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The left in France has long been dismissive of the UK, and in particular of the UK’s euro-scepticism, but there are signs that the UK’s faster recovery from the global financial and economic crisis that began in 2008 is beginning to attract some jealous attention.  On 17 November, in little noticed remarks made while speaking to the media about his new book ‘The Battle of Made in France’, France’s Industry Minister Arnaud Montebourg praised the policies of the Bank of England and clearly indicated his preference for these policies over those of the European Central Bank.  The point he didn’t make, but didn’t need to, is that France cannot follow such policies itself because it has surrendered control of monetary policy to the ‘one-size-fits-all’ remit of the European Central Bank.

Speaking about Britain’s policy of combining budgetary cuts with quantitative easing, Montebourg said: “It’s not entirely a policy of austerity.  It’s a tough policy in budgetary terms and that is what we need in Europe.  We are, ourselves, in favour of budgetary seriousness.  Paying our debts is the normal thing to do.  On the other hand, we need a European Central Bank that follows the example of the Bank of England, which, as I recall, makes out cheques for billions of pounds to Mr Osborne [Britain’s Chancellor of the Exchequer].”

This comment deserved more attention than it received for three reasons.  The first, of course, is because any wobbling in commitment from France towards the euro-project would be far more serious than happenings in Greece, or even Italy.  The second is because Montebourg’s remarks reflect a growing panic in Paris and cannot be dismissed as isolated and unimportant.  The latest example of the Hollande administration’s panic is its move to overhaul France’s tax system in response to an ecotax revolt in Brittany which could yet turn into a nationwide tax rebellion.

The third reason is the spectre of a surge of support for the extreme right in the May 2014 European elections following the announcement last week of a new alliance between the Netherlands’ Party for Freedom, led by Geert Wilders, and France’s National Front (NF) led by Marine Le Pen.  The NF took 18% of the vote in the election that elected Hollande in 2012.

Other extreme-right parties have been growing in popularity, with the neo-Nazi Golden Dawn receiving 7% of the vote in the 2012 Greek election and the Austrian Freedom Party gaining 20% in 2013.  In addition to the extreme right, more mainstream anti-EU parties such as the UK Independence Party (UKIP) are likely to poll well in May 2014.  The True Finns party won 19% of the votes in Finland’s 2011 general election.

Immigration is a key factor, as is general disillusionment with the European political elite and of course economic frustration.  The problem for the Hollande administration, as suggested by Montebourg, is that too many of the key policy levers are now out of its reach.  The crisis for the Hollande administration could become a crisis for Europe.

ECUADOR-PERÚ | Mapa de ruta para la cooperación energética. Las autoridades energéticas de Ecuador y Perú, se reunieron en las Islas Galápagos el 31 de julio, para discutir la posibilidad de desarrollar un “mapa de ruta” para la cooperación en las áreas de petróleo y gas. Durante los dos días del ‘taller de trabajo binacional Ecuador-Perú’, 40 delegados de ambos países liderados por el ministro de recursos no-renovables de Ecuador, Pedro Merizalde, y el ministro de energía & minería de Perú, Eleodoro Mayorga, intercambiaron y analizaron información acerca de los yacimientos petroleros de sus respectivos países, con el fin de “maximizar las oportunidades y aprovechar las ventajas de la infraestructura petrolera y las instalaciones existentes en las áreas de actividad en ambos países”. Ellos también discutieron la explotación conjunta de los depósitos de petróleo crudo pesado y gas en las áreas costeras del norte de Perú y del sur de Ecuador.

Después de la reunión Mayorga dijo que “Ecuador y Perú tienen similares y complementarias características geológicas y logísticas en los bloques de hidrocarburos localizados en el área de frontera”, y que el objetivo de las discusiones era hallar las maneras de aprovechar todas estas ventajas. Mayorga dijo que el oleoducto norperuano podría ser utilizado para transportar crudo liviano ecuatoriano localizado en depósitos en el área fronteriza que Ecuador no ha podido explotar debido a la falta de infraestructura; y que Perú también podría considerar la exportación de cualquier excedente de gas natural a Ecuador “siempre y cuando podamos satisfacer la demanda en los mercados de Piura y Tumbes”, las regiones del noroeste de Perú con frontera con Ecuador.

Mayorga también dijo que una firma consultora independiente ahora será contratada para identificar y cuantificar los depósitos de petróleo y gas existentes en ambos países; y conducir estudios de viabilidad técnicos y financieros para determinar el nivel de demanda y precios para los hidrocarburos en ambos países. Los dos ministros también acordaron celebrar una reunión de seguimiento a fines de septiembre para estudiar los progresos hechos a fin de tener un informe listo para presentar en la próxima reunión presidencial programada para el 28 de octubre en ciudad fronteriza ecuatoriana de Arenillas.

COLOMBIA | Enfrentando lo inevitable, ordenan recortes presupuestarios. Colombia demorará los gastos por un valor de US $ 2.44bn, en general, 3% de los US$88mm aprobados en el presupuesto nacional del 2015, debido a la aguda caída en los pronósticos de ingresos del petróleo este año. Los recortes caen principalmente sobre las inversiones, con una reducción de US$1,95mm en los desembolsos planeados, incluyendo las muy necesitadas mejoras en infraestructura, llevando la inversión total planeada cayendo a US$18mm en el 2015. Otros US$48mm serán recortados en costos administrativos.

En una declaración, el gobierno dijo que la decisión estaba basada sobre “las nuevas condiciones macroeconómicas y fiscales, asociadas primariamente con la caída de los precios internacionales del petróleo”. La declaración enfatiza que el gasto sobre los ciudadanos más vulnerables, incluidos aquellos desplazados por el conflicto interno, estará protegido. El ingreso fiscal de Colombia (incluidos impuestos e ingresos por royalties) ha sido golpeado duramente por la caída de 60% en los precios globales del crudo desde enero del 2014. El petróleo es la más grande exportación del país y su fuente de divisas.

VENEZUELA | Venezuela y Trinidad y Tobago firman nuevos acuerdos de energía. El Presidente de Venezuela, Nicolás Maduro, firmó nuevos acuerdos con el ministro de energía de Trinidad y Tobago, Kevin Ramnarine y la Primera Ministra Kamla Persad-Bissessar para la producción conjunta y el desarrollo de petróleo y gas en el yacimiento Manakin-Cocuina, que se extiende entre los límites marítimos de los dos países. Este es el segundo acuerdo de desarrollo del gas entre los dos vecinos del mar Caribe. En septiembre del 2013, luego de 10 largos años de negociaciones, los dos países firmaron un acuerdo preliminar para explotar el Yacimiento offshore Loran-Manatee.

