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ARGENTINA | Pace of growth easing off. Economic activity in May, as measured by the EAE index, which foreshadows GDP, was up 1.1% on April. This took accumulated growth in the first five months of the year to a level 8% higher than in the same period of 2005. GDP growth in the first quarter was 8.6%; in the whole of 2005, 9.2%.

Industrial activity has been ticking along at a rate only slightly lower than last year's. In June it was 0.9% up on May, taking first-half expansion 7.4% above that of the same period last year. In the whole of 2005 industry grew by 7.7%. June data showed first-half output of the auto industry up 24.3% in the year, and that of non-metallic minerals (used mainly in construction), up 18.6%.

CHILE | Two-way trade grows by almost a third. In the first half of this year Chile's foreign trade reached US$42.4bn, or 31% more than in the comparable period of 2005. Export earnings were up by 39% to US$27.8bn; imports by 19%, to US$16.6bn, leaving Chile with a surplus of US$11.2bn. 

Trade with Europe grew by 36%, faster than the 29% recorded with the rest of the Americas and the 26% recorded with Asia. The European Union accounts for 23% of Chile's foreign trade; the Latin American members of Aladi, 24%.

The second round of presidential elections on 26 November is threatening to polarise Ecuadorean politics more than the first. The surprising success of Gilmar Gutiérrez, the brother of former president Lucio, who finished third in the elections, means that there will be more at stake in the second round for Alvaro Noboa and Rafael Correa than simply winning or losing. 

Noboa, the banana magnate who is running for the Partido Renovador Institucional Acción National (Prian), forged an alliance with Gutiérrez last week. Gutiérrez conditioned the support of his Partido Sociedad Patriótica (PSP) on Noboa's agreeing to prosecute those who Gilmar deems responsible for the "coup" against his brother Lucio in April 2005. Noboa accepted the condition: top of the hit list for Gilmar is President Alfredo Palacio; Noboa is targeting Correa.

Gilmar's determination to cast the net wide could prove highly destabilising: listed among the golpistas (literally 'coupsters') are former military and police chiefs, deputies and "other people who participated in and permitted a coup d'etat". This is so vague it could stretch to almost anyone involved in the Palacio administration and could easily turn into an organised witch-hunt. Correa's only transgression appears to have been his decision to serve - albeit for only three months - as finance minister under Palacio. 

Gilmar claims that he is not pursuing a personal vendetta and that his only motive for seeking the prosecution of the coupsters is to restore "political stability" in Ecuador by discouraging future vice-presidents from conspiring against the president. Ramiro Rivas, a legislator who is on the list for having proposed the motion in congress that led to Lucio's being deposed, joked that Lucio himself should be on the list for having staged the coup that brought down the government of Jamil Mahuad in January 2000. 

Palacio and officials in his government will argue that Lucio's removal from power did not constitute a coup as the country was falling apart at the time and congress ruled that he had abandoned his post. Palacio says that Lucio was guilty of "trampling all over the constitution" by calling an extraordinary session of congress to restructure the supreme court.

Congressional force
In exchange for supporting Gilmar's prosecution drive, Noboa will enjoy the backing of the PSP in congress which, at a stroke, could come close to giving him a majority. This would give him a fighting chance of pushing his legislative agenda through congress, something that previous governments (including Lucio's) struggled to do despite desperate horse-trading in congress. Final results for the legislative elections will not be released until the end of October, according to the supreme electoral tribunal (TSE) but a provisional count shows the Prian winning 27 seats and the PSP taking 21 seats in the 100-seat congress, leaving Noboa just shy of a majority. He could gain this with the support of the Partido Social Cristiano (PSC), which looks like winning 12 seats.

Whether the alliance between the Prian and the PSP will stretch to Noboa awarding cabinet positions to PSP members is currently unclear. The support of the PSP could prove transitory; there was certainly no love lost between Noboa and Lucio when the two of them went head-to-head in the previous elections.

And if Correa wins?
If Correa wins on 26 November the executive and legislative branches of government will be set for a collision course. Correa will resist all efforts by the Prian-PSP alliance to prosecute the golpistas (not least because he is considered one of them) while the Prian-PSP will complicate matters for Correa if he tries to convene a constituent assembly. 

Correa's Alianza PAIS will have no representation in congress because it decided not to put forward any candidates for what Correa considers to be a discredited institution. Correa might try and bypass congress altogether by claiming that the high abstention rate in the legislative elections confers on him the moral authority to establish a constituent assembly without the approval of congress. He will then try and carry out his threat to dissolve congress.

