All Categories

Development: The president of the central bank, Henrique Meirelles, was called by the senate committee on economic matters on 4 August to testify on allegations of tax evasion.

Significance: Meirelles will discuss with the government the most opportune time for him to go before the committee. The Lula administration is reluctant to see the sheen rubbed off the positive economic data currently being reported by the central bank. The opposition is determined to capitalise on the Meirelles allegations in advance of municipal elections later this year.

Brazilian current affairs magazines Istoé and Veja have published articles over the last two weeks alleging that Meirelles set up a company without informing the government's ethics commission as required by law and concealed some of his holdings from the tax authorities. The director of the central bank's monetary policy committee (Copom), Luiz Augusto Candiota, resigned last week in the face of similar allegations.

Development: President Tony Saca underwent the ritual examination on 8 September of his first 100 days in power.

Significance: Predictably Saca came in for some heavy criticism from the leftwing opposition Frente Farabundo Martí­ para la Liberación Nacional (FMLN). The verdict is still out on the cornerstone of his domestic policy: national security.

The FMLN branded his tenure to date as '100 days of propaganda'. It blamed him for increasing insecurity in the country by insisting on sending troops to Iraq since when terrorist threats against El Salvador have been posted on the internet.

The main focus of Saca's first 100 days has been to tackle the threat from the 'mara' street gangs. His plan 'Super Mano Dura', which was launched last week, is an extension of the 'Mano Dura' plan carried out by the previous administration. This was not particularly successful: more than 80% of the 19,275 suspected gang members who were arrested have been acquitted or released without charge. Saca claims that his new initiative will go beyond mere repression and concentrate on rehabilitation and reinsertion of gang members into society.

Development: Over 1m Colombians across the country took to the streets on 12 October to protest against President Alvaro Uribe. In Bogotá alone, 100,000 demonstrators took part in the biggest protest against the president since he took office in August 2002.

Significance: The nationwide demonstration is the strongest indication yet that Uribe's star is finally on the wane. According to the two biggest unions, the Central Unitaria de Trabajadores (CUT) and the Confederación General de Trabajadores (CGT), as many as 1.4m Colombians took part in the protest, which was accompanied by a one-day general strike in the public sector.

The protests attracted representatives from all sectors of society including state-sector workers, students, farmers, teachers, health-sector workers, the unemployed, indigenous peoples, and Afro-Caribbeans. The leftwing Polo Democrático led the opposition parties in the marches. Virtually without exception the protests passed off peacefully, and the disruption, except to city-centre transport, was minimal. Schools even stayed open, despite a large number of teachers taking part in the demonstrations.

As is inevitable with such a broad range of participants, the demonstrators' complaints were many and varied. However, three targets stood out above the others: Colombia's proposed free-trade agreement (FTA) with the US and the government's neo-liberal economic policies in general; the government's efforts to secure Uribe's re-election for a second term; and the proposed tax reforms currently being debated in congress.

All three measures are yet to be finalised. The protestors want the government to examine fully the impact of an FTA with the US, and especially on small businesses, before the deal is signed. Meanwhile, Uribe's opponents have strong misgivings about the current moves to alter the constitution to allow presidents to serve a second time.

Arguably the thorniest issue, however, is the proposed tax reforms, which, if passed, would increase value-added tax (VAT) from 16% to 17% and introduce a 3% VAT rate on virtually all goods and services that are currently exempt. The government argues that such reforms are vital if the country is to overcome a looming pensions crisis. Opponents argue that effect of the reforms will far outweigh any benefits which might be accrued by the social-security funds.

Although economic growth has been decent (at 4%) under Uribe, the government has had great difficulty bringing down the 13% unemployment rate. Meanwhile, 60% of the 44m population live below the poverty line. Raising indirect taxes on even the most basic of goods is known to be regressive, affecting the poor more than the rich.

Criticism of the measures has not been limited to the streets and the unions. The government is having a tough time getting the reforms through congress. On 12 October the comptroller, Antonio Hernández, sent a letter to congress saying the VAT rate should be reduced, and should not be extended. Hernández, who is elected by congress, supported government plans to tax lavish pensions but he said the tax breaks the government is currently offering to the private sector were not working.

Beyond its attempts to restore law and order, the FTA with the US, re-election, and the tax reforms are the government's three chief priorities. That the 12 October demonstration proves so many people are opposed to them puts Uribe in a difficult position.

