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In agreement with incoming President-elect Nicanor Duarte, the outgoing government has asked congress to approve a US$100m bond issue to cover debt-servicing arrears plus the local counterpart of loans already granted by multilateral lenders but still undisbursed. The government's financial situation, already dire, has worsened as a result of the shortfall in revenues from the two big binational hydroelectric plants, Itaipú (which sells mostly in Brazil) and Yacyretá (aimed at the Argentine market). Itaipú is having problems collecting from its Brazilian clients, and has paid only US$9m of US$39m due. In February, the government borrowed from the central bank the equivalent of the sum owed. Yacyretá's cash flow is in even worse shape: it has paid nothing on US$20m due. The Paraguayan government has already fallen into arrears with one important creditor. It has failed to make a payment of US$9m due to the World Bank on 15 July; if this is not made good soon it could jeopardise the approval of a US$23m loan for education that comes up before the bank's board on 30 July. Also at risk are all outstanding World Bank disbursements. The government is also short of the cash needed to meet a US$5.7m payment due to Chinatrust, of Taiwan, which falls due now. Technically, non-payment would allow Chinatrust to demand repayment of the full US$400m owed, but finance minister Alcides Jiménez rules this out on the grounds that it is a 'political loan' (Paraguay is the only South American country with diplomatic ties to Taiwan). Just over a fortnight ago Jeffrey Franks, head of an IMF mission in Paraguay, predicted that the country was heading for a shortfall in fiscal revenues this year of at least US$158m -more if the incoming administration does not drastically cut spending and curb tax evasion, smuggling and corruption. The bond issue planned by Jiménez will not have placement problems: social security funds will be 'persuaded' to take the paper.

Industrial production in Argentina fell in June by 0.2% from May. This left the level 12.9% higher than in the same month of last year -which, when set against the 17.3% annual increase accumulated in the first half of the year, clearly highlights the slowdown in economic activity that is conspiring against recovery. 

The national statistics institute, Indec, tries to downplay this recent development by setting it against the broader 'firm recovery', but when analysing the figures cannot but confirm the trend. 

'After four consecutive quarters of positive variations with respect to the previous quarter,' it notes, 'the second quarter of 2003 has remained at a level similar to that of the first quarter [...] with a small decline of 0.5%.' 

Indec says the main reason for this was the contraction of domestic consumption in Brazil, which has had a knock-on effect on Argentina's bilateral trade with that country. Indeed, in June Brazil's trade balance with Argentina showed the first surplus (for Brazil) in 41 months, with Brazilian exports outstripping purchases from Argentina by US$34m. 

The huge influx of low-priced Brazilian goods (chiefly textiles, paper, footwear and foodstuffs) made such an impact on the Argentine market that an emergency bilateral meeting was convened last Wednesday in Buenos Aires. 

Another factor conspiring against industrial growth was the high cost of credit, which is affecting consumers as well as industries. 

In really bad shape, with production lower than in the first half of 2002, are three sectors: dairy products, synthetic and artificial fibres, and meats. 

While interior minister Aní­bal Fernández has admitted that private economists are right about the slowdown, economy minister Roberto Lavagna appears determined to talk it away. He says that a number of indicators [no details provided] 'are pointing towards acceleration', and that GDP growth this year will reach at least 5%.

Open unemployment in Santiago in June reached 13.4%, a mere 0.2 points lower than a year earlier, according to a report published last week by the Universidad de Chile. The latest official figures, which refer to the running quarter March-May, put the rate for Santiago at 9%, and the nationwide rate at 8.8%. 

Dante Contreras, director of the university's economic department, says that the slight annual decline reflects the low rate of growth of the economy. He finds some comfort, though, in the fact that 59,900 jobs were created in the 12-month period, and predicts that the next two surveys (in September and December) will show the unemployment rate falling more markedly. 

Santiago has 360,000 unemployed in a population of 15m (40% of the national total). According to the university's report, a household with unemployed members has an average disposable monthly income of Ch$153,000 (US$219), as against Ch$515,000 (US$736) in households with no unemployed. 

