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REMITTANCES | Nudging world leadership. Only India ranks above Mexico as a recipient of remittances by expatriates, according to a new World Bank method of calculating these flows that has raised totals way above previous IMF estimates. Working on figures for 2001, these calculations put Mexican remittances at US$9.9bn, only slightly below India's US$10bn. These two countries are in a league of their own; next down the scale is the Philippines, with US$6.4bn, and after that the totals fall below US$3.5bn. One other Latin American country made it into the top ten: the Dominican Republic, with US$2bn. [Note that, as we have been reporting, remittances to Latin America have continued to grow rapidly since these calculations were made.]

FINANCE | Banks not lending enough. Central bank governor Guillermo Ortiz has rebuked Mexican bankers for not lending enough to the private sector, despite having seen their volume of business increase thanks to the improved regulatory framework. He noted that of total financial savings, which amount to 53% of GDP, the banks are devoting only a third to lending to the private sector — the rest goes to cover the government's borrowing. Ortiz also weighed into the banks for the charges they make for their services, which he said were `quite a bit higher than in other countries.' Ortiz was speaking at the 67th convention of the Mexican banking association. President Vicente Fox also addressed the gathering, rubbing in the same message.

EMPLOYMENT | Jobless rate rises again. The official open unemployment rate in Mexico's 32 main cities reached 3.92% in February, up from 3.81 the previous month. In February 2003 it was 2.74. Given the restrictive definition of unemployment, these figures serve as a gross indicator of the trend, rather than the actual number of jobless.

Armen Kouyoumdjian, a Chile-based specialist in strategic matters, writes to amend the `perceived message' of our article last week on plans regarding the Chilean military's guaranteed revenues from copper exports (WR-04-11). He says, `The idea to do away with the Ley Reservada del Cobre is to do away with the uncertainties and limitations that it imposes [...] on funding long-term re-equipment projects, hoping to introduce longer-term firmly funded programmes. The end-result is most likely to be more, not less money [...]

`There is also a totally incorrect statement as to the Ley Reservada revenue representing one quarter of military funding. [In] the 2004 defence budget [it] represents just 8% of total spending on defence and internal security, and even if you took the narrowest definition (ministry of defence budget, which would be wrong), the percentage is not even 15%.'

"Disarmament is extremely important but if the bad guys still have the weapons it won't be a secure country."

US Marine General Ronald Coleman, commanding the force in Haiti, on the surrender of weapons by armed groups.


"We can state that there is a drug-trafficking monopoly of the Farc, the ELN and the self-defence [paramilitary] groups."

General Jorge Castro, chief of police, Colombia, on the significance of recent raids.


"[The 1992 constitution] came out wholly defective, in many cases."

Nicanor Duarte, President of Paraguay, on plans to reform the constitution.

LATIN AMERICAN REGIONAL REPORT: CARIBBEAN & CENTRAL AMERICA - NOW AVAILABLE

El Salvador's ruling party, the Alianza Republicana Nacional (Arena), extended its 15-year monopoly of power with a resounding fourth consecutive victory in the presidential elections on 21 March. With nearly 97% of the ballots counted, Arena's Tony Saca took 58% of the vote. He will assume the presidency on 1 June. We consider the challenges that lay ahead of him. Elsewhere, Berger sets the tone for his new administration in Guatemala, and there is a boost for Central America's moribund customs union. In the Caribbean, Gérard Latortue is sworn in as President of Haiti following Aristide's departure, and Leonel Fernández is set to win May's presidential elections in the Dominican Republic. An annual subscription to Latin American Regional Report: Caribbean & Central America (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]

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Latin American Weekly Report (Online) ISSN 1741-7422. Published weekly (50 issues a year) by Intelligence Research Ltd, 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 © 2004 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-04-01 will indicate Latin American Weekly Report, Issue No.1, 2004.

Gérard Latortue kept his word: he appointed a cabinet wholly bereft of political affiliation — a decision praised by the US but greeted less enthusiastically in the Haitian political milieu. The minister most likely to play a central role is retired General Hérard Abraham, one of the few former soldiers whose name does not evoke the worst of the most recent military régime.

Prime minister Latortue had promised to appoint a government of technocrats with no political affiliation. This he did, and was promptly criticised for not having included anyone with links to the pro-Aristide camp. He apologised, saying that no names had been put forward from that quarter — though it must be said that some commentators have noted some ministers' `ideological affinities' with the Lavalas camp. Women's affairs minister Adeline Magloire Chancy had actually served in an earlier Aristide administration.

The economy has been entrusted to Henri Bazin, who like Latortue has seen service in the UN bureaucracy. In this area, though, one person who will be particularly busy is planning minister Roland Pierre, whose portfolio includes `external cooperation'. It will be up to him to press for the prompt resumption of the aid flows suspended as a sanction against the Aristide government.

The US ambassador in Port-au-Prince, James Foley, hailed the composition of Latortue's cabinet as the fruit of `wise choice'. The leader of the umbrella opposition group Convergence Démocratique, Evans Paul, preferred instead to underline that the cabinet was not the result of a consensus, but rather of Latortue's preferences. Other opposition politicians have openly derided the claim that this is a `government of national unity.'

