All Categories

Bolivia’s legislature, which is controlled by the ruling Movimiento al Socialismo (MAS), has approved a new law on political parties and organisations. While the MAS government led by President Evo Morales claims that the new legislation will “strengthen democracy” ahead of the October 2019 general elections, opposition leaders such as former president Carlos Mesa (2003-2005) warned that it was designed to confer credibility on Morales’ controversial bid to run again.

A key provision of the new law, which was passed by the 36-member senate on 30 August and the 130-member lower chamber a day later, stipulates that, for the first time in Bolivia’s history, political parties must elect their presidential and vice presidential candidates through primary elections. These have since been called for January 2019.

The law, which also calls for greater transparency regarding sources of party finance, has been slammed by figures such as Mesa – who has a criminal investigation against him which he maintains is political [WR-18-27]. Mesa complained that the mechanism of holding primaries was designed to provide legitimacy to Morales’ candidacy after the February 2016 public referendum rejected the idea of changing the 2009 constitution to allow for indefinite presidential re-election (and allow him to seek a fourth consecutive term in office). The plurinational constitutional court (TCP) lifted the ban in a December 2017 ruling.

Targeting another opponent

Against this backdrop, Morales has reignited concerns that he is targeting his political opponents ahead of the election. The most recent cause for concern was the arrest on 28 August of Franklin Gutiérrez, the leader of the Yungas coca producers (cocaleros) organisation, Asociación Departamental de Productores de Coca (Adepcoca), who in May announced plans to run for his own political project in the October 2019 election.

Gutiérrez was arrested for allegedly masterminding an operation to ambush officials carrying out coca eradication duties in Asunta municipality, La Paz department, in an incident on 24 August which left a police officer dead. He has since been placed under preventive detention after being charged with eight crimes including murder, possession of illegal firearms, and attacks against state security organisations.

Tensions between cocaleros

Gutiérrez’s announcement regarding his candidacy, and the incident in Asunta which saw further deadly unrest five days later when two cocaleros were killed in clashes with coca eradication officials, highlights divisions between the Yungas cocaleros and coca producers from Chapare, Cochabamba department (the home turf of Morales, himself a former cocalero). These tensions emerged last year over the 2017 law on coca (which Adepcoca complained favoured the Chapare coca producers) [WR-17-29].

• Tensions ahead?

In a press conference the head of Bolivia’s national police, General Faustino Mendoza, said that the two cocaleros killed on 29 August were part of an “irregular armed group” comprising some 30 people who sought to ambush and intimidate eradication forces in the area. However, a local Adepcoca leader for La Asunta, Freddy Quispe, rejected these claims, insisting that security officials shot at cocaleros without provocation.

According to the most recent coca cultivation survey on Bolivia by the United Nations Office on Drugs and Crime (UNODC), released on 21 August, the Yungas region accounts for 65% of the total 24,500 hectares (ha) of the crop; the Tropic of Cochabamba (Chapare), 34%; and the north of La Paz, 1%. The same survey showed that the area under cultivation in Bolivia increased by 1,400ha in 2017. According to the survey, the greatest increase was in the Chapare where coca cultivation rose from 7,200ha to 8,400ha, while the Yungas also saw an increase (from 15,000ha to 15,700ha).

Evidence is mounting that drug gangs are seeking to produce cocaine directly in Honduras, thereby cutting shipment costs from the Andean. The implications for the country of becoming a drug producer on any large scale would be very negative, transforming the country’s position in the international drug business, altering criminal dynamics, and almost inevitably risking a sharp rise in insecurity and violent crime.

On 27 November, officials from the Honduran anti-narcotics agency, Dirección de Lucha Contra el Narcotráfico (DLCN), reported the decommissioning of 5,000 coca plants destined for cocaine processing, following the six-day ‘Operation Labrador’ in the mountainous northern department of Yoro to locate and destroy the crop. The plants – which the police said were of 20-30cms in height – were found on a hill in the village of Calderas, in the municipality of Olanchito.

This is the fourth or fifth time since April 2017 that authorities have discovered sizeable acreage of coca plants in Honduras. Drug processing labs and batches of chemical precursors have also been found and decommissioned, adding to the mounting evidence that criminals are looking to try out drug production in a country to-date used solely as the main transhipment point for cocaine moving between the Andean and North America.

In early April this year, Honduran authorities announced the discovery of some 14 hectares of coca plants in the small community of Los Tamales, located within a forest reserve between the departments of Olancho and Colón. They also dismantled a clandestine laboratory use to manufacture coca paste, the precursor to cocaine. Military police sources told Honduran media that there were signs of previous cultivation in the area.

The official suspicion was that Colombian groups were testing local growing conditions in the remote area, but Guatemalans were also suspected by the DLCN of involvement in the plantations. The direct owners of these plantations are unclear, as often they are found on communal land, and may be grown without the consent of local peasant farmers.

Just weeks later in mid-April, a 28.5-hectare (ha) plantation was discovered in Gualaco, a mountainous region also located in Olancho. Carlos Morazán, a spokesman for the attorney general’s office, told local media that the plantation “was in full production and there were signs of previous harvests”. He too speculated that traffickers were experimenting with local crops so as to save on the costs of shipping cocaine from Venezuela and Colombia.

In late April 2017, another relatively large coca plantation covering eight hectares was again discovered in Olancho. And the following month (May 2017), a further 84,000m² planted with 5,000-7,000 coca plants was found in the remote mountain community of Esquilipas Norte. After a tip-off, DLCN agents spent several hours trekking through the area before coming across the plantation, as well as evidence of a processing laboratory (with barrels of gasoline and cement found nearby).

Prior to that, smaller-scale cultivations had been discovered in the departments of Copán, Colón, Comayagua, and Yoro, which the authorities again had considered ‘experiments’ to gauge local growing conditions. In Copán, coca plants were discovered inside properties belonging to the Valle Valle criminal organisation, according to the daily La Tribuna. DLCN officials said that criminal groups were experimenting and “trying to analyse the optimal percentage of alkaloid necessary to produce cocaine”. There are 250 types of coca leaf, and so production of the best leaf for processing into the narcotic cocaine is not straightforward.

The latest crop found in Olanchito is one of the largest to date in the country and suggests that these efforts to cultivate viable harvests and produce coca paste locally are becoming more sophisticated – and successful.

Olancho has long been a strategic point for trafficking routes towards Mexico, and so it is no coincidence that the remote department is also the principal site for the cultivation efforts.

In its 2018 International Narcotics Control Strategy Report (INCSR), the US State Department reported that Honduras remained “a primary destination country in Central America for cocaine-laden aircraft departing from South America” and also noted that the region’s remote Caribbean coast is particularly vulnerable, due to the lack of state presence.

At one point (in 2012), the INCSR estimated that almost 80% of all drug smuggling flights from South America passed through Honduras. In 2014, Honduras re-authorised ‘shoot-downs’ of suspected narco flights, pushing trafficking out to sea. By 2016, the INCSR was estimating that the vast majority of cocaine smuggled into Honduras was arriving via Caribbean coastal maritime routes.

Whether by air or by sea, Honduras is still a critical corridor for cocaine trafficking to the US, with senior political figures all the way to the top of the government continuing to be implicated.

On 26 November, Juan Antonio (‘Tony’) Hernández, the brother of President Juan Orlando Hernández, became the latest to be charged with conspiring to bring tonnes of cocaine to the US, as well as “related weapons offenses involving the use and possession of machineguns and destructive devices, and making false statements to federal agents”.

Tony Hernández was convicted based on the plea-bargain testimony of a former leader of the Honduran drug trafficking organisation Los Cachiros, Devis Leonel ‘Don Leo’ Rivera Maradiaga. Rivera, along with his brother Javier, their parents, and other siblings, headed up the violent Los Cachiros in Tocoa, on the Honduran Atlantic coast, for a decade (2003-2013).

During his 2017 trial in New York, Rivera admitted to participation in the deaths of 78 people, including the Honduran anti-drug czar Julián Arístides Gonzáles, the country’s former national security advisor, Alfredo Landaverde, and a journalist, Aníbal Barrow. He implicated a swathe of the Honduran political and economic elite in drug trafficking and bribery activities, including members of the powerful Rosenthal and Facussé families.

In May, New York federal court prosecutors had charged the Honduran congressman Midence Oquelí Martínez Turcios of conspiring to import cocaine into the US, also as a member of Los Cachiros. Prosecutors alleged that over the course of a decade, from 2004 to 2014, Martínez Turcios and Urbina Soto lent support to multiple drug trafficking organisations in Honduras for the transit of 100kg loads of cocaine through the country from Venezuela, Colombia, and elsewhere. Prosecutors simultaneously announced related charges against three other people, including Arnaldo Urbina Soto, a former mayor of the city of Yoro.