The US House of Representatives last week gave its approval to the bilateral free-trade agreement between the US and Chile, passing the measure by 270 votes to 156. The bill has now moved on to the Senate for its approval, possibly as early as this week. 

The free-trade deal will abolish over 85% of the tariffs currently in place on trade between the two countries. Within 12 years it is hoped that there will be no tariffs whatsoever on exports between the US and Chile. 

The US is Chile's largest trade partner, with bilateral trade in 2001 of US$8.8bn. 

The Chilean accord, and the one with Singapore, approved the same day, are the first negotiated by the Bush administration since it obtained from Congress last year 'trade promotion' authority (previously known as fast-track), which allows the executive to submit trade agreements to Congress for a blanket vote, without amendments.

ONLY A ROUND IN A THREE-SIDED POWER CONTEST? 

Bolivia's interior minister Yerko Kukoc was feeling rather pleased towards the middle of last week, after his 'firm hand' policy appeared to work just as well with a peasant campaign to block the country's main highways as it had previously with the land invasions by the MST, the movement of landless peasants. The congratulatory mood may prove premature, as the organisers of the roadblocks have promised to escalate their action -which is being played against the backdrop of a power struggle in the indigenous and peasant camp. 

The campaign. The roadblocks campaign was masterminded by Felipe Quispe, the Aymara congressman from the Movimiento Indí­gena Pachacuti (MID) who is still clinging to his position as leader of the umbrella peasant organisation, Confederación Sindical Unica de Trabajadores Campesinos de Bolivia (CSUTCB). 

The protests are ostensibly about forcing the government to deliver on a number of promises: the distribution of 1,000 tractors (which the CSUTCB wants gratis and the government wants paid with soft loans), a speeding up of pending land tenure problems, rejection of the Free Trade Area of the Americas (FTAA), repeal of the presidential decree underpinning privatisations, and rejection of the export of Bolivia's natural gas via Chile. 

The government says that it has already acted on most of the CSUTCB's 'feasible' demands, and that the other issues are to be debated in the imminent 'national dialogue' sponsored by the Catholic church. 

When the first roadblocks started going up early last week, Kukoc ordered combined army-police units to disperse them. This was done without recourse to violence. 

Few recalled that Quispe had promised a 'gradual' campaign, starting with a few roadblocks and then slowly multiplying them. On 27 July, to drive home the point, the CSUTCB announced that this week would witness the establishment of new roadblocks. The organisation's secretary-general, Alejo Véliz, said that these would begin in the department of La Paz (Quispe's powerbase). 

The background struggle. The ostensible reason for the roadblocks was not the only one. Quispe, known as the Mallku (literally, 'Condor'; by extension, leader), has become the target of two forces: the government, which sees him as a dangerous subversive, and the Movimiento al Socialismo (MAS), the political party built up by the Quechua Evo Morales from his original powerbase, the federations of coca planters. For Morales, Quispe is a bothersome rival, far more effective than himself in mobilising the peasants beyond the coca-growing Chapare. The MAS has 35 representatives in congress; the MIP, six. 

Just under a month ago, Morales masterminded a snap CSUTCB congress, which appointed one of his own associates, MAS senator Román Loayza, as secretary-general (WR-03-26). Government officials proclaimed Quispe a spent force. 

Quispe, however, still had fight left in him. He succeeded in persuading the umbrella labour confederation, COB, to deny validity to Loayza's appointment. He then went on a highly publicised hunger strike, but when this failed to make a discernible impact, he launched the roadblocks campaign. He pointedly invited Loayza to join in as well. When the campaign appeared to abort, it was Loayza who proclaimed Quispe and his MIP 'dead and buried' -then sounded a magnanimous note by inviting Quispe to join the MAS. 

Realising that this would not be taken up by Quispe, Loayza offered an alternative: a new congress of the CSUTCB, to be convened by Quispe. 

Quispe is not the only one seeking to sidestep the 'national dialogue'. On 22 July, Evo Morales sought to discuss directly with President Gonzalo Sánchez de Lozada an agenda similar to Quispe's. He was turned down.

