by Rogelio Pardo, the US assistant undersecretary of defence, to the effect that there is evidence of the presence of `narcoterrorism' in Bolivia, and that in consequence the US would assist the Bolivian military. This comes just after a resurgence of attacks against combined military-police eradication units operating in the Chapare area, which have claimed four lives over the past couple of months. Morales had been publicly seeking to prevent such actions, so the immediate interpretation was that he was losing control over the more radical of his followers. Now in Morales's camp there are those who are openly speculating that the attacks may be the work of provocateurs determined to justify the charge that Bolivia is falling prey to `narcoterrorism'.

The US reckons that Bolivia has currently some 28,450 hectares devoted to coca, of which only 12,000 are legally tolerated plantations for `traditional' use. The eradication effort in the Chapare region has led to an increase in cultivation in the areas previously reserved to the legal crops, in the Yungas valleys north of La Paz, where attempts at eradications have been fiercely resisted.

The most significant development this week was that the national directorate of the ruling Partido dos Trabalhadores (PT) last weekend finally expelled four of its most prominent `radicals' (`Shiites' to their adversaries) who persisted in voting against the reforms being pursued by President Lula da Silva. Hardly noticed was the fact that even the staunchly pro-Lula majority turned up at the meeting armed with a document which was strongly critical of the government's failure to deliver on the social front.

The directorate voted 55:27 (with one abstention) to expel senator Heloisa Helena and deputies Luciana Genro, João Batista (Babá) Oliveira and João Fontes.

Heloisa Helena, the most prominent figure is the `radical' wing of the PT, has said she will not join any other organisation - an assumption many had made after she had joined the other three, earlier this year, in campaigns organised by the Trotskyist Partido Socialista dos Trabalhadores Unificado (PSTU), which has been attacking Lula as `a traitor to the workers' movement'. Several rank-and-file `radicals' had been saying that they would leave the PT if the expulsions went ahead.

Luciana Genro, daughter of PT co-founder Tarso Genro (currently secretary of the economic & social development council), has already set up a base for herself in a `committee of solidarity with the Venezuelan people', from which she has been promoting President Hugo Chávez 's `Bolivarian' ideology.

It is worth noting that a sizable number of directorate members, with senator Eduardo Suplicy as their chief spokesman, argued strongly against expulsion (they favoured a short-term suspension). This was reflected in the final vote on the issue: a third of the members opposed expulsion.

Mainstream doubters
Perhaps more significant for the government is the fact that the pro-Lula majority produced a paper for the directorate meeting which, without going as far as one submitted by the `radicals', was strongly critical of Lula's economic and social policies.

`After almost one year in power,' it says, `demands are growing for more effective government action [...] The rate of unemployment has reached alarming levels [...]' Within and outside the PT there is a school of thought that monetary policy could have been eased much earlier and that the reduction of interest rates should be faster.' This stance has only been strengthened by planning minister Guido Mantega's admission that the economy will register almost no growth at all this year (see Tracking Trends, page 5).

The critical mood is shared by other prominent members of the party. PT co-founder Francisco de Oliveira echoed the theme of the `radical' wing when he said that the Lula administration has merely been continuing the policies that the PT had criticised in the Cardoso government. PT ideologue Emir Sader, while acknowledging that what he calls `tropical Blairism' has gone down well with investors, is irritated by the PT leadership's quest for internal `uniformity'. He notes that `even the Blairite Labour leadership in Britain has allowed a sizable number of its MPs to vote against the Iraq war'.

And among the PT's partners in government the reaction was almost as harsh as among the PT `radicals'. A week before the PT directorate met, the Partido Socialista Brasileiro (PSB) demanded a radical change in Lula's economic policy. Almost simultaneously the Partido Democrático Trabalhista (PDT) served notice that it would be pulling out of its alliance with the government.

Pension reform approved
It was not all bad news for the government. On 11 December the senate gave final approval to the pension reform legislation in a 51:24 vote. The government sees this as a crucial first step towards eliminating the deficit crippling the pension system, expected to come close to US$10bn this year.

Opinion polls suggest that among the public at large, the pension reform is supported by 75% to 80% - or, to look at it from the opposite angle, that opposition on the street is slightly lower than among politicians.

