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FDI up: According to the latest report by the United Nations Economic Commission for Latin America and the Caribbean (Eclac), foreign direct investment (FDI) in Nicaragua reached US$840m in 2014 up from US$816m in 2013. The report, which was released on 27 May, notes that a “project that could have a significant impact on future FDI inflows is the Nicaragua Canal”. The Eclac report notes that “one of the largest investments in 2014 was the rapid expansion of Xinwei Telecom of China, which was awarded six licences to provide different services in the country, leading to expected investments of US$ 300 million”. The report also highlights the fact that, as “announced in 2013, Canada’s B2Gold is continuing to explore new mining options in order to expand its existing operations, which represents a continuous investment by the company”.

The political situation, in effect, makes it difficult for the Democratic Party administration of President Joe Biden to fully confront the fentanyl problem. At a formal level the administration is pursuing various initiatives, but Mexico’s less than whole-hearted commitment raises doubts as to their ability to succeed. Following the January 2023 North American Summit between the three regional leaders – Biden for the US, AMLO for Mexico, and Justin Trudeau for Canada - there was an agreement to “jointly confront the deadly scourge of synthetic drugs”. In July the specially created Trilateral Fentanyl Committee listed four main actions that would, it said, be taken by its members:

• intensifying and expanding prosecution of drug traffickers;
• targeting the supply of precursor chemicals and enlisting the support of private chemical and shipping companies to prevent diversion for illicit use;
• preventing drug trafficking across borders; and
• promoting public health services to reduce harm and demand, as well as providing education and treatment on substance abuse.

The three countries also pledged support for another Biden administration initiative, the newly created Global Coalition to Address Synthetic Drug Threats, which is supported by 80 countries but so far not by China (which is reported to have neither accepted nor rejected its invitation to join). The first priorities of the coalition, set up in July this year, are to prevent manufacturing and trafficking of illicit synthetic drugs, detect emerging new drug threats, and promote appropriate health responses. Caroline Rose, director of the Washington-based New Lines Institute for Strategy and Policy, a think tank largely focused on the Captagon trade in the Middle East, said that the Global Coalition would help fill information gaps. “Improved multilateral dialogue on supply and demand, interdiction strategies, intelligence-sharing, and harm reduction pathways has been sorely needed” she told UAE based news portal thenational.com.

The key problem facing the Biden administration, however, is that it is dependent on Mexico’s goodwill to try and limit the flow of migrant and asylum seekers entering the US across the southern land border. This is such a politically sensitive subject that it appears to carry a higher priority than action to crack down on the cross-border fentanyl trade. In other words, the Biden administration is unwilling to confront AMLO over his inaction and disinformation on fentanyl for fear that the Mexican president will withdraw collaboration on the migration issue.

Jose Díaz Briseno, Washington correspondent for Mexico’s Reforma newspaper, says that both US Democrats and Republicans are deeply nervous about the security situation. In his view “the Biden administration has concerns about AMLO and particularly in the area of democracy and democratic backsliding”, but it has chosen to mute its criticism because it needs AMLO’s cooperation over migration. He sees migration as the key factor in the bilateral relationship. AMLO has helped both the Trump and Biden administrations by allowing Mexico to be used as a buffer state, requiring migrants requesting asylum in the US to remain in Mexico pending the result of their cases. Briseno adds: “The fact that AMLO is willing to turn Mexico into a buffer state to hold the migrants there and prevent them from reaching the US border makes him an invaluable asset.”

There is also an impression that both the US and Canada are now waiting for the end of the AMLO presidency, to see what deals can be struck with his successor, who is due take office late next year. Political analyst Carlos Bravo Regidor says: “They know that López Obrador is a president who picks fights, who likes conflict, who’s constantly looking for people to get into the ring with him, and I think both Canada and the US have opted to be the adults in the room, not to respond to provocations, and simply wait for AMLO’s term to end.”

Date: 21 November 2021. If no presidential candidate secures an absolute majority of the valid votes, a runoff will be held on 19 December.  

Election type: Presidential and legislative elections (27 senators and 155 deputies).

Main contenders: The ruling right-of-centre Chile Vamos coalition, currently made up of Renovación Nacional (RN), Evolución Política (Evópoli), Partido Regionalista Independiente Demócrata (PRI), and Unión Demócrata Independiente (UDI). The main alliances in the centre-left/left-wing opposition are: Convergencia Progresista (made up of the Partido por la Democracia [PPD], Partido Radical [PR], and Partido Socialista [PS]); the Frente Amplio which groups five parties and political movements, some recently set up (Comunes, Convergencia Social [CS], Revolución Democrática [RD], Fuerza Común [FC], and Movimiento Unir); and Unidad para el Cambio, set up in 2019 and currently composed of the Partido Comunista de Chile (PCCh) and Federación Regionalista Verde Social (FRVS). Other parties to note are the centre-left Partido Demócrata Cristiano (PDC), the leftist Partido Progresista (PRO), and the far-right Partido Republicano (PLR).   

Shifting alliances

Even before the events of the last two years shook Chile’s political landscape, political alliances had already started shifting, with notably the dissolution in 2018 of the leftist Nueva Mayoría coalition that former president Michelle Bachelet (2006-2010; 2014-2018) had formed during her second term. Incumbent President Sebastián Piñera’s term has since been marked by the social uprising which began in October 2019, the October 2020 referendum in which Chileans voted to rewrite the constitution, and the coronavirus (Covid-19) pandemic, all casting further uncertainty over Chile’s political outlook and the direction in which the electorate is leaning.

Chileans have rejected incumbent governing parties in the past three presidential elections, and there is a strong likelihood that they will do so again this year. In mid-January, Piñera’s approval rating stood at 17% according to Cadem, a pollster. His approval ratings had fallen as low as 9%-10% in the months that followed the October 2019 social uprising, before picking up slightly at various points during the pandemic, but never exceeding the mid-to-high twenties. With still over a year in office to go, the Piñera government appears to have already fallen into lame duck territory, with the demands of the Covid-19 pandemic, confrontation from the opposition, an electoral year, and internal divisions making it unlikely that it will make any noteworthy policy advances this year.   

The government is also out of step with public opinion on a number of issues, as demonstrated by the result of the October 2020 referendum on whether to rewrite Chile’s dictatorship-era constitution, and by the issue of early pension withdrawals. In the case of the former, voters overwhelmingly favoured a new constitution while the government had chosen to remain neutral – in part because within Chile Vamos, the UDI was against rewriting the constitution. With the latter, the Piñera government fiercely opposed the widely popular measure allowing Chileans to make withdrawals from their pension pot, which was instituted by congress to help with the economic impact of the pandemic (although a number of Chile Vamos lawmakers sided against the government on the issue, causing frictions within the ruling coalition).    