BRAZIL | Housewives turn to vigilantism
A group of about 50 housewives in Duque de Caxias, state of Rio de Janeiro, have lost patience with the lack of government action against crime and set up their own, machete-wielding vigilante unit. Their leader, Hilda Prado, says that among their prime targets are rapists: their municipality has a rate of about 25 cases of rape or sexual assault a month. Their procedure: they detain suspects and, if the victims recognise them, 'take the necessary measures.' One newspaper has pointedly reported that a suspected rapist in Duque de Caxias was killed weeks ago by being dragged by horses through the town.  

CHILE | Elite force to deal with drugs & terrorism
The Chilean navy has commissioned a new, 19-strong élite unit trained in counternarcotics and counterterrorist skills, to be known as Grupo de Respuesta Inmediata (GRI, 'Immediate Response Group'). This unit is separate from the navy's buzos tácticos (similar to the US Seals or Britain's SBS), from where its members have been drawn. They report to Directemar, the navy's directorate of maritime territory and merchant marine, which had previously been assigned a role in counternarcotics operations along Chile's long Pacific seaboard, but had been charged with developing a counterterrorist capability after the September 2001 attacks on the US.  

The Chilean navy is just back from Panamax 2003, a joint exercise with the US Navy against a simulated terrorist threat (a shipload of explosives) against the Panama Canal.  

ARGENTINA | Anticrime drive also embraces capital
The crackdown on crime in Argentina is not confined to the province of Buenos Aires. It is also taking place, in a coordinated effort, in the autonomous metropolitan district of Buenos Aires city. Gustavo Beliz, minister of justice, security & human rights, has announced that 1,100 more police officers will be put on the streets (including just-graduated police cadets and officers freed from paperwork, which is being handed over to civilian employees) and that the federal police will launch a blitz of surprise raids - many of them in support of the campaign against auto theft being conducted in Buenos Aires province.

Local police stations will be given larger budgets to administer directly, but they will be controlled by local residents, under a system that will include 'productivity' bonuses. The federal police is itself a victim of the rising crime rate: a recent study highlights the fact that over the last two administrations (de la Rúa and Duhalde), one federal police officer has been killed every 7-8 days. Killings of policemen greatly influence public perceptions of insecurity.

The government of Bolivia has begun to move on liquid national gas (LNG) -but not yet on the scheme to sell the fluid to the US: it has commissioned a feasibility study for a liquefaction plant within the country. 

On 24 July, hydrocarbons minister Jorge Berindoague announced that the study, for a US$3bn gas-to-liquids plant, will be conducted by Repsol YPF of Spain, Ivanhoe Energy of Canada and Syntroleum Corp of the US. 

The initial idea is that the plant would have a capacity of 90,000 barrels per day of liquid fuel. This would mean that it would consume about 9tn cubic feet over 25 years. This is equivalent to 17% of the country's known reserves of natural gas. 

If the study yields a positive result, the three companies are expected to enter a joint-venture agreement. 

These, at 52.3tcf, are the second-largest in Latin America (the largest being in Venezuela). 

As Berindoague put it, this project is in line with the government's strategy for the development of fuels: to sell Bolivia's reserves of natural gas via projects located within the country which add value to the raw material. 

Worth recalling: Repsol YPF is also a partner (with British Gas and Pan American Energy) in Pacific LNG, the consortium promoting the US$6bn scheme to export natural gas to the US via Mexico. 

This scheme is still awaiting the outcome of several studies commissioned by the government. A crucial decision still pending is whether the Pacific coast terminal, where the liquefaction plant would be sited, will be in Chile or Peru. 

The consortium favours the Chilean port of Patillos, but there is strong opposition within Bolivia (see main story, above) to the Chilean option, as long as Chile does not cede back to Bolivia its sovereign access to the ocean, wrested from it in the War of the Pacific, in the late 19th century.

FOLLOWERS SUBMIT BILL LIFTING CONSTITUTIONAL BAN 

Even before President Alvaro Uribe's political reform is ready to be put to the electorate, he is floating the possibility of an additional one, to be voted on only by legislators: the lifting of the constitutional ban on reelection. 

Uribe has been dropping hints about this for days, expressing 'concern' that the remainder of his term of office (he has three years to go) might not suffice to see all of his aims brought to fruition. On 20 July he told the newly installed congressmen that they should double their response time to the public's 'concerns and fears'. 