The only party of any substance to pledge its support for Correa in the second round is the Izquierda Democrática (ID), which looks like winning 15 seats in congress. Correa thanked the ID on 22 October for backing him but he stressed that he was not seeking an alliance and the ID would have to support the electoral proposals of his party. He added that he was more concerned about reaching out directly to the party bases than meeting the party hierarchy. Although ID president Guillermo Landázuri said he expected nothing in return for the party's support, others in the ID want Correa to elucidate his plans for a constituent assembly and will be looking for places in his cabinet.

Gutiérrez's powerbase
Gilmar Gutiérrez won in 12 of the 22 provinces. He had landslide wins in his (small) native province of Napo, where he took 75% of the vote, and two other provinces. Correa and Noboa won only ten provinces between them, although these included the biggest two: Guayas (Noboa) and Pichincha (Correa).

Top two presidential candidates in each of Ecuador's 22 provinces

Province	Winner (%)	Runner-up (%)	% of total vote
Azuay	Correa	Roldós	5.24
Bolí­var	Gutiérrez	Correa	1.49
Cañar	Gutiérrez	Correa	1.93
Carchi	Noboa	Correa	1.29
Chimborazo	Gutiérrez	Correa	3.57
Cotopaxi	Gutiérrez	Correa	2.89
El Oro	Correa	Noboa	4.19
Esmeraldas	Noboa	Correa	3.07
Galápagos	Correa	Viteri	0.13
Guayas	Noboa	Correa	25.78
Imbabura	Correa	Noboa	2.90
Loja	Correa	Noboa	3.33
Los Rí­os	Gutiérrez	Noboa	5.20
Manabí­	Noboa	Correa	10.28
Morona Santiago	Gutiérrez	Correa	0.84
Napo	Gutiérrez	Correa	0.57
Orellana	Gutiérrez	Noboa	0.60
Pastaza	Gutiérrez	Correa	0.46
Pichincha	Correa	Roldós	19.32
Sucumbí­os	Gutiérrez	Noboa	0.93
Tungurahua	Gutiérrez	Correa	3.83
Zamora Chinchipe	Gutiérrez	Correa	0.57

President Rafael Correa insists that while he is talking to the opposition in congress to try and cement support for a referendum on a constituent assembly, he would never "betray the people", as he claims many of his predecessors did, and strike a pact that runs contrary to the interests of the country. Correa has been forced on the defensive as some of his support base is criticising him for having anything to do with congress. The opposition, meanwhile, is frantically trying to modify the statute of the consistent assembly to ensure that it does not have plenipotentiary powers, enabling it to dissolve congress.

One party that is beginning to lose patience with the procrastination over voting on the referendum in congress is the indigenous movement, Pachakutik. Gilberto Talahua, a leader of Pachakutik, said this week that he objected to the talks between the executive and the legislature as it merely played into the hands of the "partidocracy", Correa's own derisory term for Ecuador's traditional parties.

Talahua said that Correa should simply bypass congress and order the supreme electoral tribunal (TSE) to approve the referendum. He said that the indigenous movement would stage further protests if Correa failed to comply with his electoral promise to hold a referendum soon. In his post-inauguration decree, Correa said that a referendum on the assembly would be held on 18 March.

Although Correa praised the protests outside the congressional building last week as a triumph for participatory democracy [WR-07-05], he will not want to make a habit of relying on popular uprisings to pressure congress. He has not revealed the substance of the talks he has been holding with opposition parties but the Partido Sociedad Patriótica (PSP) has still not lent its votes to the referendum. This is fuelling speculation that it is holding out for Correa to appoint a comptroller general with ties to the PSP, as well as pressuring him to remove the political sanctions preventing its leader, Lucio Gutiérrez, from running for a position in the constituent assembly.

Congress seeks self-preservation
Correa claimed this week that approval of the referendum was now "practically a fact". He might be right, but he could be less than happy with what congress eventually approves. Although congress has agreed to hold an extraordinary session on 12 February to approve the referendum, it first wants to vote on some modifications to the statutes. These amendments are calculated to diminish the power of the constituent assembly so that it cannot vote to dissolve congress.

The head of the opposition Partido Social Cristiano (PSC) in congress, Pascual del Cioppo, said on 5 February that Correa was trying to impose on Ecuador the "anarchic model" of Venezuela and Bolivia by convening a constituent assembly to "destroy" all of the state institutions.

Worth noting: Lorena Escudero, a university professor, has been appointed as the new defence minister. Escudero replaces Guadalupe Larriva, who was killed in a helicopter accident last month. On 1 February the head of the army, General Pedro Aní­bal Machado, was dismissed for sending the executive a report of the investigation into the incident which it deemed to be inadequate.

