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Development: The ailing Cuban leader, Fidel Castro, gave further hints on 17 December that he may not run for a seat in congress in January.

Significance: If Fidel really decides not to run, he will be stepping down as Cuban leader. What is clear now is that the transition of power from Fidel to his brother, Raúl, has been almost flawlessly managed by the ruling party. The first phase was Fidel's surrendering of power. The second phase is now underway and involves Raúl taking power. Raúl is now clearly in charge and setting the policy agenda. Fidel, not seen in public for the past 16 months, has already become just a figure-head.

Under Cuba's one-party (Communist) rule, selected delegates are "elected" for local councils by the population. The councillors then designate their regions' candidates for the national assembly "elections". The assembly in turn chooses the so-called council of state, or Cuba's executive branch. The head of the council of state doubles as Cuba's President. Membership of the council of state requires membership of the assembly.

Fidel has headed the council of state, and therefore has been Cuba's president, since 1976. He has been Cuba's leader, first as commander of the revolution and then as prime minister, since 1959. Earlier this month, recently "elected" councillors from Santiago de Cuba picked Fidel unanimously to run for the region's seat in congress - as they have always done - in an open vote session.

Fidel has not been exercising his authority in full since June last year, when he handed over day-to-day power to his younger brother Raúl.

In a letter read out on state TV, Fidel said that his "duty is not to cling to office, and even less obstruct the path of younger people, but to pass on experience and ideas". This suggests that Fidel would remain as a propaganda tool for a prospective government headed by Raúl as from next year.

Some Cuba-watchers, however, believe that Fidel's mention of "younger people" in his letter meant that Raúl's automatic succession is not certain. Indeed, they claim that it is not sure that Raúl will be selected to head the council of state when the new congress "elected" on 20 January assembles in March. We think that Raúl's succession is assured.

It is more likely, however, that Fidel was making an indirect reference to President Hugo Chávez , whose support and petrodollars have been crucial to the smooth hand-over of power in Cuba. Chávez harbours ambitions of becoming the main leader of the Left in Latin America - a position still maintained by Fidel.

Other Cuba-watchers argue that Fidel's decision not to run for the Cuban congress is a way of portraying him as a "democratic" leader not concerned with power. As he may be close to death, this may be a way of softening his image for posterity, and possibly securing support from the younger generation.

That the second phase of the transition - Raúl's accession to power - is now under way seems clear from the recent reversal of Raúl's gestures at improving the regime's image by releasing dissidents and allowing new dissident groups to form. Indeed, despite announcing that Cuba would sign up to some international human rights agreements, the Cuban government curbed protests during the celebration of Human Rights Day in Havana on 10 December with "preventative arrests".

Development: A report by the UN published on 29 January claimed that Mara gangs in Central America are getting stronger.

Significance: The report concluded that the three Central American states plagued by Mara violence (Guatemala, El Salvador and Honduras) are losing the battle against the Maras. The report argued that the governments were failing for several reasons. One was that few Mara members had an alternative to a life of crime. The report claims that in Honduras only 30% of Mara members had any alternative to joining the Maras. Another reason for the countries' imminent defeat is that the police are often in league with the gangsters. A third reason is that the Maras have responded to the tough anti-Mara policies, notably Mano Dura in Guatemala and El Salvador and Cero Tolerancia in Honduras, by becoming better organised and more ruthless themselves.

The report, 'Maras y Pandillas, Comunidad y Policias en Centroamérica', claims that it is the first region-wide report on the gangs. It was financed by the UN, Sweden's International Development Agency and the Banco Centroamericano de Integración Económica. It was put together by Demoscopia, based in Costa Rica.

The report found that the Maras are beginning to move into other countries in the region, notably Nicaragua and to a lesser extent Costa Rica. The Mexican government claims, and the report agrees, that there are Mara cells spreading across the country from southern Mexico.

The report states that the Maras began in Guatemala in 1985 and spread to El Salvador in 1987 and then on to Honduras. Some academics argue that the Maras are the result of the US repatriating Salvadorean criminals, especially from Los Angeles. The gangs pose a huge challenge to governments in Guatemala, El Salvador and Honduras. The report said that the Mara presence in Nicaragua was still embryonic and that the gangs were even less established in Costa Rica.

The report, which was based on 3,402 interviews in 2007 with a range of people from Mara gangsters to their families, neighbours, policemen, businessmen and victims, argued that in the past four years the Maras had become more businesslike and militaristic. The report claimed that the gangs now provided a lot of the unskilled labour for drug traffickers and organised criminals operating in the region. Mexican and Colombian gangs have long shipped drugs through Central America to the US.