The mass protest rally scheduled for 20 December by the piqueteros (ostensibly organisations of unemployed workers) has been planned in the style of the pre-battle military manoeuvres of yore - to display the relative force of the various factions of the piquetero `movement' as well as their overall strength. The government will be taking note, not only of these features, but also of the extent to which the event breaks out of its stated aim of keeping the protest peaceful.

The government, all the way up to President Néstor Kirchner, has been seeking to drive a wedge between those piquetero organisations willing to negotiate and those portrayed as seeking confrontation for other purposes, such as political advantage or personal gain.

The most prominent of the piquetero leaders to have opted for Kirchner is Luis D'Elí­a, leader of the Federaci ¢n de Tierra y Vivienda. He says that insisting on confrontation is tantamount to `playing the game of the right by isolating the piquetero movement from society'. Kirchner, he says, is right: in some organisations there has appeared `a vanguard that I hesitate to describe as of the left'.

Most visible in the `hardline' camp of the Bloque Piquetero are people like Raúl Castells of the Movimiento Independiente de Jubilados y Desocupados, and Néstor Pitrola of the Polo Obrero. According to Castells sit is these groups `who mobilise the people, and they don't know how to makes us bend the knee; they don't understand that we are not prostitutes and will not become pro-government.'`Nobody can bar the unions from fighting for pay, and nobody can bar workers from fighting for a respectable, stable job.' Pitrola added.

The various groups taking part in the 20 December rally will start marching towards the Plaza de Mayo, which faces government house, from different points in the capital, so as to make manifest how many followers they can muster. The organisers say that, jointly, they will attract a crowd of about 100,000.

One rumour making the rounds in Buenos Aires is that the government is banking on the more radical piquetero groups rioting, which would provide the excuse for abandoning Kirchner's `permissive' phase and launching a crackdown.

A three-year-old bribery scandal that in its day prompted the resignation, in disgust, of Vice-President Carlos Alvarez, has been revived by claims made by a self-confessed participant - though many are wondering why he chose to break silence at this point in time.

Mario Pontaquarto told the press last week that when he was parliamentary secretary to the senate three years ago, during the de la Rúa administration, he had personally distributed bribes totalling US$4.3m to opposition senators in exchange for their support on a labour reform vote. Shortly after the event, when the scandal became public, fingers were pointed at the head of state intelligence, Fernando de Santibañes, and labour minister Alberto Flamarique as the main bribers. Portaquarto implicates then-President Fernando de la Rúa, and names nine recipients: he says he has a computer printout with the sums allotted and the names of the recipients added by hand, as well as their initials confirming receipt. He has promised to hand over this document to the judge handling the case (this had not happened up to the time of writing).

Portaquarto's claims, if verified and leading to prosecutions, could have serious political repercussions. Two of the purported recipients he has named have since become provincial governors: José Luis Gioja (San Juan) and Carlos Verna (La Pampa). A third, Ricardo Branda, now sits on the central bank's board of directors.

De la Rúa and some of the named senators have already come out with blanket refutations of Portaquarto's allegations. The government has officially adopted a wait-and-see attitude, leaving it up to the judiciary to determine their veracity (unofficially, there have been broad hints that Portaquarto is pursuing a political agenda of his own). One of the prosecutors investigating the case, Eduardo Freiler, says that `80% to 90%' of Portaquarto's claims are already `corroborated' in the dossiers he has built up.

One additional repercussion of this development could be the annulment of the labour reform law of April 2000. Prime minister Aní­bal Fernández has already ventured that, `if things are as they are being portrayed, there will be no alternative to rescinding the law, because the will of the legislators has been vitiated'.

Beatriz Merino, the government official with the highest public approval rating (65%), has resigned as the result of an influence-peddling charge - the third case of alleged impropriety to have hit the Toledo administration in the last few weeks. This precipitated President Alejandro Toledo's third cabinet reshuffle in 25 weeks.

Merino had been accused of getting a job for a female friend who was also the co-owner of her flat - a fact that gave rise to an additional accusation of an `improper' relationship (which everyone recognised as a euphemism for lesbian).