General Abraham has been the first minister to venture a policy proposal: the recreation of Haiti's army. He argues that a credible force is needed to disarm the rival political groups, and that a commission will be set up to study how this will be achieved. Reviving `the old army' is anathema to the pro-Aristide camp, and US officials have already stated publicly that they believe Haiti does not need an army.

Abraham might just pull it off. He is remembered as the commander of the armed forces in 1988-91 who kept at bay those of his comrades-in-arms who wanted to block Aristide's election in 1990, and for having thwarted a coup attempt against Aristide in 1991.

Disarmament is a major concern. The last time round, in 1994, it took 20,000 foreign troops and monetary enticement to do the job. There is no prospect of a repeat performance. Police chief Léon Charles has warned that money handed out for weapons would only be used to buy new ones. He believes that the public will only cooperate with a disarmament drive when it feels safe — and this cannot be achieved solely or lastingly by foreign military forces.

Latortue's cabinet

Foreign affairs: Yvon Siméon Interior & national security: Hérard Abraham Justice & public security: Bernard Gousse Economy & finance: Henri Bazin Planning, external cooperation & environment: Roland Pierre Public works, transport & communication: Jean-Paul Toussaint Commerce, industry & tourism: Danielle Saint-Lot Agriculture, natural resources & rural development: Philippe Mathieu Health & population: Josette Bijoux Education, youth, sports & culture: Pierre Buteau Social affairs: Pierre Claude Calixte Women's affairs & rights: Adeline Magloire Chancy Presidential liaison: Robert Ulysse

The polls were quite accurate: Elí­as Antonio (Tony) Saca, of the ruling Alianza Republicana Nacionalista (Arena), swept the board to achieve a first-round victory with almost 58% of the vote. The leftist Frente Farabundo Martí­ para la Liberación Nacional (FMLN) attracted just under 36%.

At 39, Tony Saca becomes El Salvador's youngest president, and the fourth to have been elected democratically — as well as the fourth consecutive Arena president. His background as a broadcaster and radio entrepreneur is likely to ensure a greater emphasis on communication with the public than his predecessor: his first act as President-elect was to go out on the streets of San Salvador with his family and some followers, to whitewash the generously distributed Arena campaign graffiti.

Otherwise, there is little to distinguish his proposals from those of the Flores administration. He has promised a `super-tough hand' against street gangs and crime, continuing the work of his predecessor, though he has toned down the slogan for this from Mano Dura (roughly equivalent to `Iron Fist') to Paí­s Seguro (`Safe Country'). Like Flores, he is likely to align himself with the US — which contributed to his victory by warning that an FMLN government, painted in broad Cold War brush strokes, would not be assured of good relations with Washington.

He has also promised `probity and transparency' in the public administration, more assistance to the 2m-plus Salvadorean expatriates (whose remittances are the country's leading source of hard currency), more social spending and more rural jobs.

The new government is due to take office on 1 June. It will inherit the present congressional line-up, with the FMLN as the largest single bloc, but with the possibility of a working majority in alliance with other conservative groups, starting with the Partido Conciliación Nacional (PCN).

El Salvador: Presidential election results
With 96.59% of the vote counted
Candidate	Party	% of vote
Elí­as A. Saca	Alianza Republicana Nacionalista (Arena)	57.73
Schafik Handal	F. Farabundo Martí­ Lib. Nacional (FMLN)	35.63
Rafael Machuca	Partido Conciliación Nacional (PCN)	2.73
Others		3.91

Cuba last week rejected a report by the UN Commission of Human Rights prepared by the High Commissioner's personal representative, Catherine Chanet, on the grounds that she has `ended up acting as an instrument at the service of the US government.' The announcement came almost exactly a year after the widely condemned jailing of 75 dissidents by the Castro régime.

Cuban foreign minister Felipe Pérez Roque also turned down a UNCHR request for Chanet to visit the country. The request arose from a resolution submitted last year to the commission by Nicaragua, Peru and Uruguay — which earned them a fair share of opprobrium from Cuba at the time, even though it was far less harsh than the resolution the US and the EU had proposed.

Chanet's report is not uniformly negative. It praises Cuba's efforts in the fields of health and education, women's rights and freedom of religion — and even for engaging in a measure of dialogue on human rights with the UN.

What irritated the Cuban's, though, were the strong views expressed on the incarceration of the dissidents. The 75 were among a far larger number arrested between March and April last year; while most were released, these were tried on charges such as publishing articles critical of economic, social or human rights issues in Cuba; being involved in unofficial groups considered by the authorities to be counter-revolutionary or having contacts with individuals viewed as hostile to Cuba's interests. They were sentenced to prison terms ranging from six to 25 years.

Dire prison conditions
Chanet wrote that she had received `particularly alarming [reports about the] very trying conditions from the physical and psychological point of view' in which the dissidents were being held. She was not half as damning as Amnesty International (AI) in its new report, Cuba — One year too many: prisoners of conscience from the March 2003 crackdown, released just as Pérez Roque was rejecting Chanet's report.