One of the president's greatest strengths is his popularity with the people. Since he came to power, his approval rating has consistently been the highest in Latin America. The latest opinion poll, however, published on 8 October, showed the president's popularity falling by eight points over the previous three months. At 67%, his approval is still very impressive, but the dip should encourage Uribe's opponents. The break between those who think things are getting worse and those who think things are getting better is even: 38% to 39%.

Development: Nine opposition deputies decided on 15 November to go to court to stop the recall referendums on them scheduled for 5 December.

Significance: The opposition's dismal electoral record this year, in first the recall referendum on President Hugo Chávez in mid-August and then the regional elections at the end of October, means that the deputies will almost certainly be ejected from congress. Two deputies are asking the supreme court to postpone the elections arguing that they are been penalised compared to Chávez .

The deputies argue that the electoral authorities are rushing the recall referendum and trying to panic the deputies into ducking out by saying that if they are recalled they will not be eligible to stand in the congressional elections in 2005. The deputies said that there is no legal substance for this and the electoral authorities made it clear that if Chávez had lost in August he would have been able to run in the subsequent election to pick the new president. The authorities' line is that there will be no mid-term elections to replace the congressmen, if they are defeated. Instead their alternates, all Chavistas, will serve out the remainder of their terms and thus give the government a thumping majority in congress.

The deputies are also objecting to the validity of some of the signatures on the petitions calling for their recall. A new congress will be elected in 2006: the current congress serves until the beginning of 2007.

Development: The 27th presidential summit of Mercosur ended in Ouro Preto, Brazil on 17 December. The highlight was the formal inclusion of Colombia, Ecuador and Venezuela as associate members of the bloc.

Significance: The summit was designed to indicate Mercosur's expansionary designs. According to the closing statement, the inclusion of the three Andean nations as associate members (a status also enjoyed by Bolivia, Chile and Peru) will 'broaden the political dimension and increase the possibilities of collaboration and cooperation in the integration of South America'.

Mexico and Panama, who had sent representatives to the summit, also indicated their desire to join. Mercosur unveiled a timetable for improving commercial ties with nations in the Caribbean and Central America.

Venezuela's president, Hugo Chávez , was so inspired by his country's accession to Mercosur that he called for the bloc to be scrapped immediately, along with the Andean Community (CAN), to be superseded by the Comunidad Suramericana de Naciones (CSN), which was formed at a regional summit in Cuzco on 7 December.

Mercosur's ambitions do not end with Latin America, however. Mercosur also announced it had signed a free trade agreement with the Southern African Customs Union, and that it had completed talks with India over a similar agreement. Brazil's foreign minister, Celso Amorim, spoke of the bloc's desire to promote 'South to South' cooperation, whereby Mercosur is a rallying point for developing nations throughout the world. 

Undermining such grand designs, however, are Mercosur's own internal difficulties, epitomised by the current spat between its two largest economies, Brazil and Argentina. Mercosur is founded on the notion of free trade, and Argentina's desire to restrict imports is causing an institutional crisis.

The high-level ructions did not spoil the summit's party, but Argentine President Néstor Kirchner left no doubt that he had no intention to drop his plans to limit imports despite the opposition not only of Brazil but also of Paraguay and Uruguay. In his speech to the summit Kirchner stressed that what mattered was a balanced Mercosur, and for this to happen the ends justified the means. 'We should be absolutely clear that it is the objectives that are important rather than the instruments,' Kirchner declared.

Although he generally showed greater diplomacy than has hitherto been the case, the Argentine president couldn't resist having a dig at what he perceives as Brazil's arrogance on the trade issue. 'None of our countries is in itself so big or so strong that it can stand apart from the destiny of the region while the winds of globalisation are blowing,' Kirchner told the summit.

It augured badly that Kirchner was unable to meet face to face with his Brazilian counter part Lula da Silva. Even when the two countries are at each others' throats, the pair has a tendency to resolve difficulties without too much fuss. The row will therefore carry on at ministerial level. Brazil's refusal even to consider Argentina's proposals regarding trade restrictions suggests that compromise will be difficult.

The summit in Ouro Preto showed a Mercosur that is developing internally as well as externally. The bloc established common funds for structural reforms and education in order to reduce any disparities between its members. The Mercosur parliament took a step closer to becoming a reality, and is slated to sit for the first time before the end of 2006.