The report reckons that there are 100,000 Maras spread across Guatemala, El Salvador, Honduras and Nicaragua. As many as 30,000 also operate in the United States, mostly in Los Angeles, according to US federal authorities. The report also suggested that nowadays as many as 40% of gang leaders are women.

The US has promised US$100m in aid to Mexico and Central America to fight the Maras. The bulk of the money is likely to go to Guatemala and El Salvador: Francisco Murillo, the director of the Dirección General de Investigación Criminal in Honduras, reckons that Honduras will get only US$12m from the US.

Development: On 2 March the liberals agreed to run together in the municipal elections scheduled for November.

Significance: The announcement follows much speculation after the ruling by the supreme electoral council (CSE) that Eduardo Montealegre was no longer leader of the Alianza Liberal Nicaragüense party (ALN). It suggests the political death of his former party and the failure of the Frente Sandinista de Liberación Nacional (FSLN) in its attempts to sabotage liberal unity - the CSE is headed by a Sandinista judge while the new ALN president, Eliseo Núñez Hernández, was reportedly sympathetic to the pact between the FSLN and former president Arnoldo Alemán.

Under the alliance agreed on 2 March, Montealegre's current political movement, "Vamos con Eduardo" (VCE) and the Partido Liberal Constitucionalista (PLC)will participate in party primary elections together to select candidates for the municipal elections.

Montealegre himself will run as mayoral candidate for Managua, with PLC deputy Enrique Quiñonez as his running mate. PLC spokesperson Leonel Teller explained that under the alliance, 60% of mayoralties won in the elections would go to the PLC while the VCE would take the remainder.

Development: On 6 April official sources revealed that the Argentine police has seized 492.6kg of marijuana, apparently from Paraguay, near the border with Brazil.

Significance: The drug interception, in the northern province of Misiones, is a major coup for anti-narcotics operations in the region and confirms the widely-held view that the trilateral border area between Argentina, Paraguay and Brazil is a major hub for drug trafficking and other forms of smuggling.

The incident also seems to support the conclusions of a report published in February by the US State Department, which claimed that Brazil and the southern cone (Argentina, Chile, Paraguay and Uruguay) were transit countries for drugs trafficked from other areas of South America - particularly the Andean region - to the US and European markets.

The marijuana seizure - estimated at a value of 1,478,000 Argentine pesos (US$464,779) - was not the result of police surveillance, however, but rather was thanks to a landowner who discovered the 19 sacks of the drug hidden under blankets and branches on his land.

Brazil's trade unions were embroiled in controversy last week following the alleged involvement of Paulo Pereira da Silva, the former leader of the country's second largest union, Força Sindical, in a corruption case in the national social and economic development bank (Bndes). The case fuelled criticism of the government's strategy of aligning trade unions with the government by offering them public positions.

Earlier this week the federal police announced that they were investigating 10 mayors over fraudulent loans from Bndes. The scandal appears to involve Ricardo Tosto, who was appointed to Bndes by the allied Partido Democrático Trabalhista (PDT). In April Tosto was arrested for a couple of days and on his release immediately telephoned da Silva, his patron. Da Silva left the leadership of Força Sindical when he became a federal deputy for the PDT. The call, which was legally recorded, suggested da Silva's involvement in wrongdoing.

According to police findings leaked to the Brazilian press, da Silva received R$325,000 (US$203,000) in kickbacks to influence Bndes's decision to lend money to municipal governments linked to Força Sindical. Da Silva has vehemently denied he "took money illicitly". In a meeting after the police announced it would be investigating the case further, the PDT leadership decided to give da Silva "ample rights to defence" and not to ask him to take gardening leave while his activities come under scrutiny. The alleged corruption in Bndes, Brazil's largest development bank, brought into the spotlight the government's policy of aligning trade unions with the government by providing them with public positions, such as places on the Bndes board. While some say this shows Lula's commitment to workers, others say it reveals the co-optation of trade union leaders by the government, a tactic used by populist dictator-president Getúlio Vargas from the 1930s to the early 1950s.

For Ricardo Antunes, an academic authority on the study of labour movements in Brazil, trade unions are now dependent on the government apparatus for survival. Apart from luring leaders with public positions, Antunes also cited the government's decision to keep a compulsory tax on workers to finance trade unions, which had previously been denounced by Lula while he lead the Central Única dos Trabalhadores (CUT), the country's main union federation.