US investigators alleged that Martínez Turcios had received over U$1m in bribes from Los Cachiros. He was also accused of personally escorting cocaine shipments and participating in weapons training for paid assassins that Los Cachiros had recruited from the Central American street gang MS-13. Urbina Soto and two others allegedly also helped oversee trafficking. Authorities said they would seek the extradition of all the accused to the US. In December 2017, US prosecutors also charged another Honduran congressman, Fredy Renán Nájera Montoya, with conspiring to import cocaine.

Another presidential relative – Fabio Lobo, the son of former president Porfirio Lobo (2010-2014) – was arrested in a Drug Enforcement Administration (DEA) sting in 2015. He pleaded guilty to conspiring to import cocaine into the US and was sentenced to 24 years in prison in September 2017. Again, Devis Leonel Maradiaga implicated Fabio Lobo – and controversially also claimed he had bribed his father and president to the tune of at least US$300,000, purportedly to protect Los Cachiros’ operations and to secure government contracts for money laundering purposes. (Porfirio Lobo’s wife, Rosa Elena Bonilla, was arrested in February last for embezzling US$680,000 of public funds meant for social programmes).

Elsewhere, Yankel Rosenthal, former minister of investment under President Hernández, was sentenced to two years and five months in prison in January 2018, having pleaded guilty to attempting to launder drug proceeds on behalf of a Honduran lawyer. Rosenthal’s cousin, Yani Rosenthal, was previously sentenced to three years, and his father Jaime Rosenthal, the country’s former vice president, was also charged. He too remains at large.

Since early September, a mysterious oil spill has been spoiling a growing number of the famously beautiful beaches along the coast of Brazil’s Northeast region. The first signs of oil were reported in the states of Pernambuco and Paraíba on 2 September, but just over a month later, well over 100 beaches across all nine Northeast states have been polluted by oil sludge, and more areas are affected daily. The federal government ordered an investigation this week into the origin of the oil, which remains unknown despite ongoing efforts to identify its source.

The federal environmental regulator, Ibama, is coordinating clean-up efforts and monitoring the situation daily. As of 8 October, it had recorded oil sludge on 138 beaches in 62 municipalities across Maranhão, Piauí, Ceará, Rio Grande do Norte, Paraíba, Pernambuco, Alagoas, Sergipe, and Bahia – spanning over 2,000km of coastline. Rio Grande do Norte has been one of the worst-affected states in terms of number of beaches, while Sergipe, which first recorded the oil spill on 24 September, declared a state of emergency on 5 October to better respond to the large quantity of oil on its shores.

Authorities and experts are perplexed by the situation. Analysis by Ibama established early on that the substance is crude oil, not refined, and all stems from the same source. The state-owned oil firm Petrobras, which is responsible for the vast majority of oil production in Brazil, maintained that the oil is not of the kind produced or sold by the company, or indeed anywhere in Brazil.

The occurrences of oil sludge across an important geographic area and time period represent a further source of confusion. The quantity of oil arriving on beaches – over 130 tonnes of the substance have been cleared up so far, equivalent to 500 barrels – makes hypotheses such as the oil being residue washed out from the hold of a tanker unlikely. The most probable theory is that it comes from an accidental leak in a ship, maybe even an oil tanker, passing off the Brazilian coast.

The Brazilian navy is now responsible for investigating this (with the help of the federal police), patrolling the coast and analysing the past month’s commercial maritime traffic in Brazilian waters to identify ships which could have been responsible for such a spill. President Jair Bolsonaro refused to name a country when he told journalists on 7 October that the government had probably identified the origin of the oil. The next day, he said that the oil spill was probably criminal. Environment Minister Ricardo Salles appeared to confirm growing rumours that the oil is of Venezuelan origin on 9 October. “This oil…is coming most probably from Venezuela,” Salles told lawmakers during a public audience in the chamber of deputies.

Amid the emphasis on identifying the source of this oil spill, Salles said that the federal government is also focused on helping continue clean-up efforts. Concerns are growing as to the oil’s impact on the local population and economy, which is very dependent on tourism, as well as long-term environmental damage. Academics from local universities are describing the oil spill as the “biggest environmental disaster” ever seen on the Northeast coastline and worry about harm to the local fauna, including endangered species.

“This affects those who use the sea to navigate, those who use it to feed themselves, it affects tourism in these regions, it affects the economy,” David Zee, a professor in the faculty of oceanography at Universidade do Estado do Rio de Janeiro (Uerj), told the national daily O Estado de São Paulo on 8 October, noting that it could take 10 to 20 years for all the oil residue to be fully cleared away.

Greenpeace concerns and oil tenders

A spokesperson for Greenpeace Brasil told Reuters on 7 October that the federal government’s slow reaction to the oil spills (which were managed at state-level by local authorities and universities in the first weeks) is a worrying sign of its lack of preparedness in the face of such a damaging accident. This is particularly concerning, Greenpeace says, in light of the government’s focus on expanding offshore oil production. Brazil is planning to hold its biggest-ever tender for oil-exploration concessions in the deep water ‘pre-salt’ area on 6 November.

EL SALVADOR | Cracking down on corruption. On 10 January, El Salvador’s attorney general Raúl Melara ordered the arrest of former president of the legislative assembly Sigfrido Reyes (2011-2015) for leading a corruption network, laundering some US$6m in proceeds from fraud and embezzlement, and issued an arrest warrant. Melara announced the investigation on 9 December. Reyes becomes the first former president of the legislative assembly to face legal proceedings.

Along with 14 associates (10 arrested and four at large), Reyes, a member of the left-wing opposition Frente Farabundo Martí para la Liberación Nacional (FMLN), stands accused of benefiting from the sale of government property at cut down prices. Those arrested include his wife, Susy Melba Rodríguez, who claimed to be a “political prisoner”.

Reyes is thought to have left the country in November last year and is considered a fugitive from justice. President Nayib Bukele claimed that Reyes had travelled to Mexico en route to France or Russia.

On 13 January Melara ordered another investigation into corruption allegations in the 84-seat legislative assembly, this time implicating the right-wing opposition Partido de Concertación Nacional (PCN), which has nine deputies. This after reports emerged in the local media alleging that former PCN deputy Cristina López has received a payment of US$2,000 a month for the last eight months for “administrative cooperation” in spite of the fact she lives in the US. Three other former deputies and a colonel were also alleged recipients of irregular payments.

In July Costa Rica’s security minister Michael Soto confirmed that the country’s authorities had seized 4.3 tonnes (t) of cocaine in a single seizure. This is the country’s second biggest single haul after officials found 5.48t in February 2020 at APM Terminals port of Moín hidden in a container due to be shipped to The Netherlands. It once again illustrates Costa Rica’s significance as one of the primary destinations in the region for the transit of cocaine, owing to its strategic location, long stretches of coastline, and the relatively small size of its security forces.

Announcing the haul on 18 July, Soto said the drugs were seized at Gastón Kogan dock, Moín port, Limón province, during a routine inspection. He did not give further details but the local press reported that they was found in a container coming from Colombia. Soto said that with the latest drug seizure, authorities had so far confiscated 10.698t of cocaine this year.

According to the US State Department’s latest (March 2021) International Narcotics Control Strategy Report (INCSR), during the period January-October 2020, Costa Rica seized over 43t of cocaine, exceeding the record of 35.1t confiscated during the same time period in 2019. It adds that the Costa Rican government led by President Carlos Alvarado reports having disrupted over 17 international drug trafficking organisations in 2020. It underlines that “concerns of violence have intensified the government’s fight against drug trafficking, leading to greater police professionalisation, advances in community security programmes, and improved success in drug interdiction and disruption of drug trafficking” (see sidebar).

• JOC

The INCSR report on Costa Rica highlights as examples of this institutional strengthening, the fact that in 2019 Costa Rica established the country’s first-ever Joint Operations Centre (JOC), bringing together all major law enforcement entities and enhancing coordination of alerts, assets, and operations. It describes the new centre as the public ministry’s 24/7 command and control node for coordinating, directing, and monitoring joint law enforcement operations, and maintains continual communication with the US and other partner nation operations centres.

A new report from the Economic Commission for Latin America and the Caribbean (Eclac) has revealed that poverty and inequality have fallen under Mexico’s President Andrés Manuel López Obrador, who took office in December 2018.

The ‘Social Panorama of Latin America and the Caribbean 2023’ report, published on 23 November, details how total poverty fell from 37.4% in 2020 to 28.6% in 2022, while extreme poverty fell from 9.2% to 6.2% over that period, according to Eclac estimates. The report also says that the Gini index of inequality, which uses a scale of 0 to 1 with a lower score indicating lower inequality, has fallen from 0.464 in 2019 to 0.452 in 2021 and 0.441 in 2022. By way of comparison, the Latin American average decreased from 0.464 in 2019 to 0.449 in 2022. In addition, Eclac says that billionaires’ wealth as a share of the wealth of the country’s total population has fallen in recent years, from 4.5% in 2018 to 3.7% in 2019 and 2.7% in 2020 before a slight rebound to 3.3% in 2021.