Mercosur's members also agreed to give priority to other member states when it considers making government purchases abroad and they opted to intensify the liberalisation of their service sectors for investment by their partners. Meanwhile, travel within Mercosur will be facilitated by a common travel document.

However such progress counts for little when there is such a fundamental disagreement at the highest level over how the bloc can proceed. It is not a dispute that will be resolved easily, and Mercosur will suffer as a result. This being the case, so too will the CSN.

Development: The European Union (EU) will suspend diplomatic sanctions on Cuba on 31 January. The sanctions were imposed in June 2003 after 75 political dissidents were rounded up and imprisoned without trial.

Significance: The Cuban government is expected to delay its response until after EU foreign ministers normalise ties but it will not be too impressed with the draft declaration drawn up by the ambassadors of the EU member states on 27 January. The declaration makes no mention of any plans to stop inviting members of the political opposition in Cuba to embassy gatherings. It is this above all else that irks the Cuban government.

The draft declaration spells out that "all the measures taken on 5 June 2003 will be temporarily suspended". This means that the EU will restore high-level visits by European officials to Cuba and increase its participation in Cuban cultural events. The EU has done its best, however, to deflect potential criticism that it is abandoning its principled stand on the dissidents.

The Czech Republic insisted that dissidents still be invited to attend celebrations of EU national days. Also, the declaration says that the EU will continue to insist that the Cuban government release all 75 dissidents without conditions.

Development: On 2 March, Roger Noriega, the assistant secretary of state for western hemispheric affairs, announced the US's intention to raise awareness of Venezuela's "acts of destabilisation" among its neighbours.

Significance: Noriega's comments, to the Inter-American affairs subcommittee of the senate foreign relations committee, echoed those published the day before by the Inter-American Dialogue. The "Agenda for the Americas 2005", written by policy heavyweights from across the region, called on the US to act in concert with other Latin American countries to exert pressure on the administration of President Hugo Chávez if democracy is undermined. The report argued that the US is more likely to achieve its goals of democratic transition in Cuba (and elsewhere) though cooperation with other countries in the region and European nations than through acting alone.

Noriega said that the he hoped the countries in the region would "unite in the defence of stability, security and prosperity of the region.[…]I am not saying that we must isolate Venezuela, but rather that we must ask him [Chávez ] more frequently just what his intentions are and his position as regards rebel groups," he said. Noriega also used the meeting to explain the details of President George W Bush's budget for the region, which will cut anti-drug cash for Bolivia, Ecuador and Peru but boost US support for opposition political parties in Venezuela.

According to Noriega, "the White House is concerned that Chávez 's personal agenda is undermining democratic institutions in the country and its neighbours. Despite our efforts to establish a normal relationship with his government, Hugo Chávez continues to display his opposition to the US." The assistant secretary of state went on to list the Bush administration's problems with Chávez 's government, saying it viewed with growing concern: the concentration of power in the hands of the executive; Venezuela's suspicious relations with destabilising forces in the region and Venezuela's plans to buy weapons.

Venezuela recently announced its plans to purchase up to US$2bn worth of military equipment from Russia, Brazil and Spain. According to local press reports, Venezuela intends to buy 100,000 assault rifles and 33 helicopters from Russia, nine 'Super Tucanos' training- and light combat aircraft from Brazil and six military transport planes from Spain. The Venezuelan foreign minister, Alí­ Rodriguez, said that the country was not starting on an arms race, but was merely replacing old equipment.

Following the lead of the "Agenda for the Americas 2005" report, Noriega said that the US had already been in contact with several South America governments in the region about their worries over Venezuela. The report urges the US to "fully engage Brazil and Mexico on every issue of hemispheric significance." It says that Washington should see Brazil's growing influence as positive as it allows for more strategic collaboration with the US.

Interestingly, considering President Lula's recent visit to Venezuela, which resulted in a number of trade deals, abrazos, (hugs) and promises to further the cause of regional integration, Noreiga added that Brazil's President Lula da Silva had shown an "extraordinary" level of cooperation. Eva Golinger, a Venezuelan attorney based in New York, claimed that Noriega was merely trying to create a split between the two leftwing Latin American leaders.

Development: On 7 April the first signs of consensus began to emerge from the government and opposition talks on the restructuring of the supreme court.

