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Paraguay’s political Left has ruptured ahead of the presidential elections next April. Mario Ferreiro, the favourite to run on the ticket of the disparate left-wing coalition Frente Guasú (FG) which backed former president Fernando Lugo (2008-2012) has struck out on his own, taking with him about half of the 19 parties within it. Lugo followed up Ferreiro’s announcement this week by mooting, not for the first time, a tilt at the presidency himself. He argues that his impeachment in June denied him the possibility of completing his term and that, as a corollary, the constitutional bar on re-election is inapplicable and that he is eligible to stand.

Ferreiro said he had decided to leave the coalition because of differences over the composition of the list of senators standing for election (and the possibility that Lugo might lead this list). The nine parties that went with him, known as Bloque 9 (B9), have had differences with the other 10 parties (B10) for some time. They refused, for instance, to sign a document drawn up by the FG leadership in August claiming that “Paraguayan democracy is seriously damaged” and that the conditions were not in place for free and democratic elections [WR-12-33].

In response to a question during a short press conference as to who would now stand for FG after Ferreiro’s departure, Lugo said “I will”. The national press was quick to note that Lugo had ruled out standing for election on 4 September and accused him of inconsistency. It is not clear that Lugo was being sincere, however, or whether he was simply leading the press on a merry dance. Upon being questioned about the constitutional bar on re-election, for instance, he responded laconically: “Does anyone observe the constitution in Paraguay? Who says I can’t be president?” Senator Sixto Pereira, the leader of Tekojoja within the B10, insisted there was no legal impediment to Lugo standing for election.

• Mercosur

President Federico Franco expressed his confidence this week that Paraguay would return to the Southern Common Market (Mercosur) “sooner rather than later”. Speaking during a visit to the north-eastern department of Amambay, Franco said that other members had realised the importance of Paraguay. His remarks came after Brazil’s foreign minister, Antonio Patriota, said that Paraguay, which was suspended from Mercosur shortly after Lugo’s impeachment in June, could be reincorporated into the bloc before next April’s elections provided that it was proven that democracy was “fully functioning”.

Development: On 14 November Roberto Courtney, the director of the local watchdog, Ética y Transparencia (EyT), told reporters that fraud had taken place in 70 of Nicaragua’s 153 municipalities in the 4 November municipal elections.

Significance: Courtney’s remarks will reinforce the internal and external doubts about the election process, in which the left-wing ruling Frente Sandinista de Liberación Nacional (FSLN) won 134 municipalities, up from 109 in the last (2008) municipal election. The US government took the lead in questioning the latest vote in Nicaragua. It had also raised serious concerns about the 2008 municipals and the 2011 general election, in which President Daniel Ortega swept to re-election with 62% of the vote. However, given President Ortega’s iron clad grip over the country, and the international community’s apparent failure to follow up on any complaints, local critics will remain isolated.

Key points:

• According to Courtney, outright fraud took place in four municipalities – including Ciudad Darío, (the site of recent deadly post-electoral violence) while another 66 were subject to the practice known as ‘ratón loco’ (crazy mouse) – whereby citizens are denied the right to vote, due to a lack of voting papers, which forces them to run around trying to find the correct voting booth until eventually, they give up and leave. Courtney also said that the number of people without a cédula (national identity cards, required to vote) had increased from 4% of voters in the 2006 general election to 12% this year.

• There are also questions over the level of participation on the day. Watchdogs such as the Instituto Para el Desarrollo y la Democracia (Ipade) and the Nicaraguan centre for human rights (Cenidh), challenge the officially reported turnout figure of 57.7% provided by president of the supreme electoral court (CSE), Roberto Rivas. The official figure would mean an abstention rate of 42.3%. But Ipade put abstention at 54.5%, up 10% on 2008. The opposition has seized on this to claim that high abstention undermines the FSLN’s victory and reflects broad disaffection with the electoral process.

• Yesterday (14 November), the World Bank approved its 2013-2017 strategy for Nicaragua, contemplating interest-free loans and donations totalling US$50m-US$60m. The Ortega government also recently announced renewed talks with the International Monetary Fund (IMF).

PERÚ | Royalties de Camisea. El consorcio de gas de Camisea, compuesto de las seis firmas extranjeras (Repsol, de España; Pluspetrol y Tecpetrol de Argentina; Hunt Oil, de Estados Unidos; SK Energy, de Corea del Sur; y Sonatrach de Argelia) que operan el vasto yacimiento de gas  de Camisea en el centro de Perú, reveló el 10 de junio que en los primeros cinco meses del año el Estado peruano recibió US$582,9m en royalties por la venta de gas natural.

La declaración del consorcio Camisea explica que la mitad de los royalties son pagados al gobierno central y la otra mitad al gobierno regional de Cusco, que está a cargo de la distribución de fondos a las municipalidades locales adyacentes al yacimiento de gas. La declaración agrega que desde que se inició la extracción de gas en Camisea, que tiene unos 8,7 trillones de pies cúbicos de reservas probadas de gas (lo que lo convierte en una de las más grandes reservas de gas natural en América Latina), en el 2004 el proyecto ha generado US$5,47mm en royalties para el Estado peruano.

La mayor parte del gas producido en Camisea está destinado a los mercados de exportación, una cuestión que siempre ha sido sensible en Perú, pues esto significa que las provisiones de gas natural para el mercado interno son limitadas, lo que eleva los precios. Después de asumir el poder en el 2011, el Presidente Ollanta Humala prometió que él se aseguraría de que el pueblo peruano obtenga más beneficios de la explotación de los yacimientos de Camisea. Él anunció que el gobierno renegociaría los términos del contrato con el consorcio Camisea, incluyendo la renegociación de los niveles de los royalties a fin de asegurar una mayor proporción de abastecimiento de gas natural para el mercado interno.

Estas renegociaciones produjeron resultados en abril del año pasado, cuando el gobierno anunció que había recobrado el Lote 88 de Camisea, el lote que actualmente tiene el mayor nivel de producción, enteramente para el consumo interno. En este contexto, el anuncio del consorcio Camisea será escrutado cuidadosamente por muchos en Perú, a medida que el país continua considerando si está obteniendo una porción justa de los beneficios de Camisea.

ECUADOR | Kinross se retira. El 10 de junio la firma minera canadiense, Kinross Gold, formalmente notificó al gobierno del Presidente Rafael Correa, que cancelaba su proyecto minero de oro de US$12.mm, Fruta del Norte (FDN), después de no lograr un acuerdo sobre los términos del contrato con el gobierno.

El anuncio es un golpe para el Presidente Correa, quien en años recientes ha buscado desarrollar el sector minero de Ecuador, alegando que la explotación de los ricos minerales del país ayudaría a conducir el desarrollo económico del país. El proyecto FDN, que se cree que contiene 6,8m de onzas de oro valuadas en US$10mm, es una parte importante de los planes de desarrollo de Correa. De hecho, después de ganar la reelección en febrero, Correa dijo que él esperaba concretar un acuerdo sobre FDN este año. Sin embargo, desde que asumió el poder por primera vez en el 2007, Correa ha adoptado varias medidas que han negativamente afectado el ambiente de negocios en Ecuador, disuadiendo la inversión extranjera particularmente en el sector extractivo.