Bajo el último acuerdo, Venezuela también reanudará los embarques de petróleo crudo a Trinidad y Tobago para su refinación, y también exportará asfalto y combustible de jets a su vecino. A cambio, Trinidad y Tobago proveerá a Venezuela con los necesarios aportes, incluido cemento, gasolina, y acondicionadores de aire, como también bienes de consumo. Maduro, acompañado por siete ministros del gabinete (y su esposa) en el viaje de un día, dijo que el acuerdo era “ganancia” para ambos países. Los acuerdos subrayan la urgente necesidad de Venezuela de estimular su estancado sector petrolero, con las refinerías propias plagas de dificultades técnicas.

BRAZIL | Anti-Dilma marches shrink. Marches on 12 April to demand the resignation or ouster by impeachment of President Dilma Rousseff were far smaller than those of a month earlier. In São Paulo, where in March the military police (PM) had estimated a turnout of about a million (a figure disputed by the polling firm Datafolha as biased and inaccurate), this time round it put the figure at 275,000 — a shrinkage of more than a quarter. In Rio attendance was put at 25,000, in Belo Horizonte at 5,000.

The main organiser of the latest marches was VemPraRua but there was a minority presence of the more radical groups who advocate a military intervention.

A leading spokesman of these group is retired paratroop officer Jair Bolsonaro, now a congressman for the conservative Partido Progressista (PP). He says that the solution to Brazil’s problems is not the removal of President Rousseff but what he describes as the ‘ideological appropriation of the state’ by the ruling Partido dos Trabalhadores (PT). Bolsonaro defines himself as a ‘defender of the democracy conquered at great cost in 1964 by the military.’

An opinion survey released on 11 April by Datafolha shows 75% in favour of the protests against the government and 63% in favour of impeaching Rousseff, whose approval rating remains at 13%. The pollsters also found that 33% of those who attended the march in São Paulo said they were protesting against corruption.

CHILE | Protesters in Araucanía labelled ‘paramilitary’. Angélica Tepper, president of the umbrella business association Multigremial de Araucanía, said in a radio interview on 21 April that those responsible for acts of violence in the region were ‘paramilitary groups acting in the light of day’. She amalgamated under this level the Mapuche comuneros involved in land invasions and the more radical groups that have been resorting to violence. She complained that after the most recent acts of terrorism her organisation had had no contact with the national or regional authorities.

Four days later about 70 families from the José Aillañir community in Freire, Araucanía, set up roadblocks around the region’s new airport to draw attention to their demand for restitution of ancestral Mapuche lands. Police moved in to contain the demonstration and clear the roads.

In late March in Osorno, in the Los Lagos regions, masked demonstrators set up barricades on the highway in front of the regional university. They were dispersed by Carabineros who resorted to tear gas when pelted with stones. One person was arrested. At about the same time in Iquique, in the northern region of Tarapacá, a forensic laboratory of the Carabineros was attacked under cover of night with a barrage of molotov cocktails. No group claimed responsibility.

URUGUAY | Homicides down, robberies up. On 10 April the interior ministry reported that in the first quarter of the year there had been 80 cases of homicide, almost 6% fewer than in the same period of last year. That same day the ministry released its annual report for 2014, which showed the number of homicides barely (0.8%) above that of 2013. Robberies with violence, on the other hand, were up by 11%.

In both categories the majority of cases took place in Montevideo, home to almost half of the country’s population. The capital accounted for 58% of the homicides and 82% of the robberies with violence. The report notes that 62% of the homicides were caused by firearms and 35% were due to confrontations between criminals or settlements of accounts.

MÉXICO | Lanzan tercera fase de la ‘Ronda 1’ de concesiones petroleras. El 11 de mayo la Comisión Nacional de Hidrocarburos (CNH) de México, el regulador del sector, anunció que había aprobado los términos del proceso de licitación pública para la tercera fase de la ‘Ronda 1’ de concesiones de petróleo y gas. El otorgamiento de concesiones para la explotación de hidrocarburos abiertas a las firmas petroleras nacionales y extranjeras privadas, es una parte clave de la emblemática reforma energética aprobada por el gobierno liderado por el Presidente Enrique Peña Nieto el año pasado, que apunta a estimular los debilitados niveles de producción de petróleo y gas.

De acuerdo con una declaración de la CNH, esta fase de la Ronda 1 es la primera que incluye licencias de producción de petróleo y gas independiente abiertas a las firmas petroleras privadas, a diferencia de las dos fases previas, que fueron solamente para licencias de producción conjuntas con la petrolera estatal de México, Pemex. La declaración agrega que esta nueva fase incluye 26 yacimientos de petróleo y gas maduros en tierra firme “muchos de los cuales ya están en producción”, y que tienen una capacidad de producción combinada de hasta 350.000 barriles de petróleo por día (bpd) y 22m pies cúbicos de gas por día. Cinco de los yacimientos en oferta están localizados en el estado de Chiapas; ocho en Nuevo León; cinco en Tabasco; dos en Tamaulipas; y seis en Veracruz.

El lanzamiento del proceso de licitación pública fue hecho oficial luego de la publicación de sus términos en la gaceta oficial el 12 de mayo. La CNH ha dicho que espera otorgar las concesiones de la tercera fase de la Ronda 1 para diciembre.

MÉXICO | Uniendo fuerzas con Canadá para presionar a EU en la OMC. El 18 de mayo los gobiernos de México y Canadá anunciaron el que conjuntamente buscarán autorización de la Organización Mundial del Comercio (OMC) para aplicar medidas en retaliación contra EU si éste continúa discriminando contra sus exportaciones de carne vacuna y porcina. El anuncio se produjo después de que la OMC emitiera una resolución final sobre la larga disputa entre los tres miembros del North American Free Trade Agreement (Nafta) sobre las reglas de etiquetado de la carne adoptadas por EU hace 13 años, que estipulan que los supermercados de EU deben incluir etiquetas identificando si la carne vacuna y la carne de cerdo provienen de ganado nacido, criado y faenado en EU.

México y Canadá se quejaron de que el sistema de etiquetado discrimina contra sus productores y viola las leyes de comercio ya éste no tiene nada que ver con la seguridad de los alimentos como afirman las autoridades de EU y simplemente es una medida proteccionista  diseñada para impedir el libre ingreso de productos cárnicos extranjeros en el mercado de EU.