Significance: Despite the indications of progress, political tension is still running high. Both the US ambassador, Kristie Kenney, and the Roman Catholic church have offered to mediate in the dispute. President Lucio Gutiérrez has cancelled his trip to the pope's funeral and the mayor of Quito, Paco Moncayo, has continued to call for a general strike in the capital on 12 April. Even if congress manages to restructure the supreme court in a manner amenable to a healthy majority, grievances will remain; not least thanks to the current judiciary's annulment of the criminal convictions against former president Abdalá Bucaram.

Outside the supreme court, crowds of court officials continued to protest on 7 April, burning tyres and forming picket lines to prevent the controversial judge from entering the court. In congress, however, the atmosphere was calmer. The government expressed a willingness to concede to a number of opposition requests, principally that the current supreme court should not be dissolved until a new one is elected. Discussions as to who will comprise the commission that will elect the new court appear to have been put on hold.

The government also agreed that it would not veto the reforms the opposition had requested to the supreme court. The one sticking point for the executive was that whatever reforms are decided, and whoever is elected to the court, should be subject to a referendum. Opposition legislators brushed this aside as "irrelevant", but said they were willing to agree to it, providing the government held up its side of the bargain.

Alliances are shifting as a result of these negotiations. The ruling Sociedad Patriótica is cultivating the support of the Partido Social Cristiano, the largest party in congress. The Partido Renovador Institucional Acción Nacional (Prian), which backed the initial replacement of 27 of the court's 31 judges in December - and was rewarded with a couple of magistrates affiliated to the party, is gradually accepting the idea that the dissolution of the court in its current guise is inevitable. Meanwhile the Izquierda Demócrata, the second-largest party in congress, is still dragging its feet, nervous that the government will renege on its promises. Legislators will meet again on 12 April to continue negotiations.

Development: President George Bush met the six presidents that signed up to the Central American free-trade agreement (DR-Cafta) on 12 May. He promised to provide Cafta with his full support.

Significance: The visit of the six presidents to the US was a publicity exercise calculated to elevate Cafta to a serious concern in the US, transcending the issue of trade and entering the realm of national security, before the US Congress votes on it. The defence minister, Donald Rumsfeld stressed this point during his meeting with the six presidents on 11 May and Bush echoed his words yesterday: “The best way to achieve peace and prosperity for our hemisphere is by strengthening democracy and continuing the economic transformation of Central America and the Dominican Republic," Bush said. “The United States was built on freedom, and the more of it we have in our backyard, the freer and safer and more prosperous all of the Americas will be," he added.

The vote on Cafta in the US Congress will be very close. Democrats are expected to vote against it because they feel that the Republican majority ignored senior Democrats while crafting the agreement. Much has been written about the US sugar lobby's influence and US labour organisations have lobbied against Cafta on the grounds that Central America has a poor labour record. Less has been written about objections to Cafta in Central America. The president of Nicaragua, Enrique Bolaños, says that his government will send Cafta to congress shortly but the opposition, which controls the national assembly, says it will not back it. The president of Costa Rica, Abel Pacheco, is openly stalling on sending Cafta to congress.

ARGENTINA: The economy grew 8.0% year-on-year in the first quarter of 2005 according to the state-run statistics department, Indec.

ARGENTINA: Industrial production rose 8.5% year-on-year in May according Indec.

ARGENTINA: The average debt of Argentine households to the banks stands at Arg$1,080 (US$375.5).

COLOMBIA: Domestic power demand rose 4.56% year-on-year in May to 4,110GWh according to the state transmission company, ISA.

MEXICO: Pemex exported 1.84m barrels per day (bpd) of crude oil in the first five months of the year, up from 1.83m bpd in the same period of 2004.

MEXICO: Private consumption rose 5.4% year-on-year in the first quarter according to the finance ministry.

PERU: The economy grew by 6.36% year-on-year in April.

Development: On 20 July the public defender's office denounced the incursion of the Colombian army into Ecuadorean territory. The government has yet to confirm the presence of Colombian troops.

Significance: The claim is likely to reignite the fiery debate between the two countries over their respective responsibilities for controlling the border area. In mid-June the Fuerzas Armadas de Colombia launched an attack on a Colombian army outpost from the Ecuadorean side of the border, prompting the Colombian government to demand Ecuador patrol the area; a request that elicited an indignant response from the Ecuadorean authorities, who threatened to impose visa restrictions on visiting Colombians.