Adding to the general anti-incumbent and anti-establishment sentiment in Latin America, all this should conspire to give the leftist opposition a strong chance. However, the Chilean left is extremely divided, as demonstrated by the different lists which have been presented to the electoral authorities (Servel) for the election of the constituent assembly. If the opposition’s fragmentation in the April elections is reflected in the general election in November, it will be entering the fray with a weakened hand.   

Primaries for the presidential elections will be held in July, and much could still change before then. However, a number of presumptive pre-candidates have emerged as possible frontrunners in recent polls. On the right of the political spectrum are Joaquín Lavin from the UDI – the most ring-wing party of the Chile Vamos coalition – who is mayor of Las Condes, an upscale district in Santiago; Evelyn Matthei, also from the UDI, a former lawmaker and currently mayor of Providencia, another Santiago district; José Antonio Kast, the president of the far-right PLR, who came an unexpected fourth place as an independent in the 2017 presidential election; and Sebastián Sichel, a former minister in the Piñera government who plans to run as an independent .  

On the left are Pamela Jiles, currently a deputy for the left-wing Partido Humanista (PH), which broke away from the Frente Amplio alliance in 2019; and the PCCh’s Daniel Jadue, the communist mayor of the working-class Santiago district of Recoleta. Considering hypothetical scenarios for a possible second round, a Cadem poll from 11 January found Jiles to be the strongest bet on the left, and Lavin the best performer on the right.

Although they are by no means political outsiders, Lavin, Jadue, and Jiles have been described as touting a populist agenda. They, as well as other names topping opinion polls, represent political parties on the extremes rather than in the centre of Chile’s political system. Chile Vamos may yet put forward a strong pre-candidate from one of the more moderate segments of the coalition; centre-left parties may still pull together to form a coalition in the image of the now-defunct Nueva Mayoría (which had itself replaced the Concertación grouping which was founded at the end of the military dictatorship). But the current climate suggests that Chile’s election will be a divisive and polarising one, favourable to the emergence of more radical candidates.

Elections and the constituent process  

Later this year, presidential candidates will begin campaigning while the constituent assembly elected on 11 April will be working on drafting a new constitution. In theory, the constituent assembly should not be subjected to the electoral and political pressures which shape the agenda of presidential candidates. However, there could be some crossover between the issues that dominate presidential campaigns and those being discussed by the constituent assembly. For example, police reform and a reform to the pensions system are two issues likely to be salient in the presidential campaign; there could be a desire within parts of the constituent assembly to enshrine rights in the magna carta which would then drive such reforms at a political level. 

A busy election year, with a first test in April

Chileans will be going to the polls at least twice this year, with a first electoral test on 11 April when the 14.9m voters will elect regional governors (for the first time ever, as governors used to be appointed by the president), municipal mayors, and the 155 members of the constituent assembly tasked with writing a new constitution. The mayoral and gubernatorial elections were delayed from October 2020 because of the pandemic, while the election for the constituent assembly follows the result of the October 2020 referendum, when Chileans chose to elect new representatives to draft a new constitution rather than task existing lawmakers with the job.   

Almost 3,400 people have registered with Servel for the constituent assembly election. These include over 2,200 independents – including artists, pensioners, lawyers, ecologists, local community leaders, representatives from social organisations, sportsmen, academics, TV personalities, feminists, and indigenous candidates – as well as candidates from the established party system. Chile Vamos joined forces with the PLR to present just one list, thus unifying the forces of the right. In contrast, the left has splintered into several different lists. The parties from Convergencia Progresista have joined with the PDC, PRO, and the centrist Ciudadanos to present the Unidad Constituyente list, but the FA, the PCCh, and smaller left-wing parties will each be presenting their own lists also.

This fragmentation is mirrored in the alliances for the mayoral elections, where even the Unidad Constituyente – which was initially set up for the local elections as well as the constituent convention – has splintered, with Convergencia Progresista (the PPD, PR, and PS) presenting one list, and the PDC, PRO, and Ciudadanos presenting another.  

A representative constituent assembly

The rules by which the constituent assembly will work will be established by the body itself after it has been elected. But some rules have already been laid out regarding its composition to ensure that it is a representative and democratic body. The assembly will be made up of an equal number of men and women, making it the first constituent assembly in the world to have gender parity. A minimum of 5% of party lists must be made up of people with disabilities. Another first for Chile, where the current constitution does not recognise indigenous peoples, is that a quota has been established for indigenous representatives, with 17 seats reserved for members of Chile’s different indigenous peoples.

USA Rare Earth, a Nasdaq-listed company, said on 20 April 2026 that it has agreed to pay US$2.8bn to acquire Brazil’s Serra Verde. Serra Verde is the only producer of all four magnetic rare earths outside of Asia. Through this acquisition, the US company is buying a mine in the state of Goiás that began commercial production in 2024, extracting REEs from ionic clay deposits. Serra Verde is ahead of the game; other rare earth mines in Brazil are not expected to come on stream until 2028.

The US government has been interested in Serra Verde for some time. In February his year the US International Development Finance Corporation (IDC) closed a US$565m financial support package to help the company develop, taking output up to 6,400 tonnes per annum of rare earth oxides by 2027. The agreement also leaves open the possibility that the US government might take a minority stake in the company. A further feature is a 15-year offtake agreement under which 100% of output is pre-sold at guaranteed minimum prices. This covers the four magnetic rare earth elements: neodymium, praseodymium, dysprosium, and terbium.

USA Rare Earth has itself received government support since before its purchase of Serra Verde. In January this year the Washington administration said it had provided US$1.58bn in debt and equity financing through the Commerce Department. Some of this has been controversial since Cantor Fitzgerald, a company involved in the fundraising for USA Rare Earth, was previously led by Commerce Secretary Howard Lutnick and is now controlled by his sons. They have rejected suggestions of insider training within the Lutnick family.

The company’s newly acquired Brazilian facility is particularly attractive to investors because the Pela Ema deposit it controls is rich in heavy rare earths, dysprosium and terbium, used for high-performance magnets in electric vehicles, wind turbines, drones, and defence systems. In addition, Pela Ema’s soft clay deposits mean that as production ramps up, operating costs will be lower than for rare earths extracted from hard rocks. Outside of China there is minimal processing capacity for these rare earths, so the US and EU are seeking to fill that gap in the production chain. USA Rare Earth chief executive Barbara Humpton commented “Serra Verde’s Pela Ema mine is a one-of-a-kind asset and the only producer outside Asia capable of supplying all four magnetic rare earths at scale.”

Commenting on the acquisition of Serra Verde, Brazilian investment bank BTG Pactual said that it “may mark the beginning of a larger wave of transactions in the sector, with early stage companies increasingly becoming acquisition targets as projects advance towards production”. The Brazilian government reacted to news of the acquisition with surprise and some concern, given its reluctance to see such a strategic asset controlled and part-funded by a foreign government.

Left wing political party PSOL asked the attorney general’s office to investigate if the deal poses a risk to the country’s “economic sovereignty”. On social media platform X, Lula said that critical minerals should become instruments of economic and social development and that Brazil should avoid becoming a “mere exporter” of mineral commodities. He added that his government favoured international cooperation as long as it involved developing value added and technology transfer.