Después de años de analizar los reclamos de ambas partes, la OMC le dio la razón a México y Canadá en su decisión final. La resolución fue celebrada en una declaración  conjunta firmada por los ministros de economía y de agricultura de México, Ildefonso Guajardo y Enrique Martínez, respectivamente, y sus contrapartes de Canadá, Edward Fast y Gerry Ritz. La declaración conjunta agrega que la resolución deja a EU con dos opciones: modificar su legislación para que se atenga a las obligaciones internacionales, o ser sujeto de tarifas punitivas sobre un rango de productos agrícolas y no-agrícolas.

MÉXICO | Banxico reduce el pronóstico de crecimiento. El 19 de mayo el Banco Central de México (Banxico), anunció que estaba recortando su pronóstico oficial de crecimiento del PIB para todo el año, de 2,5% - 3,5% a 2% - 3%, debido a la pérdida de dinamismo en la economía interna. El nuevo pronóstico de Banxico es menor que el pronóstico de consenso del 2,8% registrado en el último sondeo de economistas locales hecho por del banco.

El anuncio de la revisión del pronóstico de crecimiento fue hecho por el presidente de Banxico, Agustín Carstens, durante la presentación del informe trimestral de inflación del banco. Carstens dijo que la revisión se debe al hecho de que algunos de los riesgos que los analistas de Banxico temían se han materializado, tales como la aun relativamente débil actividad económica en EU; la baja confianza del consumidor y los inversionistas debido a la incrementada volatilidad en los mercados financieros; y la menor producción interna de petróleo. En particular, Carstens señaló a la caída del 7,7% en la producción de petróleo en el primer trimestre y a la caída en el precio del crudo mexicano de US$92,41 por barril en el trimestre final del 2014, a US$44,48 por barril en marzo como uno de los principales factores detrás de la revisión. En cuanto a la inflación, Carstens dijo que Banxico espera que cerraría el año en alrededor de la meta de Banxico de 3%.

• Pérdidas por robo de petróleo

El 18 de mayo el diario mexicano, El Universal, publicó un informe basado sobre información obtenida a través de un pedido de libertad de información que calcula que como resultado del robo de petróleo la firma petrolera estatal de México, Pemex, perdió unos M$20mm (US$1,29mm) en el 2014. De acuerdo con El Universal, la información obtenida de Pemex muestra que el número de tomas clandestinas descubiertas en los oleoductos a través del país el año pasado, fue de 3.348, significativamente más que las 2.614 descubiertas en el 2013. El Universal señala que el número de tomas clandestinas descubiertos se ha incrementado dramáticamente desde el 2007, cuando solamente llegaron a 324. El Universal atribuye esto a la creciente participación del crimen organizado en el mercado negro del petróleo, donde un litro de gasolina es comerciado a entre US$0,30 y US$0,50, la mitad del precio oficial.

JAMAICA | Murder trend reversed. The number of murders in Jamaica this year up to 24 August rose to 775, up 20.5% on the same period of 2014, according to figures ‘obtained’ by the newspaper The Gleaner. This is equivalent to 77% of the total for the whole of last year. The rise come after a fall of 16% recorded by the Jamaica Constabulary Force (JCF) between 2013 and 2014.

The newspaper says that with 12 of the 19 police divisions reporting a rising number of murders,  two parishes appear as accounting jointly for more than a quarter of all cases countrywide: St James (up 60%) and Clarendon (up 42%).

National security minister Peter Bunting, while expressing disappointment at the reported increase in murders, took comfort from the fact that declines were reported for all other crimes, and that the ‘projected turnout’ for murder this year would still be within the range recorded in the last few years. ‘At this rate,’ he said, ‘we would end the year at about 1,200 murders, the same number that occurred in 2013 and almost 500 fewer than the 1,692 murders in 2009.’ Avoiding a debate with opposition critics who blamed the upturn on economic policy, Bunting said that many of the factors contributing to violent crime were ‘outside the control of law enforcement.’

NICARAGUA | Crime ‘on the decline’. National police commissioner Aminta Granera, who recently declined to testify before the national assembly on the conviction of police officers for the killing of a woman and two children [SSR-15-08], announced at the celebration of the police force’s anniversary that Nicaragua’s rate of homicides per 100,000 inhabitants has fallen to 8.6, making it the safest country in Central America and in the same league as Canada and Chile, and that reports of criminal offences have fallen by 16%.

She highlighted a 9% decline in reports of robbery with intimidation and one of 22% in reports of rape. These figures, without further detail, were taken from the police’s annual report, which had not yet been released.

Granera’s claims do not seem to be shared by the public. The nongovernmental  institute of strategic studies and public policies, IEEPP, conducted in December 2014 a survey of public perceptions of security, which showed 72.7% of the 1,721 respondents expressing concern about increasing gang violence. The proportion perceiving an increase in armed robbery rose from 21.8% in 2013 to 37.7% in 2014.

GUATEMALA | Violent deaths down. The institute of forensic sciences, INACIF, reported on 12 September that in the first eight months of the year there were 3,819 violent deaths (not to be confused with the intentional homicides tallied by the national police) across the country. This was 3.3% down on the same period of 2014.

The main cause of violent death was by use of firearms: 2,847 cases in January-August this year ― almost 75% of the total, and down 4.5% on the same period of last year.

President Juan Manuel Santos appointed Rafael Pardo as his new post-conflict minister this week. Santos argued that Pardo had all of the qualities to assume this important responsibility. Pardo does have some valuable experience: he played a pivotal role in the negotiations that led to the demobilisation of the M-19 guerrilla group, as presidential peace adviser, in 1990. But his appointment serves a clear political purpose too.

Pardo, a former president of the Partido Liberal (PL), one of the fulcrums of the ruling coalition, narrowly came second in the Bogotá mayoral elections on 25 October. Although the PL is committed to the peace process with the Fuerzas Armadas Revolucionarias de Colombia (Farc), the recent tension between the three constituent parties in the ruling coalition [WR-15-44] means there is no harm in tying the PL into it more closely. Pardo replaces General Óscar Naranjo, the former director of the national police, who had resigned from the post.

Somewhat ironically Pardo takes over just as the attorney general, Eduardo Montealegre, has ordered a revision of the M-19 demobilisation, specifically the pardons and amnesties awarded to the guerrilla leadership. Montealegre said his deputy, Jorge Perdomo, would examine international human rights treaties and begin to probe whether any of the M-19 commanders were guilty of war crimes.

