All Categories

The government has completed its purchase of the 50% holdings of the Spanish-owned company Unión Fenosa (UF) in the failed power distributors Edesur and Edenorte for 384.3m euros (US$434m) over 12 years. There will be a two-month transition period.

Much of the Dominican press has lambasted the government for failing to secure a decent deal with UF. It argues that the government is buying back the companies at a much higher price than it sold them. Taxpayers are double losers, because, since the privatisation of the electricity sector in 1999, residents have received bigger bills for a poorer service, which, understandably, has caused widespread resentment.

Monday's decision by the power superintendency to increase the cost of electricity by 3% from today could provoke further demonstrations. Those consuming more than 300 kWh per month will bear the brunt of the increases. The Dominican daily 'Hoy' claims that in the year to date, prices have risen more than 80% for this category of consumer. This can be explained in part by the wild exchange rate fluctuations; the Dominican peso has halved in value over the cause of the last year.Those consuming less than 300 kWh will not have to pay more.

The administration of President Hipólito Mejí­a was accused of a cynical ploy to increase its flagging popularity ahead of next May's elections by buying out the problem-ridden electricity distributors. Bumping up prices, however, is not going to endear the government to the electorate.

The state-owned oil company Petroecuador did not receive any offers on the second day of the bidding process for concessions to operate in the oil fields of Shushufindi, Auca, Lago Agrio and Yuca-Culebra-Yulebra, which currently produce 90,000 bpd.

Industry analysts are very dubious that the bidding process will be a success. They argue that the government's desired level of participation is too high and predicted that it would run into difficulties attracting investment from the private sector. The government is after a 35% stake in the oil drilling concessions as well as 12.5% royalty fees.

Participation rights cost $80,000 for Shushufindi, US$60,000 for Auca, US$40,000 for Lago Agrio and US$20,000 for Culebra-Yulebra.

The Chinese premier, Wen Jiabao, delighted privatisers in Mexico by explaining how China's oil industry has expanded thanks to decision to allow Chinese state oil companies to issue equity to foreigners when they take a share in projects. He was speaking at a meeting with senior officials at Mexico's state owned oil company Petróleos Mexicanos on Saturday. Arch-privatisers in Mexico want Pemex to be more open to foreign capital.

This statement, from the leader of what is still the world's biggest communist country, delighted neo-liberals in Mexico who are pressing for the opening up of state companies. They and the government particularly want to open up the energy and electricity industries.

The privatisers face fierce opposition from the unions and the traditional left in Mexico. The meetings between Wen Jiabao and President Fox were, by all accounts, cordial. Both leaders expect more trade to be one of the results of the Chinese premier's two day visit to Mexico which ended yesterday.

Mexico sees itself in competition with China in the US market. The latest US trade figures for October show that China was the US's second biggest supplier, ahead of Mexico, but behind Canada. China has knocked Mexico into third place now for six consecutive months. China's exports to the US in the first 10 months of 2003 were US$125bn compared with Mexico's US$115bn. China's exports to the US are up by 23.8% on the same period of 2002.

Violence continues unabated in Haiti despite President Jean-Bertrand Aristide's recent concessions to the political opposition. Eleven protesters were shot by Aristide loyalists during a rally in the southwestern city of Petit-Goave yesterday. Between 15,000 and 25,000 protesters took to the streets of the capital Port-au-Prince yesterday for the second consecutive day demanding the resignation of Aristide.

On Sunday, Aristide met Bahamian Prime Minister Perry Christie, promising to establish a 'consensus' government, including members of the opposition; schedule legislative elections within six months; and disarm partisan political gangs. Leader of the opposition Convergence Démocratique, Evans Paul, who participated in the march in the capital, implied that the time for negotiations was over: 'We cannot resist the will of the people' he said.

André Apaid, leader of the umbrella group 184, said he was satisfied with the turnout for the march. He said that the people had sent a clear message to the Caribbean Community, Caricom, which is trying to broker an agreement between the government and the opposition, that they do not want negotiations.

The government seems to have seen off the threat of a congressional investigation (CPI) into the scandal centred on Waldomiro Diniz. He is accused of taking money from unregulated gambling operators to finance election expenses for the Partido dos Trabalhadores.