AI says that it has `heard reports that prisoners have been held in solitary confinement for long periods, receive inadequate access to medical care and that communications between prisoners and their families have been restricted.' It also cites `allegations of ill treatment by prison guards or by other prisoners with the complicity of prison guards' and it denounces `the practice of deliberately incarcerating these prisoners of conscience at extreme distances from their homes and families.' On this last point, AI notes that the practice `contravenes United Nations principles and can be construed as an additional penalty imposed upon the prisoners and their families.'

Cuban dissident Elizardo Sánchez says, `A dozen of these prisoners are in their sixties and about 20 of them are gravely ill. The health of at least 12 of them is incompatible with prison and they should be freed immediately.' It is worth noting that the last time any international organisation was allowed to view conditions in Cuban prisons was a visit by representatives of the International Committee of the Red Cross in 1988.

For AI, `it is clear that these 75 people are prisoners of conscience, detained for the peaceful expression of their beliefs.' For Cuba, the 75 have been tried and sentenced for crimes against state security, and outsiders have no business telling Cuba how to protect itself.

To judge by the most recent news headlines in Caracas, the vexed issue of the referendum to revoke President Hugo Chávez 's mandate has virtually gone away. What has suddenly replaced it, particularly in the opposition camp, is the imminence of another political deadline: the registration of candidates for the state and local government elections due in July. The referendum issue, of course, is not dead, and its resolution cannot but affect the July contests.

On the referendum front, recent developments have baffled most observers not familiar with the workings of Venezuela's new constitution. On 15 March came the news that the supreme court had ruled against the CNE, the electoral council, ordering it to count as valid the 800,000-plus doubtful signatures on `blanket' petition forms, and to issue a formal call for the celebration of the recall referendum.

This was a case where nuances matter. The 1999 constitution established a judiciary headed by the Tribunal Supremo de Justicia (TSJ) — a 20-member supreme court. Their work was apportioned to five-member specialised panels. One such panel is the electoral one; that was the body that issued the 15 March ruling.

Unnoticed by many was a ruling handed down three days earlier by the constitutional panel, which established that, constitutionally, the electoral panel did not have jurisdiction over the inner workings of the CNE, such as detailed regulations on referendum petitions. It must be noted that the CNE, the `electoral power', is deemed by the 1999 constitution to be a state power on the same footing as the executive, the legislative and the judicial (there is a fifth power, known as `citizen's power', formed by the autonomous oversight bodies).

In any case, when different panels of the TSJ clash, the matter in dispute can be resolved by the 20-member plenum. For now the CNE has said that it will abide by the first decision of the constitutional panel and ignore the ruling of the electoral one. The ruling Movimiento Quinta República (MVR), meanwhile, has requested a second ruling from the constitutional panel.

The July elections
The opposition is not of a single mind about taking the matter before the full supreme court. Its attention has been taken up by the fact that by 23 March all candidacies for the July state and local elections should be filed with the CNE (there is a further grace period to complete details of the registration). Their wholehearted devotion so far to the referendum meant that many opposition parties were wholly unprepared. 

In principle, the umbrella Coordinadora Democrática (CD) has announced that the opposition will contest these elections `united' — but its leaders acknowledge that this unity will have to be worked out after the registration process.

The member-parties of the CD are, in fact, not of a mind on participation in these elections. Primero Justicia (PJ), for instance, says that it will not take part unless the referendum issue is resolved satisfactorily. Its reasoning is that it makes no sense to take part in elections supervised by a body, the CNE, that proves itself biased on the recall referendum.

Acción Democrática (AD), the only one of Venezuela's `traditional' parties to have retained a substantial following, has never doubted the importance of contesting these elections, and intends to field candidates everywhere it can (allowing for alliances where a CD partner stands a better chance of winning).

Apart from AD, the party making the most noise about July is the Partido Unión, led by Francisco Arias, a onetime ally of Hugo Chávez (indeed, a comrade-in-arms in Chávez 's two coup attempts). Their leaders say the opposition cannot afford to `abandon a single hill, a single position'. It will be throwing its weight behind winning in the states of Monagas, Nueva Esparta and Zulia.

The Movimiento al Socialismo (MAS), without easing the pressure on the referendum front, will concentrate its efforts on its strongholds in Anzoátegui, Aragua and Portuguesa. The Alianza Bravo Pueblo (ABP) has already picked candidates for Barinas, Carabobo and Táchira.

One CD leader, Jesús Torrealba, has summed up the challenge ahead in the following terms: `If the opposition is not capable of uniting in all governorships and the most important mayoralties so as to guarantee victory over the pro-government camp, it will not be credible to the Venezuelan people or the world at large.' This is not a simple proposition. At stake are 23 state governorships and 337 mayoralties.

The dismissal of a case against a policeman for the killing of a 13-year-old girl has again highlighted the degree of impunity enjoyed by the Jamaican Constabulary for the extra-judicial killings that have been so widely denounced by rights organisations. The trial, which took four years to come to court, lasted only an hour.

