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COLOMBIA | Unemployment approaches pre-pandemic levels. On 31 May Colombia’s national statistics department (Dane) released the latest employment figures, which showed unemployment falling to levels not seen since the onset of the coronavirus (Covid-19) pandemic. Unemployment in April stood at 11.2% (2.8m people), down 4.3 percentage points year-on-year. Dane’s director, Juan Daniel Oviedo, noted that the number of unemployed was at its lowest since February 2020, one month before the pandemic struck, when 2.7m people were out of work.

ECUADOR | World Bank approves new loan to tackle malnutrition. On 26 May the World Bank (WB) announced that it had approved US$200m in additional financing for the Social Protection Systems project in Ecuador, which was approved in April 2019.

 According to a WB statement, the new resources will support the implementation of the national strategy Ecuador Crece sin Malnutrición to reduce malnutrition in pregnant women and children under 24 months through the provision of comprehensive service and benefit packages.

According to the same source, the latest round of funding will be used to finance activities in 728 parishes and enhance the effectiveness of the social protection system project through institutional strengthening and greater integration with health services.

 According to the United Nations Children’s Fund (Unicef), chronic malnutrition affected 27.2% of children under the age of two in Ecuador in 2021. Unicef estimates that expenses associated with malnutrition – such as health, education, and loss of productivity – represent 4.3% of Ecuador’s GDP.

On 11 November, thousands of demonstrators took to the streets of the Costa Rican capital San José to protest a raft of policies introduced by President Rodrigo Chaves.

The demonstration was organised by agriculture lobby group Grupo de Liderazgo del Sector Agropecuario, which comprises various organisations including Corporación Hortícola Nacional (CHN), Unión Nacional de Productores Agropecuarios Costarricenses (Unag), Unión de Pequeños Productores Agropecuarios (UPA Nacional), and Unión de Productores Independientes y Actividades Varias (Upiav), with agricultural policy the chief concern. However, teachers’ unions such as the Sindicato de Trabajadoras y Trabajadores de la Educación Costarricense also supported the protest, with the neglect and underfunding of the public education system another growing concern in the country.

Farmers believe that Chaves’ efforts to drive economic growth by liberalising trade has had a negative effect on the sector, exposing them to cheap foreign imports and reducing domestic production of basic foodstuffs such as rice and tomatoes. 

Rice producers blame changes on the tax regime covering the sector introduced by Chaves in 2022, when the president signed a decree that reduced import tariffs on rough and milled rice from 35% to 3.5% and 4% respectively. According to Minor Cruz, executive director of national rice lobbying group Conarroz, domestic rice production has fallen by 59% since the change. Cruz called on Chaves to provide financial support for the sector, citing concerns around unemployment and food security.

Some have also criticised Chaves’ efforts to liberalise trade by joining trade blocs such as the Pacific Alliance, which comprises Chile, Colombia, Mexico, and Peru. Costa Rica’s application was approved in December 2024, granting exporters from those nations greater access to the country’s market, and the country has also agreed trade deals with Israel, Ecuador, and the United Arab Emirates. Chaves has also applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), an Asia-Pacific trade bloc, which agreed to start an accession process for Costa Rica in November 2024, adding to concerns about cheap food imports from member states including Vietnam and Malaysia, both of which are significant rice producers.

Protest leaders are calling on Chaves to row back policies such as the reduction in tariffs on rice imports; the introduction of a monitoring system for cattle farmers; and the application to join the CPTPP. However, while Chaves’ drive to liberalise trade may have become a lightning rod for discontent among farmers, the issues facing the agricultural sector appear to be part of a wider shift. A report from the public Universidad de Costa Rica (UCR) published in October found that the area of land under cultivation in Costa Rica fell by 10%-27% between 2021 and 2024. It also found that the agriculture sector accounts for 3.3% of GDP this year, down from 4.7% in 2015, as well as highlighting the fact that the agriculture ministry receives just 0.49% of the government budget, which is around the same level as a decade ago.

However, these figures are understandable to a certain extent as Costa Rica has been attempting to continue its transition away from being an agricultural economy and move up value chain in sectors such as high-tech manufacturing. The country has had significant success in this regard in recent decades, with the medical devices sector a standout performer, and officials are attempting to repeat the trick by positioning Costa Rica as part of a new semiconductor supply chain in the Western Hemisphere, tapping into Washington’s desire to reduce its reliance on Asian markets.

This puts Chaves, and his potential successor Laura Fernández, a former minister of the presidency under Chaves who he has picked as his political heir and is running for president for the Partido Pueblo Soberano, on collision course with agricultural producers that face an existential threat to their livelihoods in the face of a political project that appears committed to opening the Costa Rican market in the hope of driving economic growth. This increases the likelihood of future protests, which will also likely be supported by other sectors that feel they have been neglected, and could portend political instability in the coming years.

OECD warns on impact of US tariffs

In a 2 December report on Costa Rica, the Organisation for Economic Co-operation and Development (OECD) projects Costa Rica’s GDP growth to remain “broadly stable,” easing from 4.2% in 2025 to 3.5% in 2026 and 3.4% in 2027. It notes that the contribution of external demand is expected to gradually weaken due to increased tariffs on Costa Rican exports to the US, the country’s main trading partner. In July 2025, the tariff applied to Costa Rica’s goods exports to the US rose to 15%. The US accounts for around 16.2% of Costa Rica’s total exports and 47% of goods exports according to OECD. On 14 November however the US removed reciprocal tariffs on several Costa Rican agricultural exports, in line with an executive order from President Donald Trump targeting goods that the US does not produce domestically in sufficient quantities.

*** Israeli space fears.  Brigadier-General Hayim Eshed, who founded Israel’s Defence Ministry Space Division 30 years ago, stepped down last week.  On retiring he issued a warning about Israel being in danger of losing its qualitative edge in space.  Eshed said: “Today, we have a qualitative edge over the rest of the region and parts of the world in certain space capabilities, some of which other countries are trying to copy.  If, however, we do not increase our investments in the next two years we stand the risk of losing our edge”.  Eshed said the government had refused to release funds pledged last year and intended to turn Israel into a space superpower.

*** India worries about Chinese projects in Pakistani Kashmir.  On 5 September, India’s Defence Minister AK Antony voiced fears about China’s activities in Paksitani-occupied Kashmir (PoK).  He told parliament: “The government is aware that China is undertaking infrastructure projects in PoK.  We have conveyed our concerns to China about their activities in PoK and asked them to cease such activities.”
Antony compared China’s projects in PoK with similar infrastructural developments in Tibet.  He said: “China is carrying out construction of strategic roads, railway lines, and airfields close to the LAC, which has improved its military capability.”

The defence minister added: “Necessary steps have been initiated for ensuring that national security concerns are adequately addressed through development of infrastructure, including rail, roads, and forward airfields, as well as operational capabilities of the armed forces to secure desired national security objectives.”

*** New Japanese foreign minister begins with a warning on China.  On 3 September, Japan’s new Foreign Minister Koichiro Gemba expressed concern about China’s activities in the East and South China Seas.  He said: “We all know that China’s maritime expansion is becoming visible.  It is important to ask China to improve transparency.”

Interestingly, while Gemba said that the US would remain at the core of Japan’s defence policy, among the countries he listed for better relations was Russia.

Analysts have long thought that Russia and Japan would make natural allies, but progress in this direction has always been stymied by the ongoing dispute over the Kurile Islands, seized by the Soviet Union at the end of World War II.  The other country Gemba specifically mentioned for improved ties was South Korea.
Before becoming foreign minister, Gemba was national strategy minister.