The government pulled out the stops to prevent congress from halting all business and switching into a long, drawn-out investigation into what Diniz did. Until the cabinet reshuffle, Diniz reported to the President's right-hand man, José Dirceu. The government managed to stop an investigation into bingos (the unregulated gaming) and a separate investigation in the links between Diniz and Dirceu.

Essentially the government halted the CPIs by getting its allies, notably the Partido do Movimiento Democrático Brasileiro, to refuse to nominate members of congress to serve on the investigative commissions. This means that the CPIs cannot start work. The PMDB justified its decision by saying that a CPI would allow the opposition, which has been pushing for the investigations, to use congress to pull the government apart.

Mexico's opposition parties demanded to know why the federal attorney general's office exonerated Sergio Estrada, the governor of Morelos. Estrada Cajigal is a member of the Partido Acción Nacional, to which President Vicente Fox belongs. He was accused of participating in drug trafficking.

El Universal, one of Mexico City's daily newspapers, reported on 12 April that two witnesses told federal prosecutors about Estrada's illegal activities. According to the paper, Idelfonso Ortiz, a former member of the state police, told authorities that Estrada and Nadia Esparragoza, daughter of a Juarez drug cartel leader Juan "El Azul" Esparragoza, had a romantic relationship. Although Mexico's attorney general confirmed that the young woman was an important figure in the drug smuggling business, he did not comment on whether she was romantically involved with the governor.

El Universal also stated that another witness, Marco Yepez, who has been arrested for drug smuggling, accused Estrada and the Morelos attorney general of arranging the drug cartel's payoffs to local and federal officials. General Rafael Macedo de la Concha, the federal attorney general, said that no evidence was found to back claims that Estrada helped the drug cartel.

Senior members of Morelos's police, however, were arrested. José Agustí­n Montiel, former head of Morelos's police force, and Raúl Cortés, the ex-director of operations, were found guilty of protecting "El Azul". Politicians said yesterday that Estarada's link with Montiel was not taken seriously and announced that they will demand an explanation from Macedo.

Meanwhile, Estrada is planning the restructuring of the investigative police force in his state. On 12 April he announced the suspension of all 552 state police investigative officers. Estrada wants officials to examine the records of all officers. In the meantime police academy graduates will assume the vacant positions. The governor said new police officers will have to take regular lie-detector tests in addition to drug and alcohol tests.

Morelos, home state to the Revolutionary hero Emiliano Zapata, has had a chequered political history in recent years. In 1998 the state's police chief was found guilty of working with drug smugglers. Estrada became governor in 2000, backed by a broad alliance against the ruling Partido Revolucionario Institucional.

The first part of the process of verifying all the signatures on the petition to hold a referendum on President Hugo Chávez 's government will begin today, 21 May. Up until next Sunday, voters in 11 of Venezuela's 23 regions whose signatures were considered doubtful by the national electoral council (CNE) will be able to attend verification centres in order to confirm or withdraw their opposition to fourteen Assembly deputies.

The run up to the verification process has been fraught with tension. There has been a debate about whether people who have changed their minds since signing can scrub out their signatures, while the opposition has expressed concern that government supporters may seek to sabotage the process by rejecting signatures that are not theirs or by introducing further confusion into the process.

In order to prevent fraud, the opposition was planning to demand further identification from those attending the verification, but the national electoral council (CNE) has now ruled this out on the grounds that the opposition was seeking to take on powers proper only to the CNE.

The process will begin throughout Venezuela at 6 am local time today, although verification will be delayed in some states because of the heavy rains experienced in some states of Venezuela, which has prevented the CNE from supplying all the necessary material.

International observers will be present at the verification sites, the CNE confirmed, despite recent allegations by government supporters that the opposition has bribed two of the observers.

The verification of the referendum signatures calling for President Chávez himself to step down will run from 27-31 May.

Development: The government suspended peace talks with the faction of the Autodefensas Unidas de Colombia that it believes was responsible for the kidnapping of a former senator. José Eduardo Gnecco was kidnapped on 27 June along with his wife and five children while they were travelling near Santa Marta in the northern department of Magdalena.