USA Rare Earth director general Ricardo Grossi had earlier told newspaper O Globo that “there are 17 rare earth elements, and we are focusing on the top 15, those with higher atomic weight, which have over 200 applications”. He added “we are estimating market growth at 8%-10% per annum until 2035. We have an advantageous position thanks to our operating base and portfolio of competitive products.”

Date: October 2019

Election type: National legislative elections, with 10 out of 30 senatorial seats up for election, and all 119 seats in the chamber of deputies.

Main contenders: Parties in the Alliance des parlementaires pour Haïti (APH) governing coalition: Parti Haïtien Têt Kalé (PHTK), the party of President Jovenel Moïse; Konvansyon Inite Démocratique (KID); Ayiti an aksyon (AAA); Bouclier; Organisation du peuple en lutte (OPL), which has begun to turn against the PHTK. Opposition parties: Vérité; Fanmi Lavalas (FL); Plateforme Pitit Dessalines; Fusion des sociaux-démocrates haïtiens (Fusion); Inité patriyotik.

Haiti is determined to hold its legislative elections in October, in an attempt at a semblance of normality in a country where electoral processes are usually characterised by uncertainty and interruptions (the last protracted electoral cycle stretched over a year and a half amid delays caused by fraud allegations and natural disasters). President Jovenel Moïse’s PHTK and its allies currently have a comfortable majority in the senate and chamber of deputies, but this majority will be tested in the October elections as the government has been engulfed in a political crisis. Protests over an increase in fuel prices in July led to the resignation of then-Prime Minister Jack Guy Lafontant, and Moïse himself has been facing calls to step down (his term which began in 2017 runs until 2021).

The last months of 2018 were marked by violent anti-corruption protests, some of which turned deadly. Widespread public anger against Moïse and the PHTK has been stoked by the revelations that some US$2bn in funds from Petrocaribe (Venezuela’s discounted oil initiative) were embezzled – a scandal implicating officials from the two previous presidencies, including that of Moïse’s predecessor and close ally Michel Martelly (2011-2016). Moïse and the government led by the new Prime Minister Jean-Henry Céant find themselves in a position of constant firefighting and are even beginning to lose the support of some of their allies in parliament. For example, the seven OPL deputies who formed part of the APH have now turned against Moïse, requesting his resignation.

The atmosphere is therefore favourable for the opposition to gain some ground in the October elections, if it succeeds in organising itself and turning public anger into votes. Haiti is plagued by low voter turnout (the provisional electoral council celebrated a 27.44% turnout for municipal and senatorial elections in 2017 as a success, after turnout reached just 21.09% in the 2016 presidential election) and the country’s political landscape is characterised by fragmentation and shifting alliances between disparate parties. An anti-government coalition has begun to emerge, however. Known as ‘secteur démocratique et populaire’, it brings together some 20 parties including Vérité (which currently holds 14 seats in the chamber of deputies, the second-largest after the PHTK, and three in the senate), FL (which has eight deputies and two senators currently), and Pitit Dessalines, the party of former presidential candidate Jean-Charles Moïse.

The mobilisation of Haitians in recent months, through social media and at the initiative of some opposition parties and groups (such as Collectif 4 Décembre 2013), might offer a glimmer of hope that there is a degree of reengagement in the political process. However, there is little to indicate that the disparate groups that form the opposition could succeed in offering a coherent solution to Haiti’s struggles through a parliament that is seen as largely ineffective.

• The CEP

Haiti’s elections will be overseen by the provisional electoral council (CEP), as the government has thus far failed to form a new permanent electoral body, despite this having been previously cited as a priority. Léopold Berlanger, the president of the CEP, estimates that the October legislative elections will cost US$50-US$75m. This, along with the government’s failure to address concerns raised by observation missions during the last elections (such as the CEP’s lack of transparency and an outdated voter roll), will not help reinstate public trust in institutions.

Boosting tourism: As well as mining, the FSLN government is also concentrating its efforts on the tourism sector – and environmental tourism in particular – with plans to target the European market. According to a press release issued by ProNicaragua this month, Nicaragua is hoping to lure tourists with “tours of active and inactive volcanoes, nature preserves, pristine forests, archaeological sites and colonial cities, as well as the chance to see wild birds or whales”. Thierry Lippert, charge d'affaires at Luxembourg's embassy in Nicaragua and the European Union (EU)’s office in Managua, recently organised a Euroforum on sustainable tourism in the Central American country. According to Sylvia de Levy, the president of the Nicaraguan national tourism association (Canatur), some 7% of the 1.32m foreign tourists who visited Nicaragua last year were Europeans.

Date: 10 November

Type: Presidential, vice presidential, legislative (128 national deputy candidates representing the country’s 18 departments), local (298 mayoral candidates), plus 20 candidates for the Central American parliament.

Main contenders

Presidential: Juan Orlando Hernández, Partido Nacional  (PN), Mauricio Villeda, Partido Liberal (PL), Xiomara Castro, Partido Libertad y Refundación (Libre), Salvador Nasralla,  Partido Anticorrupción (PAC),  General (rtd). Romeo Vásquez Velásquez, Alianza Patriótica Hondureña (Alianza),  Lucas Aguilera (Democracia Cristiana), Andrés Pavon (Frente Amplio Político Electoral en Resistenica).

General: Partido Nacional  (PN),  Partido Liberal (PL), Partido Libertad y Refundación (Libre), Partido Innovación y Unidad (PINU), Unificación Democrática (UD), Frente Amplio Político Electoral en Resistenica (Faper), Democracia Cristiana (DC).

Xiomara Castro was confirmed as the presidential candidate for the leftist political party Partido Libertad y Refundación (Libre) in open national primary elections on 18 November. Castro, the wife of ousted former president Manuel Zelaya (2006-2009), who will run for a seat in congress for Libre, won more votes than any single candidate competing in the elections, including the country’s two traditional parties – Partido Nacional (PN) and Partido Liberal (PL). Still, she will face an uphill battle to live up to Zelaya’s bold assertion that Libre would break “a 120-year old political duopoly” in November 2013. Castro, the consensus candidate, amassed over 502,000 votes in the primaries. By contrast the PL victor, Mauricio Villeda, the son of former president Ramón Villeda Morales (1957-1963), won some 310, 989 votes, which gave him a nine percentage point lead over his main rival Yani Rosenthal.

Hernández, the current president of congress, was declared the PN’s winner with almost 420,00 votes, compared to just under 360,000 for his main rival Ricardo Álvarez, the mayor of Tegucigalpa. Álvarez refused to concede, alleging fraud and demanding a full re-count. The supreme electoral court (TSE) agreed to a partial recount after the initial results were challenged by Álvarez, but although it did find some incidences of fraud (like dead voters and so on), the court insisted that the overall result was not affected.