La decisión de Kinross muestra que los inversionistas extranjeros continúan encontrando significativos desafíos en Ecuador. Desde que la firma adquirió la concesión de Aurelian Resources en el 2008, Kinross ha buscado obtener garantías del gobierno para el proyecto. En particular, Kinross requirió una extensión del periodo de evaluación económica para el proyecto, que expira en agosto, cuando la firma debería presentar un plan formal de desarrollo o correr el riesgo de que la concesión sea revertida al Estado. Además, la firma también trató de acordar un nuevo esquema impositivo. Sin embargo, el año pasado el entonces ministro de recursos no renovables, Wilson Pástor, dijo que las exigencias de la firma eran "exageradas". En mayo, el asesor legal de Correa, Alexis Mera, dijo que si a Kinross no le gustaban los términos actuales, "ellos pueden irse".

Premeditadamente, el anuncio de Kinross se produce en momentos que la asamblea nacional de Ecuador está debatiendo un nuevo proyecto de ley para la 'reforma de la minería y un impuesto equitativo' que busca promover la inversión privada en el sector minero estableciendo un nuevo marco para las concesiones al sector privado; pero también propone un impuesto extraordinario del 70% sobre las ganancias de las mineras. Una declaración de Kinross expresó que la compañía había decidido no proseguir con el proyecto FDN después de "fracasar en alcanzar un acuerdo con relación a ciertos aspectos económicos y legales fundamentales, que equilibrarían los intereses de todos los involucrados". La declaración agrega que la firma ahora espera trabajar con el gobierno ecuatoriano para "asegurar la transición ordenada del proyecto, para así respetar los intereses de ambas partes". Previamente, el gobierno de Quito rechazó la propuesta de Kinross de vender la concesión a un tercero o de hallar socios para ayudar a desarrollar FDN.

• TLC Colombia-Israel

El 10 de junio el Presidente de Colombia, Juan Manuel Santos, anunció la firma de un Tratado de Libre Comercio (TLC) con Israel, después de 15 meses de negociaciones. El acuerdo fue firmado durante una ceremonia en la residencia oficial del Presidente de Israel, Shimon Peres, durante la visita de Santos a Jerusalén, como parte de una gira por el Oriente Medio. Además de estimular el monto del comercio bilateral, que actualmente totaliza US$680m, el gobierno colombiano espera diversificar sus exportaciones, incrementando la cooperación bilateral en áreas como la agricultura, defensa, y tecnología de la información. Las exportaciones de Colombia a Israel son principalmente café, carbón y flores, mientras que Israel vende productos manufacturados de alta gama. El TLC ahora debe ser ratificado por las legislaturas de ambos países antes de entrar en vigencia (tentativamente) para el próximo año.

La perspectiva de que las relaciones diplomáticas entre Chile y Bolivia mejorarían con la llegada de un nuevo gobierno en Santiago recibió un golpe la semana pasada. El nuevo canciller de Chile, Heraldo Muñoz, describió la decisión del Presidente de Bolivia, Evo Morales, de sentar un precedente el 16 de abril al viajar en persona hasta la Corte Internacional de Justicia (CIJ) en La Haya para someter los documentos legales relacionados con el reclamo de Bolivia por recobrar el acceso al mar perdido ante Chile en la Guerra del Pacífico de 1879-1893, como un truco publicitario político. Muñoz acusó a la administración Morales de encubrir la “falta de sustancia legal de su caso” con un giro político-mediático.

El viaje de Morales a La Haya se produjo a menos de un año después de que su gobierno presentó su demanda ante la CIJ, la cual se podría tomar varios años para producir una resolución. En una entrevista con el diario chileno, La Tercera, el 19 de abril, Muñoz acusó a Morales de politiquería, especialmente teniendo en cuenta la proximidad de su intento de reelección en las elecciones generales de octubre.

Muñoz dijo que el nuevo gobierno de la Presidenta Michelle Bachelet estaba preparado para reasumir la agenda  bilateral de 13 puntos que acordó con Bolivia durante la primera administración de Bachelet (2006-2010), después de la cual la relación tomó un giro para peor bajo Sebastián Piñera (2010-2014). Sin embargo, la retención por Bachelet de la elección de Piñera de Felipe Bulnes, su ex ministro de educación, como representante de Chile ante la CIJ en el caso ha sido ampliamente interpretada como un signo de que es improbable que la estrategia del gobierno chileno cambie.

Permiten el voto de expatriados en elecciones nacionales

El congreso de Chile ha aprobado una ley permitiendo el voto de los expatriados en las elecciones nacionales, concluyendo así un debate que se había extendido por más de 20 años en el congreso desde la caída del dictador Augusto Pinochet (1973-1990). La cámara de diputados votó por 84 votos a favor y 25 en contra para aprobar la ley, y el senado siguió el ejemplo con 28 votos a favor y cinco en contra para enmendar la constitución. Los chilenos que viven en el exterior deberán informar al consulado de su deseo de votar a fin de obtener el permiso permanente para votar en el futuro en elecciones presidenciales, elecciones primarias nacionales, y en plebiscitos nacionales. Ellos no tendrán permitido votar en elecciones para alcaldías o elecciones legislativas, pues estas no son contiendas electorales nacionales.

• Embajador en Venezuela

La Presidenta Michelle Bachelet ha designado a Pedro Ramírez Ceballo, un ex ministro en el gobierno de Salvador Allende (1970-1973), como el nuevo embajador de Chile ante Venezuela. Ceballo estuvo exiliado en Venezuela durante la dictadura militar de Augusto Pinochet (1973-1990), donde ejerció como profesor e investigador en el Centro de Estudios del Desarrollo (Cendes) de la Universidad Central. Ceballo fue co-fundador del Partido por la Democracia (PPD), un partido clave dentro de la coalición de Bachelet, Nueva Mayoría.

The government of President Evo Morales received a boost vis-à-vis security after Timothy Torlot, the head of the European Union (EU) delegation in Bolivia, pronounced the fight against drugs in Bolivia “a success” on 17 September. While recognising that “there is always more to do, especially when it comes to control of illegal drug trafficking”, Torlot appeared to downplay the trafficking situation in Bolivia as a situation common to many other countries.

The EU endorsement was particularly timely for the MAS government, coming just two days after the US government designated Bolivia (along with Burma and Venezuela) as a country that had demonstrably failed in the past 12 months to meet its obligations under international counternarcotic agreements. This, despite the fact that the latest (June 2014) UN Office on Drugs and Crime (Unodc) annual survey on coca estimated that the total area of coca cultivation in Bolivia was 23,000 hectares [ha] in 2013, down 9% on the previous year – the lowest since 2002.

The US designation also came despite the acknowledgement in the US government’s report that, along with Peru and Colombia, Bolivia continued to reduce illegal production, which is now “at the lowest level since authorities began to establish estimates in 1990”.

According to Bolivia’s state media, Cambio, the US’s argument is that the Morales government “could have done more as regards seizures of cocaine produced in Bolivia and transiting the country”.

The Unodc report found that compared with 2012, seizures of coca leaf in 2013 fell by 36% to 476 tonnes (t); seizures of cocaine base paste by 37% to 20t; and seizures of cocaine hydrochloride by 62% to 1.6t.