Chilean steel producer Compañía Siderúrgica Huachipato (CSH) this week gave the administration of President Gabriel Boric an ultimatum. Either the government raises import tariffs on Chinese steel to at least 25% or the company will shut down permanently.

In March, CSH already began winding down its production of steel products while continuing its logistics and port operations at the plant in Talcahuano on the Pacific coast, some 500km south-west of the capital Santiago. Local sources say it has fully halted its wire rod rolling mill.

CSH, which belongs to the mining and industry conglomerate Grupo CAP, is the country’s largest steel manufacturer and the only one that produces high quality steel from iron ore, rather than scraps. The bulk of its production is consumed by the mining industry.

At stake are not only the roughly 22,000 jobs at the company, its suppliers, and its contractors. Senator Gastón Saavedra, who is from the region, says an entire supply chain of 300 small and mid-sized companies and some 66,000 jobs would collapse if Huachipato shuts down. “We can’t allow this company to close down, given the consequences,” Saavedra said.

Alarmed by the possibility of CSH’s imminent and permanent closure, senators sitting on the committee on economic affairs convened on 2 April to discuss the matter and question Economy Minister Nicolás Grau, who has pledged to find solutions that would allow the company to remain open. “It’s important for the region, it’s important for the country and it has a strategic role in a mining nation, that’s why we are striving to find a solution,” Grau said when he visited the region in late March. Grau added, however, that the government did not have a silver bullet.

Industrial prowess

The company says that it is currently losing some US$1m a day and cannot continue operating due to unfair competition from China, which it accuses of dumping excess production on the international market at about 40% below cost. Roughly 19% of domestic steel demand is met by CSH with two-thirds being imported, according to the Instituto Chileno del Acero (ICHA), the national steel institute.

The gradual plant closure came after the CNDP, the state anti-distortion agency, in March applied what CSH considered an insufficient import tariff on Chinese steel slabs and ball bearings, between 9.2% and 22.5%. CSH also argues that because Chinese steel companies are state-owned, they can circumvent company-specific, anti-dumping barriers by shifting production amongst each other.

The Boric administration has repeatedly said that it is concerned and doing what it can but also referred to a complex international scenario that played into the matter. Indeed, Washington would love to have Chile join its pushback against Chinese dumping by imposing steep tariffs.

On the other hand, China is Chile’s largest trading partner and a major investor. The two countries also have a bilateral free trade agreement (FTA). The national daily La Tercera argued in an editorial on 1 April that a company that cannot compete after it has been given adequate import protection by the state should not continue operating. It also contended that the three non-political members of the eight members of the CNDP voted against any import tariffs because they did not see anti-dumping practices as defined by the World Trade Organization (WTO).

Huachipato

Founded more than three-quarters of a century ago by local steelworkers, the company is a symbol of Chilean industrial prowess. It was privatised under the dictatorship of General Augusto Pinochet (1973-1990) and from 1981 was named Huachipato, which means ‘bird trap’ in the native Mapuche language. The homonymous football team was Chilean national champion in 2023 and many of its fans are metalworkers.

On 4 October Spain’s foreign minister, José Manuel Albares, confirmed that Spain had offered nationality to 135 Nicaraguan political prisoners taken from a prison in Managua the previous month and flown to Guatemala where they were welcomed by Guatemala’s President Bernardo Arévalo and Eric Jacobstein (a top US State Department Western Hemisphere Affairs diplomat). As with political prisoners previously expelled from Nicaragua, they have all been stripped of their citizenship.

The group of Nicaraguans flown to Guatemala City on 5 September included Catholics and students, among others. Five days later they were stripped of their nationality and their property was confiscated, after being accused of “inciting and promoting violence, hatred, terrorism, and economic destabilisation, and conspiring against peace, security, and the constitutional order”. This was the second such mass release from Nicaragua negotiated by the US. In February 2023, a total of 222 political prisoners were released and deported to the US and were similarly stripped of their nationality and assets [SSR-23-04].

While the release of the 135 political prisoners was welcomed, the decision to deprive them of their nationality has drawn condemnation. A joint communique dated 13 September by Ecuador, Costa Rica, and the Dominican Republic for instance slammed the decision as “arbitrary and illegal”. In response to the citizenship-stripping of the first group of prisoners in February 2023, the United Nations Refugee Agency (UNHCR) underlined that “international law prohibits the arbitrary deprivation of nationality including on racial, ethnic, religious or political grounds”. It underlined that “the exercise of fundamental rights, including freedom of expression, freedom of assembly, or other rights associated with a person’s political views, can never justify the deprivation of nationality”. According to a 1 October update by Netherlands-based NGO Institute on Statelessness and Inclusion (ISI), in total over 450 political opponents of President Daniel Ortega’s government have now had their Nicaraguan nationality revoked since 2023, in contravention of human rights law.

In 2012, Argentina’s government led by former president Cristina Fernández (2007-2015) regained state control of energy company YPF, arguing it was being ransacked by its then majority owner, Spain’s Repsol. From Fernández’s point of view, she was righting an historic wrong. After all, Yacimientos Petrolíferos Fiscales was founded in 1922 as the first state-owned oil company outside of the Soviet Union and was meant to be in public hands. But 13 years later, Argentina is still facing the legal fallout from her decision – a lawsuit alleging that minority shareholders had been defrauded at the time to the staggering tune of US$16bn, more than three times what Kirchner paid to recover the oil and gas company. 

At the time the Argentine state compensated Repsol for seizing its 51% stake in YPF, but it didn’t offer compensation to its minority shareholders, Petersen Energia Inversora and Eton Park Capital Management. Petersen had bought into YPF in 2008 through a complex leveraged financing scheme it was to amortise through dividend payments from YPF. Those halted with the re-nationalisation, causing Petersen Energia to go bankrupt.

Burford Capital, a UK-based firm that finances lawsuits and asset recovery, bought the legal rights to sue and, with it, potential profits. In September 2023, US District Judge Loretta Preska in New York ruled in Burford’s favour, but Argentina contended that the shares are shielded under the US Foreign Sovereign Immunities Act (FSIA), an argument she has since rejected.

Ironically, it falls on President Javier Milei, one of the staunchest proponents of privatising YPF, to settle the matter. As a pro-business economic libertarian, he sides with the investors and would honour the 30 June decision by Judge Preska for Argentina to hand over its 51% stake in YPF. In fact, he has long insisted that the debt must be paid to correct the mistakes made by his leftist predecessors.

However, Argentina doesn’t have US$16bn to spare, particularly not when every dollar of the central bank’s reserves is guarded like the crown jewels in order to help bolster the currency and anchor inflation, one of Milei’s key objectives ahead of mid-term congressional elections in October this year. Paying a foreign capital fund that is dubbed by some local media outlets as a ‘fondo buitre’ (vulture fund), while millions of Argentines are still reeling from some of the most austere spending cuts in recent history, would not do Milei’s approval ratings any favour.

So Milei is playing both sides against the middle, telling the electorate he will use all legal means available to avoid paying the so-called vulture funds, while signalling to markets that he is still entertaining the possibility of reaching a settlement that involves some form of payment.

The government appealed both Judge Preska’s US$16bn award as well as the order to hand over YPF shares as a guarantee. Giving up its stake in YPF could cause irreparable harm and destabilise Argentina’s economy, it argued. “Argentina will not negotiate with the plaintiffs and categorically denies any malicious discussion of parallel meetings or secret agreements,” government spokesman Manuel Adorni said on 18 July regarding rumours of backdoor negotiations.