The decrease in poverty is backed up by the findings of Mexico’s national council for the evaluation of social development policy (Coneval), which published its latest poverty estimations in August. Coneval found that the percentage of Mexicans whose income was lower than the cost of the basket of basic goods fell from 49.9% of the population to 43.5% from 2018-2022, a reduction of 5.7m people.

In terms of geography, the south of the country has higher rates of poverty than the north, with the ranking of poorest states in 2022 led by Chiapas, Guerrero, Oaxaca, and Puebla, which are all areas with sizeable indigenous populations. In contrast, Baja California Sur, Baja California, Nuevo León, and Chihuahua – all in the north of the country - had the lowest poverty rates. 

Some of Coneval’s findings are cause for concern. For example, the percentage of Mexicans living in extreme poverty, defined as those who cannot even afford sufficient food, showed a slight increase from 7.0% in 2018 to 7.1% in 2022, or 8.7m to 9.1m people. In addition, the percentage of the population without access to medical services increased from 16.2% in 2018 to 39.1% in 2022, although this period did coincide with the coronavirus (Covid-19) pandemic in which many Mexicans were forced to pay for private medical services as public facilities were overwhelmed, as well as López Obrador’s efforts to restructure the health service. 

Coneval went on to make a series of recommendations to further improve the situation in Mexico, including efforts to make sure those living in extreme poverty, who do not have access to social security, can receive funds from public programmes. It also recommends more efforts to create formal jobs, or the implementation of a universal social security system which does not require employer contributions, given that access to social security remains a significant issue. Coneval also recommends further efforts to organise a national health service.

Poverty reduction from 2018-2022 is impressive given the fact that the period coincided with the Covid-19 pandemic and the resulting economic contraction. One key factor is the minimum wage, which has been raised during each year of López Obrador’s administration and has doubled in real terms since 2018 with the latest increase to M$248.93 (US$14.61) per day, which came into effect at the start of 2024. While this is only a direct benefit to those working in formal jobs, it will also help boost pay for those in the informal sector.

A further 4.6m subcontracted workers are believed to have benefitted from a crackdown on the abuse of outsourcing in 2021, which some companies were using to avoid legally mandated profit sharing requirements [EB-21-04]. Plus in November 2022 changes to the social security law (LSS) came into force, making it compulsory for domestic workers to be enrolled into the Mexican social security institute (IMSS) to give them access to labour benefits [EB-22-12]. The changes had the potential to benefit almost 2.3m individuals who were working as domestic employees at the time, according to Mexico’s national statistics institute (Inegi).

Social programmes have also been a significant feature of López Obrador’s administration. The president particularly touts the benefits of his flagship Sembrando Vida tree-planting project and the Jóvenes Construyendo el Futuro apprenticeship scheme. However, the tangible impact of such programmes on poverty and inequality rates is difficult to determine. López Obrador slashed administration costs by reducing the total number of programmes and ending Prospera, a conditional cash transfer programme that was expensive to run. Another boon was the introduction of a universal pension for over-65s, which will be paid at a rate of M$6,000 every two months from 2024, doubling from 2021.

According to Coneval there would be 3.5m more people living in poverty and 2.4m more in extreme poverty if these transfers were not made. Many Mexican households have also benefitted from growth in remittances from migrants living abroad, which were worth a record total US$58.5bn in 2022 and are expected to have increased again in 2023.

Looking ahead, it seems likely that the poverty rate will continue to fall. Unemployment fell to 2.7% in November 2023, down from 2.9% in November 2022, and both GDP growth and economic activity increased. There are also further increases in both the minimum wage and pension payments set to be introduced in 2024 ahead of the general elections scheduled for June. In fact, under the proposed budget for 2024 pensions will be one of the biggest bills for the government at M$1.99trn, an 11.9% increase on 2023. This is equivalent to 21.9% of total government spending, or 5.8% of GDP, and this cost will only continue to increase as the population ages. In addition, the budget for the wellbeing ministry, which is responsible for managing and delivering direct transfers to the population such as pensions, is set to increase by 25.2% year-on-year to M$543.9bn under the proposed budget.

The cost of direct transfers has raised concerns over budgetary pressures for the next administration [EB-23-10] and many have questioned the true impact of López Obrador’s social programmes. While experts agree that these programmes do benefit the population, some would prefer to see investment in infrastructure, health, and education rather than a focus on cash payments.

Remittances to break record again

On 1 November President López Obrador noted that Mexico was forecast to receive more than US$63bn in remittances in 2023, which he called “an unprecedented record”. This would surpass last year’s total of US$58.5bn – the current record – by some US$4.5bn, or 7.7%. However, the spending power of those remittances has fallen in real terms due to the fact that the peso has appreciated 11% against the dollar since October 2022. Indeed, the value of remittances fell 2.3% in local currency and 6.3% in real local currency terms, Goldman Sachs analyst Alberto Ramos told Reuters in an article published on 1 December. Nonetheless, remittances are an important source of spending power for low-income households and are forecast to be worth 3.6% of Mexico’s GDP in 2023.

MEXICO | Sheinbaum unveils water investment. Mexico’s President Claudia Sheinbaum unveiled the national agreement for the human right to water and sustainability on 25 November. The agreement, which was signed by state governors, entrepreneurs, and other stakeholders, provides for the investment of M$9bn (US$436m) for the technification of irrigation by 2025, as well as actions to guarantee water as a national asset and a right for all Mexicans.

As part of the agreement, representatives from Mexico’s irrigation districts have committed to the voluntary return of 2,800m cubic metres of water – equivalent to the entire consumption of Mexico City for three years, according to a government statement. The industrial sector has committed to return 126m cubic metres of water, as well as to invest M$21bn in water efficiency, treatment and reuse in production processes and community works.

This comes after the president of Mexico’s water advisory council Consejo Consultivo del Agua, Raúl Rodríguez, expressed concern over a decrease in funding for Mexico’s national water commission (Conagua) in Sheinbaum’s 2025 budget proposal. Rodríguez said that Conagua’s funding had been slashed by approximately 43% in the budget proposal, which was unveiled on 15 November. He described this as a “brutal” reduction which would affect access to drinking water as well as infrastructure development, agriculture, and sewerage.

A 29 January ruling by Panama’s supreme court (CSJ) striking down a concession for two ports on the Panama Canal owned by Hong Kong-headquartered CK Hutchison Holdings (CKH) via its subsidiary Panama Ports Company (PPC) is widely considered a victory for the US, which has sought to curb Chinese influence in the region. It comes amid renewed signs of US-Panama cooperation after tensions last year stemming from President Donald Trump’s threat to retake control of the Panama Canal, citing Chinese influence, among other factors [SSR-25-02].

CKH’s concession, which US officials have long maintained is vulnerable to influence from Beijing, has emerged as a flashpoint in US-China tensions. In March 2025, CKH announced a deal to sell its stake in the Balboa and Cristóbal ports to a consortium led by US investment firm BlackRock Inc. However, this provoked resistance from Chinese antitrust authorities, after which the media reported talks were underway regarding the possibility of China’s state-owned shipping giant Cosco being granted a major stake. On 29 January however the CSJ issued a ruling in response to legal challenges filed last July by Panama’s comptroller general after an audit identified irregularities in the extension of the contract granted in 2021 to PPC, which has been operating the ports since 1997.

The ruling was blasted by China, which warned, without going into detail, that Panama would pay “heavy prices”, while CKH announced it would file arbitration proceedings against Panama. However, it has been hailed in Washington as another step in the gradual unwinding of Chinese influence in Panama – a process which began in February 2025, when Panama became the first country to withdraw from China’s Belt and Road Initiative which it had joined in 2017, after switching ties that year to Beijing from Taiwan. Ties were then further boosted with the US in April 2025 with a memorandum of understanding (MoU) which “formalized the use of designated facilities for joint rotational training and the protection of the Canal against malign influence”, albeit while drawing complaints domestically that Panama had ceded sovereignty to the US.

Since then, on 28 January, in a report published on its news website Diálogo Américas, the US Southern Command (Southcom) declared that as of the start of 2026, Panama and the US had reached a “historic high point” in their security and defence alliance. As well as the April MoU, the Diálogo Américas report highlighted that in the same month Panama and Southcom co-hosted the Central American Security Conference (Centsec), focusing on combined maritime operations and cybersecurity, while over the past five years, the US has provided over US$230m in security assistance to Panama.

• Security claims

A 2 February Diálogo Americas report states that throughout 2025, Panama “solidified its standing as a strategic leader in hemispheric security”, stating that that by “integrating advanced technology, institutional leadership, and a sophisticated network of international alliances, Panamanian security forces achieved historic victories against transnational criminal organizations (TCOs) across air, sea, and land”. Citing data from Panama’s security ministry, it said that authorities seized more than 118 tonnes (t) of illicit substances in 2025, including cocaine, marijuana, methamphetamine, ecstasy, and ketamine. It states that nearly 80 t of the total volume was cocaine, and references the record drug seizure in November 2025 [SSR-26-01].

