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Development: On 20 February President Rafael Correa claimed that Mark Sullivan, the US diplomat he expelled on 18 February, was the local CIA station chief.

Significance: Although Correa specifically denied it, he is clearly stoking the dispute with the US to distract media attention from a scandal which appears to link former members of his cabinet to the Fuerzas Armadas Revolucionarias de Colombia (Farc) and a drug smuggling gang.

This scandal is gathering momentum as Gustavo Larrea, a Correa loyalist who served as interior minister and security minister, tries to defend (and simultaneously distance himself from) José Ignacio Chauví­n, his former deputy interior minister, who appears to be at the centre of links between the Farc and the drug smuggling Ostaiza brothers.

The US embassy in Quito replied that it never comments on issues involving the Central Intelligence Agency (CIA). A Quito newspaper, El Comercio, reported that Sullivan met Correa when he arrived in Ecuador towards the end of 2007 and told the president that besides being First Secretary at the US embassy, he was also head of the CIA in the country.

On 20 February Correa accused Sullivan of ordering the return of computers donated by the US to the Ecuadorean police. The computers, which allegedly contained confidential information, were returned. Correa claimed that the US had demanded that the computers be returned, but in fact, Correa himself issued an instruction on 2 February, after an earlier expulsion of a more junior US diplomat, ordering the immediate return of all US-donated police equipment. The Ecuadoreans apparently forgot to purge confidential files from the computers before handing them over.

Chile: The national copper corporation (Codelco) will invest US$2bn this year,creating 12,000 jobs.

Region: The World Bank reported that it expects gross domestic product in Latin America and the Caribbean to contract 0.6% this year.

Brazil: The federal government's primary fiscal surplus was R$4.1bn in February, down 54.2% year-on-year.

Development: On 9 May President Hugo Chávez of Venezuela threatened to quit the Organization of American States (OAS).

Significance: Chávez 's threat follows the publication of a report by the Comisión Interamericana de Derechos Humanos (Cidh), an OAS institution,  concluding that Venezuela needed to improve its defence and upholding of human rights. The Venezuelan foreign ministry dismissed the Cidh report as “biased and false".

Chávez and his government have become hyper-active in the past few days. The headlines have been grabbed by the nationalisation on 8 May of 60 companies providing mostly offshore services to the oil industry around Lake Maracaibo. Probably the most important government move, however, is an application to congress to increase the amount of debt the government can issue.

The government has been hit by the drop in oil prices. The average price for the year to 8 May was US$41.78 a barrel, the state oil company, Pdvsa reported. In the same period of 2008 the average price was US$86 a barrel. The government trimmed spending by 5% in March, but most analysts reckon that it needs to cut spending by much more. The government hopes that the threat of oil supply cuts by the Organization of Petroleum Exporting Countries will drive oil prices higher. In the first week of May the average Pdvsa export price was US$48.7 a barrel.

In a more populist vein, the government claimed to have uncovered a terrorist plot on 9 May and on 10 May expropriated 10,000 hectares, mostly in Chávez 's home state of Barinas, from large scale farmers.

Development: On 15 June a newspaper accused the brother of President Rafael Correa of benefiting from government contracts.

Significance: The president did not immediately accuse the newspaper, Expreso, of muck-raking but asked for its evidence that any of the contracts won by his brother had been awarded unfairly or improperly.  Correa did go on to argue that because the press could not make any mud stick on him, it was now going after his family.

Expreso published a list of companies which it said were controlled by Fabricio Correa, all of which had won over US$80m of government business. Rafael Correa challenged the newspaper to show whether the contracts won by his brother had been awarded after tenders or by favouritism. He also challenged Expreso to say whether it could find any evidence that Fabricio's companies had skimped on their taxes or were ultimately based in Panama. The president said that if the paper could prove these charges, he would be the first to criticise his brother.

Correa said that he had already spotted some errors in the Expreso report. He said that one government contract had been awarded last June to a company in which Fabricio was no longer a shareholder. He also said in other cases his brother's companies were only subcontractors to the company which won the government's business. The question here, presumably, is whether officials stipulated that Fabricio's companies had to be subcontractors.

Carlos Pólit, the national auditor, said that all the contracts identified by Expreso would be audited to check that there were no anomalies.