The turnout for the primaries was very high at 2.3m (or 56% of the nationally domiciled electorate of 4.1m; a further 1.0m live abroad, mostly in the US). Impressively, that almost matched the turnout in the last presidential elections in November 2009 - 2.5m - itself a new record in Honduras. Castro’s primary performance alone amounted to 22% of that turnout - and she should win more support in the presidential contest, which attracts more public interest. She has benefited from deep disarray in the PL since the 28 June 2009 coup against her husband, with some factions from within the party (which brought Zelaya to power in 2006) joining Libre. The fact that Villeda felt compelled to say during his victory speech that “The PL is still alive” reflected the difficulties that have assailed the party. He also immediately reached out to Rosenthal and called for unity of all factions in “one great Liberal party”.

Libre could also benefit from the potentially acrimonious splits in the ruling PN. The PN brought President Porfirio Lobo Sosa to power with a congressional majority in the November  2009 scheduled elections. It is customary for the PN and PL to alternate in power. The problems besetting the PL after the coup meant that the PN was the only real choice in 2009. The PL has yet to get over its internal problems, making the PN a strong bet to retain power for a second term. However, the PN might also struggle to present a united front moving forward amid the intense animosity between the rival factions led by Hernández and Álvarez. The faction loyal to Álvarez (Salvemos Honduras) has already made its presence felt in congress by refusing to toe the line peddled by Hernández. It also accuses Lobo of using state resources to promote Hernández  as his preferred successor (presidents are limited to a single non renewable four-year term in Honduras).

Alliances

The political scene in Honduras remains marked by the coup. One outcome has been its fragmentation – nine parties will run in the 2013 election, compared with just five in 2009.  Libre hopes to take advantage of this to offer the electorate an alternative choice. Like her husband before her, Castro de Zelaya will appeal to the disenfranchised by running a populist campaign and she has followed her husband’s lead in seeking to ally herself with the country’s landless rural peasants and the main public sector labour unions.  To further increase her political firepower ahead of 2013, first off will be to forge an alliance with some of the other leftist parties like the Partido Innovación y Unidad (PINU) and Unificación Democrática (UD), which is currently allied with the PL as part of Lobo’s government of national reconciliation. The Lobo government is very unpopular heading into its final stretch. Despite heavy US backing the cash strapped administration has failed to make much headway at all, with entrenched poverty still afflicting two thirds of the population and extreme violence reaching shocking levels. On some accounts, Honduras is the most violent country in the world, including war zones. Drug trafficking and a major police corruption scandal have also weighed down the administration.

Despite all of this, however, Castro is still something of an outside bet. Between them, the PN and the PL still accounted for two thirds of the valid vote in the national primaries, with the PN, despite fielding seven candidates, taking just over 40%. For one thing there is the fact that Libre lacks the party machinery of the two big parties. Notably, Mauricio Villeda, the winning PL candidate, put in a strong showing in those very rural areas Libre is targeting, taking up to nine departments. Assuming that the two traditional parties eventually coalesce behind their official presidential contenders, they will avail of their strong local networks in the country’s 18 provinces and their well-established electoral machinery.  In contrast, the newly registered Libre has never before contested an election.

The fourth ballot

Castro is adamant that if she were to win the elections she would immediately convene a national constituent assembly. This might conspire against her winning over moderates keen to avoid a repeat of the political polarization and brinkmanship which culminated in Zelaya’s removal from power for attempting to convene a constituent assembly. It is worth noting that while Zelaya was spreading the message during the primaries that Libre is “a peaceful, revolutionary and Socialist party and the hope of this country,” an old foe, Roberto Micheletti, who served as de facto president after Zelaya’s ouster, re-emerged with a familiarly uncompromising message: “Constituent assembly, no; Communists, no; 21st Century Socialists, no; democracy, yes.”

Yet in early January both President Lobo and Juan Orlando Hernández were dropping strong hints that a fourth ballot  -  a national referendum on constitutional reform -  could be may tacked onto the general election. Such a move — which would undercut Libre’s main raison d’être  —  is looking increasingly likely after congress in December finally pushed through a pending new law on referendums and plebiscites. In mid January the effective head of the supreme electoral court (TSE), David Matamoros, said that the TSE would be ready for a referendum if the national congress called one.  Zelaya congratulated Lobo on 8 January, tweeting, “Pepe Lobo: to put a fourth or fifth ballot [box] to consult the people in the next election does have anything bad. Congratulations PEPE”. The swingeing irony in all of this cannot be lost on him.

• PAC & APH

Neither of the other two new parties Partido Anticorrupción (PAC) and Alianza Patriótica Hondureña (APH) are prospective Libre allies. The PAC’s candidate Salvador Nasralla, a TV political and sports presenter, is indirectly threatening to raze the entire political edifice to the ground, arguing that the party’s raison d’être is fighting corruption in all its forms at all levels. Complaining about Hernández’s victory for the PN, Nasralla on 26 November declared the national primaries “the most corrupt elections in history”. The APH was founded by former military officers: its presidential candidate is (retired) General Romeo Vásquez Velásquez, the commander of the armed forces when Zelaya was deposed.

• Juan Orlando Hernández

Although Ricardo Álvarez, the popular mayor of Tegucigalpa, likely has the support of more of the ruling Partido Nacional’s base, Hernández has the advantage of having served four years in central government. As president of congress he has delivered most of the legislative reforms sent down by the executive, including a truth & reconciliation commission and important constitutional reforms, both in response to the 2009 coup; US-backed security reforms in response to the country’s fragile internal security and the growth of drug trafficking; and less successfully, economic reforms in a bid to improve the weak public finances and boost foreign investment (such as some tax reform and the model cities initiative – since rejected by the supreme court on constitutional grounds). Hernández is also President Lobo’s effective number two. He regularly accompanies the President to meetings at home and abroad, including with senior US government officials, and as such has already positioned himself as a natural successor to Lobo. However Lobo is unpopular and still considered illegitimate by some sectors, so Hernández may not automatically benefit from his close association with him.

Investor confidence down: On 30 September Guatemala’s central bank (Banguat) released a survey which found that investor confidence was at just 36.11%. While an improvement on the 31.37 % registered in August, this is still well off the 80.77% registered in March, two months after the government of President Otto Pérez Molina took office. Banguat president, Edgar Barquín, attributed the fall in confidence to crime, the lack of legal certainty for investors and social conflicts. The Banguat survey comes less than a month after the Geneva-based World Economic Forum (WEF) released its latest Global Competitiveness report on 4 September, which saw Guatemala fall three places down to 86 out of the total 148 countries. The WEF report notes that “Despite fairly well-functioning goods (66th) and financial markets (43rd), thanks to its openness to trade and a sound banking system (17th), the country continues to suffer from security-related and corruption costs that hinder the functioning of institutions”. The WEF ranks Guatemala below Panama (40) and Costa Rica (54); but above El Salvador (97), Nicaragua (99) and Honduras (111).