Trump support

An appeals court on 15 July temporarily put on hold Preska’s order for Argentina’s YPF shares to be handed over. Two days later the US government led by President Donald Trump, who has lauded Milei’s liberal reforms, sided with Argentina in arguing against the handover of the shares while the original verdict is being appealed. The dispute ought to be resolved based on merit, “free from the rushed compulsion of an unstayed turnover order and any negative effects it may have on US relations with Argentina,” the US administration argued before the appeals court.

Con la salida de otro ministro la semana pasada, el cuarto desde junio, y el retiro formal de un disgustado aliado de la coalición gobernante, la administración de la Presidenta Dilma Rousseff está en cierto desorden. Serios cuestionamientos han estado surgiendo acerca del desempeño de Rousseff hasta la fecha. Sus partidarios aplauden lo que ellos dicen que son los esfuerzos innovadores para frenar la arraigada corrupción y el amiguismo en el sistema político de Brasil de intenso clientelismo; los críticos la acusan de solamente hacer un manejo de la crisis en base a relaciones públicas, motivadas por prioridades electorales de corto plazo, en vez de un genuino compromiso de reforma. No obstante, intencionalmente o no, Rousseff está rompiendo el molde, con algún costo político para ella misma y en sus relaciones con sus aliados más cercanos.

Mirando de fuera, la Presidenta Rousseff ahora luce un poco aislada en lo alto, mientras ella lucha por limpiar una serie de escándalos de corrupción ministeriales, todos los cuales se originaron bajo la administración previa dirigida por su predecesor y mentor Lula da Silva (2003-2010), y todos los cuales pueden ser ubicados parcialmente en el contexto de la lucha permanente por el dominio entre el gobernante de izquierda Partido dos Trabalhadores (PT) y el centrista Partido do Movimento Democrático Brasileiro (PMDB). La novicia presidenta está, sin duda, en una difícil posición. Mientras ella podría desear barrer todas las despensas ministeriales como parte de su fajina de limpieza, ella no puede poner en riesgo la gobernabilidad o su agenda legislativa, que está fuertemente concentrada en defender la economía brasileña de la crisis global.

Conciente de eso, Rousseff ya está buscando repactar la coalición. En su favor está el hecho que todos los partidos de la coalición están dispuestos a erradicar las historias de corrupción sin fin en las primeras páginas ante las programadas elecciones municipales del año próximo. Sin embargo, el silencio que emana del PT en particular, que también ha estado implicado en esos escándalos, es ensordecedor.

Una altamente escéptica visión del PT fue reflejada en un documento de junio de 2011 de la Brookings Institution con base en EU, que alega que la única estrategia del PT desde que llegó al poder en 2003 ha sido “minimizar los costos políticos, manejar la coalición a través de negociaciones de toma y daca en el congreso y navegar sobre positivas oleadas económicas generadas desde un medioambiente externo. La estrategia es evitar decisiones con costos altamente concentrados incluso si los difusos beneficios son abundantes”. Además, agrega el documento, “los costos de la no-reforma pueden fácilmente cargarse al congreso”.

Haciéndose eco de eso, el comentarista político Ricardo Noblat alega que luego de asumir el poder en 2003, el PT vio dos maneras de hacer funcionar el sistema: distribuyendo ‘favores’ (financieros o de otra clase) y cerrando los ojos ante las pre-existentes redes de clientelismo (e incluso cooptándolas). Después de haber logrado, contra todos los cálculos, sobrevivir a las consecuencias electorales del mensalão en 2006 (un dañino escándalo de sobornos en el congreso, de ventas de votos por dinero), el PT ha concluido que el electorado brasileño también estaba dispuesto a cerrar los ojos ante esa cultura corrupta, como expresa el adagio Brechtiano: “Primero comida, luego la moral”.

En una entrevista publicada el 16 de julio en el diario Folha de São Paulo, que ha quebrado varios de los recientes escándalos, el ministro de comunicaciones del PT, Paulo Bernardo, que es cercano a Rousseff y Lula, hizo un comentario perjudicial en el sentido que Rousseff y Lula “decidirían juntos” sobre el candidato presidencial del PT para 2014. Eso sonó como una tácita advertencia a Rousseff. La relación de Rousseff con la impaciente base del PT depende enteramente del padrinazgo de Lula. Para darle crédito, Lula fue rápido en responder, advirtiendo al partido que no “se dispare a sí mismo en el pie” con conversaciones prematuras acerca de 2014, y urgiéndolo a concentrarse primero en las elecciones de 2012. También recordó al PT acerca de la necesidad de la unidad. El propio Lula tiene parcialmente la culpa –su constante presencia en el trasfondo y su ambigüedad sobre sus ambiciones políticas futuras han perjudicado a Rousseff. Incluso cuando él, en efecto, la ha ayudado a ella, Lula recorta la autoridad de Dilma, como también sus esfuerzos por reafirmar su propio liderazgo político.

Curiosamente, sin embargo, el humor del público en Brasil parece haber cambiado, con cierto sentido que ‘las cosas van como siempre’ ya no es más aceptable. Las encuestas de opinión indican un amplio apoyo público a los esfuerzos de Rousseff. Por un lado que es positivo; por otro lado, eso significa que ella ya no se puede echar atrás ahora.

Incluso más curiosamente, a iniciativa del senador Pedro Simon del PMDB, un grupo de 12 senadores lideró un ‘Lunes cívico contra la corrupción’ el 15 de agosto. Prestando apoyo a la fajina de limpieza de la presidenta, Simon declaró, “hoy, toda la sociedad desea justicia, ética y dignidad. Que la presidenta permanezca firme y continúe”. El convocó a un amplio movimiento cívico contra la corrupción, citando el ejemplo de ‘Diretas Já’, el movimiento que clamaba contra el moribundo régimen militar en 1984 en demanda de elecciones presidenciales directas. El influyente senador Cristovam Buarque, del aliado Partido Democrático Trabalhista, que se unió a Simon, pidió a la presidenta que “hable con aquellos que desean poner a Brasil primero”. Su colega, Jarbas Vasconcelos, un senador disidente del PMDB sugirió que Rousseff estaba tratando de deshacerse del “legado maldito” heredado de Lula.

Se puede decir que el ‘Lunes Cívico’ fue puramente interesado, permitiendo a los senadores asumir una alta posición moral. Los votantes desde hace tiempo tienen al congreso en muy baja estima. Aunque notablemente, el hombre más rico de Brasil, Eike Batista, también públicamente prestó su apoyo a los “extraordinarios esfuerzos” de Rousseff. “La palabra mágica es esta, ‘transparencia’”, declaró el 16 de agosto. “Déjenme ser claro acerca de esto, es bueno para los negocios, bueno para el gobierno y bueno para la sociedad”. Brasil, quizá, está creciendo.

• Rossi apunta a Serra

En su carta de renuncia, el ministro de agricultura, Walter Rossi, alegó que existe una conspiración para la ruptura de la alianza entre el gobernante PT y el PMDB en São Paulo antes de las elecciones municipales en 2012. En privado, Rossi apunta a José Serra, del opositor Partido da Social Democracia Brasileira (PSDB), quien, habiendo perdido su segundo intento para la presidencia en 2010, puede estar buscando restaurar su sitio de poder en São Paulo, donde él ha sido alcalde y gobernador del estado. Rossi citó como evidencia de esa conspiración los alegatos en días recientes de conducta impropia contra su hijo y diputado del estado de São Paulo, Baleia Rossi, que él dijo era la gota que faltaba.