Huawei controversy

On 11 June the US embassy in Panama announced the US government would replace telecoms equipment of Chinese firm Huawei installed at 13 sites across Panama with “secure American technology”. According to the embassy, the US$8m US-funded project, which is being carried out in partnership with Panama’s public security ministry (Minseg), will also add seven new communications towers in four provinces and, once the project was completed, Panama’s security forces “will be able to control and manage their own telecommunications systems – strengthening shared security and the U.S.-Panama partnership”. However, the announcement was controversial, prompting President José Raúl Mulino to call on the US embassy to refrain from public announcements on domestic issues. Minseg also issued a statement clarifying that the deal to which the US embassy was referring dated back to 2017, as part of an investment plan to improve the communications system of the national border service (Senafront), inter alia. 

SPECIAL BULLETIN

TO: All Strategic Intelligence Forum members

FROM: Alex Standish, Editor, Strategic Intelligence Review

DATE: 4 November 2007

SUBJECT: NUCLEAR-ARMED PAKISTAN ON BRINK OF CHAOS

In our recent analysis of the deteriorating situation in Pakistan (see SIR 1 November) we warned that one of the courses open to President Pervez Musharraf would be to declare a state of emergency. Two days later, he did just that, leaving the country on the brink of chaos, with the risk that January’s parliamentary elections may have to be abandoned.

Musharraf’s suspension of the constitution and his declaration of a state of emergency look very much like the last throw of the dice for a leader whose grip on power is steadily slipping away. He is taking an enormous risk by launching a pre-emptive strike against Pakistan ’s senior judiciary.

As we pointed out earlier this week, the Supreme Court was in the midst of considering two specific issues: whether the general was constitutionally eligible to stand for re-election as president and whether Pakistan’s Prime Minister Shaukat Aziz was in contempt of court following his role in the arguably unlawful deportation of former premier Nawaz Sharif in September? A negative verdict against either Musharraf or Aziz would have been seen as further undermining the regime. In the event, the president seems to have lost his nerve by moving against his own Supreme Court justices before either issue could be decided.

Chief Justice Iftikhar Muhammad Chaudhry, regarded by many Pakistanis as a national hero from his role in resisting Musharraf’s bid to dismiss him unconstitutionally, has now been deposed following his refusal earlier today to endorse the state of emergency. His replacement, Hameed Dogar, is a well-known Musharraf loyalist who can be expected to rubber-stamp the general’s decrees. However, given the mass support Chaudhry received across the country earlier this year during his battle with the president, it is unlikely that the chief justice will go quietly, even though the army has placed him under house arrest.

The latest developments will have dashed Washington ’s hopes of a gradual transition back to democracy in Pakistan . It also seems likely that any deal negotiated with former prime minister Benazir Bhutto ahead of parliamentary elections scheduled for January 2008 will have come off the rails. Bhutto and her Pakistan People's Party (PPP) will hardly want to be seen endorsing Musharraf’s latest manoeuvre.

This leaves the general staring into a political abyss. Although unqualified support from the Bush administration is long past, a workable agreement to hold democratic elections with the PPP taking part would have allowed the US to endorse the outcome of the poll without being seen to back a leader who is already deeply unpopular at home. As we have highlighted in recent issues of SIR, recent opinion polls suggest that around 64% of respondents were already opposed to Musharraf standing for a further presidential term (see SIR 11 October). In the aftermath of what many commentators are describing as a second “coup d’état” his unpopularity can be expected to mount, raising the prospect of mass demonstrations and the risk of widespread violence.

By declaring a state of emergency and interfering with the Supreme Court, Musharraf will face escalating opposition from pro-democratic campaigners and rival politicians – as well as making it increasingly difficult for the West to continue supporting him. However, he is also facing a rising tide of violence from Islamist militants seeking revenge against the regime in the aftermath of the storming of Islamabad ’s Lal Masjid (Red Mosque) in July. Terrorist bomb attacks are increasing in frequency and even the army command in Rawalpindi was targeted last week.

Since the general is facing increasing pressure from all sides, the fear is that he will retreat behind a repressive military regime, ruling by decree. Although Pakistan is not Burma ( Myanmar ), there could be disturbing parallels and the prospect of a nationwide campaign of repression against the civilian opposition parties.

Next step martial law?

So far, Musharraf has merely suspended the constitution. He has yet to impose martial law, although that cannot be ruled out, particularly if his opponents take to the streets again, as many of them did during his attempt to oust the chief justice earlier this year. Pakistan is undoubtedly facing a major crisis. The unknown question is whether this will escalate into a full-scale political meltdown, direct army rule, and serious loss of life, particularly in key Bhutto strongholds such as the city of Karachi .

Our concern is that widespread instability is likely to boost popular support for Islamist militants as well as for pro-democracy movements. This in turn could provide fruitful recruitment opportunities for Al-Qaeda and its allies in Pakistan , as well as having the potential to further destabilise neighbouring Afghanistan . Since Pakistan is the world’s only Muslim state possessing nuclear weapons, any slide into a state of chaos would raise very serious concerns for the entire region and beyond – a risk that the US is unlikely to be willing to tolerate.

END

MEXICO | Orígenes de la elite. Inmediatamente después de la Revolución Mexicana, todos los presidentes mexicanos fueron generales revolucionarios. Eso cambió en 1946 cuando Miguel Alemán Valdés, el hijo de un general, se convirtió en el primer presidente civil del México moderno. Desde él hasta el Presidente Carlos Salinas (que asumió el poder en 1988), todos los presidentes fueron graduados en derecho de la Universidad Nacional Autónoma de México (Unam). Salinas fue un graduado en economía de la Unam. Su sucesor, Ernesto Zedillo (1994-2000), fue un graduado del Politécnico, mientras que el primer presidente del Partido Acción Nacional (PAN), Vicente Fox (2000-2006) fue un maduro graduado en marketing de la Universidad Iberoamericana. El actual presidente, Felipe Calderón, es un graduado de la Escuela Libre de Derecho. Lo interesante es que Calderón ha convertido en hábito designar a graduados en economía  del Instituto Tecnológico Autónomo de México (Itam), la mayoría de los cuales también tienen un segundo título de universidades de EU, en su gabinete. Sus nuevos designados en el gabinete, Meade y Chertorivski, son graduados en economía del Itam. También lo es el gobernador del Banco de México, Agustín Carstens. El Itam desde hace tiempo se ha especializado en políticas públicas. Las escuelas de economía rivales como el Instituto Tecnológico de Monterrey, que se concentra en el entrenamiento de empresarios, y la Unam, que aún es más que levemente Marxista, ahora son menos influyentes políticamente.

MEXICO | Producción industrial. En julio, la producción industrial se elevó en 3,2%, año en año, informó el instituto nacional de estadísticas, Inegi. Eso fue menos de lo que los economistas independientes esperaban: ellos habían predicho un crecimiento de 3,8%. Las manufacturas by la construcción tuvieron un buen desempeño en julio, elevándose en 4,8% y 4,1% respectivamente. La minería tuvo malos resultados, cayendo 3,2% debido a una caída de 4,3% en las actividades no-petroleras y una caída de 3% en la producción de petróleo. El gobierno está advirtiendo que revisará su pronóstico de crecimiento del PIB para 2011, cayendo de su actual nivel de 4,3%.

Development: Presidents Hugo Chávez of Venezuela and Mahmoud Ahmadinejad of Iran fired a barrage of insults at the US from Caracas on 9 January, amid rising tensions between the US, Europe and Iran over Iran’s nuclear ambitions.

Significance: Chávez defended Iran against “US warmongering”, noting, "Iran hasn't invaded anyone. Who has dropped thousands and thousands of bombs ... including atomic bombs?”  Ahmadinejad quipped that if he and Chávez were building something like a bomb, "the fuel of that bomb is love". Chávez also took the opportunity for a bit of electioneering, reminding the Venezuelan electorate that the choice on October 7 next is between “the motherland or the colony”. He added that the US decision to declare persona non grata a Miami-based Venezuelan diplomat was “yet another demonstration of the high handedness of the ridiculous empire”.

Key points:

• Chávez gave his full support to Ahmadinejad on a day when the US and Europe expressed renewed concern about Iran’s nuclear programme after the 9 January confirmation by the International Atomic Energy Agency (IAEA) that Iran had begun enriching uranium to up to 20% cent in its new Fordo plant – a fortified mountain bunker southwest of Tehran. Yesterday, Ali Asghar Soltanieh, the Iranian envoy to the IAEA, said the reactions by the West were “exaggerated and politically motivated”. Iran also announced on 9 January that a US citizen detained in Iran on spying charges could be executed.

• Victoria Nuland, a US State Department spokesperson, said yesterday that the US government "did not take lightly" the decision to expel Venezuela's consul-general in Miami, Livia Acosta Noguera. "We do not act flippantly when we declare somebody persona non grata”, Nuland stated, but she refused to explain the specifics of the case. Chávez defended Acosta, saying she had been “attacked, vilified and Satanized”. He said Acosta had been brought back to Caracas in December, on fears for her personal safety.