Budget proposal: On 2 September the government led by President Otto Pérez Molina sent down to congress its 2014 draft budget. As in the past, doubts persist as to whether the legislature will approve it by the 30 November constitutional deadline. Pérez Molina’s Partido Patriota (PP) has just 59 seats in the 158-member unicameral legislature. The budget, which is for Q$70.56bn (US$8.86bn), up from the Q$66.98bn (US$8.41bn) approved in 2013, is based on projected GDP growth of 3.3% - up from the 3% forecast for 2013 by the United Nations Economic Commission for Latin America and the Caribbean (Eclac). The ministries to receive the biggest allocations are: education (Q$12.32bn, up from Q$10.74bn in 2013); communications (Q$5.55bn, down from Q$5.88bn on 2013); health (Q$5.11bn, virtually unchanged from 2013) and interior (Q$4.40bn, down from Q$4.43bn in 2013).

The government tapped capital markets on 9 January, raising US$3bn, in the fourth bond issuance in under a year. Given a still-large fiscal deficit and relatively high external financing needs, the authorities remain reliant on debt issuance to close its financing gap. The fact that this most recent issuance was at better terms than previous bond sales augurs well, while President Lenín Moreno’s subsequent win in a referendum on constitutional reform is another indication of a shift to the centre, both in terms of political and economic policy-making.

Investor interest in Ecuador remains firm, with the issuance proving around three-times oversubscribed. The 10-year bond was the tenth issuance since Ecuador returned to international capital markets in 2014, following its external debt default in 2008. This most recent issuance yielded 7.875%, lower than the 8.875% 10-year bond issued last October, despite continued monetary policy tightening in several developed economies (which tends to push up yields in emerging markets, as governments are forced to increase investor returns in order to attract interest).

Higher oil prices have boosted investor interest

The fact that yields have fallen is likely to reflect a number of factors. Firstly, oil price trends are more favourable. Brent crude was trading at around US$57/b when Ecuador tapped international capital markets last October; at the time of the January issuance, prices were approaching US$70/b, with futures prices also elevated, indicating that many market participants expecting oil prices to remain reasonably firm in the short term. Given Ecuador’s commodity-dependent economy, this points to a likely improvement over the course of the year, with higher oil income helping to reduce both the current-account and fiscal deficits.

There is also a political dimension to increased investor interest in Ecuadorean debt. In recent months, President Moreno has moved steadily further away from his populist left-wing predecessor, Rafael Correa, which has boosted confidence that some form of fiscal consolidation is likely during the remainder of the current predecessor’s tenure. A subsequent landslide victory for Moreno in the 4 February referendum on constitutional reform, with the electorate approving all seven propositions, will bolster the president’s standing. Given that one of the proposals was a ban on presidential re-election (even non-consecutive), this also eliminates the possibility that Correa may again bid for the presidency at a later date. Although it is possible that another candidate may assume power in the next election and loosen the fiscal purse strings, markets will be relieved that the charismatic Correa will not be able to engineer a revival.

Structural weaknesses remain in place

That said, despite the investor interest in Ecuador amid a revival in oil prices, the economy remains fragile. Despite an improvement, the current-account and fiscal deficits will still be large and repeated bond issuance will lift public-sector debt. The debt burden, at over 40% of GDP, is fairly heavy for an economy that has only relatively recently exited default and average maturities are fairly low. GDP growth remains positive, but is fairly suppressed, while a still-strong US dollar continues to pose competitiveness problems to Ecuador’s dollarised economy.

Metals prices, although showing some differing trends on the back of particular supply and demand trends in individual markets, have risen across the board over the past year. This mainly reflects ongoing strong growth in demand from Asia (China, in particular), but it also reflects rising investor interest on the back of higher oil prices.

Latin America remains a key source market for many metals, with Chile and Peru respectively the world’s largest and third-largest copper producers in the world; Peru and Bolivia the world’s third- and fourth-largest tin producers; and Brazil the second-largest producer of iron ore. Brazil is also an important aluminium and nickel producer, while Bolivia produces reasonably large quantities of tin and silver, and Argentina aluminium.

Chile and Peru both set to perform strongly

Higher metals prices will have a much more noticeable positive impact on the Chilean and Peruvian economies than higher oil prices are having on the region’s main energy producers. Eclac is projecting an acceleration in GDP growth from 1.5% in 2017 to 3.9% in 2018 in Chile, and from 2.5% to 3.6% in Peru. In Chile’s case, this reflects much better underlying economic policy management, with firmer business confidence leading to a surge in investment. A recently-unveiled bill to simplify the tax code is likely to further facilitate investment. Export volumes are rising quickly, with copper output up by over 12% year on year in the first half of 2018. Notwithstanding a widening of the budget deficit in recent years, Chile’s public finances are in comparatively good shape, meaning that aggressive spending cuts are not necessary in order to bolster sovereign creditworthiness.

Peru is also benefitting from an investment-led acceleration in GDP growth, with investment in the country’s mining sector proving particularly strong in recent months. New capacity slated to come on stream later this year looks set to increase production volumes, which will lift exports. The quality of the policy framework is not as supportive as in Chile, reflecting political instability, weaker infrastructure, and a less investor-friendly business environment, but the economy remains in decent shape, with higher metals prices providing a boon to overall economic performance. Bolivia is in a similar position, with firm growth in fixed investment (including in the mining sector) buoying overall GDP growth, which Eclac is projecting will come in at 4.3% in 2018, identical to the rate registered last year (and the fourth-highest in the region, behind the Dominican Republic, Panama and Paraguay).

The government considers the inflation rate its main economic challenge. In the 12 months to June 2011 it was 8.6%, which is well above the official target of an annual rate of between 4% and 6%. On 12 July Fernando Lorenzo, the economy minister, outlined government measures to lower the rate and gave only the vaguest hints about what it might do next, if the official assumption that inflationary pressures in the economy will ease proves false. Lorenzo stressed that the government would not take any risks with its principal economic policy, which is to improve the distribution of wealth and reduce inequality. He claimed that the government had made steady progress on this since 2007, reducing the number of people living in extreme poverty. Lorenzo implied that the government took a broad view of inequality, because he said that spending on security, public health, housing and infrastructure would all increase.

Mining: Three cabinet ministers (industry, tourism and environment) survived an attempt on 15 July by the opposition to summon them to congress to explain the government’s behaviour over the controversial Aratirí iron ore project. A company from India, Zamin, wants to spend US$3bn on building a huge opencast pit to extract 18m t of iron ore a year. The opposition, which is in a minority in congress, claims that the recent mining law was effectively drafted by Zamin.

One way of assessing the change in circumstances that is happening in Latin America and the Caribbean is to look at it from the perspective of heightened political risk and uncertainty. Many LAC governments have reason to be fearful about the way the Trump agenda is playing out in the Western Hemisphere.