• Furia policial

La policía federal (PF) también está disgustada luego que la Presidenta Rousseff reaccionó airadamente ante el súbito arresto de docenas de funcionarios del ministerio de turismo (38 en total). Rousseff convocó a su ministro de justicia José Eduardo Cardozo (PT), para que exija una explicación del porqué ella no ha sido informada en avance de la operación, que altera sus esfuerzos para recomponer las relaciones con el principal aliado de la coalición, el PMDB. Rousseff cuestionó públicamente el duro manejo de la policía. La jerarquía de la PF la acusó de interferencia. Humillantes fotos de alineamientos en la policía que incluía a altos designados del PMDB, fueron filtradas a la prensa, elevando las tensiones. La PF defendió sus acciones, señalando que la corrupción en Brasil ha alcanzado “niveles inimaginables, con millones de Reales del dinero público, siendo desviados diariamente”.

Rossi renuncia
El ministro de agricultura, Walter Rossi, del PMDB, entregó su renuncia el 17 de agosto, citando la necesidad de proteger a su familia de “una cascada de falsos alegatos”. Rossi podría ser seguido dentro de poco por su colega Pedro Novais del ministerio de turismo, que se aferra con las uñas a su puesto, habiendo perdido a su viceministro y a docenas de funcionarios del ministerio en una masiva redada policial a inicios de este mes. Nelson Jobim, el ex ministro de defensa (PMDB), presentó su renuncia el 4 de agosto después de una serie de comentarios insubordinados.
En una breve declaración, la Presidenta Rousseff emitió una nota deliberadamente conciliadora, expresando su “pesar que el ministro no pudo contar con el principio de inocencia presumida”. El vicepresidente y barón del PMDB, Michel Temer, sugirió al diputado del PMDB, Mendes Ribeiro, para reemplazar a Rossi.
Un día antes de la partida de Rossi, El Partido da República (PR), salpicado por la corrupción, se retiró oficialmente de la coalición gobernante. El presidente del PR, Alfredo Nascimento, que perdió su cargo como ministro de transporte en julio, en medio de un gran escándalo de malversación, subrayó la furia del partido de lo que considera el tratamiento diferencial aplicado por Rousseff a sus aliados, dependiendo de su estatus dentro de la coalición. “No es aceptable que seamos tratados como socios de segunda clase,” insistió. El PR siente que ha sido un chivo expiatorio para el asalto muy público de Rousseff sobre la corrupción. El partido tiene seis senadores y 41 diputados en el congreso federal quienes ahora votarán independientemente. El principal impacto podría sentirse en el senado, donde el ejecutivo debe asegurar el apoyo sobre la base de caso por caso.

The most pressing task of Jamaica’s new People’s National Party (PNP) under Prime Minister Portia Simpson Miller, elected in late December, is to negotiate a new agreement with the International Monetary fund (IMF).  The problem with the IMF was spelled out by Finance Minister Peter Phillips on 25 January when he said: “The IMF Programme, which expires in May 2012, has not been completed because various critical structural benchmarks and targets were delayed or missed.  An entirely new programme now has to be negotiated and new targets set focusing on growing the economy.  The failure to successfully complete the Stand-by Arrangement resulted in the non-disbursement of multilateral funding, including US$220m from the IDB.  We expect that progress on the IMF negotiations will help unlock these funds.”  Phillips has warned ominously about “a breakdown of trust between Jamaica and our international partners”.

An IMF mission visited Jamaica from 18-24 January to meet the new government to discuss its priorities.  A statement issued by the IMF after the visit gave little away, although it emphasized the importance attached by the government to growth.  It said that the IMF team and the government had “a concurring view” of the key challenges facing Jamaica, arising from the high public debt and low economic growth, and that they agreed on the need for a strong policy response. 

The government reportedly told the IMF team that they are working on the early implementation of a set of policies aimed at placing the debt-to-GDP ratio “on a decisive downward path, while stimulating growth and job creation in a sustainable way”.

In its election manifesto, the PNP had hinted that it wanted more flexibility from the IMF.  It had said that while the PNP recognizes that the present economic crisis demands fiscal responsibility and prudence, at the same time the social crisis gripping Jamaica “requires creative and aggressive growth strategies”.  But Jamaica’s room for policy manoeuvre, as Phillips has now recognized, is very limited.

The government is continuing to work on its economic programme for submission to the IMF, and a government team will visit Washington for talks with IMF officials on 17 February.  Finance Minister Philips is also set to explain his plan to the nation on 8 February following a four-day ministerial conclave that ended earlier in the week.  The government hasn’t given much away yet as to the shape of the new plan, but the tension between the contradictory needs of growth and debt reduction has, if anything, intensified.  Based on current projections, the primary surplus is expected to be 1.5% of GDP below the budgeted target. 

Debt is Jamaica’s perennial problem.  The debt-GDP ratio was 212% in 1994.  This came down to 111% in 2007 but then climbed back to 131% by end-March 2011.  As Phillips said following the IMF’s visit in January: “The stranglehold of the national debt is impeding the provision of funding for vital social services and necessary capital investments to support growth.”  The finance minister added: “We recognized that there has been a worsened economic situation in the medium term, which has increased significantly Jamaica’s vulnerability to economic shocks.  We have agreed that these problems need to be addressed urgently.”

But almost every statement seems to re-emphasize the classic Catch-22 in which Jamaica finds itself.  It must reduce debt, but how can it generate growth at the same time?  There appear to be very few ideas, apart from issuing some anodyne comments about targeting key sectors for growth and improving competitiveness.  Jamaica is now listed as being 107^th in the competitiveness league table, compared with 67^th in 2006.  On the World Bank’s ‘Doing Business’ rating, it has slumped from 43^rd in 2006 to 88^th in 2010-11.  Growth for 2011 is expected to have been 1.3% after a contraction of 1.3% in 2010.  Unemployment is estimated to have been 12.6% in 2011, slightly up from 12.4% in 2010.

One eye-catching suggestion from Jamaica’s new PNP government has been to switch Jamaica’s power plants to coal.  Most of Jamaica’s ageing power generation is fuelled by oil, which is around US$100 per barrel.  Liquefied natural gas (LNG) is an obvious alternative, but there remain uncertainties about supplies from Trinidad.  Coal-fired plants, on the other hand, while costing perhaps three times as much to build as an equivalent LNG plant, are far cheaper to run.  Phillip Paulwell, minister of science, technology, energy, and mining, has suggested that a switch to coal could bring down the cost of electricity to consumers by over 50%.  However, even if this projection is correct, the World Bank, amongst others, has been discouraging the use of coal for environmental reasons.

There have also been hints at a less friendly attitude towards free trade emerging from the government.  Speaking to members of the diplomatic corps on 31 January, Minister of Foreign Affairs and Foreign Trade, Senator AJ Nicholson said that as a small vulnerable economy, Jamaica had to be careful about free-trade agreements.  He said that free trade agreements must lead to increasing exports “otherwise [they] will only lead to the accumulation of more debt by encouraging imports”.  He added: “The administration will therefore continue to require that trade agreements go beyond trade liberalization and market access to embrace development issues”.

Nicholson said that Jamaica would continue with the negotiations for a Caricom-Canada Trade and Development Agreement and would continue to engage with the Doha Round in the World Trade Organization (WTO).  However, he emphasized to the assembled diplomats: “Jamaica, as a small vulnerable highly indebted economy, must be able to benefit from the trade agreements which it negotiates.  In exchange for opening our markets, we must be able to take advantage of reciprocal market access.”