The judge had no choice but to order the jury to return a not-guilty verdict after the prosecution failed to produce evidence. Janice Turner had been shot dead in Trenchdown in April 2000; her sister and others witnessed the event, and their testimony was borne out by the coroner's report. Between then and the trial, many things happened to demolish the case.

A year-and-a-half was taken up by the preliminary inquiry, which determines if there is a prima facie case to answer. Witnesses (among them the victim's sister) were intimidated. It was reported that the same had occurred to the investigating officer; certainly he failed to turn up to testify in court. The registration document of the gun used in the shooting was `lost in a fire'. Failure to hold an identification parade voided the testimony of eyewitnesses.

Amnesty International, which describes the investigation as `marred by witness intimidation, official incompetence and delay', has offered to help the victim's family and local rights organisations take the case before the Inter-American Commission on Human Rights. Last year the Jamaican police killed 114 people, more than four for every 100,000 inhabitants.

HONDURAS | Debate over high fuel taxes. The government of President Ricardo Maduro is under heavy pressure to reduce the tax load on fuels. According to data recently released by Sieca, the secretariat for Central American economic integration, Honduras currently has the highest fuel prices in the subregion. This is partly due to increases in the world price for oil (with the exception of Guatemala, Central America imports all of its oil-based fuels), but also reflects the high rate of taxation in Honduras.

Maduro insists that he will not lower the taxes. They are, he says, `devoted to the execution of social programmes, and sacrificing that revenue would be tantamount to sacrificing the people.' He says prices should be lowered by narrowing profit margins.

PANAMA | Canal hits traffic record. Last week the Panama Canal hit a new record, transporting 1,005,551 tonnes of cargo in a single day (16 March). The previous record was 934,000t, reached on 3 July last year. 

Panama is invoking its success as a manager of the Canal (which it got back from the US in 1999) as an argument in its bid to become the seat of the Free Trade Area of the Americas (FTAA). It is competing with Miami for this.

JAMAICA | Public debt warning. Opposition senator Bruce Golding predicts that, if the current rate of borrowing continues, Jamaica's public debt will exceed J$1,000bn by December 2006. His warning came just after the senate passed a bill raising the government's borrowing limit to J$650bn from the previous ceiling of J$400bn set in 2002. Before that, during the 1990s, the ceiling stood at J$170bn (current rate: US$1=J$60.9).

Venezuela's opposition tends to describe the Chávez government as autocratic and dismissive of human rights. The pro-Chávez camp usually replies that there is no hard evidence of human rights violations in Venezuela. Two recent reports fill in some of the gaps, and the picture does not favour the government.

The Inter-American Commission on Human Rights describes the situation in Venezuela as having become `a vicious circle of impunity and violence.' It highlights `the perception that the branches of government lack independence, the growing concentration of power in the national executive [and] the impunity in which certain armed civilian groups and para-police units operate' and also points to the `undue influence' of the military in the country's political life.

It is worth noting that, leaving aside the reference to the military, much of this is as applicable to the opposition (particularly where it holds power, as in the Caracas municipalities that hosted much of the challenge to Chávez ) as to the central government.

Where the central government is unequivocally faulted is in its failure to respond to complaints. The report says that `90 percent of investigations of human rights violations never go beyond the preliminary stage.' It also notes that the Chávez government has not implemented any of the recommendations made by the commission a year ago.

The government has yet to make any comment on the report, despite the fact that it asked for its publication to be delayed for some months in order to study it more carefully. In the broader human rights debate taking place in Geneva at the UN Commission on Human Rights, deputy foreign minister Arévalo Méndez attacked what he described as the `hidden agendas' of rights advocates.

Recent events
The IACHR report only covers the situation in Venezuela up to October last year — before the latest spate of violent confrontations. A local rights NGO, Cofavic (founded before Chávez came to power), has filled in part of the ensuing gap. It has reported on nine `documented' cases of torture suffered by anti-government protesters at the hands of the security forces in late February, and says it has received reports of more than 30 persons arrested who had been `struck with helmets, cones and batons [or had] teargas canisters was thrown at them in confined spaces [or were] subjected to electric shocks, mock executions, and death threats if they reported the abuses.'

The commander-in-chief of the army, General Raúl Baduel, has denied one specific complaint: that the army had arrested a person who had later been killed after a torture session. According to the general, the testimonies presented had been `bought'. He also threatened to take legal action against further allegations of this kind. `The people who spread such stories in order to tarnish the army's good name,' he said, `are highly irresponsible, and we'll prove that [the claims are] untrue before the competent judicial bodies.'

Reprisals against TV stations
The government has laid itself open to more attacks on the rights front after the tax authority, Seniat, announced that it was imposing fines totalling US$3.2m on the opposition television stations for having granted free space to the opposition. The argument was that this deprived the public purse of the tax revenues that would have accrued had the airtime been paid for. Hit by the decision were Radio Caracas Televisión (RCTV), Televén, Venevisión and Globovisión.

The offending broadcasts took place between December 2002 and February 2003, at the time of the strike-cum-lockout staged by the Coordinadora Democrática with the aim of persuading President Hugo Chávez to resign. The broadcasters suspended their usual programmes in order to offer coverage of the anti-government marches, interviews with opposition leaders and the schedules of protest events.