Only last month Vice-President Raúl Diez Canseco had resigned his post as minister of trade & tourism, after having been caught lying to evade a charge of favouring the father of his lover with a special tax dispensation. He may also have to relinquish the vice-presidency, as a congressional committee has recommended that he be barred from holding public office for 10 years. The same penalty has been recommended for central bank director Javier Silva Ruete, who as economy minister had endorsed the dispensation sought by the vice-President. A third cabinet member, labour minister Fausto Alvarado, has been accused in the press of finding government jobs for eight relatives. Though congress has yet to initiate an investigation of these claims, Alvarado has been confirmed in his post by Toledo.

Overall, Toledo seems to have confined himself to coping with the changes that had been imposed upon him. He appointed replacements for Merino, Diez Canseco and two others: Aurelio Loret de Mola (who had already served notice that he wished to relinquish the defence portfolio) and Ana Elena Townsend (minister for women's affairs & social development), who made it clear that she did not want to remain in the government when she resigned together with the rest of the cabinet.

This could only be described as a `major' reshuffle because it involved important portfolios and very prominent politicians. Toledo had conducted one such reshuffle previously, when he appointed Merino at the end of June (WR-03-25), followed by a `mini-reshuffle' four weeks later (WR-03-29).

Carlos Ferrero, Merino's replacement, was elected to congress under President Alberto Fujimori (1990-2000). In 2000 he switched allegiances, joining Toledo's Perú Posible (PP). He was elected president of congress in December of that year, and he held that position until July of this year. At the time he had been supported by the PP bloc as potential prime minister, but this was rejected by Toledo.

Merino did not only earn her own high public-approval rating; she even managed to reverse the decline of Toledo's. Her departure, according to a poll hurriedly conducted by Apoyo, has pulled Toledo's rating down to its lowest ever: 11%.

The `demobilisation' of Colombia's paramilitary organisations seems to be losing some of its momentum, and questions over what has been achieved so far are multiplying, particularly after evidence has surfaced over continuing actions by the only big group to have `demobilised', and about financial shortfalls hindering the government's `reinsertion' programme.

The government was able to boast last week that a second paramilitary organisation, the Autodefensas del Cauca, had turned in its weapons. This small (160-strong) group was one of the few apparently genuine rural self-defence groups. Its weaponry (an assortment of shotguns, machetes and explosives) did not speak of the drug-funded affluence of the larger organisations. Indeed, for the `demobilisation' ceremony it was the government that gave the surrendering fighters camouflage uniforms, so as to give the occasion a more martial appearance.

`Reinsertion' problems
Meanwhile, Bogotá was witnessing a new variety of protest demonstration: dozens of `reinserted' fighters clamouring at the offices of the Programa de Atención Humanitaria al Desmovilizado (PAHD) for the payment of the subsidies they had been promised. The government has had to admit that the `reinsertion' programme has run short of cash. `The truth,' says interior minister Sabas Pretelt, `is the number of people [applying to join] has been much greater than we had expected'. There are approximately 2,500 `reinserted' fighters already on the roster.

The figures are likely to swell even more as the scope of government attention widens to embrace those who have been captured by the security forces. The official tally of captured members of paramilitary organisations is 2,790 since the beginning of the year; 313 in November alone. Another problem entirely is what to do with organisations that claim to have demobilised but continue to operate. Until last week the government was dismissive of charges that the Bloque Cacique Nutibara (BCN) remained active in areas around Medellí­n and in other parts of Antioquia. On 15 December the national police confirmed at least one instance of this: the murder of a town councillor in the rural village of Las Balsas.

The drugs connection
There has also been confirmation that the paramilitary interpretation of involvement in drug-trafficking is somewhat flexible. The leader of the Bloque Centauros (the second-largest member organisation of the Autodefensas Unidas de Colombia, AUC), who goes by the nom-de-guerre Jorge, acknowledged in a press interview that in areas under his control, coca-growing is tolerated.

`We only collect from the buyers,' he said, `but we tell [the farmers] to plant their other crops far from the coca, so as to avoid the effects of fumigation.'

He said this almost in the same breath as he professed obedience to the AUC commitment to eschew all involvement in the drugs trade, and he condemned a rival paramilitary organisation operating in Meta, the Autodefensas Campesinas del Casanare, of continuing links with drug traffickers.

Extradition
The overall leaders of the AUC, Carlos Castaño and Salvatore Mancuso, last week reiterated both their commitment to demobilisation and their demand not to be extradited to the US. They suggested that such a course of action would be tolerated by Washington, citing a statement by US ambassador William Wood to the effect that ' the Colombian government is autonomous, and that even in the case of the extradition of members of the autodefensas, it is the Colombian government that decides unilaterally'.