COLOMBIA | Más recortes en el presupuesto. El 9 de Noviembre el Consejo de Ministros de Colombia aprobó un recorte adicional de Col$3bi (US$1mm) al gasto planeado por el gobierno incluido en el presupuesto nacional en este año. El considerable recorte se produce después del al aplazamiento de otros Col$6bi (US$2mm) en los gastos anunciados para este año por el gobierno liderado por el Presidente Juan Manuel Santos en marzo, como parte de sus esfuerzos por frenar los gastos y ejercitar la disciplina fiscal en medio de menores ingresos en el Estado, como resultado de la aguda caída en los precios internacionales del petróleo. Esto significa que en conjunto, el gobierno de Santos ahora ha recortado su presupuesto original de Col$210,6bi, por Col$9bi.

Con el congreso habiendo recientemente aprobado un moderadamente austero presupuesto de Col$215,9bi para el 2016, todo esto ha provocado preocupaciones de que ajuste fiscal comenzará a obstaculizar el crecimiento económico interno en el mediano plazo debido a los menores niveles de inversión del gobierno. En un claro esfuerzo por calmar tales preocupaciones, después del anuncio los últimos recortes, el ministro de finanzas, Mauricio Cárdenas, dijo que los últimos recortes eran parte del principio del gobierno de ejercitar una ‘austeridad inteligente’, como respuesta al menos favorable escenario económico y que estos no afectarían los planeados proyectos de inversión, sino que primariamente caerían sobre los costos operativos del gobierno. “Los 3 billones de pesos del recorte caerán en un 93% sobre los costos operativos”, dijo Cárdenas.

Cárdenas dijo que los ahorros provendrían primariamente de una reducción en la transferencia de fondos del Estado al administrador nacional de fondos de pensiones (Colpensiones). De acuerdo con Cárdenas esto es posible debido al hecho que la situación financiera de Colpensiones ha mejorado en años recientes, gracias a que los afiliados que previamente habían migrado a las administradoras de fondos de pensión privadas (AFP), han vuelto a Colpensiones. “Hoy podemos recortar las contribuciones de pensión del Estado sin afectar la capacidad de pago de Colpensiones a todos sus afiliados”, dijo Cárdenas. El ministro también señaló que el último ajuste en los gastos “demuestra el firme compromiso del gobierno de adherirse a la legislación de responsabilidad fiscal, que estipula que el déficit fiscal no debe exceder el 3% del PIB este año”.

Igualmente, el Presidente Juan Manuel Santos dijo que la decisión de implementar más recortes este año es “una demostración adicional del compromiso del gobierno con la disciplina fiscal […] haciendo recortes en áreas en las cuales se ha identificado que los recortes pueden hacerse sin afectar el normal funcionamiento del Estado”. Santos también señaló que en un 69%, la ejecución del presupuesto de este año es una de las más altas tasas de ejecución en años recientes.

PERÚ | Buscando convertirse en exportador neto de electricidad. El 10 de noviembre el Presidente de Perú, Ollanta Humala, dijo que la intención de su gobierno es que el país comience a exportar electricidad a algunos de sus vecinos en los próximos años. Hablando en la inauguración de una nueva planta de energía solar de US$38.000 en la región sureña de Moquegua, que proveerá electricidad a unos 20.000 hogares, Humala dijo que “Perú ya puede reclamar la autosuficiencia en electricidad […] y que debería comenzar a pensar en proveer electricidad a los países vecinos que tienen déficit de electricidad”.

Humala explicó que a diferencia de algunos de sus vecinos, las geografía natural de Perú facilita la generación de energía renovable y limpia, “En las áreas secas de la costa sureña tenemos energía solar, en otras áreas como Ica, Piura, y La Libertad, tenemos energía eólica y en las áreas altas andinas tenemos energía hidroeléctrica”, dijo. En particular, Humala dijo que el objetivo de su gobierno era exportar pronto electricidad a países como Bolivia, Ecuador, y Brasil. “Hay un permanente déficit de electricidad en Brasil, y ellos necesitan importarla”, dijo Humala, agregando que “Perú puede ser un buen socio de Brasil en esto”. Agregó que su gobierno ya había estado explorando la posibilidad de establecer alianzas estratégicas con Brasil para lograr esto, y que actualmente estaba analizando las reglas y regulaciones internas de Perú para “adaptarlas para la exportación”.

Después de los comentarios de Humala, el gigante de la construcción brasilero, Odebrecht, anunció que actualmente estaba estudiando la posibilidad de participar en la planta de energía hidroeléctrica de Chaglla, localizada en la central región peruana de Huánuco, que tendrá una capacidad máxima de generación de electricidad de 2,79 gigawatts por año (el 6% de la actual producción nacional de electricidad de Perú) y que tiene fijado entrar en operaciones para febrero del 2016.

• La refinería Reficar se puso en marcha

El 10 de noviembre la firma petrolera estatal de Colombia, Ecopetrol, anunció que su nueva refinería de petróleo en Cartagena de Indias (Reficar) había producido su primer embarque de combustibles refinados de petróleo. De acuerdo con una declaración de Ecopetrol, Reficar procesó 90.000 barriles de petróleo crudo por día esta semana, para producir gasolina, diesel, combustible de aviación, y gas licuado de petróleo (GLP), después de su formal inauguración el 21 de octubre. La declaración agrega que ahora Reficar incrementará su capacidad de producción a hasta 165.000 barriles de petróleo por día para marzo del 2016. El gobierno colombiano ha dicho que al entrar en operaciones, Reficar podría ayudar a agregar un punto porcentual adicional al crecimiento del PIB por año.

Initial optimism that the 25 October elections for the first presidential round, second round of legislative elections, and 140 mayoral seats were an improvement on the 9 August first round of legislative elections – the first test for the provisional electoral council (CEP) - has proven short-lived. Since then, widespread allegations of fraud have emerged, accompanied by protests against CEP’s handling of the electoral process. The final results from the presidential first round – which confirmed a run-off scheduled for 27 December between Jovenel Moïse, of President Michel Martelly’s Parti Haïtien Têt Kalé (PHTK) and Jude Célestin, of the Ligue Alternative pour le Progrès et l’Emancipation Haïtienne (Lapeh) - have met with widespread rejection, including from Célestin and seven other presidential candidates.

On 24 November, the CEP announced the final presidential first round results which gave Jovenel Moïse 32.76% of the vote (508,761 of 1,553,131) to 25.29% for Célestin – meaning that neither candidate managed the 50% +1 of the vote or – since an amendment to electoral legislation made this year – a 25 percentage point lead over their nearest competitor. Third, with 14.3%, was Jean Charles Moïse (Petit Dessaline), followed by Maryse Narcisse, from the party of populist former President Jean-Bertrand Aristide (1991; 1994-1996; 2001-2004), Fanmi Lavalas (FL), who took 7.0%. The other 50 candidates made up the remainder.

Jovenel Moïse’s victory was in-line with the results of a survey by Miami-based Integrated Communications and Research (ICR) which interviewed 1,362 people. However, two other surveys would appear to challenge this result. One pre-electoral survey by local private think-tank Bureau de Recherche en Informatique et en Développement Economique et Social (Brides), which interviewed 11,000 people, had shown Célestin, the former head of the state-owned construction company Centre National des Équipements (CNE), as the frontrunner [RC-15-11].