Development: On 16 June foreign ministers from the European Union postponed until 19 June a decision on whether to lift diplomatic sanctions on Cuba.

Significance: Such a move would put the EU at odds with the US, which continues to demand the release of political prisoners. According to diplomats, the decision to postpone the debate was instigated by the German chancellor, Angela Merkel, as Germany is reportedly undecided over which position to take. Other countries, such as the Czech Republic and Sweden, have also raised objections to the move, amid concerns about Cuba's human rights situation. Sweden's foreign minister, Carl Bildt, noted that Cuba did not currently seem interested in forging closer ties with the EU, which would include talks on rights and reforms.

Unlike the 1962 US embargo, the EU measures, which were imposed after a crackdown on dissent five years ago, do not prevent trade and investment relations. Instead they include a freeze on visits by high-level officials.

However the curiosity of the debate is that these diplomatic sanctions are not even in effect currently, having been suspended since 2005. EU countries such as Spain have long been pushing to scrap the sanctions completely as a sign that the EU is ready to fully re-establish ties with the island. Such as move would also be seen as encouragement by the EU for further changes by the new Cuban President, Raúl Castro, who took over after his brother Fidel retired in February.

Raúl has already rolled out several reforms. The most recent, on 11 June, scrapped the wage restraints which have kept doctors and taxi drivers on similar salaries for the past 50 years.

Deputy labor and social security minister Carlos Mateu Pereira told the government newspaper Granma that the new “salary system should be seen as a tool to help obtain better results in output and services". Granma said that "the socialist principle of distribution will be achieved wherein everyone earns in accordance with his contribution, in other words, pay in accordance with quality and quantity."

Employers have until August to implement the changes.

Development: On 20 July Brazil's foreign minister, Celso Amorim, accused industrialised countries of using Nazi propaganda techniques over the reform of World Trade Organization rules.

Significance: Amorim's tough words are a sign that developing countries will not agree a deal with the industrialised countries unless the terms are substantially improved. The industrialised countries, which comprise the G8, are making a final effort to restart the Doha round of WTO liberalisation which foundered over the industrialised countries' refusal to reduce their agricultural protectionism. The final effort starts with a gathering of trade and foreign ministers at the WTO headquarters in Geneva today, 21 July. Amorim said that the industrialised countries were preparing to blame the emerging economies for causing the talks to fail.

In the past few days industrialised countries, principally the US and the European Union have demanded that emerging economies make more concessions if they want easier access to the developing countries' agricultural markets. The industrialised countries claim that the current summit is the final chance for the Doha round.

Amorim spent over an hour with the head of the World Trade Organization, Pascal Lamy on 20 July. After the meeting Amorim accused the industrialised countries of behaving like Josef Goebbels who was Hitler's propaganda chief. “Goebbels argued that if you repeated a lie enough times, people would believe it. “When I see what is said over the liberalisation of agriculture and the industrial sector nothing reminds me more of Goebbels. This [lie] has to be nailed. We will not be able to have an agreement based on lies. The rich countries cannot go on as they have done in the past, taking the most from the little countries and giving most to the rich."

There will be no LatinNews daily briefing on Monday 25 August due to a Bank Holiday in the UK.

Development: On 24 September President Michelle Bachelet of Chile announced that the Unión de Naciones Suramericanas (Unasur) would investigate the deaths that occurred 10 days ago in Pando, Bolivia.

Significance: This is the first sign that Unasur is more than just a talking shop. It is worth noting that the decision was taken at an emergency Unasur meeting of heads of state who were attending the UN General Assembly in New York. President Hugo Chávez of Venezuela was not there but in China.

The investigating committee will be chaired by an Argentine human rights expert, Rodolfo Matarolo, though exactly how it will function is unclear. The committee expects to travel to Bolivia on 29 September. It will meet government representatives and then go on to Pando and look at the site of the massacre. At least 15 people were killed on 11 September near the capital of the department, Cobija.

The Unasur presidents also agreed to postpone their next summit, scheduled for Viña del Mar in Chile in October, and meet again at the Mercosur summit in Bahia, Brazil in December.

Ricardo Martinelli

Who is he? Millionaire businessman and supermarket baron, Ricardo Martinelli is leader of opposition party, Cambio Democrático (CD).