That same day, a group of 40 pro-Uribe legislators, headed by the outgoing leaders of the senate and lower chamber, Luis Alfred Ramos and William Vélez, submitted a bill lifting the ban on reelection. The reason, as put by Vélez: 'Four years is too short a time for a good government to carry out its plans.' 

Until 1991, when a constitutional reform introduced the ban, Colombian presidents were allowed to run for re-election, but only after allowing a full term of four years to elapse after quitting office. 

Two days later, an opinion survey commissioned by Radio Cadena Nacional showed 63.6% of respondents in favour of lifting the ban on reelection. Formally, Uribe has yet to give his blessing to the reelection initiative. 

Worth noting: the bill also lifts the ban on the reelection of local and regional authorities -due to be renewed on 26 October -a day after Uribe's political reform referendum is voted on. 

On the crest. Uribe is still riding high in the polls, with the latest Invamer Gallup survey, released last week, giving him a 70% approval rating among urban Colombians. This is six points higher than his government's rating. 

The public appears more divided on his management of the economy: 48% for, 45% against. When the poll gets down to specifics, attitudes harden: on such matters as the cost of living and unemployment the disapproval rating is 62%. 

Uribe also enjoys high rates of approval for his handling of the guerrillas (67%) and paramilitaries (60%), and as many as 69% believe that the military are capable of beating the guerrillas. 

However, there is no clear majority in favour of a military solution to the internal conflict: 48% want it, but 47% favour a negotiated outcome.

IN THE BACKGROUND, A BROADSIDE OF EQUIVOCATION 

Without much fuss, the international 'facilitators' are re-entering the picture in Caracas, in a last-ditch attempt to get the national assembly to select a new electoral council (CNE) and thus clear the way for a mandate-revocation referendum. This happened against a background of equivocation, largely originating in the opposition and its friends abroad, which continues to lend plausibility to government claims that a new bid to oust President Hugo Chávez is being prepared. 

'Facilitation'. On 25 July the liaison commission between government, opposition and international 'facilitators' drew up an agenda, at the top of which is the appointment of a new CNE. This will be put before the facilitators (the OAS, the Carter Center and the UNDP), possibly in midweek. The agenda was endorsed by the representatives of the government and the opposition. 

To add urgency to the proceedings, supreme court president Iván Rincón again served notice that, if the assembly did not act fast, the court would 'fulfil its constitutional duty' and take upon itself the appointment of the CNE. 

Actually, this is a two-step process: first the court would issue an ultimatum to the assembly to complete the CNE appointments within 10 days; second, if the assembly does not comply, the court would make its own appointments. Even this would produce only a 'temporary' CNE: it would still be up to the assembly to make the definitive appointments. 

Government and opposition have formally agreed that the appointment of a new CNE is 'imperative'. Neither the international organisations nor the government want the matter to be decided by the supreme court instead of the assembly. In the government's case, it is because it does not want to see a precedent set whereby one of the powers of the state supersedes another (even if this is envisaged by the constitution). 

'Old' CNE stakes claim. The first attempt to muddy the waters came from three of the current members of the CNE: they said that it was perfectly within their powers to do all that is necessary for the mandate-revocation referendum to get under way -check the validity of signatures endorsing the call, assess the correctness of the question to be put to the electorate, set a date for the vote and supervise the outcome. 

This prompted an angry response from Chávez ; perhaps as intended, he announced that he would not accept any referendum conducted by the present CNE. 

The 'old' CNE has been left with four members, after the supreme court ordered the removal of the council's president and imposed upon the rest the obligation of unanimity in any decisions. Of the four remaining councillors, three represent the opposition. The fourth represents the government, and under the unanimity rule enjoys a veto. 

General speaks. The next round of equivocation hinged on a report that the commander of Venezuela's army, General Jorge Luis Garcí­a Carneiro, had either 'ruled out' a referendum or tried to influence the outcome by stating that it could not be carried out just yet. With great alacrity the US State Department, through spokesman Philip Reeker, delivered a lecture on the impropriety of an active member of the armed forces speaking out on matters which should be left in the hands of civilians. 