Significance: The government is sending a clear message that it will not tolerate continued criminal activity from the paramilitaries. A statement released on 28 June said that the government was suspending talks with the paramilitary chiefs Rodrigo Tovar Pupo and Hernán Giraldo Serna who operate in the area and whom authorities believe were behind the kidnapping.

They will also not be allowed safe passage in the Santa Fe de Ralito concentration zone established for the AUC leadership for the duration of the peace talks. Arrest warrants for the men have been reinstated. Colombia's president, Alvaro Uribe, declared that 'peace processes need credibility, and this arises from fulfilling a commitment to commit no further crimes'.

BRAZIL: The Confederação Nacional de Indústria raised its forecast for the growth in industrial output this year to 6%. This is the third increase so far this year. The CNI had started the year forecasting a rise in 4.5%. 

CHILE: The shortfall in the supply of imported gas in July was the lowest since the crisis started in May. The shortfall was 2.86m cubic metres, down from 7.3m cubic metres in May.

PANAMA: Economy minister Norberto Delgado said that Panama registered an average of 3.1% GDP growth during the four-year mandate of President Mireya Moscoso, who hands over to president-elect Martí­n Torrijos on 1 September. Unemployment stayed constant at 13.2% during this period.

VENEZUELA: The president of the official statistics agency, INE, forecast that the official unemployment rate will be down to 12% by the end of the year. At the end of 2003, the unemployment rate was 14.6%.

Development: The interior minister, Santiago Creel, suggested on 8 September that President Vicente Fox and the mayor of Mexico City, Andrés Manuel López Obrador (Amlo), should meet on 14 September.

Significance: The date is highly symbolic: September is known in Mexico as the patriotic month because of the succession of national festivals. The day Creel has picked is the day of national unity and is on the eve of Independence Day, which culminates in the midnight 'Grito'. The president repeats the shout of Miguel Hidalgo, who launched the independence movement on 16 September 1810.

The row between President Fox and López Obrador has poisoned political debate in the country for most of this year. López Obrador claims that the federal government has been trying to undermine him, first with the broadcasting of videos showing a Mexico City official and then a colleague of López Obrador, respectively, gambling and taking a bribe. This smear has been followed by a bizarre attempt to prosecute López Obrador for contempt of court because he flouted an injunction which would have prevented the execution of a compulsory-purchase order needed to improve access to a public hospital.

The federal government argues that it is not plotting against López Obrador, who heads the polls for the presidential elections in 2006. Instead, it says it is simply trying to uphold the rule of law.

What is clear is that the spat has alarmed ordinary Mexicans about what will happen politically and economically in the next few years. The last two important state elections - in Oaxaca in early August and in Veracruz on 5 September - have produced complaints, probably justified, that the winning Partido Revolucionario Institucional cheated.

Given the political uncertainty, it is hardly surprising that the leading economic indicators are turning down. On 8 September the official statistical agency, Inegi, reported that its forward-looking index of leading indicators fell by 0.4% in June from May. Retail sales are slowing, though most production indicators are still rising.

Creel said that the government would do its utmost to achieve a settlement with López Obrador. On 14 September, Fox will meet state governors: López Obrador will, presumably, be invited. Fox has already said that he is prepared to discuss any issue with López Obrador. Previously the government's line had been that it could not discuss pending court cases, such as López Obrador's.

Development: The former president of the indigenous people's foundation (Funai), Apoena Meireles, was murdered on the night of 9 October in Porto Velho, the capital of Roraima state in Amazonia.

Significance: According to Rondonia's police-chief, Carlos Eduardo Ferreira, Meireles death is being investigated by the police as a common crime, theft followed by murder. Meireles was killed after withdrawing money from a cash dispenser and the killer escaped with the cash. However, Ferreira said the police would also investigate whether the crime could have been political. 

Meireles was coordinating the 'Roosevelt operation', which is investigating the deaths of 29 miners inside the Cintas-Larga indigenous reserve. The miners were killed by the Cintas-Larga at the beginning of the year. Indigenous people frequently clash with miners who look, illegally, for precious stones and gold on their reserves. In January this year the Cintas-Larga cacique complained about illegal mining on the reserve to the Funai. The miners retaliated by shooting at the Cintas-Larga. The Cintas-Larga counter-attacked, killing the miners. Even if the Cintas-Larga are found guilty, they would escape sentence because under the Brazilian law, indigenous people cannot be convicted of any crime. 