President Alvaro Uribe must be crying out for a quiet week. Events over the last few days ensured that he will not have one for some time. On 14 May five more legislators (four of them Uribistas) were arrested for their alleged links with the Autodefensas Unidas de Colombia (AUC). The government then carried out the biggest purge in the history of the Policí­a Nacional after embarrassing revelations of telephone-tapping. All this set the scene for Salvatore Mancuso, a senior AUC leader, to give testimony under the justice and peace law. This time, unlike his previous four confessions, Mancuso named names, right up to the incumbent Vice-President, Francisco Santos.

The supreme court ordered the arrest of four senators and one deputy who had signed the now-infamous Santa Fe de Ralito political accord of 23 July 2001. The content of the document, which talks of "refounding our country and signing a new social contract", and the full list of the 40 signatories, including politicians and AUC leaders, only came out in January during Mancuso's first testimony. The court rejected the claim by Senator Miguel de la Espriella, one of those arrested and the man who first revealed the existence of the pact last November, that the politicians had signed the document "under pressure". 

Former president Andrés Pastrana had testified to the court that he had not authorised the meeting. The court argued that it was incumbent on the legislators to report this "illegal activity" not to be complicit in it. It also denounced the legislators for continuing to participate in ostensibly democratic electoral contests when the reality was that only those who recognised paramilitary power could run for office. On the same lines, the attorney general, Mario Iguarán, ordered the arrest on 16 May of the Governor of César, Hernando Molina Araújo, for using AUC funds to threaten political rivals.

Telephone-tapping
Hours after the "Santa Fe" arrests, the government dismissed the head of the Policí­a Nacional, Jorge Castro, in relation to a telephone-tapping scandal revealed by the weekly magazine Semana on 13 May. Semana produced recordings taken within the maximum security prison at Itagüí­ where 59 members of the AUC are being held, on which voices can be heard issuing orders for drug deals and killings. The defence minister, Juan Manuel Santos, said that if the voices were proved to be those of AUC members, they would be stripped of the benefits they enjoy under the justice and peace law. Mancuso denied that the AUC members were operating from within Itagüí­.

While this in itself is concerning, the government was compelled to take action against the police when it emerged that the telephone-tapping had been going on for more than two years and extended to people who were not the object of any suspicion, such as politicians, public officials and journalists. Santos said this was "totally unacceptable, illegal and contrary to government policy". Castro was replaced by Oscar Naranjo, who had been head of the judicial police, Dijí­n. The government promoted Naranjo above a dozen police generals, thereby forcing them into retirement without actually having to wield the axe. The government claims complete ignorance of the telephone-tapping. However -as the national daily El Tiempo was quick to point out- while responding to the criticism of Senator Gustavo Petro in late April, Uribe claimed that the intelligence agency, DAS, had collected "evidence of the actions and conversations" of members of the opposition who opposed the FTA with the US.

Mancuso's confession
Against this backdrop, Mancuso presented his testimony in Medellí­n. He started by claiming that the army had supplied the AUC with manuals on counter-insurgency and named the areas where the paramilitaries should establish themselves for lack of an army presence. He mentioned three living but retired Generals: Martí­n Carreño, Rito Alejo del Rí­o and Iván Ramí­rez, who all served during the 1990s in Córdoba and Urabá, where Mancuso began his paramilitary activity. Mancuso said that del Rí­o was the architect of paramilitary expansion in northern Colombia. He also claimed that he had taken part in joint military and paramilitary operations with Carreño in Córdoba. Carreño accused Mancuso of trying to impugn him because he had spent his life fighting paramilitarism. 

Mancuso went on to mention four separate meetings with now Vice-President Francisco Santos. Without mentioning the dates or context of the meetings, he claimed he had met Santos along with other AUC leaders in Córdoba and Bogotá. He said Santos had proposed the creation of the AUC's Bloque Capital to counter guerrilla incursions in and around Bogotá and asked Mancuso to lead it. Santos requested that the attorney general investigate him to clear his name. He said he had met both guerrillas and paramilitaries in his capacity as journalist and head of Fundación Paí­s Libre, an NGO for the victims of kidnapping. 

Mancuso also spoke about Santos' cousin, Juan Manuel Santos, the defence minister. Mancuso said that Juan Manuel Santos had sought out the leader of the AUC, Carlos Castaño, in 1997 to propose "a type of coup" against former president Ernesto Samper, whose reputation was tarnished by links to drug-traffickers. He said the proposal entailed a risky political manoeuvre in which the AUC and the Farc would reach an agreement to form a constituent assembly and then ask Samper to resign. Santos was not in public office at the time. 

Is Mancuso telling the truth?
Santos responded to Mancuso by saying that "If this is 'the truth' the country is going to be very disappointed". He said he had met Castaño twice, in the presence of others, but only to discuss a peace process that would also include the Farc and the Ejército de Liberación Nacional (ELN). 