As we had anticipated, Samuel Doria Medina, who recently defected from the Movimiento de la Izquierda Revolucionaria (MIR), has founded a new political party, in response to the `pulverisation' of Bolivia's political system by the crisis of last October - and even which, he said, `has dragged with it the old parties and the old leaders [and] exposed the economic model in all its nakedness [posing] new challenges to the economy and to national politics.'

He said that the free-market model imposed by the international financial institutions has failed, and that what Bolivia needs is to jettison dogmatism and devise formulas that will benefit the 70% of the population that is poor.

At a rally of about 1,000 followers in Cochabamba on 12 December, Doria Medina said that the new party would become `an instrument of the citizenry'. He did not give it a name: that, he said, would emerge from the first convention, to be held immediately. Present at the launch were former justice minister Ana Marí­a Cortez, former popular participation minister Hern n Paredes, civic leader Oscar Bakir, and retired footballer Milton Melgar.

Doria Medina, 44, had been an active member of the MIR since his youth. He served as planning minister under President Jaime Paz Zamora (1989-93) and has flourished as a businessman: he is the main shareholder of the Sociedad Boliviana de Cemento. Shortly after leaving government, in 1995, he was kidnapped by the Peruvian guerrillas of the Movimiento Revolucionario Tupac Amaru (MRTA) and held for 45 days, until a ransom of US$1.2m was paid.

He says he wants equal representation of men and women in the leadership of the new party, and he set as a target that half the members should be under the age of 30. This, he said, would make the party truly representative of Bolivian society today. He also says that he wants his party to represent `those entrepreneurs who generate employment and are absent from national decision-making'.

President Carlos Mesa last week promulgated a law which bars the extraction of non-metallic minerals in the area surrounding the Uyuni salt flats, next to the border with Chile. The law was drafted with the deliberate purpose of preventing Chilean firms from extracting ulexite (an ore of boron used in fertilisers and for some industrial purposes) in the border area.

Technically, the law extends the fiscal-reserve area, which previously covered only the Uyuni salt flats, to the immediately adjacent areas. The only Chilean firm that has acknowledged a presence in the area is Quiborax, one of the world's four biggest exporters of boron. Operating in Uyuni since 2001 in partnership with Bolivian investors under the name Non-Metallic Minerals, Quiborax has announced the suspension of a US$3m investment, at least until it gets a clearer idea of the scope of the new law. Some government officials have said that the law will only apply to new projects, not to existing concessions.

Headlines suggesting that Mexico's chief prosecutor, retired General Rafael Macedo, would disregard a recommendation by a UN panel and hold on to his job were highly misleading: they were the result of sly journalistic prompting. What the panel - formerly the Mexican office of the UN High Commission for Human Rights and 12 human rights organisation - had included in its 224-page report was a recommendation to stop using the military for police work and for civilian courts to expand their purview to some military crimes.

Macedo agreed with the withdrawal of the military; indeed, he said it was already taking place in step with the incorporation of new trained police cadres. `The recommendation,' he said, `is perfectly valid: it is convenient and advisable that [the military] should return to their own duties.' This could take longer, though, in the counter-narcotics effort, where - said Macedo - the military were sent in because there was no other institution capable of doing the job. As soon as the country has developed such specialised institutions, he said, `the army and the armed forces will be able to pull out of that activity, which is not their natural vocation.'

Asked whether, in the light of the report, he would himself resign, Macedo said, `I think our laws are quite clear: the constitution does not establish any impediment. I am a proud graduate of a military school, but I am also a lawyer and an academic.'

The report, prepared at President Fox's behest, focuses mainly on measures to ensure respect for human rights. It makes special reference to the Ciudad Juárez murders of women, where it tallies 321 victims between January 1993 and July 2003. On this issue it is highly critical of the police and judicial handling of the investigations, and it says that Juárez has become an icon of the broader pattern of discrimination in the access to justice by the Mexican people.

Headlines suggesting that Mexico's chief prosecutor, retired General Rafael Macedo, would disregard a recommendation by a UN panel and hold on to his job were highly misleading: they were the result of sly journalistic prompting. What the panel - formerly the Mexican office of the UN High Commission for Human Rights and 12 human rights organisation - had included in its 224-page report was a recommendation to stop using the military for police work and for civilian courts to expand their purview to some military crimes.