Why watch him? Martinelli is running as CD presidential candidate for the May 2009 elections and recent polls have shown him as favourite, slightly ahead of Balbina Herrera, candidate for the ruling Partido Revolucionario Democrático (PRD).

Born: 11 March 1952, Panama City.

Education:  After graduating in business administration from the University of Arkansas, US, Martinelli went on to do an MBA, specialising in finance at the INCAE  business school, Costa Rica.

Public Life: A renowned businessman, Martinelli built his fortune through the success of Super 99, currently one of Panama ´s biggest companies, which he started with an investment of US$1671. As well as being president of Super 99, he is also on the board of directors of sugar mill Central Azucarera La Victoria, import company Importadora Ricamar,  plastics factory Plastigol and is the director of numerous companies including Gold Mills de Panamá, Global Bank, Panasal S.A., Televisora Nacional de Panamá, Direct TV, Desarrollo Norte S.A, AVIPAC and Calox Panameña.

As well as his extensive business interests, Martinelli has also held various government posts; during the presidency of Ernesto Pérez Balladares (1994-1999), he acted as social security director (from September 1994 to July 1996), serving as minister for canal affairs in the subsequent Mireya Moscoso adminstration (1999-2004). After founding the CD in 1998, he stood as its presidential candidate in the May 2004 elections although performed miserably, receiving barely 5% of the vote.

A centre-right politician who believes in the freedom of the market, Martinelli has also built up his reputation through establishing charitable foundations such as Fundación Super 99 and the Fundación Ricardo Martinelli which both offer scholarships to children from disadvantaged backgrounds.

Time Line:

September 1994-July 1996: Social security director under the Ernesto Pérez Balladares administration.

May 1998: Cambio Democrático registered as a party with Panama ´s electoral court.

September 1999 - January 2003: Minister for canal affairs under the Mireya Moscoso administration.

October 2004: Establishes Fundacion Ricardo Martinelli.

2 May 2004: Receives 5.31% in the presidential elections as candidate for Cambio Democrático.

August 2008: Officially named Cambio Democrático presidential candidate for May 2009 elections.

Strengths: Portraying himself as a shrewd businessman, capable of managing the nation ´s finances, Martinelli certainly has plenty to invest in his electoral campaign, spending US$1.7m between January and August 2008 alone. Through his charitable foundations, he has also built up a public image as a politician committed to “social responsibility" and alleviating poverty. More significantly he faces a government which has suffered a considerable dip in popularity, following controversial security decrees and recent scandals, including murder allegations against interior minister Daniel Delgado Diamante.

Weaknesses: While the government might currently be unpopular, the PRD nevertheless has the support of roughly one third of the electorate, considerably more than that of the CD which also trails behind the main opposition party, Partido Panameñista (PP) in terms of party members.

Martinelli ´s aggressive campaign - which has so far been based on attacking his two main rivals, Herrera and Juan Carlos Varela, candidate for the Alianza Programática un Nuevo Camino (an alliance between the PP and other opposition group, Molinera) accusing them of corruption - is also alienating supporters; senior electoral official Boris Barrios recently called on Martinelli, as well as his rivals to tone down the levels of aggression in their campaigns.

Meanwhile Martinelli himself is not completely free from scandal. He has come under fire in the past for the lack of transparency in the Panama Canal Authority during his mandate - for example its refusal to translate key studies into Spanish so as to be intelligible to the majority of Panamanians. Similarly he attracted controversy when, as head of the social security fund, there was a rash of 11 sudden deaths of kidney dialysis patients, most likely caused by using bad chemicals in the machines, although the removal of key evidence meant that the cause was never identified.

Prospects: The most recent polls show Martinelli with 32.4% of support, slightly ahead of Herrera ´s 31.6%. Varela took 17.7% of voting intention while the remaining candidate, Guillermo Endara of the Vanguardia Moral de la Patria, trailed with 4.4%. Indeed, this was before the latest scandal to tarnish the government - murder allegations involving interior minister Delgado, which is likely to further impact on Herrera ´s chances. However, whether Martinelli proves able to capitalise on the discontent remains to be seen, given the entrenched support in the country for the PRD.

Development:   On 30 November primary elections took place to select candidates for the November 2009 general elections, which will decide a successor to President Manuel Zelaya.

Significance: There was an unexpected victory for Mauricio Villeda, the presidential nominee for the ruling Partido Liberal (PL) over his party rival and congressional leader, Roberto Micheletti.   Although the count is not yet final, Villeda secured a firm win, with 52% of the vote, against 26.8% for Micheletti.