Mancuso's allegation against Santos is not new. Castaño alluded to it several years ago in his book Mi Confesión. Samper had accused Santos of being "a conspirator" after he discovered that he had met Castaño to discuss the peace process. Mancuso appears to be trying to undermine Santos now so that he is less able to act against the AUC. His testimony also seems very self-justificatory, revolving, as it does, around the premise that paramilitarism was a state policy. The trouble is, under the terms of the justice and peace law, the government has demanded that the paramilitaries tell their version of events in full detail. This means that not only will more revelations be forthcoming but the paramilitaries will argue that when they tell the truth, the government does not believe them. 

What seems certain is that current developments are bound to weigh in the balance when the Democrats come to vote on the FTA between the US and Colombia shortly (see page 16). Uribe is trying to preserve a semblance of normality. In an unscheduled appearance live on television the evening after Mancuso's confession, he mentioned the passage through congress of the Ley de Transferencias, a key piece of legislation and part of the decentralisation process, which controls the distribution of funds from the central government to the provinces. This went virtually unreported amid all the parapolitical noise. Uribe also congratulated the Colombian domestic football club, Cúcuta Deportivo for its success in the Copa Libertadores, the South American cup competition.

• Farc offer
  A major development that was overshadowed by other events this week was an offer by the peace commissioner, Luis Carlos Restrepo, to free a "significant number" of Farc prisoners, if the judiciary agreed. Restrepo, who said he hoped the Farc would respond with a reciprocal offer, spoke of a real commitment to end this "interminable vicious circle". This looks like a gesture to the Democrats over the FTA. President Alvaro Uribe has never ruled out a humanitarian exchange but he had been leaning towards a military rescue of the Farc hostages.
  

The region of Ica in southern Peru was hit by a violent earthquake of force 7.9 on the Richter scale on 15 August. More than 500 people were killed with a further 1,500 injured and some 80,000 left homeless. Powerful aftershocks claimed further victims in the region. Aside from the incalculable human loss, economists estimate that the earthquake will knock half a percentage point off economic growth in 2007, lowering predictions to 7.5%.

The worst affected towns were Pisco, Ica, Chincha, Paracas and Cañete, on the outskirts of Lima. President Alan Garcí­a immediately declared a 60-day state of emergency in the wake of the earthquake before flying down to the port city of Pisco, which was worse hit, a day afterwards to see for himself the extent of the damage. More than 300 people died in Pisco and the biggest single loss of life occured when the colonial-era church of San Clemente, constructed from adobe, collapsed, killing 148 members of the congregation who were celebrating mass. The earthquake razed 85% of Pisco's, primarily adobe, houses to the ground. It also blocked roads, brought down many power cables and severely damaged water supplies.  

Garcí­a promised to rebuild Pisco, using materials that would be capable of bearing the brunt of future quakes. He said that the government would establish an agency to oversee the reconstruction job in the five towns where most damage was wrought and hand out NS$6,000 (US$1,900) in credit for each homeless family. The president of the Andean development bank, Corporación Andina de Fomento (CAF), Enrique Garcí­a, announced that the CAF had donated US$300,000 immediately to the earthquake fund and would help the Garcí­a administration to establish and finance its proposed "special autonomous fund" to coordinate reconstruction efforts.

International assistance
International aid efforts were quickly underway. The first country to send disaster aid was Colombia, which sent a Boeing 707 carrying 35 tonnes of essential supplies, including food, shelter and basic sanitation, as well as a team of search and rescue experts headed by the minister of social protection, Diego Palacios. Colombia's President Alvaro Uribe was also the first foreign head of state to visit Pisco, where he was received by Garcí­a.  

In the first few days after supplies started to arrive the many thousands of homeless Peruvians looted some of the aid convoys. Although Garcí­a accused the media of exaggerating the scale of the looting, he did decide on 18 August to deploy some 1,000 soldiers to the area -a figure that was later augmented with the addition of 200 policemen- to restore order and prevent further looting.  

Economic cost
While the Sierra Exportadora scheme is the subject of serious criticism for failing to bring much wealth to the Peruvian highlands yet, the coastal agro-export plan has been highly successful, with Ica becoming a prosperous region. Businessmen proudly boasted recently that there was zero unemployment thanks in the main to the agro-export boom which is based around production of asparagus, cotton, pisco, wine and fishmeal, as well as a burgeoning tourism sector. Ica is the asparagus capital of Peru, with exports totalling US$157.25m in the first half of 2007. More than 700 hectares of asparagus crops were decimated by the earthquake, an estimated loss of some US$4m, according to the Ica association of agricultural producers.  