Interestingly, this caution about free-trade deals chimes with indications coming from elsewhere in the Caribbean.  At the beginning of February, for instance, the Barbados Private Sector Trade Team (BPTT) warned that Canada’s aggressive trade liberalization policy would undermine key Barbadian businesses and industries and lead to a flood of cheap Canadian imports.  Joel Richards, head of the BPTT, warned: “At the moment I can’t say exactly what the Canadians are requesting, but what I can tell you from the evidence of what they have done with Costa Rica, Chile, and Peru, the Canadian approach is to go for 100% liberalization.”

The one piece of slightly better economic news for Jamaica is with regard to remittances.  For the first eleven months of 2011, net remittances were US$1.586bn, which represented an additional US$102.2m or 6.9% increase over the corresponding period of 2010.  Remittance companies recorded an increase of US$96.5m, an increase of 6.6%, while other remittances grew by US$17.2m or 6.7% compared with the corresponding period in 2010.  The improvement in remittance inflows occurred against the backdrop of the improving macroeconomic conditions in source economies.

Varela claims price control progress: On 24 August the new Panamanian government led by President Juan Carlos Varela trumpeted figures from the economy & finance ministry (MEF) which showed that the price of the monthly basic food basket (Canasta Básica Familiar de Alimentos, CBFA) in July was US$318.48 – a 7.7% fall compared to the previous month. In a press release the MEF claimed that this was the most significant CBFA fall in the last decade. President Varela’s first act upon taking office on 1 July was to announce temporary ‘emergency’ price controls on 22 basic goods in order to reduce inflation [RC-14-07]. While year-end inflation was 3.4% in 2013, down from 5.7% in 2012, high food prices were a major voter concern. According to the latest (4 August) report by the national statistics institute (Inec), the consumer price index (CPI) registered a 0.8% fall in July compared to June, bringing the accumulated rate for the year to 2.2%. The CPI rate for food and drink dropped 3.1% in July compared to June.

Job creation: At the end of July Panama’s labour minister, Luis Ernesto Carles, announced the launch of round table talks on labour policies, with the overall aim of generating 30,000 new jobs in the formal sector a year, over a ten year period. Those taking part in the dialogue include labour unions as well as Panama’s five main business lobbies  - Consejo Nacional de la Empresa Privada, Asociacion Panameña de Ejecutivos de Empresa, Sindicato de Industriales de Panamá, Cámara Panameña de la Construcción and Cámara de Comercio, Industria y Agricultura de Panamá - which represent the country’s 30 biggest employers.

• Unemployment

According to the most recent (August) report by the United Nations Economic Commission for Latin America & the Caribbean (Eclac), Panama’s unemployment rate stood at 4.1% in 2013. Meanwhile the labour force expanded by 0.7 percentage points, from 63.4% to 64.1%.

Given Barbados’s economic problems, it is perhaps surprising that violent crime ranks so highly as a concern for its citizens, especially as its crime rates look relatively good compared with many of its neighbours. But opinion surveys show that crime is uppermost in most voters’ minds as the Democratic Labour Party (DLP) struggles to engender a feel-good bounce ahead of next year’s general election.

The latest World Economic Outlook (WEO) from the International Monetary Fund (IMF) highlights just how difficult a time Barbados is having. Its average growth rate in the 10 years before the 2008-2009 financial crisis was fairly anaemic in any case, at just 1.8%, but then it suffered a -4.0% contraction in 2009 and has been struggling to recover ever since. It wasn’t until 2016 that the economy managed to advance by more than 1%, and then it was by just 1.6%, still below the pre-crash average. And now 2017 is set to see a further setback, with growth of just 0.9% forecast by the IMF. In 2018, the projected growth figure is lower still, at 0.5%.

But despite all this, a new study – Barbados at 50: National Values Assessment – puts violence as the number one concern for Barbadians, followed by closely linked concerns about crime and gangs, drug abuse, and guns. This is perhaps surprising given that Barbados suffers from a low murder rate per 100,000 inhabitants, at eight, compared with Antigua & Barbuda and Grenada both on nine, Dominica on 14, St Lucia on 16, St Vincent & the Grenadines on 36, and St Kitts & Nevis on 56 (all for 2016). It also has the lowest score among its Eastern Caribbean neighbours for sexual assaults and the second-lowest for robberies. However, on shootings, with 19 incidents per 100,000, it is worse than Grenada (six), Antigua & Barbuda (13), and St Lucia (18). St Kitts & Nevis is the worst for shootings on 93, ahead of St Vincent & the Grenadines on 38.

The problem, however, is that murders are significantly up in 2017. As at the beginning of October, there had been 27 murders compared with 22 in the whole of 2016. Twenty-one of these 27 murders involved guns. It is almost certain that the year-end figure will be worse than the previous worst year, when 28 murders were recorded in 2015. The other major area of concern is the number of drug-related crimes, recorded as 1,605 in 2016, up 35% on 2015 and more than twice the 745 drug-related crimes recorded in 2012.

The government knows it has got a problem, and in mid-October Attorney General Adriel Brathwaite revealed plans for tough new anti-gang legislation. Speaking at the opening of the National Consultation on Violence organised by the Criminal Justice Research and Planning Unit (CJRPU), Brathwaite said that under proposed new legislation gang members and leaders could face 20-25 years in prison.

The attorney general said: “These persons corrupt many of our young men and women and send them into society to commit some very serious crimes. They are not heroes, they belong behind bars and that is why we want to give specific legislation to deal with them.”

Brathwaite also revealed plans to amend the Bail Act, to prevent those accused of firearms offences from gaining bail for 18 months, and to amend the Police Act in order to give police greater powers of stop and search. A new Firearms Bill and Civil Assets forfeiture regime are also to be brought before parliament.

ARGENTINA | Bleak economic data. Argentina’s GDP fell by 5.1% year-on-year in the first quarter of 2024, according to the national statistics institute (Indec), while contracting by 2.6% on the final quarter of 2023; unemployment rose to 7.7% in the first quarter, up by two percentage points on the final quarter of 2023, the highest rate since the third quarter of 2021. Political opponents quipped that in his efforts to bring down “hyper-inflation”, Milei was delivering “hyper-recession”.

Milei took aim at “fiscal degenerates” in congress this week who earlier this month voted in favour of an inflation-adjusted formula for pension payments that could cost 0.43% of GDP this year. Accusing deputies of “a coup-mongering” destabilisation attempt, he said Argentina had a “record financial surplus, historic, in May” and there was no other explanation for country risk going up.  

The government’s huge cut in public spending might have helped produce a financial surplus and slow inflation but it has slashed domestic demand and GDP growth. Contractions were recorded in 10 of the 16 sectors that make up GDP in the first quarter. Construction plummeted by 19.7% year-on-year, manufacturing by 13.7%, and financial intermediation by 13%. Private consumption was down 6.7%, while imports of goods and services fell 20.1%.

BRAZIL | Currency weakens. The Brazilian real fell to more than R$5.5/US$1 this week, its weakest since July 2022. The markets are edgy about persistent inflation and an increasingly public feud between President Luiz Inácio Lula da Silva and the central bank president, Roberto Campos Neto, over the benchmark interest rate (Selic), which the central bank’s monetary policy committee (Copom) opted to keep at 10.5% last week [WR-24-24], much to Lula’s dismay. “The central bank has decided to invest in financial markets and speculators. We want to invest in production,” he said in response to Copom’s decision, further rattling investors.

Market nerves did not, however, stop Brazil from successfully launching a seven-year US$2bn sustainability bond on 20 June, which carried an interest rate of 6.375%. Andreas Faergemann of Pinebridge Investments told Bloomberg news agency “The country’s fiscal outlook is slowly deteriorating, and the underlying fundamentals are looking less bullish than 12 months ago, so we would have liked a higher new issue premium”. 