According to Alex Ponce, a spokesman from the Permanent Assembly on Human Rights, when Claudio Mueckay, the public defender, last spoke to Ecuadorean troops in the area they told him that during a routine patrol they came across armed men dressed in civilian clothes, who subsequently identified themselves as members of the Colombian army. The intruders were made to return to their country and a report was filed for the foreign minister, Antonio Parra Gil. Ponce also denounced the continued use of glysophate spraying the border area as a means of eliminated coca crops, saying the chemical was affecting the health of people living there and damaging their legitimate crops.

Meanwhile, also on 20 July, the Colombian ambassador to Ecuador, Héctor Holguin, denied that his government wanted Ecuador to engage more in Colombia's internal conflict, but pointed out the valuable work being done by intelligence sharing between the two countries.

BOLIVIA: The trade surplus stood at US$175.66m in the first half of 2005, down 7.0% year-on-year, according to Bolivia's national statistics institute INE.

BRAZIL: According to the São Paulo's Industries' Centre (Ciesp), employment in the São Paulo's industries was up 0.18% in July in comparison to the previous month. So far this year the industries of São Paulo have created 46,597 next vacancies, a 2.4% increase in relation to the same period last year.

BRAZIL: Online frauds in Brazil have increased 1,313% during the second quarter of 2005 in relation to the same period last year, announced the Brazilian Internet Incident Response Group (Cert.br). In relation to the previous quarter there was a 259% increase on online frauds.

BRAZIL: Imports continued to grow faster than exports in August. The external sales daily average for the month was US$479.4m, 16.6% more than in August last year. Imports, on the other hand, had a daily-value average of US$313.9m, a 22.8% increase in relation to August 2004. So far this year Brazil has recorded a trade surplus of US$27.16bn, in comparison to the US$20.93bn registered in the same period last year.

BRAZIL: Public debt increased by more than R$100bn (US$41.6bn) in the seven months up to end July, bringing the total debt to R$915.67bn (US$381.5bn), 13% more than in December 2004.

CHILE: The economy grew 6.5% year-on-year in the second quarter according to central bank figures. The economy grew 6.1% year-on-year in the first quarter.

CHILE: The trade balance stood at US$384.7m in the first half of August according to the Chilean Central Bank, bringing the surplus to US$5.89bn since the start of the year.

CHILE: Retail sales rose 1.5% year-on-year in July, according to the retail confederation Confedech.

CHILE: Chile's investments abroad stood at US$2.421bn in the period January to July 2005, according to the Central Bank of Chile.

MEXICO: The current account deficit stood at US$19m in the second quarter of 2005 against a US$200m current account deficit for the second quarter of 2004, according to the Bank of Mexico.

MEXICO: The GDP of Mexico in nominal, non-inflation adjusted terms stood at M$8.242tr (US$764.068bn) in the second quarter of 2005, up 9.2% year-on-year, according to the national statistics institute.

PERU: Exports hit a record-high US$1.495bn in July, up 32.5% year-on-year, according to the Prompex export agency.

Development: On 26 September President George Maxwell Richards said the country was in crisis because of the upsurge in crime.

Significance: Over the past few months Trinidad & Tobago has witnessed a series of explosions, bomb threats and kidnappings which the government and the police force appear unable to tackle. According to statistics published last week, when the country surpassed 2004's murder tally with three months of the year remaining, Trinidad & Tobago now has the world's fifth-highest murder rate.

At the ceremonial opening of parliament the president called for unity among the government, opposition and citizens to rid the country of its criminal element. The plea appeared to fall on deaf ears: after endorsing the president's comments Prime Minister Patrick Manning accused the opposition of failing to support the government's legislation to shake up the police force. On 28 September Manning is due to present the 2005/2006 budget, which is expected to contain major initiatives for tackling crime.

One of the triggers for President Richards's speech was the brutal murder of the nephew of a government minister over the weekend. The headless body of Dr Eddie Koury, nephew of health minister John Rahael, was found in an orange grove in central Trinidad on 23 September. Police divers spent the afternoon of 26 September searching without success the waters of Mosquito creek for Koury's head, following the confession of one of 10 suspects arrested over the murder.

Development: On 30 October President Alfredo Palacio appeared on national television to reiterate his support for a constituent assembly, saying that without profound changes the country would "go to the devil".

Significance: While the president and congress remain at loggerheads over whether to call a constituent or constitutional assembly, the former with the power to revoke the mandate of the legislature and the executive, the latter only to rewrite the constitution, a Cedatos survey revealed that 82% of Ecuadoreans did not understand the difference. Adding to the confusion is the debate over whether the supreme electoral court (TSE) has the right to refuse to allow Palacio's proposal for a constituent assembly to be put to a referendum, complicated further by the fact there is currently no constitutional or supreme court to arbitrate on the issue.