Development: On 22 July the state government in Guerrero announced that it was temporarily closing down because of cashflow problems.

Significance: Guerrero is one of the poorest and most violent states in the country. The state governor, Zeferino Torreblanca, from the leftwing Partido de  la Revolución Democrática, ordered a 15 day shutdown of all state government offices, including the state congress and the state supreme court, to save cash and to cut utility bills by US$22,500.

Torreblanca said that he was taking this radical action because the state's budget had become unhinged after the federal government slashed transfers by US$135m.

Unionised state employees will be paid during the enforced shut down but non-unionised workers will not be paid anything. The state government employs 3,000 people. The state government's offices will reopen on 3 August.

Development: On 1 September Bolivia's defence minister, Walker San Miguel, gave a press conference in which he said that Bolivia's interest in purchasing US$100m worth of arms from Russia should not be interpreted as a threat, and that the equipment would be used for the war on drugs and in response to natural disasters, among other activities.

Significance: San Miguel's remarks are aimed at reassuring Paraguay, which has expressed concern about the arms deal. In August, Paraguay's foreign minister, Héctor Lacognata, demanded that the government of President Evo Morales outline its intentions with regard to the proposed weapons acquisition.

This concern comes on the back of a report published in Santa Cruz daily newspaper, “El Deber", that Bolivia has spent US$70m on defence in the last three years and that President Morales is investing in the military on an “unprecedented" scale since the Chaco War with Paraguay in the 1930s.

What Paraguay is worried about is that Bolivia's proposed (and comparatively modest) purchase will start an arms race in the sub-region.

President Hugo Chávez of Venezuela started off an arms race in the north of South America after signing contracts worth an estimated US$4.4bn in three years for Russian defence equipment.

San Miguel and Lacognata are due to discuss the issue further in a meeting slated for 11 September.

Development: On 11 October President Felipe Calderón issued a decree to wind up the main state-owned electricity distributor, Luz y Fuerza del Centro (LyFC).

Significance: The decision is a challenge to the Left and delighted Calderón's faltering supporters on the Right. Crucially, the main opposition Partido Revolucionario Institucional (PRI), the country's largest party and the dominant party in congress, is backing the move. The PRI expects to recover the presidency in 2012, and the deal appears to be part of an understanding with the government that it will act as a 'constructive' opposition, supporting policies in the national interest. In return, the government will run policies in its final three years allowing the PRI to take up office with no immediate problems.

Indeed, if the LyFC decision is a foretaste of things to come, the PRI may be expecting the Calderón government to take the political heat for a string of unpopular, but almost certainly necessary, policy changes. Both the Left and the Right believe that the move is the first step in a new government effort to privatise key economic sectors. If Calderón's move on LyFC works, his government is likely to try to privatise the CFE (which generates power and operates the national grid) and then, most controversially, to scale back the state-owned oil monopoly, Petróleos Mexicanos (Pemex).

Francisco Labastida, the prií­sta chairman of the senate energy committee, said that people should recognise when decisions are taken for the good of the country and that LyFC needed to be liquidated. He suggested that its operations, providing electricity to Mexico City and its hinterland, should be rolled into the (state-owned) Comisión Federal de Electricidad. This suggests that the PRI may baulk at further privatisation, though it does accept that the state-sector needs a shake-up. Crucially, the government decree does not say what will happen to the assets controlled by LyFC. All the decree authorises is that the assets are put in the hands of the Servicio de Administración y Enajenación de Bienes, effectively the official receiver.

The Left's first counter-attacking move was to seek an injunction so that the issue can be considered by the supreme court.  Lawyers say that the Left, led by the Sindicato Mexicano de Electricistas (SME), which effectively runs the LyFC, has a case. Constitutionally, it is not clear whether the president has the right to take over and wind up a state- owned company, especially when there is no threat that the company will not continue to provide services. Cleverly, the SME has not threatened to strike.

Lawyers point out that the precedent of a presidential decree to liquidate Aeroméxico was triggered by a strike at the airline. Some lawyers suggest that if the SME went to the Junta Federal de Conciliación y Arbitraje on the grounds that the government has overreacted, it would win.

