All Categories

Development: Leaders of Venezuela's main opposition parties went to congress on 10 September to present their disapproval of the constitutional changes recently proposed by President Hugo Chávez .

Significance: The leaders of the centre-right party, Primero Justicia, the social-democrat party, Acción Democrática, and the socialist party, Movimiento al Socialismo (MAS), are against the proposals drawn up by the executive, which are currently being analysed in congress. The leader of MAS, Nicolás Sosa, however, did not have much hope that congress would be influenced. All the members of congress are Chávez supporters after the opposition refused to contest the legislative elections in 2005.

Among Chávez 's most controversial proposals is one that would give him the right to stand for re-election continuously. The opposition claims this is against the democratic principle of alternation of power. Chávez , justifiably, retorts that he has to win the election to retain power.

Another controversy was caused by the inclusion of a new kind of ownership, social property, in the constitution. The opposition claims that this change gives no guarantees to private owners. The opposition also complained that Chávez 's proposals to create special administrative zones under direct control of the central government and the military. These undermine democratic pluralism.

The opposition is demanding that the proposals to be submitted to popular referendum "by themes, so people can accept what they want and reject what they consider is not good for democracy". The president of congress, Cilia Flores, however, says that the proposals will be submitted to two more votes in congress "as a block". The referendum is also likely to ask the question: Yes or No.

Such a referendum will give little scope for a campaign against the proposals, since Chávez included populist measures such as reducing working hours from eight hours to six hours daily. Congress, as expected, has approved the proposals in the first of three readings in a secret session. Flores says a final vote will be carried out in October and that a popular referendum will be held in December.

Development: The president of Brazil's senate, Senator Renan Calheiros, announced he was taking a leave of absence on 11 October for a period of 45 days.

Significance: Calheiros was forced to give up the senate's presidency, temporarily, following mounting pressure from his peers. Opposition and pro-government senators, including many from Calheiros's own Partido do Movimento Democrático Brasileiro, were shocked by his antics, especially the attempt to use his position to set up a web of informers to blackmail his peers.

Calheiros's alleged involvement in several cases of corruption has seriously damaged the image of the upper house of congress among Brazilians. His acquittal by his peers, with government support, in a secret ballot last month further tainted the senate's reputation. This support, however, led the opposition to block votes in the senate, putting the approval of a four-year extension of the provisional tax on financial transactions into doubt.

Despite the acquittal on one case of corruption, Calheiros is under investigation for "breach of parliamentary decorum" in three more cases. The opposition will bring a new case against him in the senate's ethical council over the espionage web. This was, allegedly, mounted from his office with resources from the senate. The first allegations against Calheiros appeared in May.

Development: The president of the Tribunal Supremo Electoral (TSE) said on 13 November that the constitution-rewriting constituent assembly would open on 29 November.

Significance: The setting of a date for the opening of the assembly is a brave move because the final results for the elections for the constituent assembly, held at the end of September, are still not in. The two biggest provinces, Guayas and Pichincha, are still involved in partial recounts. Without the final results, the TSE cannot make a final allocation of seats in the constituent assembly. The president of the TSE, Jorge Acosta, said that despite the problems in the two big provinces, it would start to allocate seats to elected members on 19 November.

The TSE, although directed, largely, by figures affiliated with opposition parties, clearly feels that it has to get the constituent assembly show on the road. One sign of this was the replacement of the head of the Tribunal Electoral de Pichincha, Fernando del Pozo. Del Pozo comes from the Partido Sociedad Patriótica (which is loyal to a former president, Lucio Gutiérrez, and came second in the constituent assembly elections) and was replaced by another PSP member, Fidel Araujo. Del Pozo had become notorious for his hostility to President Rafael Correa and had delayed a recount for one of the losing government candidates in Pichincha. When that recount took place it found that 9,000 votes had been displaced from the ruling party's vote but this was not enough to overturn the final result and increase the tally of seats for President Rafael Correa's Movimiento Paí­s.

The timetable for reform suggests that the constituent assembly will publish its proposals for a new constitution in the middle of 2008 and these will be submitted to a referendum soon afterwards. Legally, the constituent assembly has to produce a draft constitution within six months of convening.