• According to the official press release, Chávez and Ahmadinejad signed a series of bilateral agreements on industry, science, technology and political cooperation. Chávez reported that up to 21,000 new homes will be completed locally thanks to Iranian cooperation, along with 26 new agri-food plants, milk processing plants, maize plants and tractor factories.

• The two leaders will attend Daniel Ortega’s presidential swearing-in ceremony in Managua, Nicaragua, today (10 January).

On 15 May in Brasília the Argentine and Brazilian foreign ministers firmly rejected a suggestion by their Spanish counterpart that the stop-start trade talks between the European Union (EU) and the Southern Common Market (Mercosur) go ahead without Argentina.

Spain’s foreign minister, Jose Manuel García-Margallo, was due in Brasília on16 May for talks with his counterpart Antonio Patriota. Speaking alongside Argentina’s Héctor Timerman, Patriota said the idea was “inconceivable”, stressing that there was “no other hypothesis” to bilateral (bloc-to bloc) talks. Timerman added, “We lament the Spanish foreign minister’s attitude. It seems like we are returning to colonial times, when Spain decided.” The same day in New York, the Spanish oil company Repsol sued Argentina for breach of contract, seeking unspecified damages over its recent seizure of Yacimientos Petrolíferos Fiscales (YPF).

While Patriota and Timerman put on a united external front, there is nothing but disunity inside Mercosur; the two men again agreed to disagree on their respective trade barriers, as President Cristina Fernández reported that Argentina posted a US$4.7bn trade surplus in the first trimester.

Days of unfruitful talks between lower level officials took place prior to the meeting between Patriota and Timerman. Brazil is again losing patience with Argentina’s convoluted efforts to engineer a trade surplus. On 14 May Brazil announced that it would end automatic import licensing for about 10 perishable products including apples, some cheeses, potatoes, raisins, selected wines and wheat flour. The measure applies to all countries, but was immediately interpreted as retaliation against Argentina. Key Brazilian perishable exports like pork have been subject to similar Argentine measures for an extended period.

Latest trade figures begin to flatten out

In the first four months of 2012, Brazil’s average daily exports to Argentina fell 11.7% year-on-year in volume terms and 7.1% in value terms (to US$5.9bn from US$6.5bn in the same period of 2011), on latest available figures from Brazil’s development, industry and external trade ministry (MDIC). Its imports from Argentina fell 7.3% in the same period (to US$4.9bn from US$5.2bn), meaning that Brazil still posted a small trade surplus with Argentina, of just under a US$1.0bn. Brazil posted a hefty US$5.8bn overall trade surplus with Argentina in 2011.

The increasingly isolated Argentina needs to retain Brazil’s political support, not least against Spain and the EU over the Repsol-YPF affair, and so Timerman pledged that the various restrictions on Brazilian imports would be dealt with on a case by case basis, starting with the pork sector. The two men agreed to set up a bilateral commission to supervise bilateral trade. “The idea of this working meeting…is to help reduce the commercial deficit that Brazil has with Brazil”, Timerman said cryptically. The committee will hold a first meeting in June; “with the objective of reducing Argentina’s commercial deficit”, underlined Timerman.

Only last year, Presidents Dilma Rousseff and Cristina Fernández asked their respective trade ministries to do likewise, under a bilateral framework whereby ministry officials would meet every month to discuss cross border commerce. Clearly, that forum hasn’t been a total success. Moreover, back in Buenos Aires, Argentina’s tough-talking domestic trade secretary, Guillermo Moreno, the author of most of the trade barriers, was less amenable, stating that the quotas placed on Brazilian imports would be resolved “naturally” once Brazil began to import more Argentine products. Moreno argues that Argentina has the capacity to export US$2.0bn worth of additional goods to Brazil (citing by way of example citrus fruits, grapes, fish and pharmaceuticals).

Timerman also revealed that Argentina, which is the current chair of Mercosur, intends to propose to the Mercosur council that Mercosur ask the World Trade Organization (WTO) for permission to raise its common external tariff for certain products to the maximum allowed ceiling (of 35%) under WTO rules (see sidebar).

The perennial problem in Mercosur is that the two dominant members, Argentina and Brazil, interpret the bloc’s rules to suit themselves, using them more as loose guidelines, usually to the detriment of the smaller partners, Paraguay and Uruguay, which are heavily dependent on trade with their big neighbours. Argentina and Brazil also negotiate disputes directly between themselves at the highest political levels, undermining Mercosur’s still underdeveloped institutional framework. Despite paying lip service to the need to strengthen this framework, neither country has consistently shown the political will or leadership necessary to that end. Meanwhile the two minnows, Paraguay and Uruguay, complain on the sidelines but are effectively powerless.

Businessmen seek solutions

A 580-strong delegation of Argentine businessmen led by foreign and the domestic trade, Guillermo Moreno and Beatriz Paglieri respectively, met Brazilian entrepreneurs in São Paulo in early May. Moreno said that the goal of the meeting, organised by the Argentine government and São Paulo’s Industry Federation (Fiesp) was “to develop new business opportunities and obtain a more balanced bilateral trade by diversifying the products traded and promoting the integration of production chains in the two countries”.

Ahead of the meeting Fiesp released a study in which it found that 24% of Brazilian firms did not import any products from Argentina because of a “lack of knowledge”. However the study also found that 45% of 221 Brazilian firms polled considered that substituting their current imports for Argentine imports would be “viable or very viable” in the next five years. Paulo Skaf, the Fiesp president, said that the study showed that Brazilian firms “could buy more from Argentina”. Skaf has previously been very critical of Argentina’s behaviour in Mercosur. Paglieri said the meeting allowed Argentine businessmen to establish valuable contacts, and, like Moreno, stressed that “Argentine businesses have the capacity to compete in the Brazilian market”.

Costa Rica has once again denounced Nicaragua for ignoring a World Court ruling regarding the disputed area next to the lower reaches of the San Juan River. Foreign relations minister, Enrique Castillo, told the recent 67^th UN General Assembly that it could only rely on respect for international law for its defence.

Castillo said that Nicaragua had continued to post personnel to the disputed area, despite the March 2011 ruling of the International Court of Justice barring both countries from doing so until it had ruled on the substance of the dispute. Costa Rica has repeatedly accused Nicaragua of provocative actions in the area of the lower San Juan River.

Nicaragua for its part, has taken Costa Rica to the Central American Court of Justice over its plans to build a highway along the Costa Rican side of the river (not in the disputed area). Costa Rica does not recognise the jurisdiction of the Central American court.

In August Carlos Argüello, Nicaragua’s representative before the ICJ, said that Costa Rica and Colombia are intent on "appropriating" any possibility of an inter-oceanic canal through Nicaragua. He said this is what really lies behind the suits Nicaragua is fighting against both countries before the ICJ. Costa Rica, he claims, wants to "appropriate" the San Juan River, which belongs to Nicaragua and is one of the possible routes of the canal.

VENEZUELA | Telefónica investment. On 5 February Spanish telecoms giant, Telefónica, announced that it plans to invest US$790m in Venezuela this year as it prepares to launch its fourth generation (4G) mobile phone service in the country in a bid to consolidate itself as the main provider. The announcement was made by Telefónica Venezuela president, Pedro Cortez, who said that Telefónica’s mobile phone service branch, Movistar, had become the leading provider of services oriented to smartphones in the country. According to Cortez, Venezuela has “one of the largest if not the largest penetration of smartphones in the Americas”, pointing out that two out of every 10 mobile phones in the country are smartphones. He added that last year 1m Venezuelans acquired a smartphone with Movistar, a 30% increase from the previous year, which means that currently 55% of smartphones or 3.2m customers are contracted to Movistar.

Cortez said that Telefónica now has a 33% stake in Venezuela’s entire mobile phone services market and that the planned introduction of 4G technology would be a way of consolidating this position. He explained that the investment will consist of two main areas: the setting up of the new network that will allow for faster transmission of data; and the development of the transmission infrastructure which would allow the company to provide the new technology to its clients. In this sense, Cortez revealed that Telefónica was currently waiting to hear back from Venezuela’s national telecommunications commission (Conatel) about its request for new airwave frequency slots, pointing out that something within the 20 megahertz spectrum would be the minimum requirement for the system to work.

ECUADOR | Record public investment. Public sector investment in Ecuador in 2012 reached US$6.3bn, a new record, according to the country’s national planning and development ministry (Senplades). The head of Senplades, Fander Falconí, said that public sector investment in Ecuador had sextupled in the last six years turning Ecuador into the country in Latin America with the “largest levels of investment as a percentage of GDP”, followed by Bolivia, Panama and Mexico. According to Falconí, Ecuador’s public investment/GDP ratio in 2011 was 14%, while in 2012 it rose to 15.3% and is expected to rise to 16.6% by the end of this year.

Falconí highlighted that the Ecuadorean State has shown that it has the political will to “channel these public investments so that it becomes an engine for growth”. He pointed out that the majority of the investment is aimed at strategic projects such as the “construction of productive infrastructure and human capacities”, which in the past were “not given consideration” by Ecuadorean governments that sunk the majority of their funds into paying the foreign debt.