Macedo agreed with the withdrawal of the military; indeed, he said it was already taking place in step with the incorporation of new trained police cadres. `The recommendation,' he said, `is perfectly valid: it is convenient and advisable that [the military] should return to their own duties.' This could take longer, though, in the counter-narcotics effort, where - said Macedo - the military were sent in because there was no other institution capable of doing the job. As soon as the country has developed such specialised institutions, he said, `the army and the armed forces will be able to pull out of that activity, which is not their natural vocation.'

Asked whether, in the light of the report, he would himself resign, Macedo said, `I think our laws are quite clear: the constitution does not establish any impediment. I am a proud graduate of a military school, but I am also a lawyer and an academic.'

The report, prepared at President Fox's behest, focuses mainly on measures to ensure respect for human rights. It makes special reference to the Ciudad Juárez murders of women, where it tallies 321 victims between January 1993 and July 2003. On this issue it is highly critical of the police and judicial handling of the investigations, and it says that Juárez has become an icon of the broader pattern of discrimination in the access to justice by the Mexican people.

The crackdown on the street gangs known as maras in Central America is having a spillover effect on Mexico. Gang members from El Salvador and Honduras - the countries that have adopted the toughest anti-mara measures - have fled northwards. Some are following the main migrant trail back to the US, but others have been establishing new stomping grounds in Mexico. Mexican authorities reckon that about 3,000 mareros are currently active on both sides of their border with Guatemala. The Honduran authorities calculate that as many as 2,000 mareros have fled the country since the anti-gang drive began in August.

The mareros are particularly visible in southern border cities like Hidalgo and Tapachula. In the latter, where they are reported to have engrossed their ranks with scores of Mexican recruits, they have achieved notoriety for attacking fellow Central Americans travelling northwards: a typical reprisal for resistance is to throw people off moving trains.

The question we left hanging last week has been promptly, if provisionally, answered: following the collapse of the pact between the Sandinistas and the pro-Alemán Partido Liberal Constitucionalista (PLC), what followed was an alliance of the PLC and the pro-Bolaños Liberals in the assembly, at least for the purpose of approving the budget law required by the IMF (see Tracking Trends, next page).

Though the conviction of former President Arnoldo Alemán has yet to be confirmed on appeal, signs have begun to appear that PLC legislators are warming to the idea of writing him off as a lost cause and seeking a new understanding with their former colleagues of the pro-Bolaños Azul y Blanco faction. In this they will be encouraged and supported by the US, which is determined to prevent a return of the Sandinistas to power.

They may also be pushed in that direction by the Sandinistas, who have already thrown their weight behind a wave of student protests, triggered by the elimination of extra funding for the universities from next year's budget. The protest demonstrations in the second half of last week clashed with police, leaving a balance of a couple of dozen injured and a handful of arrests. Most of the injuries were caused by the rubber bullets and tear gas canisters fired by the police, but a fair number were caused by fireworks lobbed by the students from homemade mortars.

Nobody has emerged from the recent events smelling of roses, but on balance Sandinista leader Daniel Ortega has fared the worst. In an opinion poll just released by M&R Consultores, Ortega appears with the second-worst disapproval rating (60.2%) - overtaken only by former President Alemán, who scored 74.2%.

President Bolaños has seen his approval rating shrink to only 12.6% - 41.4 points lower than just over a year ago. He could draw some comfort from the fact that only 29% of the respondents considered his performance bad or very bad, while 58% considered it middling; a situation which he could improve.

After Alemán, Ortega?
Ortega has managed to reignite the indignation of some prominent leaders of his own party. Former deputy foreign minister Ví­ctor Tinoco, a member of the Sandinista national directorate, described his quest for a pact with the pro-Alemán PLC as `bordering on betrayal of his principles.' He said that Ortega had `grown accustomed to negotiation, and that is a grave error' and `forgotten that [Alemán] was the most corrupt official after Somoza, while the FSLN is on principle opposed to corruption.'

Tinoco was sounding a note which must also be welcome in Washington, because his main message was that `for a long time now the discourse of grassroots Sandinistas has differed from that of the traditional leadership.' This fits in with the message relayed by US officials that Nicaragua should jettison `the men of the past', meaning both Alemán and Ortega. A decisive test for Ortega will be if he is able to lead the Sandinistas to a victorious round of municipal elections next year.