Fresh presidential and congressional elections, under the new constitution, are likely to be held in the third quarter of 2008. The newly elected congress and president should take office before the end of 2008.

President Correa said on 12 November that he was in favour of a president being re-elected once. He said that he was not in favour, as President Hugo Chávez of Venezuela now advocates, of indefinite re-election of the president. The constituent assembly may also set term limits for congressmen. It will also decide whether presidential and congressional terms should be kept at four years.

Assuming that the constituent assembly allows a single re-election rather than multiple re-elections, Correa could remain president until 2016. This assumes that he will be elected next year, under the new constitution, for a four year term and then re-elected in 2012.

The final results for the constituent assembly have to be declared by 15 November when the mandate for the Tribunal Supremo Electoral expires. The TSE, however, expects most of the results to be final by 19 November. Then the swearing-in of constituent assembly delegates should start. The constituent assembly has to convene within 10 days of the results being declared official by the TSE.

Development: On 17 December the production minister, Rafael Rey, said he would resign if the prime minister persisted in his plan to reward areas of the country which voted for the government with increased investment.

Significance: Rey's threat should extract the unpopular government, headed by President Alan Garcí­a, from the hole dug by the prime minister, Jorge del Castillo. On 16 December Del Castillo told a rally at Lurí­n, Lima, that the district would be first in line for spending under the social welfare programme, Crecer, because it had voted for President Alan Garcí­a so strongly in the 2006 presidential election.

Castillo claimed that the government "had an obligation to the people that backed it and these people [in Lurí­n] have priority over others who said "no I prefer the other option."

Rey is the leader of the small Renovación party. He told a national radio station, Cadena Peruana de Noticias (CPN), that he would go if what Del Castillo suggested actually happened. He added to the pressure on Del Castillo by admitting that the prime minister's words were not well-chosen, and agreeing that he understood the row they had created. Rey argued that the government would always give priority to the poorest communities in the country.

The Garcí­a government, despite the economic boom, is facing growing unpopularity. An opinion poll in early December found that 63% of Peruvians disapproved of it. Instituto de Opinión Pública de la Pontificia Universidad Católica found that only 29% of Peruvians supported President Garcí­a.

Development: The president of Nicaragua's supreme court, Manuel Martí­nez, warned President Daniel Ortega on 29 January that he could not support Venezuela militarily unless authorised by congress.

Significance: According to Martí­nez, Ortega "knows very well that he does not have the constitutional right" to decide alone whether to send Nicaraguan troops to support Venezuela in case of war. Last weekend, Ortega revealed himself to be the strongest enthusiast of the idea of creating a military alliance between member countries of the Alternativa Bolivariana para las Americas (Alba). The idea of creating the Alba Defence Council came from President Hugo Chávez of Venezuela, who claimed that the group (comprised also of Bolivia, Cuba and Dominica) has the US as its "common enemy".

Ortega gave his full support for Chávez 's idea of declaring on 27 January, after the Alba presidential summit, that "touching Venezuela is touching the whole of Latin America". He went on to say that the US is using Colombia to create "military tensions" in the region. However, as Martí­nez pointed out, although Nicaragua's constitution establishes that the president is the supreme commander of the country's army, Nicaraguan troops can only leave the country with the express authorisation of congress.

While members of Ortega's Frente Sandinista de Liberacion Nacional (FSLN) support his intention of joining the Alba military alliance, the opposition is against the idea. FSLN deputy Edwin Castro said that in the 1970s guerrillas from all over Latin America came to Nicaragua to help topple dictator Anastasio Somoza. Edwin Castro also said that the previous administration of President Enrique Bolaños sent Nicaraguan troops to Iraq in 2002. The opposition president of congress' defence commission, Enrique Quiñones, however, says that congress "will never follow Ortega in a warring adventure". Crucially, Ortega lacks a majority in congress.

Development: Figures published on 29 February by the Colombian statistics agency show that Colombia's exports to Venezuela jumped by 87% in the first 11 months of 2007.

Significance: The surge in bilateral trade shows how important Venezuela is as a market for Colombian industry. President Hugo Chávez 's growing hostility to Colombia - which began when President Álvaro Uribe formally ended Chávez 's involvement in negotiations with the Fuerzas Armadas Revolucionarias de Colombia (Farc) in November, and reached a new peak after Colombia's raid on Ecuador on 1 March - will affect this trade.