Meireles, who was a keen defender of indigenous peoples' rights, was also taking part in a governmental study to regulate mining inside indigenous reserves, which is currently forbidden by the Brazilian law. During his career, Meireles constantly interfered with farmers' and miners' activities. According to the current president of Funai, Mércio Pereira Gomes, Meireles was due to close an illegal mine inside the Cintas-Larga reserve. The government is studying how to 'rationally exploit' the region, which is rich in precious stones and minerals.

Development: The Partido Revolucionario Institucional (PRI) suggested in congress on 14 November that Mexican state governments should be allowed to make immigration deals with US states.

Significance: Such a move would need a constitutional reform in Mexico but it would signal a significant step towards decentralisation. The idea, which comes from Roberto Pedraza Martí­nez, a PRI deputy for Hidalgo, would mean that Mexican states would issue the temporary work visas for people going to the US. The states would be responsible for checking that the people getting the visas were who they said they were.

Pedraza claimed that the Democrat governor of Arizona, Janet Napolitano, supported this proposal and so did congressmen in the US. He said that all that was missing was support from the Mexican congress.

Pedraza argued that his proposal would reduce people trafficking. He claimed that the polleros (literally 'coyotes'; the people traffickers) charge an average of US$2,500 per person to get people across into the US. The consensus is that around 400,000 Mexicans cross illegally into the US every year.

Development: The finance minister, Eduardo Montiel, resigned on 15 December. Montiel said that differences of opinion with President Enrique Bolaños over economic policies had made his position untenable.

Significance: The loss of Montiel is a blow for Bolaños, who is also fighting a losing battle with the opposition Frente Sandinista de Liberación Nacional (FMLN) and the Partido Liberal Constitucionalista (PLC) over constitutional reform. Bolaños has yet to name a successor but he will be keen to reshuffle his cabinet before congress approves the constitutional reforms in January 2005 that will trim his powers, such as the need to obtain legislative ratification of ministers.

On 16 December Bolaños carried out a mini reshuffle. He appointed Margarita Gurdián as health minister. Gurdián replaces José Antonio Alvarado, who will now head up the Ejecutivo del Fondo de Inversión Social para la Emergencia (FISE). He also appointed a personal friend and advisor, Leandro Marín Abaunza, as deputy minister for defence.

Development: An economic adviser to US President George W Bush, Kristin Forbes, launched a scathing attack on Argentina's economic policy at the World Economic Forum in Davos on 27 January.

Significance: During President Bush's first term of office, the US took a soft line towards Argentina and most notably offered the Argentine government support in its troubled relationship with the IMF. If the comments of Forbes are anything to go by the White House has changed its policy towards Argentina for Bush's second term.

During a 90-minute discussion entitled "Argentina's last tango", Forbes likened the economic recovery to the famous Argentine dance, saying the first steps look easy but with time become far harder. She described the strong growth that Argentina posted in 2003 and 2004 as a "dead cat bounce" helped by a favourable global economic environment.

Forbes, who later clarified she was speaking on behalf of the White House, said that Argentina had to press on with tax reforms, strengthen the banking system and raise utility tariffs. She also pressed for Argentina to restore links to the IMF and to follow its precepts.

No officials from the Argentine government were in the audience at Davos, only businessmen. Forbes' comments will not have gone unnoticed in Buenos Aires, however. Argentina's president, Néstor Kirchner, will not be defending his record at Davos; Alfredo Chiaradia from the foreign ministry, is heading the Argentine delegation.

Development: On 2 March Renan Calheiros, the new president of the senate, refused to support a bill proposed by the new president of the lower house, Severino Cavalcanti, proposing a 67% pay rise for deputies.

Significance: The plan to increase deputies' pay looks set to split Brazilian politics down the middle. Cavalcanti, who scored a surprise win in the lower house's presidential elections on 15 February against the government's candidate, Eduardo Greenhalgh, seemed likely to get the measure passed when he secured the backing of Nelson Jobim, the head of the supreme federal court (Supremo Tribunal Federal - STF). Cavalcanti wants to increase deputies' monthly pay to R$21,500 (US$8,215) from R$12,850 in line with the salaries of STF members.