• Funding reconstruction
  President Alan Garcí­a said that the reconstruction would be financed by putting several inessential projects on the backburner rather than by creating onerous new taxes. Garcí­a said it was unfair to take money out of the pockets of some Peruvians to put straight into the pockets of others.
  

The US Congress completed its first review of the controversial Iniciativa Mérida, which amounts to an aid package of US$500m intended to help Mexico fight drug gangs, on 15 November. Neither the House nor the Senate seemed convinced by the US government's scheme.

One big problem is that 40% of the aid will be in the form of air support, particularly helicopters. Thomas Shannon, the US Assistant Secretary of State for Western Hemisphere Affairs, said that the helicopters would increase the "mobility" of the Mexicans' response to the threats from drug gangs.

Robert Menéndez (D, New Jersey) and Tom Lantos (D, California) respectively the Senator and the Congressman chairing the hearings, both said they were unhappy with the proposal. Menéndez said that he was unhappy that President George W Bush had not revealed anything of his discussion with his Mexican counterpart, President Felipe Calderón, about the background to the Iniciativa Mérida.

Lantos's criticism was more practical: he said that Mexico had "a bad experience" when the US provided it with 50 helicopters which had been used in the Vietnam war. Mexico returned the equipment saying that it was too expensive to maintain.

Shannon dismissed the misgivings in congress. He forecast full congressional approval for Iniciativa Mérida. He also added that the US would respect any future "sovereign decisions" by Mexico to buy military equipment from non-US suppliers. Shannon added that as well as the plan agreed in Congress, voters in both countries would also have a say in the terms of the scheme, so that the money was used efficiently.

A delegation of six senators, headed by the Democrat majority leader in the Senate, Harry Reid (Nevada) is due on 28 November to meet Mexican politicians and officials to discuss the Iniciativa Mérida.

President Lula da Silva is making no secret of the fact he is preparing his chief of staff, Dilma Rousseff, for the presidential election in 2010. Last week, in front of thousands of residents of Rio de Janeiro's favelas, Lula called Rousseff the "mother" and the "chief" of the Programa de Aceleração do Crescimento (PAC) - the government's plan to speed up growth through a series of, mainly, public investments. The local press claims that Lula's declarations are a sign that an "electoral agenda" lies behind the PAC. The government denies this is the case, but it is clear Lula is using the programme to promote the virtually unknown Rousseff.

Apart from criticising the tactic publicly, there is little the opposition can do to stop Rousseff's premature electoral campaign. There is nothing in Brazil's electoral laws to prevent the use of public money to promote a "would-be" candidate for an election two years away. At the same time, Lula is no stranger to the tactic of making use of public money in order to promote his allies. Indeed, only recently he became embroiled in controversy with the supreme court for using a government-funded social programme for alleged electoral means [WR-08-09].

Rousseff and alternatives

Lula's Partido dos Trabalhadores (PT) has no natural leader to succeed him, not least because the party's old guard has been implicated in a series of highly-publicised corruption cases. In the face of this predicament, Lula is willing to test the electoral prospects of his ministers in a bid to find a government candidate strong enough to confront the opposition in 2010. Tarso Genro, justice minister; Patrus Ananias, social security minister; Marta Suplicy, tourism minister; and Nélson Jobim, defence minister, have all been mentioned by the Brazilian press as Lula's potential heirs.

Lula, however, appears to favour Rousseff since Genro and Ananias do not get on with the PT leadership and Suplicy seems to have blown her chances with clumsy comments and has little to show in terms of achievement. Jobim, meanwhile, is from the Partido do Movimento Democrático Brasileiro (PMDB), whose influence on the government the PT has attempted to curtail. It is most unlikely the PT's different factions would accept an alliance with the PMDB as junior partners in a prospective Jobim administration.

Meanwhile, the opposition Partido da Social Democracia Brasileira (PSDB) has two strong contenders in the governors of São Paulo and Minas Gerais, José Serra and Aécio Neves, respectively. However, a fight between Serra and Neves for the party's presidential candidacy would weaken the PSDB. It is rumoured that the PMDB has sounded out Neves with a view to his leaving the PSDB and joining the PMDB's ranks as its presidential candidate, since the PSDB's leadership openly prefers Serra. Recently, though, there have been reports that a compromise has been agreed within the PSDB: Neves would support Serra in 2010 in exchange for having the PSDB's full support to succeed Serra after only one presidential term in 2014.

Rousseff stands the best chance of any of the candidates in the frame for the PT presidential nomination of uniting the party and providing a strong challenge to the PSDB candidate and, possibly, a PMDB rival. She has not been implicated in any of the corruption scandals involving the PT and acquired a reputation among political commentators as an "achiever" while heading the mines and energy ministry and, since 2005, as Lula's chief of staff.