In his interview on Ecuavisa, the president ruled out the possibility, mooted by some in congress as a possible way out of the deadlock, of bringing forward the presidential elections due in December 2006. "To bring forward elections under the current system would perpetuate the country's disgrace," he said. Mindful of the results of the survey that revealed the lack of understanding of the difference between the two options, Palacio explained that only a constituent assembly would reform the country's electoral, judicial and economic system. "Representative democracy is no longer serving the people," the president said.

Meanwhile, on 29 October, a Cedatos/Gallup survey showed that 68% of Ecuadoreans believe that their standard of life is deteriorating and 73% said they believed the situation would only get worse. Hefty majorities thought that it was harder to get a job and that prices had risen more than in the past, despite the country's dollarisation, introduced in 2000 to curb inflation. According to the survey's "index of well-being", 71% of the population were facing a "generally bad situation, with great uncertainty marked by pessimism". The survey also showed that only 4% of the population were supported of congress; this fact may help Ecuadoreans to make up their minds over the type of assembly they prefer. Although Palacio's popularity has been sinking rapidly since he came to office it has not fallen to congress's despised depths.

Development: Panama's President Martí­n Torrijos visited Cuba on 30 November and 1 December to meet his counterpart Fidel Castro. Torrijos accompanied 74 Panamanian patients who will be given free eye-surgery in Cuba under a health initiative agreed between the two nations called "Operación Milagro Panamá".

Significance: Torrijos chose to visit in person to strengthen ties with Cuba: diplomatic relations were recently restored between the two countries after an acrimonious split in August 2004 when former President Mireya Moscoso decided to pardon Luis Posada Carriles, a Cuban former CIA operative and anti-Castro activist, as her parting gesture. Castro said that Torrijos reminded him of his father Omar Torrijos, the military strongman who ruled Panama from 1968 to 1981. "He has the same spirit," Castro said.

There are currently more than 3,000 patients in Panama in urgent need of eye operations that they cannot afford, the health ministry says. "Operación Milagro" was launched in April 2004 in Venezuela before being extended to Ecuador, Bolivia and the Caribbean. More than 70,000 Venezuelans were operated on for cataracts and other eye ailments in the first eight months of 2005. Cuba supplies the free eye operations; Venezuela supplies oil at preferential rates. Venezuela's President Hugo Chávez agreed with Castro in August to extend "Operación Milagro" to the rest of Latin America, offering to treat 600,000 people a year over the next 10 years for eye operations funded by Venezuela.

Development: A Brazilian aircraft manufacturer, Embraer, closed its plant in the US on 13 January after the US military cancelled a development contract for the Aerial Common Sensors (ACS) spy plane.

Significance: The contract for Embraer to help develop the ACS, a next-generation intelligence-gathering aircraft, alongside US aviation company Lockheed Martin was the first the US defence industry has handed either to Brazil or to any third-world country. Under the plan, which won Pentagon approval in August 2004, Embraer would produce the ERJ145 planes in which the high-tech surveillance equipment would sit.

The contract was for up to 58 planes to be delivered to the US Army and Navy by 2025, with the first five to be rolled out by 2008. The development contract was worth US$879m, rising to US$8bn if the full quota of ACS aircraft was produced.

The US military announced it was cancelling the Lockheed Martin contract (and thus Embraer's involvement) on 11 January, saying that the programme had developed problems which were too expensive to fix. The military maintained that it remains committed to the ACS project and that it expects a new contractor to produce the first operational planes by 2009.

The timing of the cancellation is awkward for the US, especially after Brazil last week accused the US of interfering in its deal to sell 24 Supertucano jets (also made by Embraer) to Venezuela for US$230m. The US is keen to enlist Brazil's support at the International Atomic Energy Agency over Iran's nuclear weapons programme. On 12 January Secretary of State Condoleezza Rice called Brazil's foreign minister, Celso Amorim, to lobby him.

Development: The environment minister, Alfredo Molinas, claimed on 16 February that Argentine cellulose and paper plants were responsible for discharging untreated waste into the Rí­o Paraná, where it forms a natural border between the two countries.