Another, by Brazil’s Igarape Institute, released on 19 November and which was based on interviews with over 1,800 voters from 135 voting centers throughout all of Haiti’s ten departments, also revealed a very different picture. According to the Igarape survey, 37.5% of respondents indicated they had voted for Célestin while 30.6% voted for Jean Charles Moïse and 19.4% for Narcisse. Just 6.3% said that they voted for Jovenel Moïse.

Rejection of the results

Célestin, who ran in the 2010 contest for Inité, the party of former President René Préval (2006-2011), before being controversially excluded from the second round, wasted little time in rejecting the results which he described as a “ridiculous farce”. Only two presidential candidates (out of the 54) have filed official complaints – Narcisse and Vilaire Cluny Duroseau of Mouvman pou Endepandans Kiltirèl Sosyal Ekonolik ak Politik an Ayiti (Meksepa), who took just 0.08% of the vote. Célestin’s campaign spokesperson, Jean-François Chamblain, told the Miami Herald that the presidential candidate had opted not to present a formal challenge as “we don’t have any confidence that the outcome would be any different”.

Even before the nine-member CEP announced its results, it had already come under question. Ahead of the 25 October vote, CEP member Néhémy Joseph resigned, citing transparency-related concerns. Another CEP member, Jaccéus Joseph, told the international media that he refused to sign off on the results from the 25 October elections, again citing the lack of transparency over vote tabulation. On 3 November, eight presidential candidates, including Célestin, Jean-Charles Moïse, Eric Jean Baptiste (Mouvement Action Socialiste), Jean Henry Céant (Renmen Ayiti), Sauveur Pierre Etienne (Oganizasyon Pep kap Lite), Samuel Madistin (Mouvement Patriotique Populaire Dessalinien), Steven Benoît (Konviksyon) and Mario Andrésol (Indépendant), called for the CEP to set up an independent committee to investigate the allegations of fraud.

These concerns regarding fraud (see sidebar) have since been expressed in a damning 50-page report on the 25 October vote, released on 12 November by the so-called ‘Coalition’ – a group of four prominent civil society organisations: Réseau National de Défenses des Droits de l’Homme (RNDDH); Solidarite Fanm Ayisyèn (Sofa); Conseil National d’Observation Électorale (CNO) and Conseil Haïtien des Acteurs Non Étatiques (Conhane). The Coalition, which deployed 1,640 observers to 76.59% of the 1,508 voting centres, found that “massive fraud took place…which could not have been possible without the active participation of the CEP”. The Coalition also called for the appointment of an independent commission to verify the results.

The CEP is proving intransigent, however. On 16 November, after meeting with the eight presidential candidates, the CEP denied their latest request for an independent commission to be set up to verify the preliminary results. The CEP’s refusal on this count has since triggered protests. On 18 November, Jean-Charles Moïse and Benoît were injured after Haiti’s national police (PNd’H) used tear gas and rubber bullets to disperse protests which took place outside the CEP in Pétionville, a commune and suburb of the capital Port-au-Prince, and other parts of the country such as Cap-Haïtien, the capital of Nord department. Meanwhile, Céant was also reportedly detained and threatened with arrest. Two days later, one person was killed following clashes in Delmas, Ouest Department, where protests have also been taking place. This led Sandra Honoré, the head of the United Nations (UN) Stabilisation Mission in Haiti (Minustah), to issue a statement condemning the violence. Minustah had, along with the US, the European Union and the Organization of American States (OAS) initially indorsed 25 October voting day as an improvement on the 9 August elections.

And in the legislature?

On 8 November, the CEP revealed partial results from the legislative second round which suggested that, as had previously been the case, no party would have a majority in either house.

With 25 contests still to be re-run on 27 December, following violence and other irregularities which took place in the first round, on the preliminary legislative results, the PHTK looks set to have won at least 33 seats in the newly expanded 118-seat lower chamber of congress (including the four it won outright on 9 August). However the PHTK counts among its allies Konvansyon Inite Demokratik (KID) of Prime Minister Evans Paul (which won nine); Steeve Khawly's Reseau Nationale Bouclier Haitien (Bouclier) which won six; Ayiti An Aksyon (AAA) of Martelly advisor Youri Latortue which won three; and the Consortium of Guy Philippe, the man who led the armed revolt that brought down Aristide in February 2004, which won three.

Meanwhile, Préval’s new party, Plateforme Vérité, whose presidential candidate Jacky Lumarque was controversially excluded from the contest, will have at least 18; Inite (four deputies) and Lapeh (four deputies). FL will have seven while its allies Renmen Ayiti will have three deputies, and Pitit Dessalines, one.

As regards the 30-seat national senate [for which two thirds of the seats were up for grabs], Vérité took two, PHTK one (although its allies KID took three, Bouclier took one and AAA took one), and FL took one of the 12 seats so far declared.

• Municipal votes

According to the preliminary municipal results, Michel Martelly’s Parti Haïtien Têt Kalé (PHTK) won 37 of the 140 mayoral races, including in the capital, Port-au-Prince. Participation was extremely low. On official figures, turn-out was just 26.5%. In Port-au-Prince for example, the PHTK candidate, Joseph Pierre Richard Duplan, won with 14.06% of the vote, defeating Ralph Youri Chevry of Jude Célestin’s Ligue Alternative pour le Progrès et l’Emancipation Haïtienne (Lapeh), by 10,308 votes to 9,969.

• Fraud claims

While the fraud allegations vary, most centre on the 915,675 accreditation passes handed out by the provisional electoral court (CEP) to political party monitors and observers which enabled them to vote wherever they were present, even if they were not on the electoral list. According to local and international press reports, a black market emerged around these passes which ended up selling for as little as US$2.00 on the day of the 25 October election.

*** NEW SECURITY MINISTER FOR TRINIDAD & TOBAGO. On 7 August, Prime Minister Keith Rowley moved his national security minister, Edmund Dillon, to the housing ministry. Dillon has been replaced by Stuart Young, formerly the communication minister. Dillon had held the security post since the People’s National Movement (PNM) came to power in 2015.

There has been some speculation that the shifting of Dillon was a response to the appointment of Gary Griffith as police commissioner. The two were formerly colleagues in the army, and some have said there was friction between the two.

In any event, the opposition has attacked Dillon’s replacement as lacking experience. United National Congress (UNC) parliamentarian Rodney Charles described Young as an “on the job trainee” and said: “Young lacks known experience in security and managing multi-faceted bureaucracy…. His only qualifications are that he’s a talker in parliament, a ‘smooth talker’. For that he may be suited to communications to hoodwink the population into believing crime’s down.”

*** JAMAICA GROWTH ACCELERATES. According to the Planning Institute of Jamaica (PIOJ), the 1.8% year-on-year growth recorded for the April-June 2018 quarter was the fastest since the July-September 2016 quarter. It was also the 14^th consecutive quarter of positive growth.

Announcing the figures in mid-August, Dr Wayne Henry, the director-general of the PIOJ, said: “Indications are that the pace of economic growth will continue to strengthen during the remainder of 2018 and 2019. The forecast for calendar 2018 is that growth will be in the range of 1.5%-2.5%, and for fiscal year 2018/19 growth is projected to be within the range of 2%-3%.” The PIOJ is forecasting year-on-year growth of 1.5%-2.5% for July-September.