The markets are also concerned over what they see as Lula’s meddling in Petrobras, the state-owned oil and gas company which is also supposed to be autonomous. Magda Chambriard, the newly appointed chief executive, says the company’s policies are “fully aligned” with the government’s vision for the sector but has been accused of appointing three new directors with perceived political bias: they include the heads of finance, exploration, and engineering.

Public security think tank and NGO Instituto Sou da Paz (ISP) released a report on 26 August indicating that, from 2016-2023, the arsenals of organised crime groups have been filled with more and more firearms and ammunition legally registered under CAC licences for gun collectors, sport shooters, and hunters. ISP’s latest study attributes this phenomenon to the pro-gun policies of far-right former president Jair Bolsonaro (2019-2023). His successor, President Luiz Inácio Lula da Silva, has sought to redress this legacy, but conservative forces in congress have made progress in their efforts to challenge Lula’s gun control measures.

The study showed that, from 2016-2018, authorities registered six cases in which CAC firearms were used in crimes perpetrated by gang members. However, in the year 2022 alone, 11 cases were registered, while 2023 saw 12 cases. ISP also reported notable case studies demonstrating that the expansion of the legal gun market has strengthened organised crime. The NGO highlighted the case of a licensed gun owner named Victor Furtado Rebollal Lopes. He and his wife acquired 26 T4 assault rifles made by Brazilian firearms manufacturer Taurus, as well as 11,000 rounds of ammunition.

The T4 was designed for military or police use, but Bolsonaro signed a decree in 2019 which authorised civilians to own the assault rifle. In a joint operation between Rio de Janeiro state police and the federal highway police (PRF) in January 2022, the couple was arrested for attempting to supply gang members with firearms, as their rifles and bullets were due to be sold to the powerful Brazilian drug trafficking organisation (DTO), Comando Vermelho (CV).

Bolsonaro’s 2019 decree to boost civilian access to firearms authorised licensed gun owners to purchase 9mm pistols, which ISP blames for the rise in police seizures of guns of this calibre. ISP’s latest report recalled a warning the NGO made in October 2022 which highlighted that 7.6% of the guns that police seized from criminals in São Paulo state in 2022 had a calibre of 9mm, up from 2.7% five years earlier, while the figure in Rio de Janeiro was 28% in 2022, up from 19% in 2017.

In July 2023, Lula signed a decree which reversed many of Bolsonaro’s gun laws, making the civilian use of 9mm pistols illegal again. However, ISP warned that Lula’s efforts to restrict civilian access to firearms could be rolled back by a bill registered as PDL 206/2024. This bill passed the lower chamber of congress in May this year and was due to face a plenary vote in the senate on 27 August. If approved, the PDL would have repealed several terms of Lula’s 2023 gun-control decree, such as regulations on shooting ranges and additional checks to register as a gun collector. The restrictions on shooting ranges were one of the main points of contention highlighted by right-wing senators such as Flávio Bolsonaro, the former president’s eldest son. Senator Bolsonaro criticised Lula’s rule that banned shooting ranges from operating within 1km of a school, arguing that this effectively prohibits most of Brazil’s shooting clubs, over 90% of which are located near schools.

Before the PDL could face a vote, government-aligned senators and the opposition negotiated a deal and agreed to withdraw the bill. The leader of the governing coalition in the senate, Jaques Wagner, held a meeting with Lula earlier on 27 August, in which they agreed that Lula should issue a new, watered-down gun control decree which would consider some of the opposition’s demands, such as the calls to lift restrictions on shooting clubs.

Guns for municipal guards

The proliferation of firearms has been a key campaign issue in many cities ahead of the October municipal elections, including Rio de Janeiro. Left-wing candidate Tarcísio Motta (PSOL) has given several interviews to the press this week in which he criticised a bill currently being reviewed by the Rio city council which proposes allowing members of the municipal guard to carry firearms with lethal rounds. Motta argued the municipal guard is a local law enforcement body that should not aspire to replicate the firepower and allegations of police brutality of Rio’s state police, suggesting that the local institution should instead adopt a greater community engagement role.

Ecuador’s national assembly has approved the so-called ‘Law of National Solidarity’, a sweeping piece of legislation with which President Daniel Noboa’s government aims to strengthen the fight against organised crime. Among other things, the law will enable private companies to donate equipment to the authorities in return for tax benefits, make security personnel less vulnerable to prosecution, and modify penalties for drug possession.

Legislators approved the bill on 7 June with 84 votes in favour, 46 against, and 10 abstentions, returning it to President Noboa for promulgation just days after they backed another major security reform by signing off on the return of foreign military bases [WR-25-22].

Two elements of the legislation have drawn particular attention. Private companies will become eligible for tax breaks by donating equipment, such as vehicles, property, or in the case of security companies, weaponry, to the security forces. Meanwhile, the bill aims to reduce security personnel’s vulnerability to prosecution by giving Noboa the power to pre-emptively pardon those accused of crimes committed in the line of duty, before the case is heard by a judge.

The new pardoning powers will not apply in cases of suspected corruption, forced disappearance, or genocide. This article of the bill was a key source of tension between Noboa and the indigenous movement and has piled further pressure on his legislative alliance with the indigenous party Pachakutik [WR-25-20]. Pachakutik’s legislators broadly backed the government despite intense pressure from the party leadership, with six voting in favour, two against, and the other not showing up, although there are major doubts over the longevity of this arrangement.

• Indigenous leadership vents fury

The leadership of the indigenous party Pachakutik, which opposes the alliance between the party’s legislators and the government, was incensed by the passage of the security bill through the national assembly. It said that it is considering expelling those who voted in favour of President Noboa’s “neoliberal and right-wing agenda”.

The bill also instructs the judicial authorities to develop new sentencing guidelines regarding drug possession for personal consumption, with the aim of cracking down on micro-trafficking without filling prisons with addicts; makes membership of an organised crime group a specific offence; and extends the period for which suspects can be held without charge from 24 to 72 hours in organised crime cases. It also contains social measures aimed at deterring young people from joining gangs, such as boosting spending on apprenticeship schemes and community sports programmes.

Government ministers were jubilant following the passage of the security bill. The interior minister, John Reimberg, declared that “nothing and nobody can stop us” and said that the legislation is “irrefutable proof” of the Noboa administration’s commitment to tackling crime. The defence ministry issued a statement saying that “this law strengthens the work of the security forces and has become a tool of hope…finally legislation is being approved which helps the country”.

BRAZIL | Lula inaugurates new BYD factory. President Luiz Inácio Lula da Silva attended the launch event on 9 October for a new factory in Bahia state owned by Chinese carmaker BYD. Located in Camaçari municipality, near the state capital of Salvador, the factory will focus on manufacturing hybrid and electric vehicles (EVs) and is BYD’s largest EV production facility outside of Asia. The carmaker has invested R$5.5bn (US$1bn) in the factory and its initial production capacity is estimated at 150,000 vehicles per year, with expansion plans to boost production to 300,000 units per year at a later stage.

Also attending the inauguration event was China’s ambassador to Brazil, Zhu Qingqiao, who hailed the factory as a significant achievement of the strong China-Brazil partnership, especially in the area of renewable energy. The factory used to be owned by US carmaker Ford, which shuttered the facility in 2021. BYD announced in 2023 that it planned to acquire and modernise the former Ford factory and began the expansion works in 2024.