Putting it bluntly, the risk of direct US military intervention has increased quite sharply, not least thanks to the revival of the Monroe Doctrine. The attack on Caracas and the capture of President Maduro came with a clear warning that something similar could, if deemed necessary, happen elsewhere in the region. The Trump government and its predecessors have for long opposed the authoritarian left-wing regimes of Venezuela, Cuba, and Nicaragua. Venezuela, as we have seen, has now been put under Washington’s control with the force of arms. Cuba’s economy meanwhile is in a state of collapse, and the US is cutting off oil supplies to further increase the pressure on the ruling Communist Party. US officials have avoided talking about regime change, but some form of limited military strike against either Cuban or Nicaraguan targets, justified as a necessary targeting of drug trafficking cartels and their “terrorist” activities, cannot be ruled out. A year ago, such a policy would have been considered unthinkable; now the probability is small but is still definitely more than zero.

There is also a previously unimaginable, but now more-than-zero chance of US military strikes against Mexico and Colombia. In terms of GDP and population these are two of the largest countries in the LAC region, after Brazil. They also have had long-term strategic partnerships with Washington including close cooperation to try and cut off illicit drug flows entering the US. Both are democracies and are highly active in regional diplomacy. However, those credentials have not been sufficient to prevent a stream of US officials talking openly to the press about potential US strikes on cartel targets in both countries. There have been briefings about potential military operations on Mexican soil against the drug cartels, a unilateral action, and one where prior Mexican permission would not necessarily be sought. On 8 January this year, for example, President Trump told Fox News that US ground operations in Mexico were possible. He said, “we are going to start now hitting land, with regards to the cartels…the cartels are running Mexico”.

Similar comments were made about Colombia. After the US military operation to seize Maduro in Venezuela, the US president appeared to hint that something similar might happen in Colombia. Without citing any supporting evidence Trump said Colombia was “run by a sick man who likes making cocaine and selling it to the United States. And he’s not going to be doing it very long, let me tell you.”

As 2026 progresses Latin American governments also face an unusually high level of ongoing uncertainty over the application of US tariffs. Those countries that are highly dependent on exporting to the US are most exposed to potentially sharp falls in revenues if Washington imposes new tariffs at short notice – something which, as we have seen, can been triggered by transactional political considerations. The most exposed to tariff/trade risks include Mexico (around 80% of Mexican exports go to the US, equivalent to 28%-31% of GDP) but also the Central American economies such as Honduras, Costa Rica, Guatemala, and El Salvador.

Latin American countries are particularly exposed during election years. One example of the Trump administration’s electoral bullying came during the Honduran presidential elections of November 2025. In contrast with the tradition of observing diplomatic neutrality during elections, Trump publicly endorsed right-winger Nasry ‘Tito’ Asfura, one of the three presidential front runners. The US president described Asfura as “the man who is standing up for democracy and fighting against Maduro”, while dismissing the other two front runners as either “working with the Communists” or being a “borderline Communist” that could not be trusted. The US president threatened to cut off economic aid to Honduras if Asfura was not elected. Days before the election Trump also pardoned Juan Orlando Hernández (2014-2022), a former president from Asfura’s party, who was serving a 45-year sentence in a US on drug and arms smuggling charges. Asfura went on to be declared the winner by a very narrow margin and amid multiple claims of electoral fraud.

The long wait is over. The government of President Mauricio Funes finally managed to get a tax reform through the legislative assembly at the tail end of 2011. This will increase income tax on high-earning individuals and companies. The timing was crucial. El Salvador will hold legislative elections on 11 March when the main right-wing opposition Alianza Republicana Nacionalista (Arena) could emerge as the dominant party in congress. Arena, which is aligned with the private sector lobby Asociación Nacional de la Empresa Privada (Anep), was the only party to oppose the tax reform bill.

The tax reform took effect on 1 January. The economy ministry calculates that it will bring in an extra US$170m in 2012, which will be channelled into social projects. This is slightly less than the US$177m the Funes administration had sought. Those who earn up to US$503 a month will not pay income tax (the threshold was lifted from US$338), meaning 263,000 people will be exempt from income tax. Income tax was not increased for the middle class - those earning between US$2,080 and US$6,200. The ruling left-wing Frente Farabundo Martí para la Liberación Nacional (FMLN) rejected the proposed increase by the Funes administration on the grounds that the burden of tax fell disproportionately on the middle class. The 3,657 Salvadoreans earning in excess of US$6,200 per month will start paying 30% income tax (up from 25%). Companies that report annual earnings of less than US$150,000 will continue to pay 25% but those reporting above this will be taxed 30%.

A 2009 report by the Inter-American Development Bank (IDB) and the Central American Institute of Fiscal Studies argued that 30% of the income of the poorest 10% of households in El Salvador went on tax, the next lowest 10% of the population paid 17%, while the wealthiest 10% contributed just 11% of their income.

The business sector, represented by Anep and backed by Arena, opposed paying any more taxes, insisting that Funes “squandered” resources in spending and social programmes. The government’s riposte was that a higher tax take is essential to stop El Salvador from falling further and further into debt and that investing in social programmes to benefit the poor was essential for the country’s economic as well as social development.

The government invested US$597.7m in social programmes and infrastructure construction in 2011, according to the presidential technical secretary, Alex Segovia, up from US$481m in 2010. He said this would rise to US$839m, the equivalent of 3.5% of GDP, in 2012, partly funded by the increased tax take. “The social security system is now a reality in El Salvador,” Segovia said. He added that the aim for the remainder of Funes’ term, which concludes in June 2013, was to consolidate this as a legacy.

The reform was approved by 66 of the 84 deputies, with the 18-strong Arena bloc rejecting it en masse. It was important for Funes to push it through congress before legislative and municipal elections on 11 March because Arena could strip the FMLN of its congressional edge. As things stand, the FMLN controls 35 of the 84 seats in congress, followed by Arena with 18; Gran Alianza por la Unidad Nacional (Gana), a mid-term splinter group from Arena, 16; the Partido de Conciliación Nacional (PCN), 10; and smaller parties, five.

An opinion poll carried out by LPG Datos for the conservative daily La Prensa Gráfica projected a 29.5% to 22.2% advantage for Arena over the FMLN. If this is accurate Arena would increase its congressional presence significantly, the FMLN would lose ground and Gana, which was third in the poll with 3.5%, would suffer the fate of every previous splinter group in El Salvador: life in the political wilderness. Another poll, by the Instituto Universitario de Opinión Pública de la UCA (Iudop) concurs that Arena will increase its presence but concludes that the FMLN will remain the largest party (29.6%), followed by Arena (24.2%) and Gana (7.6%), a respectable first electoral outing but insufficient to maintain its current presence.

The PCN and the Partido Demócrata Cristiano (PDC) are in the midst of a prolonged legal battle after the constitutional branch of the supreme court ruled last February that they should be wound up; this was upheld by the supreme electoral tribunal (TSE) in October, but another branch of the constitutional court is now hearing their appeal against the TSE. While this convoluted process was going on the two parties took the opportunity to set up surrogate parties: the PCN will compete in the elections as Concertación Nacional (CN), while the PDC set up as Partido de la Esperanza. The public does not seem impressed.