Significance: Paraguay's decision to wade into the cellulose dispute will irritate Argentina which is engaged in a protracted row with Uruguay over the latter's plans to build two cellulose plants close to Fray Bentos on the banks of the Rí­o Uruguay. After initial misgivings Argentina's President Néstor Kirchner publicly endorsed the campaign of the Asamblea Ambiental, the umbrella body created in the Argentine border city of Gualeguaychú (Entre Rí­os), against the plants, on the grounds that they could contaminate the water supply. Paraguay is now levelling the same charge at Argentina.

Molinas requested an investigation into the alleged pollution of the Rí­o Paraná by four cellulose and paper plants established on its banks in the far northeastern Argentine province of Misiones, across the river from the Paraguayan department of Itapúa, earlier this month. However, he visited the local border town of Carlos Antonio López on 15 February to see the site in person. A day later the environment ministry said that Molinas had observed the serious amount of untreated effluent discharged by one of the plants into the Paraná. Ministry officials took a sample of the water for testing; the results of the test will be available by the end of February, they said.

Development: The Argentine government pledged to provide the same amount of natural gas to Chile in an agreement signed by the Chilean President Michelle Bachelet and her Argentine counterpart Néstor Kirchner in Buenos Aires on 22 March.

Significance: It seems that Bachelet's choice of going to Argentina in her first international visit since her inauguration on 11 March paid off after the Argentine government decided to scrap its previous proposal to cut the supply of gas to Chile by 10%. Both presidents have also announced that they will give the task of finding a long-term solution to Chile's gas supply issue to a Bilateral Energy Matters Group, a joint commission of ministers.

Bachelet also popped over to Montevideo for a four-hour visit to meet Uruguayan President Tabaré Vázquez. Bachelet said that Chile and Uruguay shared "a history of unity and friendship for many years". Both presidents instructed their delegations to start work to consolidate trade and taxation accords, as well as scientific and social cooperation. Again Bachelet raised her concerns over energy supply to Chile when she asked the joint Chilean-Uruguayan communiqué to include mention of "the importance of energy integration" in South America.

Bachelet's visit, however, was not all about energy and trade. In a speech to Argentine congressmen she said that Chile had "gone far beyond" the Washington consensus, which promoted conservative economic and social policies for Latin America. According to her, "market policies are not sufficient to improve the living standards of the poor". She promised to put her energy into guaranteeing that Chileans will be covered by a social security system "from the womb to old age".

Development: On 27 April former president Alan Garcí­a, a candidate in the second round of presidential elections, accused Venezuela's President Hugo Chávez of hypocrisy for instructing other countries not to negotiate trade deals with the US while Venezuela is busy exporting billions of dollars of oil to the US.

Significance: It is the second time in the last week that Garcí­a has lashed out at Chávez , who is overtly backing his rival in the run-off, the nationalist candidate Ollanta Humala. On 20 April, after Chávez announced his intention to pull Venezuela out of the Andean Community (CAN), Garcí­a branded Chávez "anti-Bolivarian". He said that Chávez 's professed hero Simón Bolí­var would be turning in his grave at the decision.

Garcí­a continued his diatribe on 27 April by saying that Chávez was “a sin vergüenza" -a scoundrel- for asking Colombia and Peru not to trade with the US while Venezuela was still selling 80% of its oil to the US, as it always has done. Garcí­a's stance on Peru's free trade agreement with the US, approved by the Toledo administration, is slightly equivocal. He is reluctant to alienate the many Peruvian voters who oppose an FTA and has opted instead to suggest that he will “revise" it.

Development: On 1 June the government partially accepted the demands of high school students who have been protesting against the education system.

Significance: The government has approved the students' request for free transport to school. It has also announced grants for the poorest 155,000 students to enable them to take the university entrance exam (PSU) for free and has outlined a project to reform the Ley Orgánica Constitutional de Enseñanza (Loce). The students are convening today (2 June) to discuss the government's offer.

The proposals, announced by President Michelle Bachelet herself on national TV and radio, come one day before an ultimatum set by the student's assembly (Aces), which had threatened to call a strike on 5 June if their demands were not met. The protests continued on 1 June as students organised sit-ins in classrooms in schools and universities across the country.

Although there were fewer demonstrations in the streets, a small bomb was detonated outside the education ministry in the early morning. No one was injured in the blast, which shattered a number of windows in the neighbouring buildings. A group called "Revuelta Antonio Román" claimed responsibility for the bomb in pamphlets littered around the ministry. The pamphlets also contained the slogan "no to private education, no to state education, what they call education is just training."