BRAZIL | Industry lobby warns of lower confidence in sector. The national industrial sector lobby group Confederação Nacional da Indústria (CNI) released new figures on 14 October for its Industrial Business Confidence Index (Icei), which showed a confidence score of 47.2 in October. Although this is up from the score of 46.2 in September, the result marks the tenth consecutive month that the Icei has remained under 50.

The CNI surveys over a thousand Brazilian companies in the industrial sector, and the historical average score for the month of October is 53.6. The October 2025 score is the lowest figure for the month since October 2015, when the Icei stood at 35.1. In every year from 2016-2024, the Icei figure for the month of October was above 50.

*** Indian fears over China water plans.  The possibility of China diverting the waters of the Brahmaputra to the detriment of India has been raised again.  The river enters India from Tibet and is vital to the Indian state of Assam.  Following reports of new Chinese plans to divert waters to Xinjiang, India’s External Affairs Minister SM Krishna said on 13 June that he was seeking clarification from Beijing.

Assam Chief Minister Tarun Gogoi is to meet with Krishna on 16 June to ask him to pursue the question with vigour,  He has said that he is "very concerned" about the reported Chinese plan as any diversion in the course of the river would affect Assam’s agricultural economy.

The issue has also been taken up with some enthusiasm by the main opposition Bharatiya Janata Party (BJP), whose spokesman said: “These reports are of real concern to India.  Since the last two years there are reports that China wants to divert the Brahmaputra waters from the Himalayas.  If it is diverted, we will have terrible environmental, ecological, and real problems which will affect the economy of the whole region.”

*** Clinton warns Africa about China.  On 11 June, US Secretary of State Hillary Clinton provided further evidence that US-China relations are going through a rocky patch with remarks recorded for a television programme in Zambia.  Clinton described China’s policies in Africa as a “new colonialism”.

She said: “We saw that during colonial times it is easy to come in, take out natural resources, pay off leaders, and leave...And when you leave, you don’t leave much behind for the people who are there.  We don’t want to see a new colonialism in Africa.”  China’s foreign ministry responded by saying: “We hope the parties concerned will view Sino-African cooperation in an objective and just manner.”

Interestingly, as we reported in our 25 May issue, India has also been critical of Western attitudes to Chinese as well as Indian engagement in Africa.  A senior Indian official accompanying Prime Minister Singh during his recent visit to Africa complained on 24 May that the West was trying to portray the engagement in Africa of both China and India in a negative light to protect its own vested interests.  He said: “The West is setting up Africa as a zone of contention.  They want to play India against China.  They want us to be at each other’s throat.”

*** Egypt delays resuming ties with Iran.  Egypt has been under huge US pressure not to resume diplomatic relations with Iran.  On 12 June, Egyptian Foreign Minister Nabil Abdallah al-Araby confirmed that “Iran is not an enemy of Egypt”, but he added that the decision to resume diplomatic relations will be left to the new Egyptian parliament to decide in about three months’ time.  Leaving it to parliament will neatly sidestep US objections.

In the second quarter, the rate of economic growth slowed down, but it still grew at the year-on-year rate of 4.8%. Quarter-on-quarter, the rate of growth was much less impressive at 0.5%, according to the central bank.

In the first quarter of 2011, quarter-on-quarter growth was 2.1%. Local analysts say that the slowdown in the second quarter was much sharper than they had expected. All parts of the economy grew less. The worst affected was the primary sector, which contracted 2%. This was mainly due to fewer animals being sent for slaughter. This outweighed the effect of the record rice crop and a decent performance from the dairy industry.

Construction dropped by 2.4%, thanks to a drop in public investment. This was partly offset by an increase in private sector investment.

The biggest surprise to local economists was the 2.4% contraction in the sector covering commerce, hotels and restaurants. This did not square with what tourism operators had said was a bumper season.

Industry was up 0.4% year-on-year, but this was a big drop from its year-on-year increase of 2.8% in the first quarter. The transport and communications sector was strong, up 2.2%, quarter-on-quarter, but this was slower than the first quarter rate of 3.6%.

The extraordinary performance was the 40% jump in output from utilities (gas, water and electricity)

There is some doubt about the reliability of the second quarter figures from the central bank, however. Several local economists question the way the figures are calculated by the central bank and point out that they are not seasonally adjusted, so the lateness of Easter this year had a significant effect. These analysts say that the apparently abrupt slowdown may be more statistical than real. One question is how can these figures square with the strong figures for domestic consumption? These are up by 9%, year-on-year. There are also signs that business investment remained strong.

On the other hand, exports fell in the second quarter by 4.4% year-on-year. Lower beef exports were one reason. Imports, however, have been strong, up 7% year-on-year in the second quarter. It is possible that the strength of the Uruguayan peso has started to price domestic industry out of both its domestic and some export markets.

It is possible that the apparent drop in investment in the second quarter could be due to worries about the international situation. More likely, investment will fall further in the third quarter as the international economic situation remains uncertain.

The big question for Uruguay is what happens in Brazil. If the Brazilian economy accelerates again, like a train it will pull the rest of South America onwards and upwards.  The consensus for GDP growth in 2011 is for a rate of about 5.5%. Previously, local analysts had been expecting a rate of 7%.

Interest rates: It is now just possible that the central bank may cut interest rates at its next monetary policy meeting from the current rate of 8%. Monthly inflation in August was 0.56%, bringing the 12 month rate to 6.1%.

The Russian general election produced more or less the result we had been indicating: a victory for United Russia but a loss of its constitutional majority.  The ruling party’s share of the vote has fallen from 64% in 2007 to 49%.  The awakening of the Russian electorate, in large part thanks to the efforts of anti-establishment internet campaigners such as Aleksey Navalnyy, is a welcome development in Russia, but it does nevertheless reinforce the view we have been expressing for some months, namely that relations between Russia and the West are set for an extended period of turbulence.

Our sources in Moscow believe the authorities will manage to contain the post-election demonstrations.  From what our sources are saying, there does not appear to be the necessary appetite on the part of the public for a ‘Slavic Spring’, while on the other hand the authorities certainly retain their determination to hang on to power.  Nevertheless, there has undoubtedly been a mood change and the legitimacy of the authorities is in decline.  One well-placed source has told us that the authorities will survive this test but that if reforms are not implemented before the next election the system will face an existential challenge.  A key marker will be corruption.

The success of the internet campaign against United Russia has been based around the slogan coined by Navalnyy that it is the “party of crooks and thieves”.  In the 2011 Corruption Perceptions Index published by Transparency International on 1 December, Russia was 143rd out of the 182 countries listed.  The allegations made by Navalnyy on his blog spilled over into the political debate on mainstream television despite the tight control, or at least influence, over the main television channels exercised by the state.  The slogan was taken up in one form or another by all the main opposition groups including the Liberal Democratic Party of Russia (LDPR), the Communist Party of the Russian Federation (CPRF), and A Just Russia (AJR).

LDPR leader Vladimir Zhirinovskiy stated on television that under United Russia “the whole police force is corrupt, along with the FSB [Federal Security Service], and the Prosecutor’s Office”.  AJR ran an election poster with the slogan “We are for a Russia without crooks and thieves”.  And the Communist Party produced an advertisement complaining about the “pyramid of corruption” and showing money being passed from a policeman to a man in a suit to a judge.  The voiceover added: “They’ve built a pyramid of corruption.  The system is devouring the country...” 