Venezuela is now Colombia's second biggest export market after the US, and more importantly Colombian exports to Venezuela are increasing while those to the US are falling. In the first 11 months of 2007 Venezuela spent US$4.56bn on Colombian goods, mostly cars and car parts. Only US$275m of Colombia's exports to Venezuela were food. On 26 February the Sociedad de Fabricación de Automotores (Sofasa), which builds Toyota and Renault cars in Colombia, announced that it was cutting production in Colombia because of the new lower quotas for imported cars that Venezuela has introduced.

Development: At least four people were killed and 20 wounded in southern Haiti after demonstrators protesting against rising food prices clashed with security forces, an official said on 4 April.

Significance: The riots demonstrate how fragile the security situation remains in Haiti and indicate the strength of public anger at the government in the face of soaring food prices.

Demonstrations escalated into violence in the southern town of Les Cayes in southern Haiti on 4 and 5 April. Some protesters reportedly fired shots at UN troops based in Les Cayes, who fired back in response. A small group of protesters also broke into the UN compound in the town.

This outbreak of violence follows a period of relative tranquillity in Haiti under President René Préval. The UN stabilisation mission in Haiti (Minustah), whose mandate was extended for another 12 months in October 2007, has made considerable inroads into improving the security situation on the island since its deployment in 2004.

Nevertheless, a resurgence of kidnappings and crime in recent months has alarmed the UN and the food crisis represents a considerable threat to the country's stability.

The island is dogged by gang violence and Haiti's Prime Minister, Jacques Edouard Alexis, accused criminal factions of manipulating the demonstrations to foment unrest: "We know that these demonstrations have been infiltrated by individuals linked to drug dealers and other smugglers".

These gangs will doubtless do their upmost to use the protests to undermine the security forces, namely Minustah, and increase popular resentment against their presence in Haiti.

Alexis said that the government had immediately made $10m available for schemes to help fight the rising cost of living, including food aid. The situation in the country nevertheless remains tense and more protests are planned for today (7 April).

Chile: Chile's central bank cut its forecast for economic growth this year to between 4% and 5%, down from the 4.5%-5.5% forecast in January. The bank cited increased energy prices and the effects of a drought as reasons for the new forecast.

Mexico: Mexico's finance ministry announced that the newly created national infrastructure fund began operations after approving projects worth a total of US$695 m. These include a highway project and the construction of water treatment plants.

Development:  On 17 June President Lula da Silva will hold a meeting with the main coalition parties in an effort to restore unity ahead of October's municipal elections.

Significance: Lula's personal intervention underlines the extent of the fractures within the ruling coalition ahead of the municipals and reflects his concern that the increasingly public animosities will benefit the opposition in the upcoming polls.

Lula will meet with the presidents of the Partido Socialista Brasileiro (PSB), the Partido Comunista do Brasil (PCdoB) and the Partido Democratico Trabalhista (PDT), all traditional allies of the ruling Partido dos Trabalhadores (PT). The main aim of the meeting is to ensure there is an electoral alliance in at least four main cities, including the most influential cities of São Paulo and Rio de Janeiro, as well as Belo Horizonte and Manaus.

The main allies have complained about the ruling PT's 'hegemonic' attitude to the municipals, which has seen local PT branches refusing to endorse allied candidates.

The PT will launch candidates in at least 20 state capitals. It will have the support of the PcdoB in five of those, while the PSB will support it in six, with the other key coalition party, the Partido do Movimento Democrático Brasileiro (PMDB), to lend the PT its support in four states.
 
In contrast, the PT has to date only expressed its support for two PSB candidates, two PcdoB candidates and only one PMDB nominee.

Municipal elections are notoriously complex in Brazil, with state and local electoral pacts rarely reflecting the make-up of central government.

However, the PT-led Lula government is keen to impose coalition unity from the top down ahead of the upcoming municipals, as the alliances forged now will set the scene for the subsequent presidential election in 2010, which will decide a successor to Lula (who has served two consecutive terms and cannot run again).