However, without Calheiros's backing the measure will struggle in the senate. Political sources claimed that the senate president was initially in favour of the measure, but that he changed his mind after consulting with the senate's party leaders. Although Calheiros's election was backed by President Lula da Silva, the new senate president has recently been attempting to use his leverage in order to gain greater representation for his Partido do Movimento Democrático Brasileiro (PMDB) in the government in the light of next week's reshuffle.

The government is officially against the measure. Lula's chief of staff, Jose Dirceu, said on 1 March that now was not the time for deputies to receive a pay rise. Dirceu declared that government will soon cut some 20% of expenses for government travel, office equipment, surveillance, and food catering that cost the state as much as R$20bn (US$7.6bn) per year.

ARGENTINA: The managing director of IMF, Rodrigo Rato, on 6 April asked the government of Argentina to elaborate a "strategy" to deal with the 24% of debt holders who haven't yet accepted the debt exchange.

BOLIVIA: The GDP of Bolivia grew by 3.58% in 2004, the highest increase in the last period of five years, thanks to the oil and manufacturing industries, informs the National Institute of Statistics.

BRAZIL: According to the official statistics agency, the Ibge, industrial output shrunk 1.2% in February in relation to the previous month. This is the second consecutive month industrial output has diminished. In January it decreased 0.6%. 

BRAZIL: According the Brazilian Cars Manufacturers' Association (Anfavea), the production of cars has beaten a new record, increasing 17.5% in March when compared with the previous month, and 14.1% when compared with March last year. Exports in the sector were also up 5.9% when compared with February and 30.9% in comparison with March 2004.

BRAZIL: Inflation in March has more than doubled, jumping from 0.4% in February to 0.99% in March, according to Fundação Getúlio Vargas. This is the highest inflation level since August last year, when it reached 1.31%. 

BRAZIL: The National Electric Energy Agency (Aneel) has authorized an average readjustment of 17.74% in the price of electricity. 

BRAZIL: The price of the basic basket of food in São Paulo has shrunk by 0.54% in the first quarter of 2005, according to Fundação Procon. On 31 March it stood at R$216.30 (US$81.62). 

BRAZIL: According to the Shopping Centres Retailers' Association (Alshop) the volume of sales registered in stores at shopping centres has increased by 5% in the first quarter of the year when compared to the same period in 2004.

COLOMBIA: Operations in the Colombian stock exchange (BVC) increased by 36% in the first term of 2005, compared with the same period in 2004, it was informed today.

EL SALVADOR: The Central Bank of El Salvador announced on 6 April that the country received US$496.6m dollars in foreign investment in the previous year, representing 3.1% of GDP.

MEXICO: The European aeroplane manufacturer Airbus expect a 9% increase in their aircraft sales to Latin America, the vice-president for Spain, Latin America and the Caribbean, Rafael Alonso said on 6 April in the Mexican capital.

PARAGUAY: The tax take in Paraguay registered an increase of 12.7%  during the first term, compared with the same period in 2004, the government announced today.

Development: On 12 May Alberto Santofimio Botero was arrested in connection with the murder of presidential candidate Luis Carlos Galán in 1989.

Significance: Over the course of his political career, Santofimio (who belonged to the Partido Liberal, PL) was minister of justice in 1974, president of the chamber of deputies and a senator for his native department of Tolima until he retired 10 years ago aged 51. Unofficially, he also acted as spokesperson in congress for Pablo Escobar, Colombia's most famous drug lord who was killed in 1993.

Escobar has long been blamed for the murder of Galán, who ran for the reformist Nuevo Liberalismo faction of the PL ahead of the 1990 presidential election. However, recent testimony from Escobar's top hit man, known as 'Popeye', suggested that Santofimio told Escobar to kill him after it became obvious that Galán was about to win the election. Galán had vowed to extradite the drug lord and other members of his powerful Medellí­n cartel if he became president.

'Popeye', who was sentenced to 20 years in jail for his part in the killing, said that Santofimio was paid handsomely to protect Escobar and the other so-called 'Extraditables' from being sent to the US to face trial, receiving individual payments of up to US$50,000 each time he acted on their behalf. Escobar's former hit man alleges that Escobar and Santofimio also resolved to kill César Gaviria, the head of Galán's campaign who also replaced him as candidate for the liberal party and subsequently won the election, but that Escobar then abandoned the idea.