After President Rafael Correa assumed office in 2007 the Ecuadorean government conducted a general audit of its onerous international debt and decided to suspend the payment on certain obligations that were considered to be “illegitimate”. As Ecuador prepares to hold general elections on 17 February, in which Correa is seeking re-election, the presentation of the figure by Falconí looked like a defence of the Correa government’s management of the economy. Falconí added that the government’s public investment plans had helped to reduce poverty figures in the country. He said the majority of public spending was “oriented” towards social areas which allowed the country to reduce poverty from 36.7% in 2007 to 23.5% in 2012, while extreme poverty fell from 16.5% to 9.4% in the same period.

COLOMBIA | Inching towards unemployment target. The overall unemployment rate in 2012 was 10.4%, according to Colombia’s national statistics department (Dane). Dane director Jorge Bustamante said the figure was 0.4 percentage points lower than in 2011, making it the lowest rate in the past 11 years.

President Juan Manuel Santos has said that one of his objectives is to bring Colombia’s stubbornly high unemployment to single digits before the end of his current four-year mandate in 2014. Yet, despite the fact that the Colombian economy has posted strong economic growth in recent years this goal has eluded the government. However, Bustamante also revealed that the national unemployment figure for the month of December stood at 9.6%, bringing it to a single digit for the first time since Santos took office in 2010. This was hailed by Santos, who via Twitter celebrated that “We closed the year with a single digit unemployment rate… this means that this government has created more than 2m jobs”.

• Bolivia rejects investment proposal

The Bolivian government has formally rejected the US$36m investment proposal presented by Spanish firms Abertis and Aena for their local subsidiary, Servicios de Aeropuertos Bolivianos (Sabsa) - the country’s main airport operator. In January the Bolivian government had warned the Spanish firms that it was unhappy about the level of investment at Sabsa and that it was considering taking over the company, unless changes were made. Abertis and Aena submitted their proposal in the hope of avoiding this. However, Bolivia’s public works minister, Vladimir Sánchez, said that after looking at the plan, “we are not happy; the projected investment is too low”. According to Sánchez, the government will announce its final decision on Sabsa by the end of this month.

Development: On 30 April Venezuelan opposition deputies claimed that nine legislators were injured, with one temporarily hospitalised, after fresh violence broke out in the national assembly.

Significance: President Nicolás Maduro last night denounced the violence, which he blamed on the opposition and warned of measures by the national assembly president, Diosdado Cabello, to ensure it is not repeated. He called for tolerance. The opposition says it is concerned that Cabello, who has denied the opposition the right to speak in parliament pending their recognition of the new Maduro government, is seeking an excuse to dissolve parliament; although given that the ruling Partido Socialista Unido de Venezuela (PSUV) has a majority, it would have little to gain politically from such a controversial move.  The defeated opposition presidential candidate, Henrique Capriles Radonski, who is still considering whether to mount a legal challenge to contest the 14 April election ahead of the 6 May deadline for doing so, last night Tweeted:“Nicolás Maduro wants to convert our country into a circus and not of Soleil! But a circus of violence and barbarity” (in allusion to Maduro’s earlier attendance to a Cirque du Soleil show in Caracas).

Capriles called on the opposition to march in peace today, Labour Day. Maduro has also called for a large mobilisation of government supporters today, risking further potential flashpoints.  There is still no sign of any reduction in the high tensions between the two sides and no sign of the mooted political talks between Maduro and Capriles.  Maduro seems happy to allow the radical face of the Revolution to remain to the fore for now, while he asserts a working control over the administration.

Key points:

• According to the opposition, the following deputies were injured: Julio Borges, María Corina Machado, Américo de Grazzia, Nora Bracho, Ismael García, Eduardo Gómez Sigala, Homero Ruiz, Luis Barragán and Abelardo Díaz. Borges, who along with Capriles was one of the founding members of Primero Justicia, and Corina (an independent), later appeared on the main opposition channel, Globovisión, with bloodied faces to denounce the violence.

• It is unclear what triggered the incident. PSUV deputies said it started when opposition legislators shouted "fascist" at Cabello and unfolded a protest banner reading "parliamentary coup” after the majority bloc voted to continue denying the opposition the right to speak until it recognises Maduro. Cabello has sanctioned the opposition for its refusal to recognise Maduro, refusing to allow deputies to speak in the house, stripping the opposition of committee leaderships, and even threatening to stop legislators’ pay until they accept the new government.

REPÚBLICA DOMINICANA | Alivio cuantitativo. El 8 de mayo el banco central de la República Dominicana redujo el requerimiento de relación de reservas para las instituciones financieras que operan en el país por 3,5 puntos porcentuales, para así liberar unos RD$20mm (US$487m) en la economía local en un esfuerzo por estimular la actividad económica. En una declaración, el banco dijo que la decisión fue tomada en su última reunión de política monetaria, y se debe al hecho de que los indicadores económicos del primer trimestre habían mostrado una “mayor desaceleración que lo esperado”. Según las cifras oficiales del banco, el crecimiento real del PIB en el primer trimestre fue de un poco menos del 1% año en año.

De acuerdo con el banco, la desaceleración se debe en parte a la implementación de la nueva reforma fiscal. La reforma incrementó el impuesto sobre productos industriales (Itbis), que es aplicado a todo un rango de productos que van desde maquinarias hasta alimentos procesados y bebidas. Como tal, el incremento en el Itbis fue controversial, con las empresas y los consumidores por igual.

El gobierno liderado por el Presidente Danilo Medina también ha prometido promover el desarrollo de pequeñas y medianas empresas (Pymes) y cualquier sostenida desaceleración en la actividad económica golpearía duramente a este sector. Intencionalmente el presidente del banco central, Héctor Valdez Albizu, dijo que él esperaba que los fondos extras sean canalizados hacia la los sectores locales de la agricultura la construcción y sectores comerciales, y que el banco se asegurará de que las Pymes sean las beneficiarias del los nuevos créditos. Según Valdez Albizu, una nueva unidad de ‘seguimiento’ en el banco central trabajará para asegurar que el crédito llegue a los sectores indicados.

Este paquete de estímulo del crédito fue anunciado justo un par de días después de que el gobierno dijo que gastaría RD$9mm para estimular la actividad en el sector de la construcción, comenzando desde el 6 de mayo. El ministro de finanzas, Simón Lizardo Mézquita, dijo que el gasto extra era posible gracias a las anteriores medidas de austeridad adoptadas por el gobierno de Medina, en conjunto con un incremento en la toma fiscal como resultado de la nueva reforma fiscal, que permitieron al gobierno sobrepasar sus metas fiscales y crear RD$15mm de fondos “libres” ene l primer trimestre del año.

Comentando sobre las medidas conjuntas tomadas por el banco central y el gobierno, el ministro administrativo presidencial, José Ramón Peralta, dijo el 10 de mayo que el gobierno esperaba que las medidas den a la economía un “impulso sin precedente”. El sector comercial local estima que podrían ayudar a impulsar el crecimiento real del PIB  a un 3% en el 2013.

NICARAGUA | Liberalizando los puertos. La unicameral Asambela Nacional de Nicaragua aprobó el 14 de mayo una nueva ‘Ley General de Puertos’, que abre por primera vez la vía para la inversión privada en los puertos marítimos y de ríos del país. Actualmente, todos los puertos son propiedad de y manejados por la Empresa Portuaria Nacional (EPN), que no ha logrado realizar la inversión necesaria para expandir la infraestructura portuaria.

Aunque Nicaragua tiene más de 500kms de costa sobre el Mar Caribe y unos 300kms sobre el Pacífico, tiene solo un gran puerto marítimo adecuado para el comercio –el puerto de Corinto, sobre el Océano Pacífico, en el departamento de Chinandega. Para los embarques desde la costa caribeña, Nicaragua ahora depende del puerto Cortes en Honduras y el gran puerto de Limón en Costa Rica. Según Jenny Ramírez, la presidenta de la comisión de infraestructura de la Asamblea Nacional, la ley apunta a crea “una nueva institucionalidad portuaria”.

Aunque los puertos aún estarán administrados por la EPN, las firmas privadas podrán solicitar concesiones por hasta 20 años para construir nuevos puertos u operar los ya existentes. Además, la ley también provee a la Asamblea Nacional el poder de aprobar la construcción de nuevos puertos de aguas profundas. El presidente ejecutivo de la EPN, Virgilio Silva, dijo que él tenía la esperanza de que la nueva legislación proveería incentivos para que las firmas extranjeras inviertan en nuevos puertos de aguas profundas, particularmente en la costa caribeña, para así “mejorar las oportunidades para los exportadores [nicaragüenses], ayudando a reducir los costos”.