A co-founder of the M-19, Arjaid Artunduaga, accused Montealegre of a “media show” which would be “very harmful to the peace process in Havana, because who is going to negotiate with a State that isn’t serious?” Revisiting the M-19 peace process could make the Farc distrustful of the terms of an eventual peace accord being subject to later judicial revision. Conversely, the Farc might feel that by participating in the transitional justice system, which offers the prospect of lenient sentences, it would not run the same risk as those who have benefitted from amnesties.

• Palace of justice

The decision by the attorney general, Eduardo Montealegre, to investigate former M-19 guerrillas for crimes against humanity coincides with the 30^th anniversary of the siege of the palace of justice on 6 and 7 November 1985 by the M-19. After a military raid almost 100 people were killed, including 11 of the 25 supreme court justices. Speaking at the rebuilt palace of justice on 6 November, President Juan Manuel Santos publicly apologised for the botched raid, in accordance with a ruling by the Inter-American Court of Human Rights, singling out the families of 12 people, mainly workers in a café, who were taken alive from the building by the military but later ‘disappeared’.

The fate of the world’s largest free trade agreement, the Trans Pacific Partnership (TPP), hangs in the balance. Three of the 12 signatories to the agreement are from Latin America – Chile, Peru and Mexico. There is a danger that the TPP, finalised in October last year, will fail to get legislative approval, particularly in the US, where the two main presidential candidates for the November elections say that they don’t support it. If the TPP fails, it may signal a more protectionist trend in global trade, which could have negative effects for the Latin America as a whole.

The TPP matters for several reasons. The 12-country agreement – negotiated over nearly ten years – includes among others the US, Japan, Canada, Australia, Malaysia and Vietnam – countries representing around 40% of world GDP. (It does not include China). For the three Latin American participants, it represents the opportunity to widen their tariff-free access to world markets in general and to the Pacific Rim in particular. On some calculations, it could add 1.1 percentage points to their GDP growth rates.

Notably, the proposed agreement goes beyond merchandise trade to include services. For Mexico, it is an opportunity to deepen and intensify the trade advantages it began to acquire over two decades ago through the North American Free Trade Agreement (Nafta) with the US and Canada. Wider strategic issues are also at play – for the US it is a chance to exercise a leadership role in the Pacific, to some extent countering Chinese influence.

But the TPP is in trouble. With protectionist sentiment on the rise and both Donald Trump, the US Republican presidential candidate, and Hillary Clinton, his Democratic Party rival, now opposing ratification of the treaty, analysts say that its only chance of US Congressional approval will come in the ‘lame duck' period between the 8 November election and the end of President Barrack Obama’s term in early January 2017. And that chance looks slim.

Many Mexican analysts feel that a failure to ratify the TPP might be an early sign of a US attempt to turn away from Nafta, particularly if Trump wins the elections. With the Mexican economy very closely integrated with its northern neighbour, an attempt to restrict bilateral trade flows could have negative effects for both economies.

It is hard to square talk of building a wall, deporting migrants and raising tariffs between the two countries with the fact that the components in the average automobile now on sale in the US may have crossed the border up to eight times as part of an essentially bi-national assembly process. Gary Clyde Hufbauer, of the Peterson Institute for International Economics, says that 70% of a Honda CR0-V built in Jalisco, Mexico consists of inputs originally made in the US and Canada. He thinks a Trump administration would threaten to leave Nafta so as “to create some story line where jobs are created in the United States” by pressuring US companies to shift operations back north of the border. But this would risk reprisals from Mexico and set off what could develop into a mutually very costly trade war.

In its October edition of Caribbean Outlook, the United Nations (UN) Economic Commission for Latin America and the Caribbean (Eclac) looks in detail at what the Caribbean needs to do to adjust to the post-coronavirus (Covid-19) world. Eclac argues that “the last two years have taught the region that continued ‘business as usual’ is no longer an option for advancing sustainable development”. For Eclac, “repositioning must take place at all levels, encompassing all sectors, if the region is to thrive”.

The Covid-19 pandemic exposed many areas where Caribbean countries need to take action, including over fragile health systems, national and regional interconnection, diversification of their economies, and investment in services. A major problem, however, is that debt accumulation and servicing costs have narrowed the fiscal space available. And natural disasters constantly threaten to make matters worse. For instance, Hurricane Maria in 2017 left Dominica with damage equivalent to 226% of its GDP. In 2019, Hurricane Dorian caused over US$3.4bn worth of damage in The Bahamas.

The 2021 La Soufière was another major disaster that affected Saint Vincent & the Grenadines, St Lucia, and Barbados. Also in 2021, Haiti was hit by a 7.2 magnitude earthquake.

As the table below illustrates, most countries in the Caribbean returned to growth in 2021, and all are forecast to grow in 2022. The average growth rate for the region in 2021, excluding the exceptional case of newly oil-rich Guyana, was 3.5%. In 2022 it is projected to reach 4.6% (10.4% including Guyana’s 52% advance). Nevertheless, most of the individual economies are still smaller than they were in 2019 and won’t get back to those levels until 2023 or 2024.

Real GDP growth rates, 2020-2022
(Percentage)

Note: Guyana is unique among Caribbean countries as it experienced major economic transformation in 2020 with the introduction of oil production and export. As a result of this new industry the Guyana economy has entered a period of explosive expansion, with growth rates of 43.5% in 2020, 18.5% in 2021, and a forecast of 52% in 2022.

Source: Eclac on the basis of official figures.

Affordable development financing is key

Eclac argues that economic restructuring in the subregion “can revitalise economic activity, bringing it closer to the path of sustainable long-term growth”, but the essential prerequisite for this is access to affordable development financing – and that is a continuing difficulty. Not just the quantity of the finance is inadequate but also the quality (meaning the cost, term structure, and scale).

There are problems with all main sources of finance. For instance, banking sector credit to the private sector, which grew on average by 12.5% annually from 2001-2008, only expanded by an average 1.8% annually from 2009-2021. Furthermore, the majority of bank lending has been for personal needs and consumption rather than to productive sectors such as tourism, manufacturing, and agriculture.

Foreign direct investment (FDI) has also been inadequate in recent years, accounting for only 9.1% of GDP and declining by 13.7% (if the exceptional case of Guyana is excluded) in the last five years. Remittances are also disappointing at 5.1% of GDP.