President Alvaro Uribe has embarked upon a four-day visit to Washington with the purpose of lobbying the Bush administration and just about everyone who might be able to influence it, on the need to extend the Plan Colombia anti-drugs programme for a further four years (it was launched in 2000 by Uribe's predecessor, Andrés Pastrana). The US has contributed about US$2bn to what was originally envisaged as a US$7.5bn initiative. Initially designed purely as an anti-drugs venture (with some grey areas) it was later extended to include aid for counterinsurgency purposes. One headache will be explaining the recent apparent rebound of the Farc guerrillas.

President Alejandro Toledo has just lost his fifth consecutive intelligence chief. Retired General Daniel Mora resigned as chairman of the Consejo Nacional de Inteligencia (CNI) after it became public knowledge that his agency was involved in a plot to unseat interior minister Fernando Rospigliosi.

Ironically, it was the man whose job it was to prevent leaks of sensitive information, retired Colonel José Valdivia, head of counterintelligence, whose central role in the plot was leaked to the press. Valdivia had been compiling `dirt' on Rospigliosi and passing it on to pro-government legislator Jorge Mufarech. The latter had been publicly accusing Rospigliosi of corruption in connection with a contract to acquire uniforms for the police.

Though Mora said that Valdivia had been acting on his own, prime minister Carlos Ferrero hinted darkly that Mora's own resignation `implied a degree of responsibility'. Mora's predecessor, retired Admiral Alfonso Panizzo, was forced to resign last September after the CNI was found to have been spying on journalists who were investigating acts of corruption.

An interesting detail is that nobody seems to have accused Colonel Valdivia of fabricating evidence. The closest thing was Ferrero's dismissal of the charges made against Rospigliosi as `unfounded' allegations that had already been circulating. The alleged reason for trying to unseat Rospigliosi? According to El Comercio, what some members of the military perceived as his `pro-Chilean' leanings.

COLOMBIA | Avianca goes Brazilian. Surprise was the dominant reaction in Bogotá when it was announced last week that Colombia's flag air carrier, Avianca - the oldest airline in Latin America - had been taken over by the Brazil-based Sinergy group, founded and headed by Germán Efromovich (Bolivian-born, of Polish extraction, naturalised Brazilian).

That Avianca was up for sale was no secret. It was running heavy losses (US$100m last year), and the main shareholder, the Baviera or Santodomingo group, wanted to unload it in order to concentrate on its core business, beer. Interest had been expressed by such as LAN-Chile, the Central American airline TACA, and the US-Panamanian Copa. Nobody had heard of Efromovich, whose core business is offshore oil drilling but who also owns a fairly small shipping and air transport business, Ocean Air. Efromovich is taking a 75% stake in Avianca. The Federación Nacional de Cafeteros is holding on, for now, to its 25%. The new proprietor plans to inject about US$64m into the airline and restructure it.

ECUADOR | Vital oil sector takes a hit. A mudslide that ruptured Ecuador's main oil pipeline from the Amazonian fields to the Pacific, SOTE, interrupted oil exports for a week. On 18 March the government announced that it had worked out an emergency solution by contracting out the transport to the privately-owned OCP pipeline, originally meant to carry only heavy crudes. Petroecuador reckons that it will have to pump about 1.1m barrels of crude through the OCP before the SOTE duct becomes operational again. This, it says, will enable it to meet current contractual obligations. The state oil company normally exports about 160,000 barrels per day of crude. Oil export earnings are what has been buoying up Ecuador's dollarised economy; they also provide about 40% of the funding for the national budget.

The US State Department has confirmed that President George Bush is seeking substantial increases in the ceilings placed on the posting of US military and mercenary personnel in Colombia. The announcement came just as Colombian President Alvaro Uribe was visiting Washington to lobby for a four-year extension of Plan Colombia, the counternarcotics and counterinsurgency scheme launched by his predecessor Andrés Pastrana, which has already received about US$2.6bn from the US.

At State, spokesman Richard Boucher revealed that President Bush wants to double the number of US military personnel authorised to be posted to Colombia, from 400 to 800, and raise by 50% that of mercenaries (euphemistically described as `civilian contractors'), from 400 to 600. The use of mercenaries sidesteps legal constraints on the use of active-duty military personnel in roles other than those of advisers and trainers. These constraints, it should be noted, apply only to on-the-ground US military personnel. Others, once removed, are cooperating with the design of operational plans (right down to authorising the destruction of suspect aircraft) and supply of military intelligence.

President Uribe said after a meeting with Bush that he had found `a high degree of understanding that we can't leave this fight half-way along.' He also said that he supported Bush's request for higher ceilings on the posting of US personnel.

The argument in favour of higher ceilings was taken to the House armed services committee by General James Hill, chief of the US Southern Command, who said that it would help deliver a `decisive blow against narcoterrorism.'

Uribe found considerable cross-party support in congress for the extension of Plan Colombia. Minority senate leader Tom Daschle, who declared himself `impressed' by Uribe's success so far, said, `We talked about raising the military cap, and many of us support it.' In the House foreign relations committee, the Republican Henry Hyde came out clearly in favour of extending Plan Colombia.