Gaviria did not extradite Escobar. In fact, under his government in 1991 a new constitution was drawn up preventing the extradition of Colombian nationals. The extradition treaty with the US was not restored until 1997 under the government of President Ernesto Samper.

Development: Between 12,000 and 20,000 Nicaraguans took to the streets of Managua on 16 June to protest against the political pact between the opposition Frente Sandinista de Liberación Nacional (FSLN) and the Partido Liberal Constitucionalista (PLC) led, they said, by corrupt caudillos Daniel Ortega and Arnoldo Alemán respectively.

Significance: The march suggests that President Enrique Bolaños is winning the popularity stakes in his clash with the opposition-dominated national assembly. The organisers, Red por Nicaragua, made up of social organisations, businessmen and small political parties, say they put 20,000 people on the streets; the police put the figure at 12,000. Ortega dismissed the march. He said the real demonstration would come on 5 November 2006 when general elections would decide the next president. 

The man who might be able to help Bolaños limp through to those elections, the secretary general of the Organization of American States, José Miguel Insulza, met most of the main protagonists in the institutional crisis on 16 June. Insulza said he had come to listen and to ensure that there was “a democratic solution to the reigning problems". After speaking to Insulza, Bolaños said that three-way talks with the FSLN and the PLC should start again from scratch as those that began in January had failed. He added that he was confident that the national assembly would not remove him from power as requested by the comptroller general on 14 June. Insulza then met the president of the national assembly, René Núñez (FSLN), and other legislators, and the presidents of the supreme court of justice and the supreme electoral council. They all emphasised that his role was restricted to mediation.

Development: On 20 July the comptroller-general's office revealed that it had been unable to establish the identity of the donors who gave US$9.4m to the election campaign of President Enrique Bolaños.

Significance: The comptroller-general's office is calling for the removal of Bolaños from office for electoral irregularities. Speaking before a special parliamentary committee set up to consider whether to lift Bolaños's immunity from prosecution, the vice-president of the comptroller-general's office, Guillermo Argüello Poessy, a close associate of former president Arnoldo Alemán, admitted that the institution had been unable to trace where the money had come from. Bolaños has accused the comptroller-general's office of doing the bidding of the leader of the opposition Sandinistas (FSLN), Daniel Ortega, by putting him under pressure to accept the constitutional reforms passed by the national assembly. 

In Nicaragua the comptroller-general's office is not an independent body, but one of the agencies shared out between the two dominant parties, the FSLN and the Partido Liberal Constitucionalista (PLC). The comptrollers (three from the PLC, two from the FSLN) accused Bolaños last year of refusing to answer questions about a dollar account in his name used to pay campaign expenses that were not reported to the electoral authorities. On paper the comptrollers are legally empowered to apply fines and recommend the dismissal of officials for administrative misdeeds. Removing the President is up to the assembly, on the strength of a two-thirds vote - which the PLC-FSLN 'pact' is easily able to muster.

Development: President Abel Pacheco's popularity is at the lowest point of his mandate, according to a Unimer opinion poll published in La Nación on 22 August.

Significance: A worrying 41% of Costa Ricans considered Pacheco's administration to be "bad" or "very bad", whereas only 17% believed it was "good" or "very good". This is worse than in September 2003 when 40% of those polled thought badly of Pacheco's government, but this followed a series of scandals over campaign-funding and the resignation of three cabinet ministers. This recent poll follows no major political trauma, but is merely indicative of the general perception of malaise in the administration.

For 70% of Costa Ricans, Pacheco's government "doesn't know how to solve the country's problems". Four months ago, 60% of respondents thought that way. The rising cost of fuel is proving a burden for much of the population as is the ever-rising cost of living. The central bank's initial estimate of 10% inflation in 2005 was adjusted at the end of July to 12.7%.

Another cause of dissatisfaction is the government's poor spending of the public purse. There is a general perception that the government is failing to invest money in the most efficient way; 84% believe the government is not administering its budget effectively.

The poll was carried out between 1 and 10 August and conducted face-to-face with 1,413 people of voting age. Men, those over 50, those in the higher income bracket and the uneducated were the most harsh in their criticism of the government.