Development: Colombia's president, Alvaro Uribe, met his Brazilian counterpart Lula da Silva in Bogotá on 19 July. The following day, the pair travelled to the south-eastern Colombian city of Leticia to celebrate Colombia's independence day, where they were joined by President Alan Garcí­a of Peru.

Significance: The meetings indicate how Uribe's stock has risen in the region since the Colombian military freed Ingrid Betancourt and 14 other hostages held by the Fuerzas Armadas Revolucionarias de Colombia (Farc). The meetings also underlined how isolated President Rafael Correa of Ecuador will find himself if he persists with his policy of shunning Uribe and applauding attempts by Nicaragua's president, Daniel Ortega, to mediate in a peace process with the Farc.

Cross-border security and the fight against international drug-trafficking were high on the agenda at the meetings, which took place at a point where the borders of Colombia, Brazil and Peru meet. The three leaders stressed the importance of regional integration under the Tratado Constitutivo de la Unión de Naciones Suramericanas (Unasur), and Uribe announced that Colombia would join Unasur's security council - a move with which he had previously been uncomfortable.

Uribe's meeting with Lula, however, went beyond security. The two leaders discussed how to increase trade, investment, and energy cooperation between their two countries during an overwhelmingly positive meeting which has prompted speculation that Brazil and Colombia are becoming stronger allies. Garcí­a's arrival the next day has given rise to talk of a new triple alliance in South America.

BRAZIL: Unemployment in the main six state capitals stod at 8.1% in July according to the statistics department, Ibge. July's rate was slightly up on June's 7.8% and was thus the first rise in six months.

MEXICO: Crude oil production fell by 10% in the first seven months of 2008 to an average of 2.845m barrels per day (bpd), according to state-owned energy company Pemex.

MEXICO: The economy grew 2.8% in the second quarter, slighlty below market forecasts for growth of around 3.0% but above the 2.6% expansion in the first quarter.

Development: On 24 September the College of Dominican Doctors (CMD) announced that it will hold a one-week strike next month for higher wages and better facilities.

Significance: The strike comes soon into President Leonel Fernández' third term in office and shows that his proposed pact between all sectors of Dominican society is not working. The CMD is an important lobby, and has credibility on social welfare issues.

The president of the CMD, Waldo Ariel Suero, deplored what he described as the government's apathy on the issue of low doctors' wages and poor equipment in hospitals and said that they are asking for a monthly salary of RD$58,000 (US$1,700); new hospital equipment and the preservation of the state Instituto Dominicano de Seguros Sociales (IDSS).

Last month the doctors' union accepted the government's offer of a 15% salary increase for healthworkers. Soon after, however, Suero said that the offer had been “disappointing" and a “pyrrhic" victory, and called for fresh protests.

The strike is due to take place in all of the country's public hospitals and those belonging to the IDSS between 6 and 13 October.

Development: On 27 October Ecuador's President Rafael Correa said that under current circumstances, his government has “not the least interest" in re-establishing diplomatic relations with Bogotá.

Significance:  The prospect of Colombia and Ecuador restoring bilateral ties is getting ever-more distant, despite a number of gestures on both sides that seemed to indicate a slight thawing in hostilities last month (in September).  Ecuador severed diplomatic relations with its neighbour on 3 March, two days after a military incursion by Colombia onto Ecuadorean soil. In the attack on a clandestine guerrilla camp near Angostura, 26 people were killed including the “number two" of the Fuerzas Armadas Revolucionarias de Colombia (Farc), Raúl Reyes.

Ecuador has repeatedly maintained that the administration of Colombia's President Alvaro Uribe is not genuinely interested in restoring relations. President Correa said at a military ceremony on 27 October: “The Colombian government has not lost any opportunity to show us its ill-will and its cynicism. Under these circumstances, we have not the least interest in restoring diplomatic relations".

This statement comes just one day after Colombian foreign minister, Jaime Bermúdez, told press that the mediation process which had begun negotiating a restoration of relations “was suspended some time ago. At the moment there is no rapprochement with Ecuador". He added, pointedly, that in the fight against terrorism “there can be no marginal position".