The actual trigger for the row was last week's protests by the SME against a decision by the Labour Ministry not to accept the result of a close (and potentially flawed) vote in July to re-elect the union's president, Martí­n Esparza. The government announced that it would not recognise Esparza as SME leader before the courts had ruled on the validity of his re-election.

The real issue, however, is the SME's dominance of the LyFC. Effectively, the union has for years run the firm in the interests of union members. As a result, the company provides a poor, expensive service and has racked up operating losses, met by taxpayers. Almost a third of the electricity the LyFC distributes is not paid for.

Mexico: Real GDP contracted 6.2% year-on-year in the third quarter, a little better than expected. It fell 8.1% year-on-year in the first nine months of 2009.

Mexico: Foreign Direct Investment (FDI) was US$9.75bn in the first nine months of 2009, down 37% year-on-year over US$15.56bn in the same period of 2008. Total FDI was US$22.52bn in 2008. The government expects a total of US$15.0bn in 2009. The US is  the main source of FDI.

Development: On 12 January  Fander Falconi, the minister for foreign affairs and trade, tendered his resignation.

Significance: Falconi, who was one of President Rafael Correa's closest allies, resigned after Correa heavily criticised him in his weekly radio broadcast on 9 January. Correa said that the people managing the innovative 'Yasuní­-ITT' scheme to persuade industrialised countries to pay Ecuador not to tap the oil that lies below the Yasuní­ national park had mismanaged the project. The president stated that foreign countries were dictating to Ecuador.

However Correa's local opponents say that he is preparing the way to allow foreign companies to produce oil in the Yasuní­ national park, which is one of the world's 25 most important ecological sites, according to Unesco.

Correa's main criticism was the decision, apparently taken by Falconi, to allow foreign contributors to the fund put in place to pay for the Yasuni project to have a majority on the trust that would manage the scheme. The president said that he had accepted Falconi's resignation, even though he himself had retracted some of the harsher comments he had made on 9 January. Two other members of the Yasuní­-ITT project team have also resigned, while the three remaining members have yet to declare whether they are staying or going.

In a six-page resignation statement put out by the foreign ministry, the ministry argued that the Yasuní­-ITT project deserved more support and not a “peremptory demand" that it be sorted out in six months. Alberto Acosta, once President Correa's most loyal ally but now a prominent critic, said that Falconi's resignation put the whole scheme at risk. He said that the government appeared to be abandoning the scheme so that oil could be produced from Yasuní­. There are at least 846m barrels of oil (20% of Ecuador's proven reserves) under the park.

To date, Belgium, Spain and Germany have provided (of between US$972m and US$1.23bn) to enable Ecuador not to extract oil from Yasuní­.

Development: Joviel Acevedo, the leader of the national teacher's union (ANM) announced that mass protests would continue today (24 February) in the capital and at various points across the country, to demand a 16% pay rise.

Significance: The threat of action, which has been looming for months, began on 22 February. It's the latest sign of the pressure on the government of President Alvaro Colom, which is struggling to pass a much needed tax reform aimed at boosting fiscal revenues from a low 9.9% to 11.7% of GDP. The reform is vehemently opposed by the powerful private sector lobby, Cacif.  

The ANM represents some 80,000 teachers and is one of Guatemala's most active unions. It claims that the Colom administration has failed to comply with a collective-bargaining agreement signed last year and insists that as it did not deliver the 8% pay increase promised in 2009 it must now deliver an across-the-board 16% increase - equivalent to a total US$97m. The government however, maintains that it can only offer an 8% increase.

The prospect of continued strike action, which the Guatemalan Chamber of Commerce estimates has so far caused economic losses of some US$40m amid external trade delays, is not the only problem facing the government in relation to education. Education Minister Bienvenido Argueta, who has only been in the post since September 2009, is facing the prospect of dismissal for failing to provide congress with information relating to the government program 'Mi Familia Progresa' (Mifapro), which provides subsidised access to health and education for low income sectors and has long been criticized for lacking in transparency.

The campaign against Mifapro, spearheaded by Nineth Montenegro, a deputy for the leftwing Encuentro por Guatemala, is damaging not only for Argueta, who now has 12 hours to provide the information, but also for Colom's wife, Sandra Torres de Colom, who heads the social cohesion council responsible for executing the Mifapro. Torres is rumoured to be a presidential candidate for the ruling Unidad Nacional de la Esperanza ahead of the 2011 elections.