• Rousseff's metamorphosis

Dilma Rousseff, the chief of staff of Brazil's presidency, has gone through a transformation in recent weeks. Previously a reserved character, she has now started to attend parties, conferences with businesses, press conferences and is now accompanying President Lula da Silva in all official travels and even delivering speeches to crowds already fired up by Lula. Significantly, Rousseff has stopped talking about numbers and statistics and is now promoting and defending the actions of the government. The transformation seems to confirm suggestions in the Brazilian press that Lula is anointing her as his successor.

The government announced a deal with food producers on 18 June that temporarily freezes the prices of 150 staple foods. The move is further evidence of the government's worries about inflation (which hit 4.95% in the year to May) and its instinct to make populist responses to economic problems. President Felipe Calderón Hinojosa broke the long standing taboo that politicians should not try and influence the Banco de México by calling, on 4 June [WR-08 -22], for the central bank to cut interest rates despite the rise in inflation.

The price fixing deal is with the Confederación Nacional de Cámaras Industriales de México (Concamin) and commits Concamin members to holding some prices at their current level for the rest of the year. The agreement is entirely voluntary. Among the items whose prices are fixed for the rest of the year are: various sorts of beans; tinned tuna; fruit juices; ketchup and coffee. Some other foods, notably cooking oil and wheat flour, will only have their prices fixed until either July or August. The president of Concamin, Ismael Plascencia, said that if there were no sharp rises in the prices of these two items by then, their prices would probably also remain fixed until the end of the year.

The cost of the government's efforts to limit the effect of high international food prices on the Mexican poor is comparatively little when set beside the cost of the fuel subsidy. Besides the Concamin deal, which appears to cost the government nothing, the government is also issuing food stamps of M$120 (US$11.3) a month to 25.6m Mexicans. This dole is likely to cost around US$433m this year.

Other moves by the government that will cost money include establishing a strategic reserve of 500,000t of maize and the waiving of import duties on various grains. The government is waiving import duties on 100,000t of beans as well as on maize; rice; wheat and fertilisers and halving the tariff on imports of powdered milk. The cost of the fuel subsidy, which will most benefit middle-class Mexicans, is budgeted to cost M$200bn (US$19bn) a year.

President Leonel Fernández presented a comprehensive constitutional reform package to congress last week. It embraces the thorny issues of presidential re-election, judicial reform and nationality, in addition to increasing citizen participation and enshrining social development initiatives in the constitution. It also advocates enlarging both chambers of congress and re-synchronising legislative and presidential elections, which have taken place two years apart since 1996, when seven times President Joaquí­n Balaguer was forced to cut short his mandate under heavy domestic and international pressure.

The Dominican Republic has rewritten or amended the constitution nearly once every four years since independence in 1844. The latest reform amends 122 articles of the constitution. Fernández justified the changes on the grounds that he was creating a more participative and inclusive democracy. The constitution must be approved by a two-thirds majority in both chambers of congress, which the government enjoys, and then go to a national referendum within 60 days. To be approved it will need to gain 50% plus one support, provided the turnout is greater than 30% of those registered on the electoral roll.

Fernández introduced several reforms to increase citizen participation, although he stopped short of making provision for a recall referendum in the constitution. He also enhanced the protection of citizens' rights by creating the post of a public ombudsman, to be named by congress. The ombudsman will be independent, with budgetary autonomy. The constitutional reform also commits the state to investing more in education and science and technology, and prioritises environmental protection.

The local press praised many of these reforms, but it was no great surprise that the reform which attracted most attention was one which has recent precedents across Latin America: the relaxation of the constraints on presidential re-election.

The constitution currently limits presidents to two consecutive terms in power. Fernández proposed an amendment allowing a president who has served two straight terms to stand again after a four-year hiatus. Fernández argued that leaders who have “accumulated experience in the exercise of power" should not be prevented from running for election.

Re-election was a highly divisive issue within the ruling Partido de la Liberación Dominicana (PLD) in the party's primary election ahead of May's presidential contest, with widespread talk of a backslide to the continuismo that prevailed during Balaguer's tenure. However, Fernández appears to have assuaged internal fears.

The proposal split the main opposition Partido Revolucionario Dominicano (PRD): former president Hipólito Mejí­a, and his support base, favours it as it would allow him to stand for election again; Mejí­a's detractors in the PRD object to it for precisely that reason. The latter faction argues that the proposed reforms should be debated in a constituent assembly. It is very conscious that the PLD enjoys comfortable majorities in both chambers of congress, and is desperate for some political protagonism after two straight electoral defeats.