What General Garcí­a had done was to place in context the questions put to him by a TV interviewer, stating the obvious: that with no new CNE appointed, and a 6-7-month lead time for the electoral logistics, the referendum was not likely to take place any time soon. The political component? That 'telling the people there will be a referendum soon is deception.'

Demobilising the paramilitary organisations (WR-03-28) is not proving easy. Carlos Castaño, leader of the Autodefensas Unidas de Colombia (AUC), the biggest of the lot, announced last week that the process was 'irreversible' -and almost in the same breath served notice that his fighters would not surrender their arms upon congregating in the 'concentration' areas. That, he said, will only happen when a deal is finalised. Castaño also made a pitch for international financial assistance to 'assist' the demobilisation effort. 

A couple of days later another of the signatories of the demobilisation accord, the Bloque Central Bolí­var (BCB), turned up in the town of Segovia, Antioquia, briefly abducted the mayor, and left behind a message: all those continuing to support the Bloque Metro would be killed. 

The Bloque Metro is one of the paramilitary organisations that broke away from the negotiations being conducted by the AUC, ostensibly because it saw these as a salvage operation for the paramilitary leaders involved in the drugs trade. 

An interesting sideline: so far this year, 250 members of paramilitary groups have surrendered to the government seeking the benefits of the 'reinsertion' programme. This compares with 751 members of guerrilla organisations.

Finance minister Alberto Carrasquilla announced last week that the government will not seek to introduce or raise the rate of the value-added tax on basic goods until 2005. 

The government had originally planned to introduce new taxes and higher rates in 2004 in order to help close its large fiscal deficit, which risks exceeding the 2.1% of GDP target agreed with the IMF. 

Thus, the plan to introduce a 2% value-added tax on all previously exempt components of the basic food basket goes back to its originally scheduled date: 2005. What is unclear is if at that time the government will also raise the rate on the components that are currently taxed. 

Carrasquilla said President Alvaro Uribe had decided that it would be wiser to delay the application of the new measure given the current uncertain economic climate. What may have helped reach this decision is the fact that the public in general is distinctly less enthusiastic about the government's management of the economy than about its handling of the internal war (see main story, above). 

The decision was immediately welcomed by business leaders, and particularly by the agricultural sector, which had feared the effect of the new tax on their business and had asked for more time to prepare for the changes. 

Carrasquilla said that the government would instead focus on cutting public spending still further and would boost income by strengthening its tax-collection procedures to catch tax cheats. 

Colombia is currently facing an estimated revenue shortfall of Col$3.7tn (US$1.28bn) in 2004, but the government has ruled out raising the level of income tax, introducing a new capital gains tax, or the issuance of compulsory bonds. 

The government will, however, press ahead with the introduction of a new tax on pensions, which is expected to raise up to Col$800bn.

Venezuela's finance minister, Tobí­as Nóbrega, said last week that he expects second-quarter GDP to be 14-16% down on the same period of 2002. He underlined that this was a personal estimate and that the final official calculations were not yet complete. Still, if he is right, the decline in activity is slowing down: in the first quarter, GDP was down by a record 29%. 

That, of course, was largely the result of the two-month strike-cum-lockout staged by the opposition. 

The government of Venezuela is planning to launch a US$2bn, seven-year dollar denominated bond issue. 'We decided to work on a seven-year basis and with a maximum interest rate of 7.0%,' Nóbrega said. 'Our belief is that the bond will end up being issued below 6.0%.' 

Potential local purchasers can buy the bonds in bolí­vares at the official rate of Bs1,600 to the US dollar and then sell them abroad for dollars. This makes them an extremely attractive option for local investors, as the US dollar is currently selling for around Bs2,900 on the black market. 

The minimum purchase level for the new bonds will be set at US$1,000. 

The funds generated by the new issue will allow the government to buy back bonds scheduled to mature in 2005, 2007 and 2008, as part of its debt-restructuring programme. 

Open unemployment in Venezuela appears to have virtually stopped rising. At the end of May the rate stood at 19.2%, only 0.1 points higher than a month earlier -which leaves it 3.9 points higher than in May last year. 