Brazil: The death toll from the flash floods and landslides in Rio de Janeiro has risen to 151.

Bolivia: Bolivia's minister for the presidency, Oscar Coca, announced that state investment for 2010 would exceed US$1.8bn.

Mexico: The president of Mexico's chamber of mining, Manuel Luévanos Sánchez, announced that mining companies were planning to invest a record US$13bn in new mining projects between 2010 and 2012.

Venezuela: The electricity minister, Alí­ Rodrí­guez, said that the government may extend the current national electricity emergency for a further six months. The emergency decree first took effect on 8 January.

Brazil:   Brazil registered record tax returns in the first four months of 2010. Total federal tax income came to R$256.8bn (US$136.5bn), up 12.5% year-on-year. The result for April alone (R$70.9bn) was a series record. The result suggests a strong economic recovery and should help assuage recent doubts about the federal government's ability to meet its 3.3% of GDP primary fiscal surplus target this year.

Development: On 25 June the deep water Esmeraldas port, Ecuador's second largest port, will return to the administrative control of the national ports authority.

Significance: The move to nationalise Esmeraldas cuts short a 25-year operational concession awarded to a private sector consortium made up of Ecuadorean and Colombian investors, Puerto Nuevo Milenium, under the former president Lucio Gutiérrez Borbúa in 2004. The government says the port is being re-nationalised after plans for its modernisation failed to progress under Puerto Nuevo Milenium.

According to Gustavo Sargiotto, the head of the consortium, under the deal to revert the concession the ports authority will pay the group US$6.7m.

The move has been welcomed by export and import groups who saw the previous management as onerous, bureaucratic and uncompetitive. The national port authority estimates that the port moves between 600,000 and 1m tonnes of cargo a month, valued at US$1.5m.

Development: On 4 August the national assembly voted in favour of the government's controversial plan to reform higher education.

Significance: The government's success, at the fifth time of asking, means that it is unlikely now to call fresh elections. Under the new constitution, the president has the right to call fresh elections (but they have to be for both congress and the presidency) if congress blocks key legislation. President Rafael Correa had threatened to do this when congress failed to approve key reforms in the first half of July.

Since then, however, Correa managed to get a key oil reform through congress (albeit by exploiting the small print of his new constitution) on 25 July. Now he has a second success on another key reform. The big question is whether the government's alliance will hold together for a third, but more controversial, reform the government wants to make to the media laws.

On the higher education reform, the ruling Alianza Paí­s (AP) persuaded ten  other assembly members to back the reform. For all July, until Correa (metaphorically) thumped the table and told party managers to get their act together, the government had shied away from presenting the reform to congress for fear of losing. The only slick trick the AP pulled was to say that Washington Cruz, one of the expatriate deputies, had presented his apologies: this allowed the AP to appoint a temporary alternate who was a much surer “yes" vote. The opposition said that as there was no evidence that Cruz had presented his apologies, the whole assembly vote was illegal.

The most controversial element of the higher education reform is the setting up of a new 11-person Consejo Superior de Educación (CSE) to regulate the sector: the government will effectively have a majority, although it will only directly appoint four members of the CSE. The AP claims that it has modified the bill to include sensible suggestions from both the opposition and universities. It is just possible that Correa may veto some parts of the bill which would send those bits back to the assembly. Correa has 30 days in which to consider his veto.

The AP and Fernando Cordero, the president of the national assembly, had shied four times in July at getting the higher education reform voted on by congress. Each time, they said that they were striving for greater consensus and so would postpone the vote. This month they were more confident. On 3 August they boasted that they had 67 votes, four more than they needed for a bare majority in the 124 seat assembly, though by the morning of 4 August some AP bigwigs were beginning to wonder if they had not been overconfident.

The session opened at 12.45pm with 123 deputies present (the missing deputy was César Gracia, from the AP) and the opposition Partido Sociedad Patriótica (PSP) waving placards criticising the proposed reform. Gracia's absence meant that the AP had only 52 deputies in the chamber: this became 53 when the AP introduced the alternate. The first sign that the government would win came when an opposition motion that the reform be voted on article-by-article was defeated. The bill has 211 articles, 12 general dispositions and 24 enabling provisions.