The major problem, however, is with Official Development Assistance (ODA), which suffers from the fact that most countries in the subregion are not eligible for concessional financing from the World Bank and other multilateral sources of funding because of their official ‘middle-income’ status. Eclac’s proposed solution to this problem is to use a measure of national vulnerability, rather than per capita income, as the benchmark for deciding on concessional funding, and the UN is looking at the possible development of a Multivariate Vulnerability Index (MVI) that would take account of both economic and environmental vulnerability.

Eclac is also working on a Caribbean Resilience Fund (CRF) intended “to provide long-term, affordable financing for climate and economic resilience building, debt relief, and liquidity enhancement to achieve sustainable debt levels in the subregion”. For Eclac, the aim of the CRF initiative is “to extend maturity structures and reduce servicing costs by 50% in selected countries while providing for new debt to be guaranteed by [Development Finance Institutions] as a means of crowding in private creditors to scale up development finance to the subregion”.

Finance, of course, is only part of the solution, albeit a prerequisite. Also on Eclac’s radar is the need to foster economic diversification and structural change in the subregion. Eclac points out that “after six decades of regional integration” the subregion continues to specialise in “relatively low value-added segments of global value chains”.

Eclac argues that, in addition to finance, “substantial technical” support is needed to push the region up the value chain. It notes that services sectors which could be “key poles of industrialisation and diversification drivers” include the creative industries; education, sports, health, and medical tourism; community-based and eco-tourism; business process and other tertiary services; and renewable energy services.

Modernisation of the subregion’s information and communications technology (ICT) infrastructure is also considered central to improving competitiveness. Eclac argues: “Investment in promoting technical capacity in human capital development will help support economic diversification, allowing countries to ascend the value chain”. Another crucial investment will be in reducing transportation costs in order to improve trade competitiveness.

On 16 August Mexico’s economy ministry (SE) published temporary tariffs that will be levied on imports from countries that do not have a trade agreement with Mexico. These will remain in place until 31 July 2025. The changes to the law of general imports and export taxes came into force following the publication of a decree in the official gazette (DOF). The countries that will see their exports most affected by this are South Korea, India, Taiwan, and China, which have become significant trade partners to Mexico despite not having signed an agreement with them. This is particularly the case with China.

The government said that the aim of the tariffs of between 5% and 25% that will be applied to 392 products - including plastics, glass, ceramics, chemical products, and inputs for the steel, aluminium, tires, and garment industries, among others - is to help national industries that were affected by losses during the coronavirus (Covid-19) pandemic, particularly some 206,000 micro-, small- and medium-sized enterprises.

However, the changes also follow the stance of the US government towards China. While Mexico has 53 trade agreements, its main trade partner remains the US, which has been locking horns with China on trade matters for years. According to local press reports, Chinese exports to the US declined by 24% during the first quarter of 2023 relative to the same period of 2022.

Juan Carlos Baker, a former deputy economy minister and negotiator of the US-Mexico-Canada Agreement (USMCA), points out that this is undoubtedly a result of pressure by the US for Mexico to become aligned in its stance towards China. Baker emphasises that the decision undermines much needed trade diversification, which could eventually have a negative impact for Mexico. Similarly, Roberto Serralde, a local foreign trade advisor in Nuevo León state, says that the decision could adversely affect new nearshoring investment projects from Asian companies interested in settling in Mexico as it will impact supply chains and input prices.

Business groups

In contrast, business organisations such as the Confederación de Cámaras Industriales (Concamin), one of the most influential and largest business organisations in the country, and Mexico’s national iron and steel chamber (Canacero) have welcomed the import tariffs due to the benefits for domestic companies.

Guatemala’s government led by anti-corruption reformer President Bernardo Arévalo is seeking to bring a criminal complaint against former president Alejandro Giammattei (2020-2024), over a corruption case involving one of his close allies, the former head of the national electrification institute (Inde), Melvin Quijivix Vega. The move against Giammattei, who was blacklisted by the US three days after leaving office in January [WR-24-02], is the latest attempt by the Arévalo administration to deliver on its core pledge to dismantle the so-called ‘pacto de corruptos’ network of institutional corruption. As with other efforts, the alignment of key institutions, such as the judiciary and attorney general’s office, with the ‘pacto’ cast major doubt on the government’s chances of success.

Unveiled by the government on 4 November, the case, which is dubbed ‘RedQ’, implicates Giammattei, who as a member of the Central American Parliament (Parlacen) enjoys immunity from prosecution, Quijivix, and a former head of the presidential planning secretariat (Segeplan), Keila Gramajo. It centres on claims  that Quijivix, who was fired in January as Inde president [WR-24-03] – a post he had taken up in 2021 when Gramajo was head of Segeplan – was given a fake job in Segeplan with a monthly salary of Q20,625 (US$2,670) for which he provided no services. The case also involves claims that multi-million-dollar contracts were awarded to companies linked to Quijivix and his relatives.

• Dubious contracts

State news agency Agencia Guatemalteca de Noticias (AGN) highlights among the alleged contracts benefiting Melvin Quijivix Vega and his relatives, contracts awarded to a firm called Mine, of which Quijivix is managing director, worth Q1.5m between 2022-2023; a company, Parime, which is owned by his brother-in-law and father-in-law; and Corporación Educativa en Informática, a firm with links to his wife, Nina Patricia Román Rojas.

The government accuses Giammattei, who has previously faced accusations of accepting bribes from Russian businessmen in exchange for mining permits, among other things [WR-21-29], of abuse of authority, influence trafficking, and dereliction of duty for allegedly authorising Quijivix’s fake post. It also accuses Quijivix, who in July 2023 was added to the US Department of State’s ‘Corrupt and Undemocratic Actors’ list [WR-24-03], of the same crimes as Giammattei, along with the added crime of embezzlement.

Another corruption case

In another case of alleged corruption which occurred under the previous Giammattei administration, last month the health ministry revealed a ‘mega fraud’ case involving San Juan de Dios hospital in the capital, Guatemala City, to the tune of over Q11m. According to state news agency Agencia Guatemalteca de Noticias (AGN), the hospital paid local company Grupo Propela Q11.83m for renovation works which were never provided.

On 11 October Julio Flores, the head of the anti-corruption commission (CNC), said that so far the executive had presented 162 corruption complaints to the attorney general’s office, which is headed up by a Giammattei ally, María Consuelo Porras, who has also been blacklisted by Washington. He said that of the 162 complaints, seven had been shelved, 17 thrown out, and 24 closed down. He said that of the total, 27 corresponded to the health ministry. 