*** GUYANA RISING UP US AGENDA. Guyana has been clear that its granting of exploration rights to US oil giant Exxon-Mobil in its oil-rich territorial waters was in part motivated by the need to secure a tacit US guarantee to support Guyana’s territorial integrity in the face of a long-standing dispute with Venezuela. Exxon-Mobil has been duly rewarded with significant oil discoveries – and a production-sharing agreement that is considered by some to be generous.

Against this background, it is not surprising to see US politicians taking a greater interest in Guyana than previously, and in the third week of August, a delegation of nine US congressmen accompanied, significantly, by some senior military personnel visited Guyana to learn more. At the start of the visit, on 22 August, Minister of Foreign Affairs Carl Greenidge explained: “They are coming to have discussions of a general political nature”.

The visit has not been without its critics, largely due to past difficulties between Guyana and the US. This was acknowledged by Prime Minister Moses Nagamootoo, who said: “There have been previous episodic decades that could give justification for this negative nationalism, going back to the late 1950s when the-then British colony became a pawn in the Cold War. She was subsequently converted into a laboratory for every conceivable stratagem of American imperialism, which has since been well-documented.”

However, the prime minister went on to explain the importance of the US support for Guyana in its dispute with Venezuela, saying: “With the expected oil bonanza came renewed but overt diplomatic support for Guyana’s territorial sovereignty against a spurious claim by Venezuela.”

The Bahamas central bank governor John Rolle recently gave an update on the island nation’s central bank digital currency (CBDC), the sand dollar.

Launched in October 2020 following a pilot in 2019, the sand dollar is a digital version of the traditional Bahamanian dollar, which differentiates it from cryptocurrencies such as bitcoin, which are made to be free from ties to central authorities. The sand dollar made The Bahamas a global leader in digital currency, coming into use six months before China’s “digital renminbi.”

Rolle, who has been central bank governor since 2016, told Bloomberg in an article published on 20 May that the aim of the sand dollar is to improve access to banking across the complicated geography of the island nation, where some bank branches still haven’t been rebuilt following Hurricane Dorian in 2019, and accelerate the move to digital transactions. In the interview Rolle said there were 200,000 sand dollars in circulation, a number which is likely to increase rapidly in the next few months, and he also forecasts growth in user numbers as people become more familiar and comfortable with the idea of digital currency. “What we want is - for anyone who today is making a payment by writing a check or having to withdraw cash - that they can accomplish the same through this new payment channel,” said Rolle.

The Eastern Caribbean Central Bank (ECCB) also launched a digital currency pilot called DCash on 31 March, and Rolle said The Bahamas had shared expertise during the development process. The ECCB covers the Eastern Caribbean Currency Union (ECCU), which includes eight islands, but the DCash pilot will cover four: Antigua and Barbuda, Grenada, St Kitts and Nevis and Saint Lucia. Rolle also mentioned that several other Caribbean nations are also exploring CBDCs. “I think part of the excitement for the region is the possibility of exploring technical cooperation that will eventually lead to regional payment platforms,” he said. “There are some constraints, because it depends on the level of interregional trade, and typically we trade a lot in US dollars. But once you move beyond that, there is some room for an interregional mechanism.

Experts say CBDCs could present a threat to payment firms and banks if people shift to using them instead of credit and debit cards. This would reduce their income from transaction fees. In an article published in December 2020, news agency Reuters spoke to a small business owner in The Bahamas who cited avoiding these fees, in their case around 4% of sales, as a positive in adopting the sand dollar. However The Bahamas has teamed up with Mastercard on a prepaid card which allows customers to instantly convert sand dollars to Bahamanian dollars and pay for items at any business which accepts Mastercard. The company is also developing a platform that will assist central banks in developing digital currencies.

The Bahamas has been hailed as a success story as other countries around the world wake up to the potential of CBDCs. In June Andrew Bailey, the Governor of the Bank of England (BoE), hailed the digital currencies as potentially “one of the most fundamental innovations in the history of central banking” which will “move us into a new era.” And The Bahamas is at the forefront of the movement, with British consultancy firm PwC ranking the country first in the world for retail CBDC development in an April 2021 report, as almost 25% of sand dollar pilot programs are now at the implementation stage. With a warm reception from early adopters and increasing familiarity with digital currencies, it seems likely that the sand dollar will continue to go from strength to strength.

A new United Nations (UN) report focuses on The Bahamas as an example of the growing financial cost of climate change and health pandemics. Natural disasters are becoming more frequent, are leading to increased foreign debt, and are restricting both the value and impact of social programmes.

In per capita terms The Bahamas is one of the wealthiest nations in the Caribbean, but it has not been able to escape a series of economic body-blows. Since 2012 the country, with a 400,000 population, has been hit by no less than five major hurricanes. They include Hurricane Joaquin (2015), Matthew (2016), Irma (2017), and Dorian (2019). Of those, Dorian was by far and away the most destructive with over 70 people killed, and damages estimated at US$3.4bn, equivalent to roughly one-fourth of GDP. As if that were not enough, the highly tourism-dependent Bahamas was also hit by the coronavirus (Covid-19) pandemic in 2020 which triggered a 24% fall in GDP that year.

Attiya Waris, the report’s author, who is also a UN independent expert on foreign debt, says the growing cost of climate change is forcing Caribbean governments to spend less on support programmes such as food assistance, business loans, and unemployment benefits. In the case of The Bahamas after Dorian, the government was forced to raise US$500m in additional debt, almost doubling its debt servicing costs. Waris calls for a series of measures from the international community, including more concessional lending, write-downs for climate disaster-related debts, and contributions to the proposed Loss and Damages Fund (agreed last November at the UN climate change conference [COP28] in the United Arab Emirates). She also recommends strengthening taxes and reducing finance-related corruption such as money-laundering. The report notes that while Caribbean countries such as The Bahamas are suffering the sharp end of climate change losses, they have contributed least to global warming. In fact, The Bahamas contributes less than 0.01% to global greenhouse gas emissions.

Paraguay’s President Santiago Peña has paid a visit to Venezuela to meet President Delcy Rodríguez. This signals a major diplomatic shift for one of the region’s traditionally more vocal critics of the ruling Partido Socialista Unido de Venezuela (PSUV). The visit is the latest sign of changing regional relations with Caracas following the US military capture of Venezuela’s former president Nicolás Maduro (2013-2026) in January and Rodríguez’s subsequent cooperation with the US government of President Donald Trump. Against this backdrop, governments with close ties to Washington, including Paraguay and Chile under President José Antonio Kast, have moved to normalise relations with Venezuela.

• Chile

On 30 July the foreign ministries of Chile and Venezuela announced the launch of a roadmap for the gradual normalisation of bilateral relations. The first phase of the plan comprises the reactivation of consular relations “as an initial step towards the full resumption of bilateral ties”. President José Antonio Kast stated that the agreement would allow the countries to move forward on shared challenges such as security, migration, and economic development. He met President Rodríguez on the sidelines of the UNGA in New York on 24 September to discuss this first phase of the roadmap.