Private economists had been predicting that the rate would go on rising, to reach 22-25% by year-end. 

The government had introduced legal measures in April 2002 preventing companies from dismissing personnel. These were extended in July to cover the period to January 2004. However, the statistics show that despite the regulations, 540,000 people lost their jobs in the year to May 2003.

INDIGENOUS ORGANISATIONS WARN OF IMPENDING UPRISING 

President Lucio Gutiérrez appears to have decided to test a thesis that has begun to make the rounds in Ecuadorean political circles: that his indigenous allies of the Pachakutik movement (PK), or at least its leaders who have landed top government positions, are too enamoured of their quota of power to make good on their threat to withdraw from the coalition. 

On 21 July he demanded the resignation of education minister Rosa Marí­a Torres, of PK, for violating his gag order and arguing in the press that Gutiérrez lacked the powers to dismiss PK ministers. [Sociedad Patriótica (PSP), the President's own party, had been demanding Torres's resignation since February, shortly after her appointment.] 

She went, and her resignation was followed by that of 24 PK officials she had appointed. 

PSP rubs it in. This was followed by a barrage of statements by Gilmar Gutiérrez, the PSP bloc's leader in congress. He proclaimed that there had never been a formal agreement on policies with the PK (untrue: within hours the press was publishing extracts from two separate agreements, in writing, and signed by Lucio Gutiérrez, dating back to October and December last year). 

Then he went on to say that the majority of PK members had no quarrels with the President or his party. 'Regrettably,' he said, in a rather crude attempt to introduce an ethnic element to the disagreements within the coalition, 'there are five or six PK members who have split the alliance, and these are the mestizos [half-breeds].' 

His final contribution was to propose a merger of the PSP and the PK as a means of overcoming the present difficulties. 

Threat of 'uprising'. The idea of a merger was flatly rejected by the PK leadership, which was also fuming because, they said, President Gutiérrez had reneged on a commitment to take no action against PK officials without first talking to PK national coordinator Miguel Lluco. 

The umbrella indigenous body, Conaie, abruptly cancelled a meeting to discuss policy with the President (though representatives of Confeniae, a member confederation, did attend). 

Leaders of Conaie and the Confederación del Seguro Campesino (CSC) -another component of the indigenous conglomerate- have even begun to threaten with a levantamiento (literally, 'uprising', though in practice this means mass protests, usually accompanied by the blockading of highways). 

Conaie president Leonidas Iza made this sound like a certainty when he said, 'We won't say when or where it will begin -but that we'll act, we certainly will.' 

The PK in power. It is arguable that without the support of the PK, Gutiérrez would not have won the presidency. Apart from its representation in the coalition government, the PK, though only a contender for the past eight years, is clearly an electoral force in its own right. It has 11 seats (11% of the total) in the single-chamber congress. Across the country it holds 28 mayoralties and (either singly or in alliance with others) five provincial prefectures (governorships). 

With Torres's departure, the PK has four cabinet posts left: foreign affairs (Nina Pacari), agriculture (Luis Macas), planning & social dialogue (Augusto Barrera) and tourism (Doris Solí­s). 

Also prominent in government is Wilma Salgado, head of the AGD, the bank deposit guarantee agency, who is credited across the board with having done an excellent job chasing down debtors of the banking system. 

Political analyst Patricia de la Torre, of Quito's Catholic university, is one of those who say that the PK leaders are desperately hanging on to their quota of power, at the risk of losing their reputation for putting dignity and principles first -as well as probably having to pull out regardless.