The small left-wing party Partido Socialismo e Liberdade (PSOL) decided on 7 March to reject a proposal to join a party federation with the ruling Partido dos Trabalhadores (PT) of President Luiz Inácio Lula da Silva. A federation is akin to a temporary, partial merger of parties in which each party would retain its own membership and identity but would be able to share election campaign resources and act as one bloc in congress. The rejection of the federation marks a blow to a prominent member of PSOL, Guilherme Boulos, who is currently serving as the secretary general of the presidency and is reportedly a staunch advocate of presenting a more united front among Brazil’s left-wing parties.

PSOL emerged in 2004 as an offshoot founded by dissatisfied members that either voluntarily defected or were expelled from the PT. They were frustrated with the pragmatic approach of President Lula during his previous presidential terms (2003-2011) to work with conservative parties and tack towards the centre ground. Since then, PSOL has gained a support base of younger, cosmopolitan students and social activists who express more radical left-wing views, are less connected to traditional trade unions compared with the PT, and are more adept at engaging voters on social media.

Instead of a federation with the PT, however, PSOL has instead opted to maintain its federation with the small centre-left environmentalist party Rede Sustentabilidade. The lawmakers of PSOL and Rede tend to be aligned with the PT in congress, but the decision to reject the offer to join a bigger party federation might indicate that Lula does not have the unconditional support of the entire Brazilian left, even though he is expected to be the main champion of the left to run in the presidential election in October.

Meanwhile, PSOL’s refusal to form a federation with the PT has also prompted speculation over Boulos’ future. Boulos is close with Lula, especially since 2024, when Lula endorsed his ultimately unsuccessful bid to run for the mayorship of São Paulo. Given that Boulos is a charismatic left-wing activist-turned-politician, some political pundits have compared him to a younger version of Lula and a potential successor who could at some stage seek to inherit the veteran left-winger’s political estate. But if Boulos’ party does not want to ally itself too closely with the PT, the main bulwark of the Brazilian left, some media reports have speculated that it is not implausible that Boulos could be tempted to leave the smaller left-wing outfit to join the PT, if he truly has ambitions to go on to become a new Lula.

Trade surplus increases

The ministry of development, industry, trade, and services released new figures on 5 March showing that Brazil’s monthly trade surplus in February stood at US$4.21bn, up from the surplus of US$3.82bn in January.

Future of Haddad

Another figure whose name is often floated in the press as a potential political heir to President Lula is Fernando Haddad, who is currently serving as Brazil’s finance minister. Compared with Guilherme Boulos, Haddad is more moderate and is associated with the more centre-left factions of the PT.

Over the past week, several media outlets, including Folha de São Paulo, have cited government sources as saying that Haddad is expected to step down from his cabinet position in the coming weeks and run for the governorship of São Paulo state.

If Haddad were to run against the right-wing incumbent Tarcísio de Freitas, it could be a rematch of the 2022 gubernatorial race between the potential political heirs of Lula and Jair Bolsonaro respectively.

In our 20-27 April issue we focused on the strength of Russia-China relations, but we also noted that not all is perfect between China and Russia (China has not recognized the pro-Moscow breakaway mini-states of Abkhazia and South Ossetia in the Caucasus, for instance), and the possibility of a divergence between Russia and China remains. It has been interesting, therefore, to see Russia expressing concerns about Chinese competition in the global arms market. Chinese dependence on Russian weapons was at one stage a key driver in their relationship. That has been changing, and now they are in increasing competition in the export field.

According to Ruslan Pukhov, director of Russia’s Centre for Analysis of Strategies and Technologies (CAST), the problem is that Russia and China are focused on the same regional markets, that is large emerging markets that are keen to pursue a military-political line that is relatively independent of the West.

The problem for Russia is not so much in the quality of China’s weapons but in the fact that China’s economy is complementary to those of many of the countries to which it is seeking to export. Essentially, it buys raw materials from the countries to which it wishes to sell arms. Russia, on the other hand, is an exporter of raw materials. As Pukhov puts it: “China is becoming one of the main buyers of raw materials from the countries of the Middle East, Latin America, and Africa, and it is constantly boosting its investment in these countries.”

The exception to this is Asia. According to Pukhov: “Chinese policy is giving rise to increasing fears among neighbouring states in Southeast Asia, which provides Russian exporters with new opportunities.” Vietnam, for instance, is one of Russia’s key partners in “military-technical cooperation”. Strengthening military-technical cooperation between China and Pakistan also helps the Russian cause in India.

Pukhov also sees some benefit to Russia in the fact that China’s military exports will more and more reflect China’s foreign policy priorities, thus reducing its flexibility and willingness to supply.

On 5 December the government of President Rafael Correa changed the system for setting minimum prices for banana producers. Ecuador is the world’s biggest banana exporter and bananas account for 30% of the country’s annual export receipts. Unusually, almost half of Ecuador’s bananas now go to secondary markets (ie not the European Union nor the US).  Ecuador’s biggest markets are the Baltic countries (24% of total exports), Russia (22%), the US (17%) and the Mediterranean (14%).

The new prices are an effort by the government to capitalise on supply and demand. In the high season, (the first 22 weeks of the year when alternative fruit is in short supply in the northern hemisphere), banana exporters will have to pay growers US$6.25 per 18.2kg box. The exporters immediately quibbled with the new system, saying that their cash flow could not run to paying US$6.25 a box so they would cancel orders for Ecuadorean bananas and switch to buying bananas from rival producers in Central America.

For the other 30 weeks of the year, the floor price will be US$4.90 a box. In 2011, there was a flat minimum price throughout the year of US$5.50 a box.

The agriculture minister, Staynley Vera, claimed that 52% of Ecuador’s banana exports occur in the first five months of the year. He argued that the change should help growers’ cash flow, provided orders hold up. The new high season minimum price is a bit lower than President Correa suggested on 3 December, when he mentioned US$7 per box as the high season’s minimum price.

The new system will also involve the agriculture ministry in a much closer monitoring capacity to determine what is happening in the local banana market and, producers hope, issue fines for exporters who try to rip off producers.

In the first nine months of 2011, Ecuador exported 214m boxes, up from 201m in the same period of 2010.

Costa Rica: In 2011 Costa Rica increased its banana export revenues by 3% to US$768m. The country increased the volume of exports by about 1m boxes or 102m. The industry’s target is to push exports back up to 114m boxes, which was the record set in 2007. Costa Rica’s two biggest markets are the US and the EU.