President Peña was hosted on 19 September by his Venezuelan peer at the Miraflores presidential palace, where they discussed “the institutional process” in Venezuela, the economy, and the joint fight against transnational organised crime. President Rodríguez hailed the meeting as the start of “a new era of rapprochement, dialogue, and cooperation”. The country’s foreign ministers, Paraguay’s Rubén Ramírez Lezcano and Venezuela’s Félix Plasencia, were also present and issued a joint statement, saying that the meeting marked a new stage in relations and highlighting the importance of “fostering opportunities for dialogue” between the productive and commercial sectors of both countries.

The visit marked a significant step in restoring diplomatic and consular relations between Paraguay and Venezuela. These were severed in January 2025 after Peña’s government recognised opposition candidate Edmundo González Urrutia, rather than Maduro, as the winner of Venezuela’s widely disputed 2024 presidential election. The severing of ties saw diplomatic personnel expelled from both countries, with Peña pledging to work with the international community to ensure “the prompt restoration of democracy in Venezuela”. However, the staging of elections in Venezuela was not publicly announced as a topic of conversation during the 19 September meeting.

The meeting represented the first high-level official contact between the two countries in the 20 months since the diplomatic rupture. However, while the trip was clearly geared towards normalising relations, both Peña and Ramírez were clear that it represented the beginning of dialogue aimed at an “eventual” re-establishing of ties, rather than an immediate reset, signalling some enduring caution around the bilateral relationship. Nevertheless, as a vocal critic of the Maduro regime and one of Washington’s closest partners in South America under Trump, Peña’s visit to Caracas would have been unthinkable a year ago, prior to Maduro’s removal and Venezuela’s realignment with the US. His decision to move towards a normalisation of relations with Venezuela now therefore illustrates how engagement with Rodríguez is increasingly compatible with alignment with the US.

Peña’s visit to Caracas immediately preceded his trip to New York for the United Nations General Assembly (UNGA), where both he and Rodríguez were scheduled to speak. Peña addressed his visit to Venezuela during a speech on 23 September, stating that he had not gone “to validate a regime”. He said Paraguay could help with Venezuela’s move towards a democratic transition, which should be “real and lasting” and include reintegration into the international community. He said this should include Venezuela’s re-joining of the Mercosur regional trade bloc, from which it was suspended in 2017. Readmission into such a bloc would be a major boost for Venezuela in terms of regional political, diplomatic, and economic reintegration, although it would face significant hurdles.

Investment

While in New York, President Peña also met representatives from the Bank of America, highlighting the country’s investment-grade rating, macroeconomic stability, and sustained annual growth of around 5-6%. He also participated in the Paraguay Investment Forum, which brought together government officials, Paraguayan business leaders, and international investors with the goal of attracting investment to the country.

*** Israeli hawks eye Sinai.  In our 3 August issue, we looked at Israeli reactions to the fifth attack in the last six months on the Sinai pipeline carrying gas to Israel.  The attacks on the gas pipeline have coincided with an increase in the smuggling of weapons into the Gaza Strip.  It is thought that the number of rockets in the Gaza Strip has increased from 5,000 to 10,000 since the end of 2010, and it is estimated that there has also been a sixfold increase in the amount of smuggled explosives.  As we reported, the assessment of Israeli intelligence is that Egypt is “losing control over the Sinai region”.

The assessment that Egypt is losing control of the Sinai was reinforced by the 29 July attack by 150 masked men on a police station in the Sinai city of Arish.  The masked men, thought to be al-Qaeda operatives, raised black flags and took control of the city for six hours, during which time seven people were killed and 30 injured.

Israeli hawks say that Israel now has three choices: watch Sinai becoming a haven for al-Qaeda and other extremists; allow an increasingly hostile Egypt to remilitarize the peninsula in order to re-establish control; or for Israel to retake control of the region itself.   There is little doubt which of the three options the hawks favour.

*** Crackdown in Xinjiang.  Following the 30-31 July bombings that killed 18 people, the Public Security Department in China’s restless Muslim province of Xinjiang has ordered a two-month crackdown “on violent criminal activities” with a view to “crushing terrorist groups, nabbing behind-the-scene plotters, and preventing mass incidents”, according to local reports.  The Zhongguo Xinwen She news agency says that police “will sternly crackdown on illegal religious activities, materials advocating violence and extremism, illegal publicity materials using electronic media, and criminal online activities”.   Police patrols are being increased in public places such as squares, rail and bus stations, markets, and shopping areas.

*** China’s challenging demographics.  A Chinese government report issued on 16 August says that the number of Chinese citizens aged 60 or over is now 177.65m, or 13.26% of the total population.  It is estimated that the percentage of China’s population categorized as ageing will reach 17% in the next five years and 30% by 2050.  The report was produced by China’s National Working Commission on Ageing (CNWCA).

The United Nations says that at present almost 700m people worldwide are aged 60 or above, which is still under 10% of the total. By 2050, this is expected to have grown to 2bn, which is over 20% of the world’s population.  The latest Chinese statistics suggest that China will be one of the country’s with the highest percentage of ageing people.

CUBA | Corrupción y derechos humanos. El empresario chileno Max Marambio fue condenado en ausencia a 20 años de prisión por fraude y soborno esta semana, luego de un juicio en Cuba. Marambio, un guardaespaldas del ex presidente socialista de Chile, Salvador Allende, y amigo por mucho tiempo de Fidel Castro era copropietario de una compañía de alimentos, Río Zaza, una empresa conjunta con el gobierno cubano. Un chileno que trabajaba para Río Zaza fue hallado muerto en el departamento de Marambio en La Habana, después de ser interrogado en una investigación de corrupción el año pasado. Alejandro Roca Iglesias, que fue destituido como ministro de alimento en marzo de 2009, recibió una sentencia de 15 años. Marambio dijo que él no apelaría ante lo que calificó como un “juicio show”.
En la misma semana que el juicio, un ex prisionero político, Juan Wilfredo Soto García, falleció. Soto murió el 8 de mayo, habiendo sido admitido en el hospital de Santa Clara dos días antes con intenso dolor abdominal. El 5 de mayo, él había tomado parte en una protesta en un parque en Santa Clara. Luego de la cual fue llevado a una estación de policía. Los disidentes cubanos afirman que él había muerto debido a los golpes propinados por la policía. En un comunicado de prensa, el gobierno dijo que “no había signos internos o externos de violencia,” y que Soto había fallecido a causa de una “pancreatitis aguda”.

Paraguay’s main opposition Partido Liberal Radical Auténtico (PLRA) began a signature-collection campaign on 9 January in favour of impeaching President Horacio Cartes for attempts within the ruling Asociación Nacional Republicana-Partido Colorado (ANR-PC) to allow presidential re-election, which is prohibited under the constitution.

The president of the PLRA, Efraín Alegre, said Paraguay was not “prepared to endure another dictatorship”. He argued that “there is no government because [President Cartes] is campaigning and, most serious of all, this is unconstitutional”. Alegre said that PLRA deputies were working on tabling a motion of impeachment against Cartes in the lower chamber of congress, although it lacks the requisite number of seats for this to prosper unless it gains support from dissidents within the ANR-PC. Senator Rafael Filizzola, of the opposition Partido Democrático Progresista (PDP), said the signature-gathering was not “a trivial matter [as] there is an attempt to violate the constitution and interrupt the democratic process”. The ANR-PC, meanwhile, is gathering signatures in favour of re-election.