The traffic, however, did not flow in only one direction. Democratic congressman Jan Schakowsky, an outspoken opponent of US military involvement in Colombia, complained, `It seems that the Bush administration's solution to dealing with the world is to deploy more U.S. soldiers and guns for hire, while refusing to seek real, lasting solutions.' Another Democrat, Gene Taylor, has drawn attention to the fact that US influence has not led Colombia to change recruitment policies that discriminate in favour of the better-off.

The drugs angle
Uribe's lobbying effort was helped by the publication of the State Department's annual International Narcotics Control Strategy Report, which showed the area devoted to coca cultivation in Colombia shrinking by 21% in 2003 — the third successive year of substantial reductions. All told, the US government says, the area cultivated with coca has been reduced by a third since 2001 — the year Plan Colombia was launched.

Critics, like Adam Isacson of the Center for International Policy (CIP), wonder about the accuracy of these figures, which also suggest that cultivation throughout the Andean region fell by 15% last year. What invites their scepticism is the fact that the price for cocaine has remained constant, rather than increasing in response to the reported production shortfall.

Picking up on observations that arise from the UN's analysis of developments in Peru, Isacson wonders if there may be a move of coca cultivation to areas that were not being targeted by satellite surveillance. In fact, there has been a detectable move of new cultivation towards the largely empty eastern territories of Colombia.

Extradition policy `inalterable'
Linked or not to Uribe's discussions in Washington, his interior minister, Sabas Pretelt, announced on 24 March that the government's extradition policy is `inalterable'. He made this point at a meeting with legislators involved in the debate over the law of `penal alternatives' to be offered to paramilitary fighters opting for demobilisation. The government intends to re-present the draft legislation to congress this week.

Pretelt's statement is a direct response to the demand by the two top leaders of the paramilitary Autodefensas Unidas de Colombia (AUC), Carlos Castaño and Salvatore Mancuso, for guarantees that they will not be extradited. The extradition of both, to answer drug-trafficking charges, has been requested by the US.

The AUC leaders, who have virtually frozen the demobilisation process and stand accused of having violated their ceasefire agreement, have hinted broadly that the whole process could collapse if there was no flexibility on extradition.

They are finding support in congress. A number of legislators have made a big show of visiting jailed drug-trafficking suspects to verify the truth of claims that they were being denied due process. Rafael Nieto Loaiza, until a few days ago deputy justice minister, sees this as the tip of an iceberg: he expects a `systematic attack' on extradition by `a coalition of drug traffickers, paramilitaries and guerrillas.' The paramilitary leaders have often boasted that they have a large number of legislators on their side; this claim may be put to the test very soon.

Extradition of Colombian nationals was barred by the 1991 constitution, but reinstated in 1997. Over the past two years 124 suspected drug traffickers were extradited to the US.

In Ecuador
The developments in Washington have raised the alarm in some quarters in Ecuador. Retired General René Vargas Pazzos, a former commander of the armed forces who now leads a group monitoring Plan Colombia, said, `This confirms that the US and Colombia are preparing for an all-out military operation on the border and that they are going to force Ecuador's military to confront the guerrillas.' Former defence minister José Gallardo sees Ecuador having to face a much greater influx of refugees from Colombia — though he sees a possible positive angle as well: that more intense action by Colombia in the area close to the border might relieve some of the pressures Ecuador must now contend with.

Contrary to what has been widely reported, Venezuela's supreme court has not thrown out the signatures collected by the opposition to request a referendum to unseat President Hugo Chávez . One supreme court panel has overruled another panel's decision to validate all signatures without verifying them. In any case, this particular dispute must now be settled by the full supreme court — and even when it does, the referendum issue remains open.

On 23 March the constitutional panel of the supreme court annulled the decision of the electoral panel to validate 876,017 questioned signatures on petitions for the recall referendum. Had that first decision held, the referendum would have gone ahead. As it is, the electoral panel has now done what was expected: it has petitioned for the plenum of the supreme court to settle this `dispute of functions'.

The only big problem this might pose right now is that the judicial process may be delayed so much that an eventual referendum would be pushed beyond the crucial 19 August deadline — crucial because before that date an opposition success would have to be followed by the election of a new President to complete Chávez 's term; after that date, it would mean that Vice-President José Vicente Rangel would take over to complete the term.

A lesser problem would be created by a slightly shorter delay, which would leave an eventual referendum too close to the state and municipal elections, now scheduled for 1 August. Indeed, simple logistics would dictate that the referendum would have to be held simultaneously with those elections.

Practically nobody wants this to happen, as it would hopelessly confuse the issues at stake: continued tenure of office by Chávez on the one hand, renewal of local authorities on the other.

All this assumes that the referendum will go ahead. That depends on two alternatives. The first, that the full supreme court should endorse the position of the electoral panel and order the validation of the suspect signatures. Should it not, that would not automatically rule out the referendum: it would put the ball back in the opposition's court, forcing it to get its petitioners to ratify publicly their signatures. Only if that were not to happen would the referendum initiative fail.