Villeda, who is not a politician but a lawyer (and the son of a former PL president, Ramon Villeda Morales [1957-1963]), was running as a proxy candidate for Vice-President Elvin Santos. Santos was barred from running by the supreme court on a rather dubious legal technicality.

In August, the supreme court ruled that Santos was constitutionally barred from standing in elections because he had served as president during Zelaya's absences from the country during the present executive. As such, the court argued, he would effectively be seeking re-election in 2009, which is prohibited under the constitution. The electoral court subsequently refused to inscribe Santos' name on the electoral list, and so Santos instead registered the name of his lawyer, Villeda, on the list.

In his defence, Santos argued that he had never actually donned the presidential sash during Zelaya's absences and consequently should be allowed to stand.

Santos accused Micheletti (who secured the support of President Zelaya) of conspiring against him and indeed Micheletti had been widely expected to win the primary vote.   Santos supporters however, successfully portrayed the vice-president as the innocent victim of an underhand political plot, which clearly worked in his favour. The Santos faction had also intimated ahead of the vote that Micheletti would attempt to win the vote by fraudulent means.

Many in the PL were also probably aware that an eventual Santos candidacy might have a better chance of winning the 2009 presidential vote against Porfirio Lobo, who won the nomination for the opposition Partido Nacional (PN), with 77% of the vote. (Lobo lost to Zelaya in the last presidential election in 2005.)

Micheletti accepted defeat, called for party unity and said he was ready for dialogue with Villeda at the nearest opportunity.

However, he was adamant that the presidential nomination had gone to Villeda and not to Santos, saying, “Mauricio Villeda Bermúdez is the presidential candidate of the PL".

Villeda's victory leaves the PL in a bit of a legal quandary, however the most likely outcome is a negotiated solution allowing Santos to eventually become the party's presidential candidate.   Polls suggest that Santos and the PL, which tend to secure the urban vote, would run a close race against Porfirio Lobo and the PN, whose support base is more rural.

For President Zelaya, the victories of Villeda/Santos may work in his favour.

The president recently sparked controversy with the announcement that he may send a bill to congress to organise a national referendum on whether to convene a constituent assembly in 2010. The referendum would be held at the same time as the presidential and legislative elections in November 2009. Zelaya's announcement follows similar moves in other left-wing countries in the region such as Venezuela, Ecuador and Bolivia. While the move was greeted with scepticism across the board - the opposition denounced it as a power-grab by Zelaya despite the fact that he will no longer be in office in 2010 - it may well be in Santos' interest to support the measure, as it could also clear the legal path for him to run again down the line.

Aside from the presidential primaries, Hondurans yesterday (30 November) also voted for three vice presidential nominees, 128 nominees for the national congress, 298 municipal nominees and 20 deputy nominees to the Central American Parliament. An estimated 26,046 candidates ran for 2,894 posts across 5,306 voting stations, according to the national electoral court. The elections were monitored by the Organization of American States (OAS) as well as local observer groups, with no reports of irregularities.

The pre-vote period was marked by violence, with three candidates for the PL (two congressional, one mayoral) and one for the PN (a deputy mayoral candidate) murdered in November. Although the interior ministry ruled out a political motive behind the killings, the local press was less convinced. It also raised the possibility that some of the crimes could be drug-related.

Cuba: On 11 January, the US Assistant Secretary of State for Western Hemisphere Affairs, Tom Shannon, said it would be “logical" for the US to sign a drug-trafficking accord with Cuba. Shannon made the comments as part of wide-ranging interview with the Spanish daily El Paí­s on US- Latin American relations. While noting that the US does not have formal dialogue with Cuba on drug-trafficking, he said that there is informal cooperation. Shannon said that given the extent of the problem and the size of Cuba, it would “be logical" for the US to institute a more formal drug-trafficking accord. While Shannon insisted that moves towards fundamental changes (such as the release of political prisoners) were still a pre-condition for any shift in US relations with Cuba, he agreed that the incoming Obama administration might oversee some form of rapprochement with the Castro government. Obama has said he will leave the economic embargo in place in order to promote democratic reform on the island. However on 23 May 2008 he pledged that upon taking office he would “immediately allow unlimited family travel and remittances to Cuba".