Less contentious than re-election was Fernández's proposal that congressmen elected in 2010 serve just two-year terms in order to re-synchronise presidential and legislative elections from 2012. He also called for the senate to be enlarged from 32 to 34 seats by adding two senators to represent Dominicans living abroad and for the lower chamber to have between 175 and 250 deputies. There are currently 178. This only increased from 150 two years ago.

Nationality issues
While the re-election issue is likely to trigger a heated debate in congress, the proposed reform of nationality status could lead to blows being exchanged. This is a very delicate issue: any move to grant citizenship to Haitians living in the Dominican Republic in the past has caused serious political tension.

Fernández has fudged the issue. The new constitutional reform package grants citizenship to the children of foreign parents born in the Dominican Republic, but there are certain caveats, the most significant of which is that this will not apply to undocumented foreign nationals. Therein lies the rub. NGOs estimate that there may be as many as 500,000 Haitians living illegally in the Dominican Republic, a number that has oscillated in line with indiscriminate “repatriation" in recent years, and obtaining legal documentation is very difficult.

Judicial shake-up
The reform bill also includes judicial reforms such as the creation of both a constitutional court to ensure the legality of governmental legislation and a Consejo del Poder Judicial (made up of representatives of all of the principal courts and presided over by the supreme court president), which will be in charge of promotion and disciplinary action within the judiciary, and the judicial budget. The role of the Consejo Nacional de la Magistratura - comprising inter alia the President - the heads of both chambers of congress and the supreme court president, will also be augmented. It will now designate an electoral procurator for four years to investigate alleged electoral fraud; appoint judges to all of the different courts; and discipline or reprimand supreme court judges.

• Constituent assembly
  The spokesman for the ruling PLD senate bloc, Luis René Canaán, insisted that the constitutional reform package would be decided by consensus even though the PLD enjoys majorities in both chambers. The opposition is dubious and favours the option of a constituent assembly, which the PLD backed before it obtained its respective majorities. The opposition is confident it would win greater representation in a constituent assembly than it has in congress because of public unease over increases in food and fuel costs.
  

The interior minister, Francisco Jiménez, was dismissed last week as President Alvaro Colom continued the high-level changes on the security front instigated at the end of last year. His departure follows that of the army top brass, including defence minister Marco Tulio Garcí­a Franco. Jiménez's successor, Salvador Gándara, a former deputy interior minister and three-time mayor of one of the most violent municipalities in the country, has been welcomed by the right-wing opposition Partido Patriota (PP) for his hard-line stance on crime. Human rights organisations were less enthusiastic.

Colom's announcement that Gándara would take over the interior ministry portfolio on 7 January was hardly a surprise, given both the government's recent admission that it was unable to cope with the current security situation and concerns voiced by the opposition regarding Jiménez.

Indeed, Jiménez had been summoned to defend his security strategy in congress in the wake of spiralling crime [WR-08-48]. There were more than 6,200 murders registered in 2008, according to police figures, making it one of the bloodiest years in the country's recent history. Jiménez was also facing the possibility of a vote of no confidence in congress.

While Jiménez, an academic who has since been “promoted" to coordinate the technical secretariat of the recently established national security council (CNS), was popular with human rights organisations, Gándara's appointment has aroused concern from civil society groups, who fear he may well signify a return to a more repressive security policy. These fears have been fuelled by the fact that the PP welcomed his appointment, in light of his identification with a more hard-handed “mano dura" approach to tackling crime.

Gándara
Gándara was head of the Secretarí­a de Coordinación Ejecutiva de la Presidencia at the time of his appointment. He previously served as deputy security minister under the Arzú administration (1996-2000). He was also elected mayor of Villa Nueva, one of Guatemala's most violent municipalities, on three occasions.

While the new security minister is undoubtedly familiar with the country's parlous security situation, civil society groups have flagged up concerns about his possible involvement in human rights violations committed under Arzú, particularly with regard to dealing with gangs of kidnappers. The umbrella human rights group, Convergencia por los Derechos Humanos, which comprises organisations such as the Archbishop's Office of Human Rights in Guatemala (ODHA) and the Centro de Acción Legal de Derechos Humanos, released a statement warning that his appointment could represent a step backwards, while Convergencia spokesperson Claudia Samayoa highlighted the increase in cases of “social cleansing" or extrajudicial crimes which occurred in Villa Nueva while Gándara was in charge.

Continuity
Colom stressed that the change was designed to boost efforts against organised crime. Gándara pledged to continue with the strategy currently in place. This includes purging the institutions of corrupt officials, a move rendered necessary given the widespread perception that police officials themselves are operating in league with organised crime groups in the country (see sidebar).