The latest spat between the two governments was provoked by the recent kidnapping of an Ecuadorean, Kléber Larriva (brother of the governor of Azuay province, Osvaldo Larriva), by Colombian armed groups. The hostage was taken into Colombian territory and was eventually released upon payment of a ransom. Despite being informed of his whereabouts, the Colombian authorities reportedly refused to intervene, claiming that they were unable to enter the area as it was Farc-controlled.

President Correa said that it was “embarrassing" that the Colombian state does not have control over the whole of its national territory. He later stated that if this situation should continue and Colombian armed groups should carry on kidnapping Ecuadorean citizens, “with profound pain we will be obliged to restrict the entry and residence of Colombian citizens in our country". There are currently some 500,000 Colombians estimated to be living in Ecuador, many of whom are refugees fleeing the conflict in their home country.

Development: On 30 November the opposition Partido Liberal Constitucionalista (PLC) rejected a proposal made by its national secretary Francisco Aguirre Sacasa regarding the possibility of a “governability pact" with the government.

Significance: Aguirre's proposal, made on 28 November, points to differences among the PLC leadership and suggests the difficulty of uniting the opposition against the government of President Daniel Ortega.

The proposal to unite the opposition was recently put forward by defeated Managua mayoral candidate, Eduardo Montealegre, using as a rallying point the alleged fraud committed in the 9 November municipal elections, which saw a sweeping victory for the ruling Frente Sandinista de Liberación Nacional (FSLN).

Aguirre's proposal (which he subsequently retracted) was rejected by Montealegre as well as PLC vice president Wilfredo Navarro, who told a local TV station that the party was not prepared to negotiate with the executive unless a recount was held in the presence of national and international observers.

The proposal also revived fears of a new pact between the FSLN and PLC.   The liberals were forced to issue a statement denying that negotiations were taking place and that deputies Jorge Castillo (PLC) and Edwin Castro (FSLN) had met secretly in Guatemala to seek a bi-party agreement.

Meanwhile, the congressional board of directors is planning to meet tomorrow (2 December) to discuss the possibility of introducing a bill to nullify the 9 November elections before the plenary. However, the opposition currently lacks the necessary 47 votes (out of 92) to pass the initiative. This is largely because the Alianza Liberal Nicaragüense (ALN) continues to side with the FSLN, arguing that it lacks the necessary resources to conduct a new campaign.

Development:On 14 January President Felipe Calderón Hinojosa said that he would ask neighbouring presidents to implement a regional anti-drugs strategy.

Significance: Calderón is visiting Panama on 16 January to meet the presidents of Panama, Guatemala and Colombia. The theme of the summit is to discuss policies to combat organised crime. Calderón has told the Mexican congress that he will propose that Mexico should share security information with the other countries.

Mexico is also looking at ways of ensuring that the various countries' criminal justice systems can be made to work together.Concertación party, the Partido Radical Socialdemócrata, who is also running a low key campaign for the ruling coalition nomination.

Development: On 22 February gangsters tried to assassinate the governor of Chihuahua, José Reyes Baeza Terrazas.

Significance: The attack was a first by gangsters against a front-rank politician. Previously gangsters have killed police chiefs and municipal and state heads of public security and, most recently, a retired general. The attack marks yet another deterioration in the security situation in Chihuahua, by far the most violent state in the country. On 22 February at least another eight people were murdered in Ciudad Juárez, where the police chief, Roberto Orduña Cruz resigned on 20 February.

Orduña, a former soldier, resigned after the operations director of the municipal police and two of his bodyguards were murdered on 17 February. Immediately after they were killed, banners went up in Ciudad Juárez saying that more policemen would be killed if Orduña did not resign. Indeed, just before Orduña resigned, one policemen and a prison guard, were killed. There was a message by the policeman's body which read: “Time is passing and the public security director, Roberto Orduña Cruz, has not resigned". Orduña said that his respect for police lives was greater than his dedication to public service. He also said that the mayor of Ciudad Juárez had tried to dissuade him from resigning.

Reyes's motorcade was attacked as he was going home. The attackers used two cars and machine-gunned one of the two pick-ups in which Reyes's bodyguards were travelling. They killed one bodyguard and wounded two others. In a press conference held at 23.15 local time, Reyes said that the bodyguards' vehicles stopped to beat off the attack while he escaped in the vehicle he was driving back to the governor's mansion, 2km from the site of the incident.