The chairman of the assembly's ad hoc education committee then read a brief outline of the reform and claimed that the government had accepted amendments from both universities and the opposition and stressed that the reform would not diminish academic freedom. The final vote was: 63 in favour; 47 against; one blank and 12 abstentions.

Pointer:  The AP's 53 votes were bolstered by four votes from the Partido Socialista; three from the Alianza Democrática Ecuatoriana; one from the Partido Social Cristiano; another from a former social democrat and a third from a defector from the PSP. The PSP has now lost three members in the year since the national assembly first convened. It now has 16 members. The AP has lost five of the members who were elected on its slate and is now down to 54 deputies. The big question is whether Cordero and AP can repeat its success with the media bill which, media companies claim, will set up a government controlled commission to regulate the media.

Development: On 9 September, four deputies visiting a group of Mapuches on hunger strike in a prison in Temuco, southern Chile, were evicted from the premises after joining the hunger strike.

Significance: The Mapuche hunger strikers, 34 in all, are want the government to stop using the country's anti-terrorist law (introduced by the Pinochet regime) to prosecute them. The hunger strikers have dismissed as insufficient President Piñera's proposed reform of the military justice system, which is also being used against the Mapuches.

The legislators - Hugo Gutiérrez (Partido Comunista), Tucapel Jiménez (Partido por la Democracia), Sergio Aguiló and Manuel Monsalve (both of the Partido Socialista) - all members of the human rights commission in the lower house said they would remain in the prison and take up the hunger strike themselves in an effort to urge the centre-right government led by President Sebastián Piñera to begin talks with the strikers.

The justice ministry subsequently asked the Gendarmerí­a, which is in charge of prisons, to evict the deputies, on security grounds. The four said they would continue with hunger strike in the headquarters of the Central Unitaria de Trabajadores (CUT) in Temuco. Jiménez stressed that the Mapuches would end their protest if the government agreed to talks, but the government “has not done anything".

The Catholic Church has urged the government to bring the hunger strike to an end.

Development: On 20 October President Juan Manuel Santos presented a new government plan to speed up the process of returning land to former owners that had been displaced by the country's internal conflict.

Significance: In an attempt to promote political stability, and appease international criticism, the new Santos government has made it a priority to return lands to all those people that were forcefully displaced during the height of paramilitary violence of the 1980s and 1990s. In September, President Santos presented an ambitious 'Leyes de Victimas y de Tierras' land reform bill that intends to set the basis for the land recovery and redistribution process. The bill is currently before congress.

The government also intends to expedite the return of lands to over 130,000 families while it waits for the land reform bill to be passed by congress. 

An initial phase will allow it to transfer 321,000 hectares (ha) to displaced people by 31 December. This mostly involves the redistribution of illegally obtained lands, seized from drug dealers, paramilitary groups, and from the corrupt and now defunct land reform institute (Incora). According to Santos, all the lands targeted in this phase were found to be illegally obtained either through illegal purchase from the Incora or through the forceful appropriation by armed groups.

The seized lands are to be transferred to the Instituto Colombiano de Desarrollo Rural (Incoder), which replaced the Incora in 2008, so that it can distribute them to displaced people and landless farmers. This phase will benefit displaced families from the departments of Chocó, Tolima, Madgadalena, Cesar, Norte de Santander, Bolí­var, and Antioquia. It is also set to benefit ethnic minorities, through the creation of 23 indigenous reserves and the formalization of seven collective land titles, which will be granted to afro-Colombian communities in the regions of Choco, Valle del Cuaca and Bolivar. 

Development: On 1 December, Brazil became the first Western Hemisphere country to recognise the Palestinian State based on the 1967 borders, after President Lula da Silva acceded to a 24 November request by President Mahmoud Abbas. Argentina followed suit on 6 December, while Uruguay and Paraguay are also expected to follow the lead of their Southern Cone partners shortly.

Significance:    President Lula da Silva's fiercely independent foreign policy, which has sought to elevate Brazil on the global stage, has been controversial both at home and abroad. This parting gesture on the Middle East, just weeks before he leaves office on 31 December, coincides with the latest WikiLeaks cables, which if anything underline the multifaceted nature of Brazil's foreign policymaking.