Exchange rates
Local currency per US$1
COUNTRY	CURRENCY	Year ago	Previous	Current
		26.07.02	18.07.03	25.07.03
Argentina	peso	3.60	2.83	2.84
Barbados	dollar	2.00	2.00	2.00
Belize	dollar	2.00	2.00	2.00
Bolivia	boliviano	7.23	7.70	7.71
Brazil	real	3.01	2.88	2.89
Chile	peso	702.00	705.00	704.00
Colombia	peso	2,580.31	2,888.88	2,887.51
Costa Rica	colón	362.52	400.95	401.66
Cuba	peso	1.00	1.00	1.00
Dominican Rep.	peso	17.96	34.71	35.66
Ecuador	dollar	1.00	1.00	1.00
El Salvador	colón	8.75	8.75	8.75
Grenada	EC dollar	2.70	2.70	2.70
Guatemala	quetzal	7.83	7.93	7.92
Guyana	dollar	180.50	180.50	180.50
Haiti	gourde	28.60	_	_
Honduras	lempira	16.69	17.58	17.60
Jamaica	dollar	48.35	_	_
Mexico	nuevo peso	9.82	10.45	10.57
Nicaragua	córdoba oro	_	15.30	15.32
Panama	balboa	1.00	1.00	1.00
Paraguay	guaraní­	6,800.00	6,000.00	6,000.00
Peru	nuevo sol	3.55	3.48	3.48
Suriname	guilder	2,178.50	_	_
Trinidad & Tobago	dollar	6.08	_	_
Uruguay	nuevo peso	26.00	27.65	28.10
Venezuela	bolí­var	1,321.25	1,600.00	1,600.00
Sources: EFE; Bank of America.

Inflation in the region
Country	Source	April	May	June	Last 12m	Jan-Dec 2002
Argentina	Indec	0.10	-0.40	-0.10	10.20	41.00
Bolivia	INE	0.32	0.02	0.20	3.23	2.45
Brazil	FGV	0.41	-0.67	-0.70	26.94	26.41
Chile	INE	-0.10	-0.40	0.00	3.60	2.80
Colombia	Dane	1.05	0.49	-0.05	7.21	6.99
Costa Rica	DGEC	0.96	0.52	0.67	10.21	9.68
Ecuador	Inec	0.97	0.17	-0.21	7.61	9.36
El Salvador	Min.Ec.	0.00	-0.10	-0.10	1.60	2.80
Guatemala	BCG	0.45	0.25	0.22	5.24	6.33
Honduras	BCH	0.50	0.10	0.30	8.00	8.10
Mexico	Bco.Mx.	0.17	-0.32	0.08	4.27	5.70
Paraguay	BCP	1.20	-1.20	-1.50	15.70	14.60
Peru	INE	-0.05	-0.05	-0.47	2.17	1.52
Uruguay	DGEC	0.95	0.37	0.16	24.64	25.94
Venezuela	BCV	1.70	2.30	1.40	34.20	31.20
US	DOL	0.20	0.20	0.10	2.10	1.60
Previous: WR-03-28

The stockmarket in figures
Market	Index	18.07.03	25.07.03	Variation (%)
Buenos Aires	Merval	743.24	733.76	-1.28
São Paulo	Bovespa	13794.26	13750.36	-0.32
Santiago	IPSA	1248.75	1301.84	4.25
Bogotá	IGBC	2182.36	2174.67	-0.35
San José	BCT	12185.55	12174.16	-0.09
Quito & Guayaquil	Interinvest	71.49	74.77	4.59
Mexico	BMV	7030.76	7349.96	4.54
Lima	ISVBL	1819.06	1855.95	2.03
Caracas	BC	15024.55	14132.84	-5.94
Source: Daily market reports.

On 24 July a federal judge issued arrest warrants against 45 former members of the military who took part in Argentina's 'dirty war' of the 1970s, at the request of Spanish judge Baltasar Garzón (the same one who unsuccessfully sought to try former Chilean dictator Augusto Pinochet), who wants to try them on charges of torture and murder. 

This followed President Néstor Kirchner's decision not to continue with the policy of his two predecessors, Carlos Menem and Fernando de la Rúa, to oppose such extraditions. They did so ostensibly because, as a result of two laws passed under the Alfonsí­n administration (1983-89), some of these officers were exempted from penal responsibility, while others, tried and sentenced, were later pardoned by Menem -so trying them again would mean violating the double jeopardy principle. 

Underlying their stance, also, is a resistance to 'outsource' judicial remedies, an option only Colombia has embraced under US pressure for people wanted on drug-trafficking charges. 

There is some doubt as to whether the extradition will actually go ahead. Spain's chief prosecutor has said that he will oppose it, on the grounds that the accused would most probably have to be released. 