In late December the PLRA presented an accusation before the electoral authorities (TSJE) against Cartes for “deceitful electoral propaganda” over re-election. The PLRA and other opposition parties insist that the only valid procedure to permit re-election would be via a constitutional reform approved by a constituent assembly. Ironically, shortly beforehand, the ANR-PC filed a case before the TSJE challenging the right of impeached former president Fernando Lugo (2008-2012), currently a senator for the left-wing Frente Guasu, to stand for presidential re-election after he stated his intention to run in 2018. The TSJE ruled that Lugo was ineligible to run for president under the constitution.

With private-sector oil firms coming under continued pressure to lift output, there has been speculation that the state-owned oil firm Pemex may be seeking to take over production in an offshore field awarded to a US firm, Talos Energy, as well as its partners – a UK firm, Premier Oil, as well as a Mexican firm, Sierra Oil and Gas. 

To date, the speculation remains unsubstantiated, relying on several articles in the local press, which have cited several company officials and former public-sector energy officials. However, if the speculation is indeed true, Pemex is considering seeking to take control of exploration in the Zama 1 well, in Block 7, which is located in the southern Gulf of Mexico.

The Talos consortium was one of the first to be awarded exploration rights in an auction in 2015; two years later, the firms announced that they had made a significant discovery, with initial estimates of oil reserves for the whole Zama block ranging from 1.4bn-2bn barrels of oil-equivalent, with a possibility to extend off the block.

Pemex owns exploration rights in an adjacent block, with the reservoir from Zama 1 believed to extend into this block. It is on this basis that the state-owned firm is reportedly considering taking over exploration in Zama 1.

Investors remain cautious

These developments will reinforce investor uncertainty in the oil sector. Although Lopéz Obrador has promised to respect the terms of the contracts signed between the government and private oil firms under his predecessor, private-sector firms have come under mounting pressure to accelerate exploration and production.

Lopéz Obrador has repeatedly voiced frustration that oil production has continued to fall, despite the contracts signed in recent years with private oil companies. Should Pemex seek to take over operations in Zama 1, companies with stakes in other oilfields may get nervous about government encroachment, which may affect future investment decisions.

The new administration has not lacked for ideas but has been less successful in its efforts to persuade an opposition-dominated congress to give those ideas a green light. One of the Milei administration’s first moves was to use an existing procedural rule to temporarily (and legally) side-step congress. This was achieved by introducing DNU 70/2023, a “decree of urgency and necessity” (Decreto de Necesidad y Urgencia, DNU) which contained no less than 366 specific measures. Signed on 20 December – just ten days after Milei took office - the DNU can be seen as a wide-ranging enabling law. It cancels 80 pre-existing laws and over 300 regulations, prohibitions, and limitations on business activities, simplifies administrative procedures, and seeks to weaken the power of trade unions over their members.

DNUs delegate powers to the presidency for a specific period of time (in this case, two years). They are allowed in emergency situations only, and they must be accepted or ultimately rejected in their entirety, without the possibility of line-by-line amendments. They can only be rejected by a majority vote in both houses of congress. DNUs are also subject to legal challenge; in fact, a labour court promptly rejected the DNU measures on trade union power, as unconstitutional, saying any changes to labour law would have to be submitted to congress in the normal way, and not through the DNU procedure. The northern province of La Rioja has also challenged the DNU on procedural grounds in a filing to the Supreme Court.

While the DNU came into effect in December, at the point when the new president signed the decree, the possibility of it being rolled back remained significant. Indeed, on 14 March the senate voted 42-25 against the decree with four abstentions. On its own this was insufficient to reverse the decree. As we have seen, a similar vote in the lower house would be needed to force the termination of the DNU. Milei responded by re-posting social media messages describing those who had voted against the DNU as being “traitors to the motherland”. There was also speculation over tensions within the government, itself with internal criticism of Victoria Villaruel, LLA senate leader and vice president, for having accepted opposition requests for a debate on the DNU. Presidential spokesman Manuel Adorni found himself forced to tell a press conference “there is no internal fight or conflict involving the vice president”.

The purge of the Nicaraguan judiciary which began in late October 2023 as part of efforts to shore up support for Vice President Rosario Murillo [SSR-24-02] has been ongoing, according to local media outlets such as Confidencial. In early April Confidencial reported moves against the vice president of the 16-member supreme court (CSJ), Marvin Aguilar, who since the purge late last year (which local commentators considered indicative of divisions between factions of the ruling Frente Sandinista de Liberación Nacional [FSLN], loyal to Murillo and to President Daniel Ortega) had taken over as the CSJ’s “acting president”. Along with Aguilar, the president of Managua’s court of appeals, Octavio Rothschuh, and other political allies of Néstor Moncada Lau, a national security advisor to Ortega, are reportedly facing an uncertain future.

Aguilar took over as acting president of the CSJ in November 2023, during the first round of purges related to efforts to cement control by Murillo. The younger of the presidential couple (at 72, Murillo is six years younger than her husband), the first lady is widely tipped to take over from Ortega ahead of the next elections due in 2026, and since 2018 has assumed control of spheres such as the police (PNN). Under the purge of the judiciary in late 2023, which was carried out by retired general commissioner Horacio Rocha, a presidential adviser with ministerial rank, following a restructuring in early 2023, and Fidel Moreno, the FSLN organisational secretary, CSJ president Alba Ramos was removed, along with over 900 staff, including judges, magistrates, and administrative staff.

According to a Confidencial report published at the start of April, however, in February 2024 Aguilar was subjected to police interrogations in the notorious Managua prison, El Chipote, in relation to a corruption investigation. According to Confidencial, while not officially removed from his position, Aguilar is “now in a state of limbo” and “no longer has any decision-making authority” in the CSJ. Confidencial also reports that in March Rothschuh was interrogated in El Chipote and was released but has been stripped of his judicial powers.

Confidencial and other outlets such as Divergentes, which like Confidencial is now operating from exile in Costa Rica, highlight that Aguilar’s dismissal indicates that Moncada Lau’s influence in the country’s judicial system is waning. This at a time when the judiciary itself has been weakened, with legislation passed for example in January removing oversight of all national registry documents from the courts to the attorney general’s office [SSR-24-02]. The recent purges leave at least ten vacancies in the CSJ (not including Aguilar), which are likely to be filled with Murillo allies. With the CSJ now paralysed for over five months, the so-called “Murillo List” of replacement magistrates is expected to be presented for approval in the next few months to the 92-member unicameral legislature which, like all other institutions in the country under the authoritarian government, is controlled by the FSLN.

Aguilar

In 2019 Aguilar took over the crucial post of national political secretary of the FSLN leadership council after former CSJ magistrate Rafael Solís, Ortega’s political operator in the justice system, stepped down in protest at the government repression that began in 2018 in response to social unrest. In 2020 he was designated by the US Department of the Treasury’s Office of Foreign Assets Control (Ofac) for “assisting in the Ortega government’s effort to undermine Nicaragua’s democracy”.

Rothschuh

Rothschuh has been a prominent figure in Nicaragua’s judiciary. He announced the decision to release 222 political prisoners and expel them from the country in 2022 [SSR-22-04] as well as sentencing Catholic Bishop Rolando Álvarez, an outspoken critic of the Ortega government, to over 26 years in prison in February 2023 which prompted widespread outrage and precipitated the severing of Nicaragua’s relations with the Vatican. In April 2023 Rothschuh was sanctioned by the US Department of the Treasury’s Office of Foreign Assets Control (Ofac) in relation to the Managua appeals court’s decision to deport the 222 dissidents. 