MEXICO | Mexico City. The three main parties are starting to line up their candidates for the mayoral election. On 11 January two of the main candidates for the Partido Acción Nacional (PAN) nomination said that the party had decided to nominate Isabel Miranda de Wallace, an anti-crime campaigner, who has never run for public office before, as its candidate for mayor. She set up an NGO, Alto al Secuestro, which campaigned against violent crime and kidnapping in particular. She takes no nonsense from the government and pointed out late last year that the federal government had still failed to deploy specialist anti-kidnapping police forces, promised in 2008, and that the national kidnapping rate went up by 15% in 2011.

The Partido Revolucionario Institucional (PRI) seems certain to nominate Beatriz Paredes, a former party president, as its candidate - and she tops the polls.

The left-of-centre Partido de la Revolución Democrática (PRD), which has run Mexico City since 1997 when the mayor was first elected, has six candidates running for its nomination. The party will pick its candidate by reconciling the results of three opinion polls. The frontrunner of the PRD nomination is Miguel Angel Mancera, the city’s current attorney general.

The PRD and Diálogo para la Reconstrucción Nacional (DIA), has picked three pollsters (Covarrubias, Nodos and Buendía y Laredo) to poll people in the city on whom they would like the candidate to be. All the PRD candidates have to stop campaigning on 14 and 15 January so that the polling is not influenced by their campaigns.

Following the succession in December in North Korea of the untested Kim Jong-un to his late father Kim Jong-il, South Korean governmental sources suggested that Kim Jong-un could face a revolt from the inner circle of power because of his inexperience and youth.  The dangers of this were counter-balanced by the swift move by China to support the new regime with food and other aid, however news of Kim Jong-un’s rather frantic efforts to curry favour with the army do suggest his position is not yet fully secure.

According to analysis of North Korean state media, during the month of January Kim Jong-un paid eight visits to military units, compared with just one made in the same month last year by his father.  If you add in a visit to a military institute and attendance at a concert by a military orchestra, the total comes to 10.

Baek Seung-joo of the Korea Institute of Defence Analyses says: “The fact that Kim Jong-un is making such frequent visits to military units is evidence that he does not enjoy solid support within the armed forces.”  Kim has little if any military experience despite being created a four-star general in October 2010.  As the country’s new leader, he is now supreme commander of the armed forces.

Japanese sources say that China decided to supply North Korea with 500,000 tonnes of food and 250,000 tonnes of crude oil immediately after Kim Jong-il’s death.

Las denuncias de golpe parecen contagiosas. Los motines de la policía, esta semana, a lo largo de Bolivia ha llevado al Presidente Evo Morales a clamar que “las fuerzas de la Derecha” han infiltrado las protestas para montar el escenario para un “golpe”. Aunque los policías descontentos tenían claras demandas –por mejores de salarios y de las condiciones de trabajo– y la oposición política acusó a Morales de recurrir a una táctica ya familiar de calificar cualquier malestar como un complot desestabilizador, la rebelión, que ha terminado luego de un acuerdo concretado con el gobierno, es el último signo de la crisis dentro de la institución.

El malestar, que ha dejado en general a varias personas heridas, adquirió fuerza después que una unidad de elite de la policía en La Paz, la Unidad Táctica de Operaciones de la Policía (Utop), expulsó a sus comandantes el 21 de junio, siguiendo a los intentos de expulsar a las esposas de los policías de los cuarteles. Las esposas de los policías han sido clave en montar las protestas. También han tenido lugar revueltas en capitales provinciales como Santa Cruz, Tarija, Potosí y Cochabamba. En cierto momento, la Asociación Nacional de Suboficiales, Sargentos, Clases y Policías (Anssclapol) estimó que unos 3.000 de los 33.000 funcionarios policiales habían abandonado sus funciones.

Como palanca de las demandas de Anssclapol fue la necesidad de llevar los salarios y las condiciones en línea con los que disfrutan los militares (FFAA). Mientras los oficiales de policía de menor nivel reciben un pago de BS$1.200 (US$174), los oficiales de las FFAA de similar rango (suboficiales o sargentos) reciben un salario promedio mensual de BS$2.500 (US$364). Como también demandan una pensión equivalente a su salario final pleno luego de retirarse –otro beneficio del que disfrutan las FFAA– Anssclapol está ñpidiendo la creación de un defensor público de la policía y la anulación de la Ley 101 de abril del 2011 sobre disciplina policial, que sus detractores afirman que niega los derechos constitucionales a los oficiales de menor rango.

El acuerdo concretado el 27 de junio, otorga algunas de esas demandas. El ministro del Interior, Carlos Romero, dijo que concesiones como el aumento de 9% en los salarios; provisión de alimentos por un valor BS$110 y un bono de BS$400 eleva el salario mínimo a BS$2.055 (US$293). El acuerdo también provee para la creación de un defensor público de la policía, la promesa de revisar la Ley 101, y la creación de una comisión para analizar las demandas referidas a las pensiones. Aunque el acuerdo ha servido para que Anssclapol ponga fin al malestar, la rebelión ha servido como el último signo de desafección dentro de la institución –un problema que ha atraído creciente atención en meses recientes. Esto siguió al rechazo por altos oficiales del Coronel Víctor Santos Maldonado el mes pasado para reemplazar al General Jorge Santiesteban quien se retiró por alegatos de corrupción [IL-12-21], como también más frustración dentro de la institución sobre el manejo de Morales de la represión policial del año pasado relacionada con las protestas contra la propuesta de construcción de una carretera a través del territorio indígena (Tioc) y el parque nacional, Isiboro Sécure (Tipnis) [IL-11-39].

Los pedidos para que los salarios y las condiciones de trabajo sean puestos en línea con los disfrutados por las fuerzas armadas, también apuntan a un resentimiento más general dentro de la policía  con relación al percibido tratamiento preferencial hacia los militares de parte de Morales. La Red de Información Andina (RIA) con base en Cochabamba, rastrea este resentimiento refiriéndose a la histórica rivalidad entre los militares y la policía, que fue exacerbada durante la guerra a las drogas que tuvo lugar bajo la segunda administración de Hugo Banzer Suárez (1997-2001) como resultado de una mezcla de misiones, por la cual los militares recibieron el rol de erradicación, una tarea más acorde para la policía, y la policía recibiendo entrenamiento militar antidrogas. La RIA también apunta que mientras las FFAA fueron utilizadas para patrullar las calles y reprimir las protestas populares bajo Banzer, la reacción violenta ante la represión por el ejército en el 2003, conocido como "octubre negro" que tuvo lugar bajo Gonzalo Sánchez de Lozada, dejó a los militares menos dispuestos a intervenir. Por tanto, el rol de “represor” volvió a aplicarse a la policía que desde entonces ha sido acusada de violaciones contra los derechos humanos en medio de violentas represiones –como la represión en el Tipnis.