This is because, first, there is now Spanish jurisprudence that prevents trying anyone for crimes committed abroad in which there were no Spanish victims and, second, that the only crimes for which Spain could claim extraterritorial jurisdiction, genocide and terrorism, are not on Garzón's charge sheet. 

The situation regarding a third possibility, torture, is unclear.

Five Central American leftwing parties gathered in Tegucigalpa last week and issued a call for the 'immediate withdrawal from Iraq of the invading Anglo-US troops and other occupation forces.' 

The five were: Frente Farabundo Martí­ para la Liberación Nacional (FMLN, El Salvador), Frente Sandinista de Liberación Nacional (FSLN, Nicaragua), Unidad Revolucionaria Nacional Guatemalteca (URNG, Guatemala), and Unificación Democrática (UD, Honduras). 

This comes as troops from El Salvador, the Dominican Republic, Honduras and Nicaragua are about to leave for Iraq to serve in the Spanish component of a Polish-led international occupation force. 

The five signatories of the Tegucigalpa Declaration are members of the São Paulo Forum. Two of them, the FMLN and FSLN, are credible contenders for power in their countries' next elections.

A special investigator from Mexico's federal district has reasserted that Digna Ochoa, a noted human rights lawyer and activist, committed suicide in October 2001. State prosecutor Bernardo Bátiz said that Margarita Guerra, the special investigator assigned to review the case, had drawn her conclusions from nothing but the evidence. 

The finding has shocked and outraged leftwingers and human rights activists. They particularly object to the way that hints were dropped to the media that Guerra could find no evidence to support the thesis that Ochoa was murdered. 

Guerra's decision, if ratified by Bátiz, will mean that the investigation into Ochoa's death will halt. Her family can challenge this decision in the courts.

Less than a month after his latest cabinet reshuffle, on 25 July President Alejandro Toledo made three further changes: Jaime Quijandrí­a, hitherto mines & energy minister, took over economy & finance from Javier Silva Ruete, who has taken over the vacancy left by Richard Webb at the central bank. Businessman Hans Flury has taken Quijandrí­a's old post, and hardline former leftwinger Fernando Rospigliosi has returned as interior minister, replacing Alberto Sanabria.

Last year expatriates remitted home about US$32bn - and each dollar generates three more. 

If remittances home from Latin American and Caribbean expatriates continue to grow at the current average rate of 7% annually, by the end of this decade they will have contributed more than US$400bn to the regional economy. This eyecatching figure, tossed out last week by Trinidad-born Professor Anthony Bryan (who heads Miami University's Caribbean studies programme), on the basis of data compiled by the IDB's Multilateral Investment Fund, is based on a big `if' - and for a number of reasons doubts are being voiced nowadays about the sustainability of the growth rate. 

But even without that potential escalation, the impact the remittances are already having could not have been imagined a decade ago.
Last year remittances by expatriates climbed by 18% to a level in the same order of magnitude as all direct foreign investment in the region: US$32bn. (They had already overtaken aid disbursements some years ago.) 

The oldest known case of remittances earning as much as a country's leading exports is that of El Salvador. In recent years it has been joined by Guatemala and Ecuador. As Bryan points out, their importance in the Caribbean has also grown enormously: remittances to Jamaica are already equivalent to 10% of GDP; those to Guyana, 16.6%. Bryan says it has been calculated that one dollar remitted generates three or four dollars worth of economic growth - though the mechanics still need studying. Little is known about how much of what is remitted ends up being invested reproductively.

It is worth noting that this has been happening in the teeth of growing restriction to freedom of movement. It is no secret that much of what is remitted comes from illegal migrants. 

One thing is certain: the amount sent home by expatriates could be boosted almost instantly by cutting the exorbitant cost of the remittances (about 12%, according to the IMF; a considerable burden when only small amounts at a time are remitted). The IDB has been working on this problem. 

A couple of words about the doubts being voiced regarding sustainability. In the wake of the September 2001 attacks against the US many predicted that the volume of remittances to Latin America and the Caribbean from that country - the main source - would decline sharply. They did not; indeed, in some cases they increased. The sluggishness of the US economy has prompted similar speculation, but so far there has been no hard evidence of a decline.