• Panamá se une al Sieca

El 6 de mayo, una delegación panameña sometió la ratificación del país de un protocolo del tratado de integración económica centroamericano, el paso final para formalizar la entrada del país al Sistema de Integración Económica Centroamericano (Sieca). El ingreso de Panamá a Sieca y al Mercado Común Centroamericano (MCC), compuesto por Costa Rica, Guatemala, El Salvador, Honduras, y Nicaragua, fue aprobado por los cinco miembros del MCC en junio del 2012. Una declaración del Sieca señaló que la participación de Panamá en el MCC que en el 2012 importó US$421,6m desde Panamá y exportó US$913,2m hacia Panamá, ayudaría a fortalecer “el crecientemente dinámico” MCC.

Chile ha montado interesantes debates durante los últimos dos fines de semana antes de las elecciones primarias del 30 de junio; llamativos no debido al contenidos sino debido al tono. La elección primaria dentro de la opositora Concertación ha sido calificada como un paseo fácil para la ex presidenta, Michelle Bachelet (2006-2010), la clara favorita para triunfar no solamente este fin de semana, sino también en las eventuales elecciones presidenciales de noviembre. El hecho de que sus rivales tienen una mayor intención de discutir entre sí en lugar de hacerle frente a ella, demostró la importancia de terminar segundo para elevar el nivel de influencia dentro de la campaña presidencial de Bachelet. Los dos hombres que buscan la candidatura de la gobernante Coalición por el Cambio, por su lado, parecen haber firmado un pacto de no agresión, prometiendo trabajar juntos, cualquiera sea el resultado, para derrotar a Bachelet en noviembre.

Bachelet sonrió serenamente mientras Andrés Velasco, un independiente que sirvió como su ministro de finanzas, y Claudio Orrego, quien se presenta por el Partido Demócrata Cristiano (PDC) de centro-izquierda, concentraron su poder de fuego uno sobre el otro. Velasco dijo que Orrego representa a la elite del partido, feliz de hablar acerca del cambio pero con un escaso récord de producirlo; Orrego dijo que Velasco no tiene experiencia política (obviando su previa alta posición ministerial en el gabinete) y que está cortado en la misma medida que los tecnócratas con los cuales el Presidente Sebastián Piñera ha llenado su gabinete, sin ninguna habilidad para relacionarse con el público.

El feroz intercambio entre Orrego y Velasco ha hecho que algunos comentaristas a preguntarse porqué Bachelet Salió más o menos impune en el debate. La probable respuesta a esto es que Orrego y Velasco han aceptado que la ventaja de Bachelet es insuperable y están empujando por el segundo lugar junto con José Antonio Guzmán, el presidente del Partido Radical Socialdemócrata (PRSD).

Llegar en segundo lugar es más significativo de lo que parece. Las posiciones finales, y los votos obtenidos por los candidatos perdedores, tendrán relevancia sobre la campaña presidencial que Bachelet conducirá después de las primarias. Si Orrego logra un buen desempeño, por ejemplo, Bachelet tendrá pocas opciones más que hacer gestos al PDC. Si él tiene un mal desempeña, y Velasco llega segundo, esto le dará a Bachelet mayor libertad para proseguir con su estrategia actual de tratar de establecer buenas relaciones con la izquierda radical, el Partido Comunista de Chile, puesto que el PDC habría perdido influencia.

Dado que se predice ampliamente que Bachelet ganará confortablemente, entusiasmar y movilizar a los partidarios será un desafío real para el PDC. Sin embargo, como el partido más grande en la Concertación, el PDC tiene una impresionante maquinaria partidaria. Esto es algo que Velasco palpablemente carece, pero sin tener intereses partidarios arraigados él puede más creíblemente alegar que él cumplirá su promesa de cambio (ver más abajo).

Debate en la Derecha

El debate dentro de la Coalición por el Cambio (CC) fue un asunto más anodino. Andrés Allamand, de la centro-derechista Renovación Nacional (RN), había estado enzarzado en una cáustica pelea con Laurence Golborne, el candidato de la derechista Unión Demócrata Independiente (UDI) a comienzos de este año por la candidatura de la CC, hasta que el último fue forzado a hacerse a un lado ante vergonzosas revelaciones [IL-13-17].

El nuevo abanderado de la UDI, Pablo Longueira es, como Allamand, un político veterano. Los dos nunca se han realmente enfrentado, posiblemente calculando que los debates (un nuevo rasgo) no capturarán la imaginación popular y, como tal, tendrán poco impacto sobre el público. Después de la divisionista pelea Golborne-Allamand al parecer ellos tienen más la intención de demostrar la unidad de propósitos dentro de la CC en preparación para la pelea que se avecina con Bachelet en noviembre.

Estallan las protestas antes de las primarias

Docenas de escuelas designadas como locales de votación para las elecciones primarias del 30 de junio han sido ocupadas por estudiantes, aunque el gobierno insiste en que serán desalojadas a tiempo para las votaciones. Decenas de miles de manifestantes participaron en una movilización nacional, organizada por la Confederación de Estudiantes de Chile (Confech), el 26 de junio, la más grande manifestación tuvo lugar en Santiago.

Estudiantes universitarios y secundarios han estado protestando periódicamente desde el 2011, para exigir educación gratuita y el fin de las universidades con fines de lucro. Ellos han montado cuatro tales protestas hasta ahora en el 2013. Estas demonstraciones, sin embargo, han sido diferentes, pues han recibido el apoyo, entre otros, de la Central Unitaria de Trabajadores (CUT), de la Federación de Trabajadores Portuarios, y de la Confederación de Trabajadores del Cobre (CTC), una importante confederación que incluye a los trabajadores contratados del gigante del cobre del estado, Codelco, quienes cerraron algunos puertos y minas y presionaron por sus propias agendas, tales como mejores salarios y derechos de los sindicatos.

Muchos de los manifestantes hallaron una causa común en pedir la 're-nacionalización' de la industria del cobre de Chile, con los estudiantes alegando que "La educación gratuita en Chile es posible porque tenemos cobre".

Las protestas fueron en gran medida pacíficas, aunque una pequeña minoría de manifestantes encapuchados chocaron con los Carabineros, quemando barricadas montadas en la capital, y fueron dispersados con gases lacrimógenos y cañón de agua.

• Velasco

Andrés Velasco alega que la reforma constitucional es esencial, incluyendo un cambio al sistema electoral bi-nominal, que él afirma que es obsoleto. Velasco, educado en Harvard, fue coautor en diciembre del 2011 del libro titulado "Contra la desigualdad", que sirvió como un manifiesto electoral adelantado. La premisa central del libro es que la desigualdad del empleo amplifica la desigualdad de ingresos. El libro propone políticas económicas que promuevan el acceso a empleos, especialmente en los sectores más pobres; ampliando los subsidios para trabajadores jóvenes; y abrir el mercado laboral a las mujeres.

• Alianza del Pacífico

El 20 de junio la agencia de promoción de exportaciones de Colombia, Proexport Colombia, dijo que Chile fue el que más se había beneficiado de la primera ronda de negocios patrocinada por el bloque de comercio regional de la Alianza del Pacífico, que tuvo lugar en Cali, Colombia. De acuerdo con las cifras de la agencia, US$90,8m en acuerdos de negocios fueron concretados durante el evento de dos días que comenzó el 22 de junio, con Chile asegurando el 31% de todos los acuerdos, seguido por Colombia (26%), Perú (22%), y México (21%). El sector que produjo el mayor nivel de potenciales acuerdos fue el sector de alimentos (53%), seguido por manufacturas (25%), textiles (13,8%), y servicios (7,1%).

El ministro del interior, Wilfredo Pedraza, acusó a la justicia la semana pasada de dos perversas resoluciones, que él afirmó que son inconsistentes con los esfuerzos del gobierno del Presidente Ollanta Humala para combatir el tráfico de drogas y el terrorismo y mantener la ley y el orden. Pedraza reaccionó con fuerza contra una resolución que permitió la liberación de 16 personas arrestadas por sospechas de colaboración con las guerrillas de Sendero Luminoso (SL) en el Valle de los Ríos Apurímac, Ene y Mantaro (Vraem); y otra resolución que dejó libres a 63 personas acusadas de desórdenes violentos cuando la policía trató de cerrar el mercado callejero de La Parada, en Lima, el pasado octubre.

El juez que tuvo a su cargo la audiencia del caso del Vraem no tardó más de 48 horas en concluir que no existía suficiente evidencia para condenar a los 16 acusados. Este fue un serio revés para el gobierno, que había pregonado los arrestos el mes pasado en  una operación conjunta policial-militar como un progreso en sus esfuerzos por debilitar a SL apuntando a sus redes de apoyo en el área y cortando sus fuentes de financiamiento.

Pedraza implicó que el juez no había dedicado el tiempo suficiente para considerar “muchos meses de trabajo”, alegando que la evidencia presentada era sólida. La evidencia estaba basada en testimonios de ex miembros de SL en el Vraem, quienes reconocieron  a los arrestados como personas que habían proveído alimentos, medicinas, refugio, armas, y logística de todo tipo a las guerrillas. El abogado de los acusados dijo que eran testigos no confiables que proveyeron información genérica. La resolución podría desalentar a la policía de invertir el tiempo, recursos, y el riesgo personal asociado con la construcción de tal caso y lanzar tales procedimientos en el futuro.