Ecuador: On 13 January the US ambassador to Ecuador, Heather Hodges, said that the US would quit its military base in Manta either by, or a little before, the expiration of its lease in November. Ecuador's president, Rafael Correa refused to extend the 10 year lease the US had on the base, arguing that the US was using the base for purposes other than those Ecuador intended. The US uses part of Manta's airfield as a Forward Operating Location for US Southern Command. The base is mainly used by US aircraft to monitor suspicious (probably drug-carrying) flights by small planes across the Northern Andes.

Mexico: On 12 January Mexico's president, Felipe Calderón Hinojosa met the US president-elect, Barack Obama in Washington. According to Obama's transition team, the meeting was intended to underscore the importance of the US-Mexico relationship. Since 1980, newly-elected US presidents have developed a tradition of making sure that they meet the Mexican president ahead of any other head of state before inauguration. According to Obama's team, the two leaders discussed such topics as the North American Free Trade Agreement (Nafta), border security, immigration and crime. The Mexicans said that Calderón proposed a strategic alliance in which security would top a long list of bilateral issues. Neither leader however mentioned Nafta when they made some brief comments after the meeting and while Obama's own comments on the meeting with Calderón were positive, he was, however, non-committal about immigration reform, a key issue from Mexico's point of view. Obama said that the two men had discussed “how we can have a comprehensive and thoughtful strategy that ultimately strengthens both countries."

Mexico: On 13 January El Universal, a Mexico City newspaper reported that the US Department of Defense rated Mexico and Pakistan as the two countries most likely to need a sudden deployment of US troops. The conclusion, buried in the Joint Operating Environment (JOE), drawn up by the US Joint Forces Command, is further evidence that senior US policymakers are very worried the Mexican government's failure to defeat violent, drug trafficking gangsters operating in Mexico. The JOE was published at the beginning of December. Its conclusions may have percolated up to President George W Bush who gave an interview to The Washington Post before Christmas in which he forecast that the US would be fighting a war against drug gangs and the “first battleground would be Mexico."

Development: On 23 February a new report endorsed by the senior Republican on the US Senate Foreign Relations Committee will call for change in US policy towards Cuba.

Significance: The report may encourage President Barack Obama to fulfil his campaign pledge to lift restrictions on family travel and remittances to Cuba. That would represent a strong political gesture towards Latin America and the Caribbean ahead of his first regional trip to attend the Summit of the Americas, in Trinidad, on 17-19 April. The support of a prominent republican senator, Richard Lugar, from the agricultural state of Indiana, will also give weight to US farming lobby efforts to introduce a new congressional bill to allow Cuba to access US banks in order to finance its US food purchases.

The document, prepared by Republican staffers, calls for the removal of restrictions on family travel and remittances to Cuba (which were tightened up by the George W. Bush administration); reinstituting formal bilateral cooperation on drug interdiction and migration and; allowing Cuba to buy US agricultural products on credit. However, it does not call for the removal of the four decade-old US economic embargo against Cuba.

In a speech in May 2008, Obama called for a new Cuba policy and said that upon taking office he would “immediately allow unlimited family travel and remittances to Cuba", a pledge he has yet to fulfil. He hedged his position by pledging to retain the 1962 embargo in order to “leverage" political change on the island.

In mid-February the US-Cuba Trade and Economic Council reported that food sales to Cuba rose 61% year-on-year to a record US$710m in 2008, up from US$437.5m in 2007. US producers began selling to Cuba in 2001 under an amendment to the embargo.

Development: On 30 March representatives of the ruling Concertación said discussions with the far left Juntos Podemos Más (JPM) regarding the possibility of an electoral pact would resume next week.

Significance: The announcement by Alejandro Bahamondes, of the Partido por la Democracia, one of the four members of the ruling alliance, points to difficulties between the Concertación and the far-left group in reaching an agreement ahead of the December elections.

It follows a statement days earlier by JPM rejecting an offer from the Concertación regarding an electoral pact, a move which prompted another negotiator for the Concertación, Jorge Pizarro, a senator for the Democracia Cristiana, to dismiss the pact as  “dead and buried", comments which the JPM were quick to downplay.

The JPM and Concertación had been discussing the possibility of running on a joint ticket in some districts in the legislative elections, which would enable the JPM access to the binominal electoral system. However, the far-left group objected to the fact that the agreement would have left out three districts.

Colombia: Colombia's exports in February fell 17.4% from the same month in 2008, to US$2.34bn, according to the national statistics department DANE.

Development: On 14 June Nicaragua's President Daniel Ortega threatened to expel US ambassador to Managua, Robert Callahan.