Lula has had great foreign policy successes, notably his promotion of South-South relations and his role in securing a position for Brazil as leader of the developing world in international forums, but he was left with egg on his face in his forays as a 'facilitator' in the complex Middle East peace process. He still hasn't forgiven the US administration for 'betraying' him over Iran - he still argues that he merely delivered what had been asked of him by President Barack Obama in the deal he and the Turkish premier, Recep Tayyip Erdogan, negotiated with Iran over its nuclear ambitions in May this year. The US secretary of state, Hillary Clinton, later suggested Lula was well meaning but naí¯ve, a suggestion given weight by Iran's subsequent forthright rejection of Lula's efforts to mediate in the controversy over the case of the Iranian woman condemned to stoning.  

Lula's presidential foreign affairs advisor, Marco Aurelio Garcí­a, has long argued that Brazil's foreign policy is based on the notion of permanent engagement and dialogue, as well Brazil's traditional strict respect for sovereignty. However, conservative right-wing critics in Brazil argue that Lula simply can't have his cake and eat it. They suggest that under Lula Brazilian foreign policy has become imbued with an outdated left-wing ideology that is both reactive and inherently anti-US. They flag up what they see as dangerous ambiguities in Lula's positions (over Cuba, Iran, etc.), arguing that these ambiguities undermine his ambitions to secure a permanent Brazilian seat on a reformed UN Security Council.

Clinton, likewise, appeared to be suggesting that the US would accept Brazil as a global player on soft power issues like development, trade and climate change, but that the US would continue to reserve for itself   dominance over hard power issues such as the Middle East. Lula, naively or not, rejects that argument outright.

But the view that Brazil is dancing to too many tunes and risks damaging its reputation perhaps misses the point that Lula has already, in fact, succeeded in elevating Brazil's global standing to the point where, regardless of his perceived 'successes' or 'failures', Brazil is now taken very seriously by the likes of the US and Europe on the global stage.

The move by Lula to recognise the Palestine state based on its pre-1967 borders with Israel, including the occupied West Bank, East Jerusalem and Gaza, is designed to encourage other Latin American countries to follow suit. Although President Abbas has previously said that he might appeal directly to the UN for recognition of Palestine as a sovereign state, the presumption is that the US would veto any UN Security Council resolution to that effect. The argument is that a state-by-state individual recognition of Palestine would avoid a US veto.

The Israeli government reacted strongly against the “unilateral" Brazilian move, saying Lula was not contributing but undermining the (stalled) peace process, and noting that “recognition of a Palestinian state is a violation of the Interim Agreement signed between Israel and the PA [Palestinian Authority] in 1995" (a reference to the Oslo Accords), and also of “the Roadmap (the peace plan formulated by former US President George W. Bush), adopted by the Quartet and supported by the international community".

US legislators, led by Eliot Engel (D, NY), chair of the lower house subcommittee on foreign affairs, were equally damming. Engel said the move was “severely misguided," adding that it represented “a last gasp" of a foreign policy that was “already substantially off track."

Pointer: Lula's successor-elect, Dilma Rouseff, is retaining Lula's closest foreign policy advisor, Marco Aurelio Garcí­a. Antonio Patriota, a former US ambassador and current number two at the foreign ministry, is slated as the new foreign minister.

Development: On 26 January, a Uruguayan military lobby group, Foro Libertad y Concordia, sent a letter to the commanders of the armed forces demanding more support for military personnel accused of committing crimes during the military dictatorship (1973-1985).

Significance: The 1985 amnesty offered by Uruguay to its military for crimes committed during the dictatorship has become increasingly controversial. The second consecutive left-wing Frente Amplio (FA) government, led by President José Mujica, a former Tupamaro guerrilla, has repeatedly attempted to repeal the 'Ley de Caducidad', in which the amnesty is enshrined. However, it has met stubborn resistance in congress, both from the opposition and from certain FA members. Meanwhile, the Uruguayan courts have found loopholes in the law and in November 2010 charged General Miguel Dalmao for human rights violations committed during the dictatorship.
 
Key points:

The Foro Libertad y Concordia is a military association composed of active and retired military personnel from all three armed forces. It was created after the Dalmao trial, chiefly to raise funds to aid the defence of military members accused of involvement in criminal acts.