Uruguay’s economy grew by an impressive 5.7% year-on-year in 2011, according to the central bank, down from stellar growth of 8.9% in 2010. The growth figure was above the regional average for the seventh consecutive year, and came in spite of the adverse global economic context, but the government still found itself slightly on the defensive. This was because of suggestions that the economy is slowing down, a suspicion compounded by developments in neighbouring Argentina. Real GDP grew by just 3.5% year-on-year in the final quarter, the slowest growth for this period since 2006, and it contracted by 1.9% on the previous quarter.

The government’s economic team was quick to point out that there were specific reasons for the slowdown in the final quarter. The decline, for instance, was heavily influenced by the drought, which impacted hydroelectric power generation. On top of this, the La Teja oil refinery was inactive: it is undergoing maintenance, and it also endured a labour conflict from last August until January this year. The industrial sector contracted by 7.9% and the electricity, gas and water sector by 41.4% year-on-year in the final quarter.

On 30 August Colombia’s largest commercial bank, Grupo Bancolombia, announced that it had acquired a 70% stake in local virtual mobile services firm, Uff!, for US$11.4m.

Bancolombia specifically intends to improve its mobile banking services with this acquisition. The fact that one of Latin America’s major banks is looking to expand mobile banking signals the next important area of development for the region’s banking. Access to banking is still relatively low in Latin America, but mobile phone usage has seen a steady rise, reaching almost full coverage. As in other emerging regions, notably Africa, mobile banking has the potential to quickly expand in Latin America. Regional firms are starting to realise the increasingly attractive business prospects attached to mobile banking services and are already positioning themselves to take advantage of future opportunities in the area.

Data from the World Bank (WB) shows that 60% of the adult population in Latin America still lacks access to banking services; yet 90% of adults own a mobile phone. Mobile banking has the potential not only to substantially increase banking access for the general population, but also represents a good opportunity for financial institutions to expand their business in a region enjoying a consumption boom. While other emerging economies have quickly spied the opportunities in mobile banking, Latin America has so far lagged behind. Currently, there are just 12 mobile banking schemes in operation in Latin America, compared with 25 in Asia Pacific and 45 in Africa, the region that pioneered the use of mobile phones for making financial transactions.

According to a 2011 study by the consulting firm, Pyramid Research, for the Latin American banking federation (Felaban), there are an estimated 18m mobile banking customers in Latin America. With potential growth estimated at as much as 65% a year, there could be 140m customers by 2015. According to the report, “Latin America has achieved the right conditions to smoothly increase the uptake of mobile financial services including banking and payments”.

Founded in 2010, Uff! offers pre-paid SIM cards, pre-paid mobile data packages, mobile top-up services and voice mail services. The company operates a virtual business model. It does not have any physical stores and relies primarily on the internet and call centres to conduct business. It is Latin America’s largest virtual mobile services operator, with over 100,000 kiosks across Colombia serving 272,000 customers. Uff! does not provide mobile banking services but it has the infrastructure and systems in place do so.

Announcing the deal, Bancolombia’s president, Carlos Raúl Yepes, declared mobile banking “Banking’s new challenge and that is why we must promote the development of new products and services that will meet [customers’] expectations”. Yepes noted that customers are increasingly interested in having quick and easy real-time banking access that provides them with the mobility, portability and connectivity they need. He added that, with its latest acquisition, Bancolombia aims to offer even more banking services to “more Colombians that today don’t have any access to the banking system”.

Bancolombia may only be seeking to expand its mobile banking services in Colombia for now, but it has the capacity to expand the service regionally. It has a presence in Panama, Puerto Rico and the Cayman Islands and is also El Salvador’s leading financial services provider through its local subsidiary, Banco Agrícola.

Mobile banking provides additional opportunities for local intermediaries, which are also setting their sights on its regional growth potential. On 14 August GCS International, which specialises in the development and management of mobile payment services, announced that it would expand its tPago payment platform from its native Dominican Republic (DR) to other Latin American countries. GCS expects to launch the service, which allows customers to top-up pre-paid minutes for mobile phones, make payments and transfer money from their banking accounts as well as make credit card advance payments, in Colombia, El Salvador, Guatemala and Puerto Rico this year . According to Day Jiménez, GCS co-founder and executive, the system began operating in the DR in 2010 after GCS partnered with three local mobile phone operators and three financial services providers. Since then, its customer base has grown by an annual rate of 57%, capturing 16% of the DR population with banking access.

According to Jiménez, tPago’s success lies in characteristics that differentiate it from its rivals such as the fact that no mobile internet connection is required to access it and that unlike other platforms requiring a subscription, “It is completely open, anyone can connect to it”. As long as the user has a mobile phone, he/she can access the platform and carry out transactions upon approval of their bank or financial services provider. Jiménez revealed that GCS is currently working on a new pilot platform, tPago Prepago, to provide mobile payment services to individuals without bank accounts.

Even though Hugo Chavez’s successor in Venezuela, Nicolas Maduro, has only narrowly won election, our sources in the region say that the most persuasive scenario for the future of Venezuela is the one outlined by Uruguay’s President Mujica.  In his judgement: “We will witness a process of chavismo without Chavez which will be long-lasting because of its mystique.  [It will become] something similar to Peronism in Argentina.”

In the shorter term, relations with the US are set to be tense under Maduro.  Since before the recent elections, Maduro made it clear that open confrontation with the US was being revived - reversing a rapprochement he had set in motion while foreign minister.  Maduro has invoked a succession of alleged US-staged plots of varying degrees of outrageousness.  The primary motive may have been electoral, but the consequences are likely to be longer lasting, particularly as the new president struggles to burnish his chavista credentials after a much tighter election than he had expected.

Shortly before Chavez died on 5 March, Maduro said in a broadcast to the nation, “There is no doubt that comandante Chavez’s health came under attack by the enemy.  The old enemies of the fatherland [an allusion to the US] sought means of harming his health”.  On 5 March Maduro announced that two air force attachés at the US embassy had been ordered to leave the country within 24 hours, on the grounds that they had been holding meetings with members of the military “to propose destabilising projects”.

On 20 March, Maduro took up a claim made by his foreign minister, Elias Jaua, that two former US diplomats, Roger Noriega and Otto Reich, were hiring mercenaries to kill Henrique Capriles Radonski, the opposition presidential candidate, and to blame the government.  On 7 April he said that the mercenaries were already in the country: “Their objective is to kill me”.

Just before the elections, acting vice-president, Jorge Arreaza, Defence Minister Diego Molero and Interior Minister Néstor Reverol held a press conference to announce that the government had dismantled “a plan that would try to affect the electoral or post-electoral process”. Separately, Reverol produced two audio recordings, handed to the government by “a reliable source” in which two Salvadorean individuals - identified as the retired colonel David Koch and congressman, Roberto d’Aubuisson - discuss plans under way to “disorient the vote”.

On 14 April, after casting his vote, Maduro announced that the following day he would present “direct evidence” of the conspiracy and air the reasons that had led him to expel the two air attachés.  This proof did not materialise, but two days later Maduro said that the US had “financed and directed all of the acts of violence” in Venezuela.