Development: On 31 March a bipartisan group of US senators introduced a new bill to eliminate US travel restrictions on Cuba.

Significance: It is notable that the recent changes to US Cuba policy have originated in congress. Cuba policy remains a domestic US issue and ultimately, change is likely to be the form of a piecemeal and gradual removal of the 1962 embargo provisions.

The latest bill would bar the US president from regulating travel to Cuba. The timing could be apt for the US president Barack Obama ahead of his regional debut at the Summit of the Americas in Trinidad on 17-19 April. The strength of the bipartisan pro-embargo Cuba lobby on Capitol Hill, however, should not be underestimated.

In his 2008 election campaign Obama said that he would “immediately allow unlimited family travel and remittances to Cuba", dismantling restrictions placed by George W. Bush in 2004. Measures to ease family travel and agricultural trade restrictions and curbs on sending medicines and food were approved in the 2009 budget, marking a return to the pre-2004 status quo. There was no change, however, to the current family remittance regulations.

Introducing the bill, Senator Byron Dorgan (D, North Dakota) suggested he has enough votes to secure its approval. Dorgan represents the US agricultural lobby which strongly advocates increased trade with Cuba. An identical bill will be introduced to the lower house on 2 April.

Counting the cost of swine flu

Agustí­n Carstens, Mexico's finance minister, has put the cost of the swine flu outbreak at M$30bn (US$2.3bn) or 0.3% of GDP. He has also announced a package of measures to compensate businesses for the losses and disruption caused by the outbreak.

Independent economists say that Carstens is underestimating the effect of the outbreak. They say that the outbreak will probably have added another one percentage point to the economy's contraction in 2009. One international bank, Crédit Suisse, is now forecasting that the economy will contract by 6% in 2009. The government is now forecasting that the economy will contract by 4.1% in 2009, up from its earlier forecast of a contraction of 2.8%.

Carstens reckons that the outbreak will have cost the central government M$17.4bn (US$1.33bn) in lost fiscal revenues, while state governments will have lost around M$1.4bn in revenues.

In compensation the government is fiddling with social security payments and taxes. It is cutting the employers' social security (IMSS) levy by 20% for a couple of months. The measure is aimed at small businesses, because the most any company can claim is M$35,000 (US$2,665). The government is also amending the timing of corporate income tax payments. Most analysts say that this change will help corporate liquidity but will not actually lower payments.

The government is also trying to help the tourism industry. It is halving landing charges at airports for three months, but again it has limited this by capping the total compensation at M$250m (US$19.2m). The government is also abolishing the landing charges cruise companies have to pay when they disembark passengers in Mexico. Analysts doubt this will have much effect because cruise passengers want to avoid Mexico until they are sure that there is no chance of them catching AH1N1. The fact that the landing charge in Mexico may be US$10 or US$15 cheaper is neither here nor there.

The most important benefit would be the idea of giving hotels, restaurants and other hospitality businesses a long tax break. The problem is that the government is only prepared to forego M$500m in revenues if the states agree to waive M$1.9bn. As most state governments' budgets are stretched tight, there is little chance of this idea getting off the drawing board.  

Carstens said that the government will meet the cost of dealing with the crisis by increasing its borrowing.  

Development: On 15 June an opinion poll published by national daily ABC Color indicated that President Fernando Lugo's approval rating has fallen to 54.4%, from a high of 93% when he took office in August 2008.

Significance: Paraguayans are losing patience with Lugo, who has made little or no progress with key campaign promises - namely, implementing land reform, combating institutionalised corruption, and renegotiating the Itaipú dam contract with Brazil to fund social welfare programmes. His credibility has been further undermined by April's paternity scandal.

The poll, by research company First Análisis y Estudios, shows that 40.5% of respondents have a negative image of the president, compared to 2.4% last August. Lugo's main support base remains the rural poor, with more affluent, urban voters most critical of his administration.

Lugo's faltering approval rating may put paid to his idea, floated at a press conference last week, to hold a referendum on congress, the executive, and possibly the judiciary.

Brazil: Unemployment dropped unexpectedly to 8.1% in June, from 8.8% in May.