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The Dominican police has taken a sharp rap on the knuckles by the Inter-American Institute of Human Rights (IIDH, in the Spanish acronym) - and a severe drubbing from the local rights NGO, Comisión Nacional de los Derechos Humanos (CNDH). The reason: excessive use of force, including `extralegal executions'.

The IIDH, a Costa Rica-based dependency of the Inter-American Human Rights Court and Commission, has just delivered to the authorities in Santo Domingo a hefty report on `citizen security' in the country. It says that `the existing gaps in the local public security system have been used to justify security policies of an authoritarian bent, based on the increase of the police's discretionary powers [...] and the vindication of recourse to extralegal force as the dominant and legitimate mode of action.' What is urgently needed, says the report, is `a profound process of doctrinal, organisational and functional restructuring of the institution to transform it into a police for the protection of the citizenry.'

CNDH president Virgilio Almánzar put a similar message much more bluntly: `The police has agents that only know how to kill.' Since the beginning of the year, he claims, there have been almost 200 `extralegal executions', usually passed off by the police as `exchanges of gunfire' with criminals. These cases of `illegitimate homicides', he said, have been increasing in number over the past few months, though many of them are not being reported in the press.

Almánzar also publicly denounced the existence of a police `torture centre' in the district of Los Mina, in the east of Santo Domingo. There, he said, the preferred method of torture is the `dummy', in which a detainee has an onion stuffed in his mouth and a bag placed over his head as a prelude to a beating. According to Almánzar, who claims to have been given video-recordings of torture sessions, three police colonels have personally engaged in these practices. The chief of police, General Jaime Marte Martí­nez, has denied all of Almánzar's accusations.

One thing on which there is little disagreement is that violence is on the rise in Dominican society. According to the national institute of forensic pathology, so far this year there have been 968 homicides; an average of three per day. Of these deaths, 74% were caused by gunfire.

One more of Paraguay's supreme court justices, Luis Lezcano, resigned before the senate handed down its sentences in the impeachment proceedings congress had initially brought against six members of the court. This left only the president of the court, Bonifacio Rí­os, and justice Carlos Fernández Gadea, to deal with. On 12 December it did so, finding them guilty of corruption and malfeasance and removing them from office. The whole process took less than two months, a record in judicial or quasi-judicial proceedings in Paraguay.

This is a victory for President Nicanor Duarte in his campaign to reserve a situation in which, as he put it, `the law is applied to the poor and not to the manguruyú [literally a huge bottom-feeding fish].'

Duarte now faces the challenge of building an almost entirely new court as quickly as possible in order to minimise disruption to the legal system. The new court faces a busy time if Duarte continues his success in challenging powerful political institutions.

The President has promised that the new appointments will be transparent and not partisan, breaking with a tradition that supreme court appointments were a fruit of political patronage. One of the problems with this is that all judicial appointments were traditionally of political origin, so the best that can be hoped for is all-party consensus of the new supreme court appointees.

At present the supreme court is functioning with only three titular members, which means that in any substantial case it would have to co-opt magistrates from the appellate courts to make up the requisite numbers.

Twenty years after the event, a judge in Chile has indicted a former military intelligence agent, retired Lieutenant-Colonel Rafael González Verdugo, as a direct accomplice in the 1973 murder of US national Charles Horman, a journalist. For many, the name of the victim will arouse less recognition than that of the Costa-Gavras film Missing, in which Jack Lemmon portrayed Horman's father.

Horman was arrested six days after the coup that took Augusto Pinochet to power, as he was investigating the role of the CIA in that event. He was last seen alive in the national stadium, which had been converted into a detention centre. Weeks later his family found his body in a secret grave in Santiago's general cemetery. Last year General Sergio Orellano and Colonel Jorge Espinoza, both retired, were also indicted on remoter charges in the case.

Former US Secretary of State Henry Kissinger was deposed last year: the Horman family lawyers have filed charges against him, on the grounds that the US embassy in Santiago was told by the CIA of Horman's death before it had actually taken place. They are seeking a new, `more complete' deposition of Kissinger, conducted by a judge and not by State Department officials as was the case last year.