It is unlikely that the FMLN will lose significant ground in the 84-seat congress but a revived Arena could leave Funes with a potentially rough ride for his final year in power before presidential elections in March 2013. When Funes has had strained relations with the FMLN, he has generally been able to win backing from Gana, but this option might not be available to him after the elections.

• Munguía Payés

David Munguía Payés is El Salvador’s new public security and justice minister. Not even under the succession of right-wing governments that ruled El Salvador between the signing of the peace accords in 1992 and 2009 did a military man hold the top law and order post. The appointment of Munguía, a retired general by the country’s first left-wing government caused a furore. Veteran guerrillas in the FMLN, which brought President Funes to power, argue that his appointment was part of a pact with the US, and will lead to the militarisation of the police. Munguía, a close ally of Funes, had served as defence minister, a position which has now been filled by General Atilio Benítez, who led Salvadorean troops in Iraq.

• Murders

There were more murders in 2011 than in any other year since the signing of the 1992 peace accords. According to police statistics, there were 4,308 murders with five days of December left, more than the previous record of 4,233 in 2009. The number of homicides in 2011 represented a 9.3% increase over 2010. The new public security and justice minister, David Munguía Payés, claims that 90% of the murders are gang-related, but, in a major disparity, the national police (PNC) put this at just 30%.

The finance minister, Dionisio Borda, announced on 13 February that he was planning a 5% cut in spending to balance the budget. The only public institutions exempted from the cut will be the legislature and the judiciary, whose budgets are protected against such arbitrary cuts. Borda said that he was obliged to impose the cuts because tax revenues were already well below what was needed to balance the budget. He said that the budget imposed tax increases of 15%, but once congress had finished increasing the government’s spending commitments a 37% increase would have been needed on the revenue side. Cuts, he said, were the only alternative to a worrying rise in the fiscal deficit.

In the budget approved by congress, the fiscal deficit was set at G$2.8 trillion (US$622m). This was largely the result of increases in the public sector wage bill, which in turn was the result of 14,000 new jobs in the public sector. Finance ministry officials say that the cut will amount to G$1.3trillion (US$289m) of expenditure financed from the revenue account. The officials say that spending financed by loans or the reinvestment of profits from state companies will not be subject to the cuts.

Borda added that congress could avoid the cuts by deciding to approve his proposal to introduce an income tax and his separate proposal to set up a national development fund, Fondo Nacional de Desarrollo Económico y Social (Fondes). This fund would be supported by the increased payments Brazil is making for electricity generated by the Itaipú project.

A third alternative for generating extra revenue is to introduce export taxes on soya, maize and sunflower. This is a proposal that has come from congress, not the government.

Inflation: In January monthly inflation was 1.1%. This brought the lagging 12 month rate down to 4.4%. In calendar 2011 the rate was 4.9%.

INTELLIGENCE RESEARCH HIGHLIGHTS

TO: All Strategic Intelligence Forum members

DATE: 4 May 2007

The Strategic Intelligence Forum is part of the Intelligence Research group, and as a member of the Strategic Intelligence Forum I am very pleased to send you from time to time a selection of reports published recently by Intelligence Research Ltd that I consider to be of particular STRATEGIC significance. Please find below my latest selection of Intelligence Research articles:

1. LATIN AMERICA: Interstate conflict a thing of the past? - Latin American Special Report, April 2007

SUMMARY: It has become almost a cliché that interstate armed conflict in Latin America is a thing of the past. The last war between Latin American countries (Ecuador against Peru) took place took place 22 years ago; the one before that (El Salvador against Honduras), 38 years ago. In between there were three armed confrontations involving extra-regional powers, which are usually not counted. However, the region has 18 unsettled inter-state disputes, and over the past 20 years eight of them involved sabre-rattling, deployment or use of military force. The most widely held view is that the region has found a way to contain these disputes. This report takes a hard look at this assumption...

Link to full article: http://www.latinnews.com/lsr/secure/iscil.pdf

2. CHINA: The illusion of liberalisation - ChinaWatch Monthly Review, May 2007

SUMMARY: April was a month full of mixed messages regarding the government’s willingness to open up. Signs that it was ready to increase official transparency, ease censorship, and be more receptive to the public were offset by new restrictions on newspapers and the internet, evidence of continued religious repression, and an increased reliance on the use of force to quell unrest...

Link to full article: http://www.asiaint.com/arl/arl13850.asp

NOTE: Links to these - and other - reports can also be found in the Strategic Intelligence Monitoring Centre, which you may access on a 24/7 basis by going to www.stratintforum.com, logging in as a member, and selecting the Strategic Intelligence Monitoring Centre option.

With best regards

JKC de Courcy
Chairman
Strategic Intelligence Forum

P.S. You may sign up for a free evaluation of any Intelligence Research Ltd services by visiting the following websites, or you may contact our Business Development Director: [email protected].

www.intelligenceresearch.com
www.stratintforum.com
www.asiaint.com
www.latinnews.com

The legislature’s failure to approve the 2012 state budget is fast serving as the latest political and financial problem facing the government of President Laura Chinchilla. While the third proposed fiscal reform plan continues to be held up by the unicameral national assembly, the wrangling over the government’s US$11.8bn financial plan has increased animosities and promises to set the stage for a new political confrontation.

   The opposition Partido Unidad Social Cristiana (PUSC), Partido Acción Ciudadana (PAC) and Moviemiento Libertario (ML), which together have more seats in the national assembly than the ruling Partido Liberación Nacional (PLN), had called in early October for a reduction of the budget of several ministries of between US$70m and US$110m (or 0.9% of the total budget) in order to re-direct those funds to the ministry of security.

    Luis Fishman, the president of the financial committee and leader of the PUSC legislative bloc, said the adjustments were “minimal” and that the money would be taken from “superfluous” spending such as training, social events and advertising.

   Those ministers whose portfolios faced cuts, such as Justice Minister Luis Paulino Mora, have warned that the re-allocation of funds could threaten the viability of crucial programmes, such as the witness protection programme and the normal operation of the judicial investigative unit. Similarly, the supreme electoral tribunal has said that such cuts would threaten its ability to organise referendums and issue national ID cards, while the ministry of culture warned that it would be forced to shut down altogether.

   However, “motion 91” failed in a closed committee vote as a legislator from Fishman’s own party, Gloria Bejarano, voted against it. The government responded by offering a reduction of ¢4.9bn (US$9.57m), but President Chinchilla warned that “there wasn’t much left to scrape off the bottom of the pan”.

   As we go to print, all proposed amendments to the government’s budget bill (No. 18,234) had been defeated in the financial committee and the proposed budget will be voted on by the plenary in its original form. The government has also said that the opposition should start the dialogue anew if it wanted it to maintain the offered cut, which means Chinchilla is likely to taste defeat once more.