There is no doubt that it was the anti-corruption slant of the opposition campaign, ably amplified as it was by the blogging community, that undermined United Russia’s support.  Now Vladimir Putin, who is seeking to regain the presidency in March after a term as prime minister, appears to be following a three-pronged strategy to overcome this setback.  First, he is using the usual methods to cow the opposition.  Secondly, he is trying to put some distance between himself and United Russia.  In an interview earlier this week with the BBC, his press secretary Dmitriy Peskov said: “Putin has never been connected directly with the party, therefore he has been regarded as an independent politician, not as a member of the party.”  Thirdly, it is certain, as we argued last week, that Putin will play the nationalist card as strongly as he can in the run-up to the March presidential poll.

Further evidence of this latter point will be seen at this week’s Russia-Nato Council meeting in Brussels on 8 December.  On 7 December, Russia’s envoy to Nato, Dmitriy Rogozin, said: “We insist for a reaffirmation of the basic principles of international law.  We insist that Nato return to the legal field and realize its subordinate role in relation to the UN.” 

The continuing and strong Russian emphasis on Libya is, of course, linked to its parallel support for Syria.  On 6 December a squadron of the Northern Fleet, including the Admiral Kuznetsov cruiser and the anti-submarine warfare ship Admiral Chabanenko, set sail for the Eastern Mediterranean on a mission that will include a visit to the Syrian port of Tartus.  Commenting on the deployment last week, former Chief of Naval Staff Admiral Viktor Kravchenko said that having a naval force in the Eastern Mediterranean to balance Nato’s presence was very useful because it would “prevent the outbreak of armed conflict”, by which he meant a Nato intervention in Syria.

The conditions for a stable and lasting peace accord have never been so favourable, the ‘foreign minister’ of the Fuerzas Armadas Revolucionarias de Colombia (Farc) and part of the negotiating team in Cuba, ‘Rodrigo Granda’ (Ricardo Téllez) said at the weekend. Granda’s remarks come as Óscar Iván Zuluaga, the presidential candidate for Centro Democrático (CD), the party of former president Álvaro Uribe (2002-2010), is intensifying his attacks on the government of President Juan Manuel Santos ahead of presidential elections on 25 May. Zuluaga accuses Santos of offering impunity to Farc leaders. This prompted an intriguing response from ‘Andrés París’ (Jesús Emilio Carvajalino), another Farc negotiator in Havana.

‘Granda’ told Ecuador’s El Telégrafo on 6 April that the scope of the agenda being negotiated in the current peace talks, and the firm support of the international community, meant that the conditions were better than ever for a successful outcome as opposed to the failed peace processes in 1982, 1992 and 1998. This despite the fact that in more than 16 months of talks, only two of the six points up for discussion have been concluded – and these with partial accords.

As the presidential elections approach, Zuluaga is trying to wrest second place from a former mayor of Bogotá, Enrique Peñalosa, the candidate for the Alianza Verde. Polls suggest it is nip and tuck between Zuluaga and Peñalosa for second place and a likely run-off against President Santos. Zuluaga is trying to exploit voter concerns about senior Farc leaders not just avoiding any kind of punishment for their crimes but also potentially being allowed to participate in politics.

“Colombians want peace but not with impunity, not at any cost, and the leaders of the Farc who have committed atrocious crimes […] must pay for their mistakes in prison,” Zuluaga said. He added that he agreed that there should be reduced sentences “in some cases” but that “there has to be prison for those who have done so much harm to Colombian society”.

Santos’ running mate, Germán Vargas Lleras, insisted this week in Bucaramanga, the capital of the northern department of Santander, that there would be “no impunity” in Havana. Meanwhile, ‘París’, responding to Zuluaga from Havana, accused the CD presidential candidate of being “so low in the polls” he was seeking “political marketing” by trying to “sabotage the [peace] process”. ‘París’ said that “never before has a peace process ended up with jail for the protagonists, the constructors of peace”.

• Colombia’s Gulf spill

The Farc’s indirect support of President Santos ahead of May’s elections has not been accompanied by a slackening of guerrilla activity. In recent weeks there have been increasing attacks by the Farc on police and the army (three policemen and two soldiers have been killed in the last week alone) and oil infrastructure, especially in the south-western departments of Cauca and Nariño and the eastern department of Arauca.

Aside from the obvious benefits at a human level of an end to the armed conflict, the economic benefits would also be immense. On 8 April Colombia’s energy & mining minister, Amylkar Acosta, said that last year’s attacks on Colombia’s oil infrastructure by guerrillas had halted the export of some 35,000 barrels of crude oil a day, which Acosta calculated as a loss of some US$3.54bn. Acosta also cited official figures claiming that the recurrent attacks on Colombia’s oil infrastructure over the past 27 years have resulted in some 4.3m barrels of oil being spilt, not far short of the 4.9m barrels spilt in the 2010 Gulf of Mexico disaster - the largest oil spill in history.

• Oil infrastructure

According to Colombia’s oil producers’ association (ACP) last year there were 228 attacks on oil infrastructure in the country, the highest number of attacks since 2008. However, Camilo Marulanda, the president of Cenit, the hydrocarbon transport and logistics subsidiary of the state-run oil company Ecopetrol, said that there had been a 40% year-on-year fall in attacks on company infrastructure in the first quarter of 2014; 27 attacks in total.

Opinion polls rarely tell the full story, but the latest could denote an important turning point for President Michelle Bachelet. A survey by Plaza Pública Cadem released this week showed Bachelet’s approval rating had climbed two percentage points to 27% on the previous week. On 4 November Adimark published the results of its regular monthly opinion poll, showing that for the first time since January Bachelet’s approval rating had improved in a statistically significant way. In October, Adimark said, Bachelet’s approval rating rose four percentage points to 29%.

Needless to say there is divided counsel on how to interpret these numbers. Another opinion poll, by Universidad Diego Portales (UDP), shows President Bachelet still losing popularity. However there are good reasons to take the Adimark numbers in particular seriously: its surveys are regarded as credible; the UDP survey is a once-a-year affair.

Bachelet’s disapproval rating in the Adimark survey dropped by three percentage points on the preceding month to 67%. It now looks like Bachelet’s worst month, with the lowest approval rate (24%) and the highest disapproval rate (72%) was in August.

The detail of the Adimark survey offered some tantalising hints as to what may be happening. There were pronounced increases in Bachelet’s ratings for “dealing with a crisis”, “being active and energetic” and “inviting trust”. Her approval ratings increased among those defining themselves as left-wing (rising to 50%) or independent (to 24%), while they fell among those defining themselves as right-wing (to 12%). Some say Bachelet is finally emerging from under the shadow of the various corruption scandals that have dogged her, and that her image was helped by the government’s response to the earthquake in September.

Writing for the national daily La Tercera, blogger Andrés Benítez suggested the numbers showed Bachelet was rebuilding her appeal to her natural constituency of those on the Left, low income earners, and women. Sociologist Eugenio Trioni argued that Bachelet is re-establishing a leadership role with which she feels comfortable. He cited her cabinet reshuffle, her decision not to attend the annual dinner with business lobby Sofofa and her success, against opposition, in imposing her chosen candidate, Jorge Abbott, as the new national prosecutor, as signs that she is now more “empowered”.

Government officials say they are stepping up Bachelet’s “field visits” around the country so as to get the message out. But Bachelet’s reforms, particularly in education, still face an uphill struggle. Her challenge is to consolidate her core supporters but reach out more to independents and those in the political centre. That remains a difficult task.

• Bachelet bounces

President Michelle Bachelet’s supporters may be getting themselves over-excited. Writing for the national daily La Tercera, blogger Andrés Benítez makes the simple point that Bachelet still has plenty more disapprovers than approvers. “Despite the change in trend, most people still think this is a bad government,” he says.