The letter demanded that President Mujica fulfil the promises made at the Durazno air force base at the beginning of his term that he would give special attention to military affairs and ensure that they would not be persecuted by his government.

The letter went on to denounce the “harassment" that their comrades have been subjected to recently and urged the three military commanders to “raise their voice" in defence of the accused. The text concluded: “Many of us are willing to resist this vengeance by any means available to us. Everyone has now been warned".

While no official response has been issued, military sources were quick to point out that the group does not have any authority; and that it does not represent the military or any of the armed forces' social organisations.

Development: On 15 March Foreign Minister Mario Canahuati announced that Honduras will close its embassies in Argentina, Brazil, Ecuador, Bolivia and Venezuela, the leading five countries in the Southern Cone that refuse to recognise the government led by President Porfirio Lobo.

Significance: "It is better to have friends than enemies", Canahuati declared. However, the move is likely a mis-step by the Lobo administration, which has gradually been building up support in the region in a bid to persuade the main hemispheric body, the Organization of American States (OAS), to lift its suspension of Honduras, imposed after the June 2009 coup. The OAS secretary general, José Miguel Insulza, along with the US, is supportive.

So too is all of Central America (bar Nicaragua). El Salvador will host the next OAS general assembly in June. Its foreign minister, Hugo Martí­nez, said in Washington last week (9 March) that El Salvador hoped Honduras would be reincorporated into the OAS in June. “Some countries feel that the process of [democratic] reconstruction in the country should be completed before readmitting Honduras into international organisations. Others, we suggest that the best way to guarantee that Honduras advances is by being in those organisations and we continue to work on that", he stated. Honduras requires 24 votes of the 33 current active members to lift the suspension, which also requires some multilateral lending to be frozen.

Key points:

The five countries, led by Brazil and grouped under the 12-member Union of South American Nations (Unasur), remain adamant that they will not recognize the Lobo administration until the ousted former president Manuel Zelaya (2006-2009), exiled in the Dominican Republic since January 2010, is allowed to return to Honduras with full guarantees and without the threat of prosecution on corruption charges. Other Unasur members - Chile, Colombia and Peru - have recognised the Lobo government. The Unasur countries have made clear that they want to see the annulment of the formal charges against Zelaya, which he says are trumped up and politically motivated. President Lobo has put fairly strong pressure on the politicised Honduran supreme court to scrap its charges, to no avail as yet. Zelaya refuses to travel back, despite formal assurances that he will not be detained.

Another option is that Lobo could guarantee a formal presidential pardon for Zelaya, if he were found guilty, though Zelaya would first have to submit himself to the court.

The cash strapped Honduran government will apparently use the savings to establish commercial offices in Canada, China, India and Singapore.

Development: On 4 May a local watchdog, the Instituto Para el Desarrollo y la Democracia (IPADE), issued a report on Nicaragua's electoral process ahead of the 6 November general elections.

Significance: The report is the first by the watchdog for this voting cycle and was damming.

Key points:

The report criticised the partiality of the supreme electoral court (TSE) which is headed by Roberto Rivas, a close ally of President Daniel Ortega.

The Ipade also raised concerns about access to cédulas (national identity cards) which are necessary to vote.   Voting itself is not mandatory. According to the Ipade, of the 80 municipalities which it had sent observers to, only 18 (22.5%) had delegations set up to issue the cédulas.

This adds to existing controversy regarding the CSE's decision in August last to increase the price of cédulas by 600% to C$300 (US$13). This is in a country where 44.7% and 9.7% of the population were described as living in poverty and extreme poverty in 2009 (on US$1.60/day and US$0.64/day respectively). In its annual human rights report released last month, the US State Department cited local civil society groups as warning that the move disguised an attempt by the Frente Sandinista de Liberación Nacional (FSLN) to manipulate voter lists and that “government and political party resources were used to purchase large numbers of cedulas [sic] for party members".

A December 2010 poll released by M&R Consultores claimed that more than 460,000 citizens (12% of the eligible population), lacked cédulas and that 70% of these people were either members of opposition parties or independents.

Aside from ongoing concerns about Ortega's refusal to allow international and respected local watchdogs to oversee the November vote, Ipade also highlighted as a problem Ortega's April decree changing the electoral boundaries in a clear move to benefit his FSLN.