• Public calls for increased security

In a recent poll by the Costa Rican ministry of planning and economic policy (Mideplan), 19.2% of respondents said that increased security is the number one challenge for the government if it is to ensure the country’s development, while another 18.9% said the country should be “more pacific”. President Laura Chinchilla and Planning Minister Laura Alfaro Maykall said the study served to corroborate the fact that the government was addressing the main concerns of Costa Ricans and implementing plans to address these issues in the short- medium- and long-term.

Western consumer attitudes have often been sceptical of Chinese vehicle brands which are seen to score poorly on vehicle and passenger safety. For this reason, many sales executives promoting Chinese cars welcomed an announcement late last year that the BYD Dolphin had become the first electric vehicle to win a five-star rating in the Latin NCAP crash and safety test, allowing it to claim to be the safest car in its category in Latin America. Latin NCAP stands for Latin New Car Assessment Programme, an independent, non-profit organisation that assesses car safety. The Dolphin has seven airbags and comes with an ADAS (Advanced Driver Assistance System) as standard. The car scored highest for child occupant safety, followed by adult safety, pedestrian protection, and vulnerable road users’ safety. Latin NCAP said that the model tested, Dolphin Plus, “showed, in general, good performance with stable structure and footwell areas, and adequate to good adult chest protection in the frontal impact”.

Not all assessments of the new wave of Chinese EVs are positive. According to a survey by Vietnamese car-listing platform Oto.com.vn several models of Chinese cars lost re-sale value by 24%-33% between 2022 and 2024, much more than their Japanese and South Korean counterparts. Cars built by Kia, Hyundai, and Toyota depreciated by less than 20% in the same period. Anh Dung, a used-car distributor, said: “Buyers prefer safe options when it comes to used cars to ensure stability, and they often look to Japanese and Korean brands.” However, the survey also revealed that Chinese brands are gradually gaining the trust of Vietnamese consumers, a process that could also be taking place in Latin America. 

On 21 February 2024 Ronald Ojeda, a former lieutenant in the Venezuelan army, was kidnapped in Chile. Ten days later his corpse was found, bearing signs of torture, in a suitcase partially encased in cement. For more than a year since his death, Chilean police have been investigating the case. At least 12 members of the Tren de Aragua have been arrested in connection with the crime. Chilean public prosecutor Héctor Barros has said the focus of the investigation is on a spin-off from the main criminal organisation, known as Los Piratas de Aragua, a group of 23 individuals who he says have a “distinct dynamic and internal hierarchy”. The US authorities also reported arresting a man named Rafael Gómez Salasin (aka El Turko) thought to be one of the intellectual authors of the abduction and murder. Very significantly, a witness was quoted as saying that the crime had been ordered by Diosdado Cabello, the Venezuelan minister of the interior and justice, who is generally considered to be number two in the Venezuelan regime (after President Nicolás Maduro).

Suspicions of a politically motivated crime were accentuated when members of the Chilean Policía de Investigaciones (PDI) said they had found a fingerprint in the elevator of Ojeda’s home which matched that of Alexander Granko Arteaga, a colonel in the Venezuelan army, who is also head of the General Directorate of Military Counterintelligence (DGCIM).

Ojeda is very likely to have been targeted because of his alignment with his country’s opposition. He was arrested in Venezuela in 2017 along with three other soldiers, jointly accused of acts with “conspiratorial purposes” and the “planning of terrorist actions”. In November 2017 while being transferred between military prisons, Ojeda and eight other imprisoned ex-soldiers were able to overpower their captors, seizing their weapons and vehicle and escaping. One ex-soldier died and two were injured in the gun battle.  

Ojeda was among the survivors who went into hiding, later to arrive in Chile in 2018, having first spent some time in Peru – an emigrant route followed by many of his compatriots. In January last year Venezuelan defence minister Vladimir Padrino published a decree announcing the “demotion and expulsion” of 33 military officers, including Ojeda. From his new base in Chile Ojeda was an outspoken critic of the Maduro regime, saying he had been tortured while held by the DGCIM and frequently posting anti-government content on social media.

The Ojeda case has caused a sharp deterioration in diplomatic relations between Chile and Venezuela. Both countries’ current governments are left of centre, but Chile’s President Gabriel Boric is democratically elected and a promoter of human rights, while Venezuela’s Nicolás Maduro is an authoritarian who supresses political opposition. Boric has taken the view that the investigation and trial of those accused of Ojeda’s killing should be allowed to conclude before considering the next political diplomatic steps. Earlier this year justice minister Jaime Gafardo said, “If the commission of a political crime is confirmed in Chilean national territory, ordered by a high authority of a foreign government, Chile will exercise all the actions available to it in the national and international legal system.”

The Ojeda case takes on extra significance because in its investigation and verdict, the Chilean court may provide hard, evidence-based confirmation of a link between the Tren de Aragua and the Venezuelan government. In effect the allegation is that the Caracas government commissioned a contract killing from the Tren for political motives. While many politicians would perhaps use different words and context, the case appears to vindicate Trump’s claims that the Tren de Aragua is a “foreign terrorist organisation” and that President Maduro is a cartel kingpin.

Deal over hydro-electrics: Following the recent flare-up of unrest caused by President Ricardo Martinelli’s refusal to provide reassurances regarding hydroelectric concessions in the Ngäbe Buglé comarca (an indigenous political administrative region) [RC-12-03], on 17 March, the government reached an agreement with Ngäbe Buglé representatives. The deal provides for the cancellation of all mineral (mining) concessions in the comarca and establishes a special framework for the protection of minerals, water and other natural resources. This is in line with article five of a controversial bill (415), the omission of which had triggered the recent unrest. The agreement also states that: future applications for hydroelectric projects in the comarca and annexed areas must receive the backing of the Ngäbe Buglé authorities; inhabitants would receive 5% of the annual income earned by these projects; and at least a quarter of the workforce for the projects must be from the area.

New Panama Canal Administrator: On 9 March the Panama Canal Authority (ACP) Board of Directors named engineer Jorge Luis Quijano as the new Panama Canal Administrator. He takes over from Alberto Alemán Zubieta whose second eight-year term expires on 3 September. Quijano’s appointment has been well received across the political spectrum in terms of representing institutional continuity within the ACP, the autonomous agency of the government that manages the Canal, rather than political patronage. Having begun his professional career at the Panama Canal in 1975, Quijano was promoted to Maritime Operations Director in 1999 and, since September 2006, has served as the Executive Vice-President of the Engineering and Programs Management Department in charge of the US$5.2bn Panama Canal Expansion Program. While the expansion plan is due to be completed in October 2014, Zubieta admitted last month that there had been a seven-month delay in pouring cement (which should have begun in January 2011 but didn’t start until July) due to the fact that the mixture did not have the right specifications. This has raised questions as to whether the expansion plan will be completed on time.