• Ecos del pasado

La revuelta en La Paz atrajo particular atención debido a un precedente; una protesta policial que comenzó en los mismos cuarteles en el 2003, bajo la administración del Presidente Gonzalo Sánchez de Lozada (1993-1997; 2002-2003), disparada por los planes del gobierno de reformar el servicio policial, fue sofocada por los militares, resultando en 19 muertos.

This month saw a flare-up of the dispute between Costa Rica and Nicaragua over the San Juan River area, which is currently before the International Court of Justice (ICJ) at The Hague. In a statement to the press on 6 February, Edén Pastora, the controversial former Sandinista leader, said that the government of President Daniel Ortega had asked the ICJ to grant Nicaragua navigation rights to Costa Rica’s Colorado River, a distributary of the San Juan. Pastora’s announcement, which revives a demand made back in 2010, comes amid renewed concern from Nicaragua regarding the contentious Juan Rafael Mora Porras road that Costa Rica is currently building parallel to the San Juan River.

Road works

A study by Nicaragua's National Autonomous University’s Investigative Centre for Aquatic Resources (CIRA-UNAN), released on 21 January, found that 100km of the 160km road will be built inside an area considered "highly fragile and ecologically delicate". The CIRA-UNAN report, which was dismissed by Costa Rica’s foreign minister, Enrique Castillo as propaganda by the Nicaraguan government, concluded that the Costa Rican road will have “unforeseeable consequences on the ecological stability of the region in the mid-term.”

Costa Rica began to build the Juan Rafael Mora Porras road in late 2010 and the project has been plagued by corruption scandals, culminating in the resignation of the public works and transport minister, Francisco Jiménez in 2012 [RC-12-06]. In October 2012, Transport Minister Pedro Castro reiterated that the project would continue although at the end of January he suggested that only 40% of the road would be finished by the end of the current government of President Laura Chinchilla, whose mandate ends in May 2014.

Colorado River

In his statement to the press this month, Pastora, who was in charge of the dredging project which triggered the revival in 2010 of the historic spat, said: "This government of Daniel Ortega applies the logic of what is good for the goose is good for the gander, if they can navigate in our waters, why [can’t we] sail in the waters of the Colorado and also San Juan River”.

In November 2010, Ortega had announced that he would ask for the rights to navigate the Colorado River on the same terms and conditions by which Costa Rica can navigate the San Juan River. The Nicaraguan logic, other than a simple tit-for-tat, is that 90% of the water in the Colorado River comes from Nicaragua, despite the fact it is located entirely within Costa Rican territory. The Costa Rican government gave Pastora’s latest announcement short shrift, accusing Managua of "expansionist policies".

The Hague will study Nicaragua’s request and issue one of three possible rulings: reject it entirely, admit it and start a new case, or include the complaint as part of the current dispute.

• New PAC candidate announced

This month, Epsy Campbell, a former legislator, announced her bid to run for the presidency in 2014 for the opposition Partido Acción Ciudadana (PAC) in early February . Campbell currently runs the Centre for Afro-Costa Rican Women. In the last general elections, held in February 2010, the PAC won 11 out of 57 seats in congress; its presidential candidate, and founder, Ottón Solís, won 25% of the vote. Solís has said he will not stand in 2014.

REGION | More migrants being abducted in Mexico. The number of abductions of Central American migrants reported to the Mexican authorities increased tenfold in 2014, according to a report by Mexico’s national migration institute (INM) disclosed to the newspaper Excélsior under freedom of information provisions.

In 2013, 62 cases were reported. In 2014, there were 682 cases. Of the latter 365 were Hondurans, 200 Salvadoreans, 100 Guatemalans and 17 Nicaraguans. There has also been a substantial rise in the number of complaints about ‘other crimes’, from 43 in 2013 to 119 in 2014. In that category there was a 176% increase in the number of complaints about extortion and other abuses.

Reported cases of people trafficking regarding Central American migrants rose from 18 in 2012 to 33 in 2013, but fell to 28 in 2014: 21 Hondurans, six Guatemalans, one Nicaraguan and one Costa Rican.

Most of the crimes against migrants are attributed by the INM and the International Organization for Migration (IOM) to ‘members of transnational organised crime’.

HONDURAS-US | Talk of basing US task force in Palmerola. Defence minister Samuel Reyes confirmed on 7 April that the US had filed a request for the entry of a military contingent to Honduras, but did not elaborate on the details of the request, saying that it was in the hands of the foreign relations ministry and was being processed. That same day the newspaper El Heraldo said that the US had requested permission to instal a special task force in the country.

The online service defensa.com had reported on 27 March that the US had ‘ready’ a new 250-strong unit named Special Purpose Marine Air-Ground Task Force-South (SPMAGTF-South) which it wished to station in the Soto Cano airbase in Palmerola. It described this force as akin to (but much smaller) the SPMAGTF-CR stationed in the Spanish airbase of Morón for service in Africa.

On 8 April the US ambassador in Honduras, James Nealon, said that a request had been filed for the temporary posting of a small group of marines, tasked primarily with training their Honduran peers, but also available to respond to emergencies such as floods and to carry our humanitarian missions in remote parts of Honduras. If the request is approved, he said, the marines would arrive in June and leave in November.

El Heraldo cited foreign relations minister Arturo Corrales as saying that the announcement of an arrival of US marines might provoke speculation, mainly because the situation in the Gulf of Fonseca is not quite peaceful.

COSTA RICA-NICARAGUA | Gesture on the eve of ICJ hearings. On 8 April Costa Rica’s foreign relations minister Manuel González announced that work had ended on blocking a canal Nicaragua started digging in 2013 in disputed territory close to the mouth of the San Juan river. If completed, he said, it could have diverted water from the San Juan into the Caribbean, threatening the internationally protected wetland further downstream. The works involved laying three rows of sandbags across the canal.

González said that the works were observed throughout by members of the Nicaraguan military. The canal is at the heart of Costa Rica’s suit against Nicaragua. Reactions in Managua to the blocking of the canal were unusually low-key. González later travelled to The Hague to attend the last round of oral hearings before the International Court of Justice (ICJ) of its border dispute with Nicaragua.