Regional candidacy rows
In the meantime, preparations for the state and municipal elections have been running into problems on both sides of the big political divide. In the opposition camp, the Partido Unión's national executive has decided not to support the bid by its leader, former Lieutenant-Colonel Francisco Arias, to run for the governorship of Zulia state. Arias, it will be recalled, accompanied Chávez in his coup attempts, but later became a bitter adversary. The party's secretary-general, Luis Manuel Esculpí­, has thrown the executive's weight behind the reelection of Manuel Rosales, who enjoys the support of the umbrella Coordinadora Democrática (CD). Arias insists that he will run anyhow.

In the pro-government camp an analogous situation has emerged in Bolí­var state. Governor Antonio Rojas is defying Chávez 's choice of General Francisco Rangel as the Movimiento Quinta República (MVR) candidate, and is seeking reelection. The mayor of Caroni, Antonio Briceño, is also seeking reelection, while the MVR is backing former CVG chief Clemente Scotto.

The opposition Movimiento al Socialismo (MAS) announced last week that it had received intelligence of a coup plot, involving members of the military and union leaders, scheduled to coincide with a 25 March demonstration organised by the umbrella labour organisation COB in La Paz. It did not materialise, but the commander of the armed forces said he, too, had knowledge of retired military officers involved in plotting a coup.

MAS congressman Gustavo Torrico had said the plotters had planned to `infiltrate people [in the COB demonstration] to provoke total chaos in the city, then order the troops into the streets and consolidate a coup which would have been very well received by the middle and upper class.'

The claim was dismissed by interior minister Alfonso Ferrufino and the president of congress, Hormando Vaca Dí­ez — the latter still smarting at the MAS's dismissal of his own claim, back in February, that there was a plot afoot to seize congress (that didn't materialise either).

COB leader Jaime Solares said he knew nothing about the alleged plot. However, Admiral Luis Alberto Aranda, commander-in-chief of the armed forces, while denying any involvement of active-duty officers in coup plots, said that some former members of the military, together with some political and union groups `are trying to generate an attitude in that direction.' He added, `I wouldn't like to name names, so as not to make mistakes. They are just two or three high-ranking retired officers: generals, lieutenant-colonels, et cetera.'

Aranda is currently involved in a dispute with the judiciary, which wants to try four army officers for homicide in the `Black February' events of last year. The military preempted this by holding a court-martial that acquitted all four, and issued a `study' pointing the finger elsewhere. Aranda said he would not accept the jurisdiction of civilian courts in this matter.

One thing is indisputable: President Alejandro Toledo is not fortunate with his choices of intelligence chiefs. Only a week after losing the fifth man appointed to that position, he has found himself accepting the resignation of the sixth, following news that he faced trial on a corruption charge. Toledo has now decided that the national intelligence council, CNI, needs a thorough overhaul.

Admiral Ricardo Arboccó, appointed to succeed Daniel Mora (WR-04-12), did not manage to take up his post. When the media published reports that he was facing prosecution on a corruption charge, and that he had had dealings with the now-jailed former national security adviser Vladimiro Montesinos, Arboccó submitted his resignation.

Prime minister Carlos Ferrero promptly announced that the CNI would undergo a 90-day `reorganisation' process, during which time it would be overseen by a temporary administrator, Admiral Aybel Raygada. In the meantime, intelligence work will be taken over by the armed forces and the police. All existing intelligence operational plans, `except those necessary to prevent any danger or threat to national security', have been suspended.

A vast array of public-sector workers have been building up protest actions in demand of back pay owed them by the government. The healthworkers' union went as far as to briefly `kidnap' President Lucio Gutiérrez last week in pursuit of their claims. It seems to have worked.

Gutiérrez had chosen to celebrate his 37th birthday, on 23 March, handing out loans to peasants at the state-owned Banco Nacional de Fomento. The healthworkers, unpaid since January, surrounded the building and began to chant, to the tune of `Happy Birthday to You,' a ditty which roughly translated as, `A green frog are you.' The flustered President, unwilling to order their dispersal by force, remained in the building for an hour, until officials managed to spirit him out of a side door.

The very next day Gutiérrez ordered his economic team to find the funds to meet the back-pay obligations. An earlier offer to transfer US$20m to the health sector was rejected by the union because it did not suffice to cover the back pay and purchase the materials needed to keep the hospitals going. They have closed down all but emergency services as part of their protest.

Apart from the healthworkers, protest actions have been initiated by the teachers, the prison guards, and municipal workers throughout the province of Guayas (supported, in many cases, by their employers). The prison guards are demanding an increase in their sector's budget allotment, `not for remunerations, but to cover the feeding of the inmates and basic services [in the prisons].' They are refusing to take in any more prisoners until their demands are met.

COLOMBIA | Remittances on the rise. Over the past four years, remittances by Colombian expatriates have more than doubled, to just under US$3bn; measured as a share of GDP, they have increased from 1.5% to 3.9%. This is still below Ecuador's 5.9%, but is considerably more than Mexico's 2.6%.