Significance: While Ortega is unlikely to make good his threat, his anti-US rhetoric is not a surprise given the recent “definitive" decision by the US government Millennium Challenge Corporation (MCC) to cancel US$62m (out of a total US$175m) in aid and points to a deterioration in US-Nicaragua relations.

The MCC announced its decision on 10 June in light of Ortega's failure to respond to concerns surrounding the November 2008 municipal elections, which saw a sweeping win for the ruling Frente Sandinista de Liberación Nacional (FSLN) amid widespread fraud allegations. As well as threatening to expel Callahan, Ortega also accused US President Barack Obama of repeating hostile policies established by predecessors like George W. Bush and Ronald Reagan and suspending the program because the “US's candidate for the Managua mayoralty, ex presidential candidate, Eduardo Montealegre was defeated".

While the accusations of US interference in elections have undoubtedly rung true in the past - notably in the 2006 elections, under Callahan's predecessor, Paul Trivelli - Ortega's current claims are less convincing, in part due to his refusal to authorize established election observers to oversee the November 2008 municipal elections at the time, or convincingly counter accusations that fraud did in fact take place. According to watchdogs such Ética y Transparencia (EyT) and the Instituto para el Desarrollo y la Democracia (Ipade), as well as the US Carter Center and the European Union, fraud was carried out in at least 40 of the 146 municipalities in which elections took place.

Development: On 22 July the central bank's monetary policy committee (Copom) unanimously voted to cut the benchmark Selic interest rate by 50 basis points to a record new low of 8.75%, without bias.

Significance: The move, which may mark the end of the current monetary easing cycle, signals rising confidence that Brazil is set fair to return to steady, low-inflationary growth, led by resilient consumer demand.

Inflationary pressures remain contained despite a relatively strong real, leaving the Copom well placed to anchor the Selic at this new lower position, which would be very positive for Brazilian investors and consumers, and would propel growth forward.

“This level of the benchmark rate is consistent with a benign inflationary outlook, helping ensure the conversion of inflation toward the target, in a meaningful horizon, as well as a non-inflationary recovery of economic activity," the Copom stated.

Annual inflation, as measured by the national IPCA consumer price index, slowed to 4.8% in June, down from 5.2% in May and the lowest since March 2008. The bank expects year-end annual inflation of 4.5%, at the centre of the target range (4.5% +/- 2.0%). Accumulated inflation was 2.57% in the first half, meaning it will have to slow a little over the rest of the year in order to meet that forecast.

Although the private sector still expects a slight GDP contraction overall this year (-0.34% year-on-year), the central bank expects positive real annual GDP growth of 0.8%, supported largely by private consumption, which is benefitting from record low borrowing costs, reduced taxes, and sustained public spending by the government of President Lula da Silva. The consensus is for GDP to bounce back to 3.6% in 2010.

The Copom has cut the Selic by a full five percentage points since January, when it was 13.75%, while banks, particularly public sector institutions, have followed suit, with plenty of prodding by the Lula government to maintain consumer credit. Average consumer lending rates are still a high 47.3%, but this is down from an eye-watering 60% in November 2008.

The real was trading at R$1.90/US4 yesterday (22 July). Brazil's main Bovespa stock index closed at 53,072 points. The Bovespa has gained about 33% to date in 2009 and stocks have recovered to their pre-crisis early September 2008 levels.

As growth recovers strength towards year-end, the Copom may act pre-emptively with a small hike in early 2010 to contain any fresh inflationary pressures next year. Some of these pressures will likely arise from additional public spending by the Lula government ahead of the general elections in October 2010.

Development: On 1 September congress voted (by 85 votes to 5) to approve a referendum on whether President Alvaro Uribe can run again for the presidency.

Significance: Uribe's victory in congress was narrow: he needed 84 votes, a simple majority. His big problem now is that the schedule for holding a referendum to allow him to run in the May 2010 presidential elections looks impossibly tight. Another, longer term, problem is that the US is clearly unhappy that Uribe wants a third term. The US objections, expressed by President Barack Obama when Uribe visited him in June, are on principle, and underline why the US prefers to deal with President Lula da Silva of Brazil, who has very publicly eschewed amending the constitution to allow for his third consecutive re-election.

There are also major question marks over how Uribe achieved his congressional majority. The moderate opposition to Uribe suggests that at least 13 members of the congress were bribed to vote in favour of re-election. A former president, César Gavirí­a (1990-1994), claimed that “consciences have been bought."