La resolución sobre La Parada fue igualmente controversial: 63 de las 102 personas arrestadas el pasado octubre por oponerse violentamente a la clausura del mercado callejero fueron liberados con sentencias de prisión de tres años suspendidas (23 ya habían sido liberados) y solamente dos recibieron firmes condenas debido a que los mismos previamente habían cometido delitos penales. Cuatro personas resultaron muertas cuando la policía fue atacanda por manifestantes armados que se resistían a una directiva de la alcaldía para cerrar La Parada. Pedraza despotricó contra la resolución expresando que era equivalente a otorgar “una licencia libre para atacar a la policía”.

El presidente de la corte suprema, Enrique Mendoza Ramírez, se vio forzado a salir al paso y decir que la justicia estaba del lado de la policía en la preservación de la ley y el orden, agregando que aquellos quienes atacaron a la policía merecían sentir todo el peso de la ley. Él dijo que podía entender la indignación del público con la resolución, pero dijo que no era un caso cerrado, y que podría ser apelado. Y, por otro lado, urgió a las autoridades de pensar larga y duramente antes de criticar las resoluciones judiciales.

• No prospera moción de censura a Rivas

Esta semana el congreso de Perú rechazó una moción de censura presentada contra la canciller, Eda Rivas, por no buscar la aprobación para la escala del Presidente Ollanta Humala en París, en ruta desde Asia para conversaciones con su par de Francia, François Hollande. La moción, presentada por la oposición Fujimorista, Fuerza Popular (FP), no prosperó pues Perú Posible (PP), el partido del ex presidente Alejandro Toledo (2001-2006), se puso de lado de la coalición gobernante Gana Perú (GP). Keiko Fujimori, la líder del FP, criticó con fuerza a través de Twitter que el PP había salvado a una ministra “incompetente” y era culpable de “complicidad” con el partido de gobierno para salvar a Rivas como parte de un quid pro quo para exonerar a Toledo en una investigación de corrupción del congreso.

President José Mujica held a closed-door meeting with his Brazilian peer Dilma Rousseff in Brasília on 10 November shortly before flying on to Caracas to meet his Venezuelan counterpart Nicolás Maduro two days later. The Southern Common Market (Mercosur) was top of the agenda: the full incorporation of Paraguay into the bloc; the protracted free trade talks with the European Union (EU); and the postponement of the 17 December summit in Caracas until the end of January as Argentina’s President Cristina Fernández is still convalescing and will not return to work until 18 November.

Neither Mujica nor Rousseff offered up any details on the substance of the talks in Brasília, but the pro-secretary of the Uruguayan presidency, Diego Cánepa, intimated a day earlier that the EU talks would feature prominently. Cánepa said that Uruguay, Brazil and Paraguay all had their tariff and product proposals ready to present to the EU but Argentina “is living a different reality”.

The two presidents almost certainly discussed Paraguay too. On 25 October Mujica hosted Paraguay’s President Horacio Cartes in Montevideo, when he announced that Paraguay will represent Mercosur in the next round of talks with the EU. This was deft diplomacy from Mujica. It simultaneously sent a message to Asunción that Paraguay is still considered an integral part of Mercosur and to Brussels, which respected the constitutionality of president Fernando Lugo’s removal from power in June 2012 (which led to Paraguay’s suspension from Mercosur and Venezuela’s subsequent adhesion) and recognised that the bloc-to-bloc talks could not continue without Paraguay.

The issue of Paraguay is likely to have been raised by Mujica with Maduro in Caracas too, as Venezuela’s incorporation into the bloc is the principal stumbling block to Paraguay’s return. This was Mujica’s first visit to Venezuela since Maduro took office on 19 April. Maduro welcomed Mujica as “a brother and a teacher”, and after both men shared platitudes about consolidating Mercosur, Maduro outlined a grand scheme to embrace the Caribbean, arguing that Mercosur could only strengthen if it expanded. Given the failure to deepen Mercosur, widening is perhaps inevitable (Bolivia is expected to become a full member in 2014) although bigger groupings have not exactly met with unparalleled success in Latin America.

• Bordaberry to run for president

Some 6,000 people gathered in the Palacio Peñarol sports venue in Montevideo on 10 November to see Senator Pedro Bordaberry launch his presidential candidacy for the opposition Partido Colorado (PC; Colorados) to contest the October 2014 general elections. Bordaberry was defeated by Mujica in the last elections in 2009 and will almost certainly face former president Tabaré Vázquez (2005-2010) in 2014. Both men should cruise through primary elections next June: Vázquez is up against Senator Constanza Moreira, who seems more intent on using the contest to stake a claim to a position in a future Vázquez cabinet (or even to be his running mate) than trying to win; Bordaberry will need to see off Senator José Amorín Batlle, who he defeated comfortably in the previous primary elections in June 2009 by more than 50 percentage points.

Bordaberry faces a formidable challenge if he is to deny Vázquez and the ruling left-wing Frente Amplio (FA) another term, although his primary goal will be to emerge ahead of the eventual candidate for the Partido Nacional (PN, Blancos) to contest a second round run-off, when he would hope to pick up the majority of PN supporters. In an interview with the national daily El Observador on 12 November Bordaberry accused the FA of being obsessed with party issues, such as annulling the Ley de Caducidad amnesty law rather than national issues, particularly security (see sidebar).

• Security

Pedro Bordaberry is conducting a tour dubbed ‘100 barrios, 100 peoples’ in Montevideo to gather ideas and suggestions to draw up a manifesto to address the public’s principal concerns. Insecurity tops the list. There were 289 murders in 2012 in Uruguay. This was a massive 45% jump on 2011 and meant Uruguay’s homicide rate rose to 8.71 per 100,000 inhabitants. Bordaberry has sought to capitalise on the public mood by spearheading the collection of signatures to hold a plebiscite together with next year’s elections on whether to lower the age of sentencing to 16 from 18 for crimes such as rape and homicide. Polls suggest this would be successful.

The IMF’s Mideast department has just produced a report on “Arab economic transformation amid political transitions – Toward New Horizons”.  It summarizes well the economic dangers faced by the Arab Countries in Transition (ACTs) at a time when the transitions themselves are very unconvincing.  While there may be some progress in Tunisia, Morocco, and Jordan, it is hard to be optimistic about significant economic reform coming soon in Egypt, Libya, and Yemen.

The key problem remains as it was before the transitions began in 2011, namely the difficulty of creating enough jobs to sustain the growing population.  The problems have included a private sector that lacks dynamism.   Short-comings in trade integration, infrastructure investment, access to finance, and the labour market and education system have also held back private sector-led growth.  High levels of government subsidies have compounded inefficiencies and tied up scarce resources.

According to the IMF “these problems have become more acute since the onset of transitions in 2011, as popular expectations for better living standards have risen”, and the ACTs have experienced an economic downturn “resulting from transition-related disruptions, regional conflict, an unclear political outlook, eroding competitiveness, a challenging external economic environment in the context of the European crisis, and declining confidence”.

The problem is that this downturn has worsened the unemployment crisis, which is the single most serious economic/social issue for the ACTs.  According to the report, demographic pressures require growth to be above 6% if unemployment is to be reduced, yet under current projections, GDP growth is likely to average only 4.25% through to 2018.  This means that fewer than 5m jobs will be created when the requirement is for 7m “to reduce the unemployment rate halfway to the average of emerging markets (that is about 8.5%).”

To close this gap of 2.25m jobs, an annual growth rate of 6.25% is required.

The IMF stresses the need for governments “to embark on bold reform agendas that will make for more dynamic and inclusive economies, generate more jobs, and provide equal access to economic opportunity for all segments of society”.  Yet there is nothing in the post-Arab Spring Middle East that suggests this is possible, let alone probable.

NOTE: A good example of the continuing inability of the Middle East to make meaningful political progress is provided by this week’s presidential election in Algeria.

Although this is the fifth multi-candidate presidential election since independence in 1962, the incumbent President Abdelaziz Bouteflika seems certain to win his fourth term despite not having been able (through ill health) to address the Algerian people for two years.  He won in 1999, 2004, and 2009 with, respectively, 74%, 85%, and 90% of the vote.

Sources in Algiers seem certain that Bouteflika will win in the first round because the establishment has taken the decision that going to a second round would be disastrous for security.  The expectation of a stitch-up is reinforced by the fact that the ministers of the interior, justice, and communication, as well as the chairman of the Constitutional Council, which validates elections, are all Bouteflika allies from his home province of Tlemcen.

The two largest parties in the coalition, the National Liberation Front (FLN) and the Democratic National Rally (RND), and the largest trade union, the General Union of Algerian Workers (UGTA), are all campaigning for Bouteflika.  All this has prompted Islamist and democratic parties to call for a boycott of the election on the grounds that the outcome is predetermined.