Remittances have become a major source of hard currency; last year they were equivalent to 90% of Colombia's oil earnings, almost twice those from coal, and 3.7 times those from coffee. The US is the main source of remittances, but it accounts for only a little more than half, since the Colombian diaspora is spread more widely than those of Mexico or Central America.

BOLIVIA | Argentina returns as gas buyer. Argentina's current energy crisis, most acute in the gas sector, has translated into a welcome increase in demand for Bolivian gas. Between 1972 and 1999 Argentina used to buy from Bolivia up to 6m cubic metres of gas a day. The volume later shrank to a trickle as Argentina brought online huge fields of its own.

From May the flow will increase by 4m cmd. Construction of a new US$1bn pipeline is due to begin in June, which should be pumping about 10m cmd by 2006.

PERU | Key tax trimmed, threatened further. The tax on financial transaction, on which the government relied to raise US$1.5bn over the coming three years, has just had its rate trimmed by a third, from 0.15% to 0.10%. Business associations are collecting signatures for a petition to the constitutional court to have the tax declared unconstitutional.

The unexpectedly early arrival of a power shortage in Argentina has not only posed an extra threat to President Néstor Kirchner's domestic standing, but has also created disruption and unease in Argentina's two closest neighbours, Uruguay and Chile; the former facing a suspension of its electricity supply contract; the latter, the prospect that Argentina may reduce the exports of natural gas that fuel about a third of Chile's electricity supply.

One cause of the crisis has been building up for some time: the freeze of electricity rates, which worked its way back up the system in the form of an inability to compete with the high prices the oil and gas companies could obtain by exporting. Another could have been anticipated: that domestic demand would shoot up with economic reactivation. The government says that two other factors have been at work: the lack of investment by the oil and gas companies, and deliberate withholding of supplies in order to force domestic price increases. Yet another was the policy decision that allowed big consumers to switch supply contracts more frequently from deregulated generators to controlled `peso-ised' distributors.

The fuel suppliers have been acting as if the reactivation effect had come out of the blue. The chief spokesman for Repsol-YPF actually described the increase in demand in the first two months of the year as `irrational'. The government says it had been foreseeing a squeeze, but only in another three months' time, when winter sets in.

One genuinely unexpected factor did crop up: two power plants -- Embalse and Genelba -- had to be closed for maintenance work. This meant that this week the system would be short about 700MW, which would leave it without any reserves (as against the usual 30% surplus). Another not entirely foreseeable factor is building up as well: low rainfall, that has translated into lower water levels at the dams serving the big Yacyretá and Salto Grande hydro complexes.

For the first time since 1991, Argentina's energy system has come face-to-face with a supply shortfall — and the possibility of a return to power rationing. Directly (there is nothing that sours public moods more than power blackouts) or indirectly (through sharp rate increases or a marked slowdown in economic growth), this threatens Kirchner's popularity at a time when he has to deal with a crisis in the ruling party and an almost inevitable climbdown on the external debt.

Political response
The Argentine government's response has privileged the political aspect of the crisis, seeking to protect the domestic power supply. It issued a resolution allowing itself to `rationalise' exports of natural gas `that may be useful for domestic supply.' This mainly affects Chile, which takes 90% of Argentina's natural gas exports to fuel about a third of its electricity generation. The Chilean government had been warned several times last year that supply problems were mounting, but beyond a modicum of concern they rested secure in the knowledge that the gas supply contracts made provision for interruptions only in cases of force majeure. The Argentine government seems to be arguing now that a shortfall in domestic supply could be construed as force majeure.

In any case, the Chilean authorities have been told that there might be some rationing come May, and that everything would be done to try to avoid that. Argentina is already in negotiations to increase its purchases of gas from Bolivia — though the Bolivians want assurances that this will not end up going to Chile. In the worst case, planners in Santiago reckon that rationing could reduce imports of Argentine gas by up to 20%, enough to disrupt their domestic power supply.

One thing the Chileans have going for them is that Argentina is most reluctant to do without the hard-currency earnings from gas exports — especially as it braces itself for the outcome of the external debt dispute.

The neighbour that is taking a more immediate hit is Uruguay. On 18 March the Uruguayan authorities were notified that Argentina was suspending its supply of electricity, which has thrown the country back onto reliance on its thermal power plants. The switch, given current fuel prices, could cost Uruguay an extra US$10m a month. This did not come as a complete surprise: like their counterparts across the River Plate, executives at the state power utility UTE had been expecting the crunch to arrive in winter.

This has given added urgency to negotiations with Paraguay, with a view to buying about 40MWh from the Acaray hydro complex on the Paraná river, which already supplies electricity to Argentina (indeed, any supplies to Uruguay would have to be transported through the Argentine grid). Paraguay's power utility is eager to please, and is taking the opportunity to press again for movement towards electricity integration in Mercosur. As a net exporter of electricity, it would be, in relative terms, the biggest beneficiary of this.

The Argentine government is envisaging one more preventive measure: increasing the export tax on oil, and extending it to gas. Economy minister Roberto Lavagna says no domestic rate increases are being considered.