To meet the legal deadlines, the referendum will have to be held in the next couple of months. This is all but impossible. Local commentators reckon that the earliest a referendum could be organised is early in 2010, which means that Uribe will miss the deadline for registering his presidential candidacy. That deadline is 30 November, six months before the scheduled elections in May 2010. The deadline is set via Law 996 (2005), known as the Ley de Garantí­as.

Theoretically, Uribe could get this law amended by congress, but he took such a long time to get the referendum proposal through the lower house that this option looks fraught.

Uribe has a more immediate problem because the congressional decision is not the end of the preliminaries before the referendum can be called.

The referendum bill now has to go to the constitutional court for revision. Legally, the court has six months to rule, but as it is stacked with Uribistas, the proposal is likely to emerge quickly.

Then the Registradadurí­a Nacional (which keeps track of the electoral rolls) is likely to take at least three months to organise a referendum. In the referendum itself, a minimum of 7.5m voters, of an electorate of 30m, will have to vote and a majority will have to vote in favour of re-election.

Furthermore, the electoral authorities still have not approved the financial accounts relating to the original campaign to collect signatures for the petition calling for the constitution to be changed so that Uribe could run again. This issue has been with the electoral authorities for most of 2009.

Legal and constitutional experts are divided how Uribe can get around all these obstacles without offering a hostage to fortune. His supporters argue that a referendum outranks a mere law and therefore the 30 November deadline does not matter. Uribe's opponents and constitutionalists argue that at the very least the supreme court, which is strongly anti-Uribe, should rule on the law/referendum issue.

Pointer: The two main opposition parties, Polo Democrático Alternativo and the Partido Liberal abstained from the congressional vote. Opinion polls show that Uribe would easily win a referendum and the May 2010 election.

Development: On 8 October the government of President Hugo Chávez announced its latest measures to tackle the domestic economic crisis that has resulted from the collapse in global oil prices.

Significance: There was nothing radical in the plan. The government is waiting for oil prices to rebound, so meanwhile will continue to issue debt in support of public spending, and make additional efforts to meet the demand for US dollars on the domestic market. The government wants to reduce the massive gap between the fixed official and parallel exchange rates and thus stem renewed inflation pressures.

The central bank president, Nelson Merentes, along with the economy minister, Alí­ Rodrí­guez and the planning minister, Jorge Rodrí­guez, presented the government's latest proposals to manage the economic downturn.

The central bank will seek to strengthen the bolí­var by setting a target for the unofficial exchange rate for the first time in a bid to stem inflation, which is still running above 25% annually. Merentes said the bank will set a target gap of 60% between the official and unregulated rates and wants to reach that level by November/December. The parallel rate has recovered from a low of BF7.0/US$ in August to around BF5.4/US$ now (against the official rate of BF2.15/US$), following a US$5.0bn bond issue last week that was many times oversubscribed. Merentes again denied any plans to devalue.

Rodrí­guez said he now expected zero real growth this year, with marginal growth of 0.5% in 2010. He suggested that the 2010 budget may set a conservative oil estimate of US$40 per barrel, which would allow the government to skim off any additional revenues above and beyond that for additional public spending. To date this year the Venezuelan oil basket has averaged US$56.2/b, compared to a record US$86.5/b in 2008, but was trading at a higher US$65/b in early October.

Development: On 19 November an influential congressman, David Price (D, North Carolina) said that the narco-violence in Mexico was demoralising the whole of Mexico.

Significance: Price, a former political science and public policy professor at Duke University and a congressman since 1987, chairs the House's Appropriations subcommittee for Homeland Security. He was speaking after three senior US officials gave evidence to the subcommittee on the violence in Mexico and his staff reported back from a fact-finding trip to Mexico.

What made Price's comments more telling was that they were endorsed by Ciro Rodrí­guez (D, Texas) who said that although he did not have firm numbers he was sure that lots of Mexicans had moved across the border, legally, into the US to escape the violence in places such as Ciudad Juárez. Rodrí­guez implied that he did not believe the witnesses testifying to the Appropriations' subcommittee on Homeland Security that the violence in Mexico was for the most part criminal vs. criminal. He asked, rhetorically, if this was so, why many innocent people were moving across the border to escape the violence.

On 19 November five people, including four state law enforcement agents, were killed in Ciudad Juárez. So far this year, over 1,760 people have been killed in the city. In the whole of Mexico, 5,575 people have been killed in the war against organised crime in the year so far.