• Security

A recent survey by the pollster, Voz Latina, published in the national daily, Prensa Libre , showed 90% of respondents feared being kidnapped, assaulted or blackmailed, while 78% were afraid to walk the streets. The poll questioned 1,200 Guatemalans across the country. Another key finding from the poll was that 82% of those questioned were afraid of the police, believing them to have links to organised crime.

With the general elections less than two weeks away, the opposition presidential candidate, Ricardo Martinelli, is poised to take the presidency. Two highly questionable rulings by the electoral authorities and the attorney general's office, however, have cast grave doubts over the credibility of the electoral process itself.

On 14 April, the attorney general, Ana Matilde Gómez, announced that the criminal investigations into Martinelli and the ruling Partido Revolucionario Democrático (PRD) presidential and Panama City mayoral candidates, Balbina Herrera and Roberto Velásquez, respectively, were at an impasse. She said that campaign finance reports (which are not made available to the public) are not due until 60 days after the election. The investigations had followed claims by the jailed Colombian financier, David Murcia Guzmán, that he contributed US$3m to both Herrera's and Velásquez's campaigns [WR-09-12]. Herrera had also accused Martinelli of links to Murcia. Gómez's ruling effectively allows all three candidates to stand, despite evidence that, at the very least, Murcia had met Velásquez and enjoyed privileges from the PRD government.

The following day saw a contentious ruling by the electoral court (TE) in relation to another candidate for the Panama City mayoral race, Bosco Vallarino, of the opposition. In early April, Vallarino had admitted to becoming a naturalised US citizen during the Noriega dictatorship (1983-89) which, under article 13 of the constitution, technically renders him ineligible to compete in the elections [WR-09-14]. However, on 14 April, TE magistrates ruled that they were not “competent" to determine Vallarino's “nationality and citizen rights", leaving him free to stand.

Local commentators remarked that a more appropriate ruling would have been that the TE was not “competent" to do anything. Cynics also argued that the decision reflected the TE's alignment with the ruling party; with Vallarino out of the race, Velásquez would no longer have faced a divided opposition.

• Polls

Panama's opposition candidate, Ricardo Martinelli, enjoys 47.9% support in the most recent poll by Unimer, published in the national daily La Prensa on 20 April, compared with 36.3% for the ruling Partido Revolucionario Democrático (PRD) candidate, Balbina Herrera. As regards the Panama City mayoral contest, despite the recent scandals involving both the main contenders, there was little change in ranking order; 37% of respondents said they would vote for PRD candidate, Roberto Bobby Velásquez, compared with 28.2% for the opposition candidate, Bosco Vallarino, while the independent candidate, Miguel Antonio Bernal, came in third with 9.8%.

The government has won control of a R$158bn (US$87bn) welfare fund, the Fundo de Amparo ao Trabalhador (FAT), ahead of next year's general elections. Under a gentlemen's agreement in place since the FAT's creation, the administration of the fund should be rotated every two years between its tripartite council: the government, trade unions and business associations. After two years under the management of a trade-union-nominee, it was the turn for business associations to appoint the fund's next manager. But, following a manoeuvre from the labour minister, Carlos Lupi, a government-ally was chosen to take over the FAT and its spending budget of R$43bn in 2010.  

Brazil's four oldest business associations blame the presidency for ditching the agreement that has been in place since the FAT was created in 1990. The fund is boosted by tax money, through compulsory welfare contributions paid by both workers and businesses. Next year - when voters will choose a new president, as well as state governors and congressmen - the FAT is expected to spend R$21.8bn on unemployment benefits and R$8.8bn on bonuses for workers who earn less than twice the minimum-wage. A further R$12.4bn was budgeted to be spent on financing the National Social and Economic Development Bank (Bndes) and on skill-development programmes.

Critics of Lupi's manoeuvre claim the FAT budget can now be directed to boost the candidacies of government-allied politicians. In control of the fund's management, the government can dictate which Bndes projects will be funded by the FAT and who will carry out the skill-development programmes financed with the fund's money. In effect, the government can choose projects that benefit allied candidates, boosting their chances of being elected in 2010, while also keeping a tight grip on trade unions by controlling the disbursement of FAT money for skill-development. The more suspicious also fear some of the FAT money will be funnelled, like funds of state-owned companies, to finance directly the electoral campaigns of government-allied candidates - which though illegal, is very common in Brazil as recent corruption scandals suggest.

Lupi, who until recently was the president of one of Brazil's largest trade unions, vehemently denies that he conspired to have a government-ally administer the FAT. He claims that, as expected under the tripartite agreement, the fund's administration will stay in the hands of a business association: the inexpressive Confederação Nacional de Serviços (CNS). But, as critics point out, the CNS was established in December last year with Lupi's blessing to fill one of the six new seats created in the FAT's council in April. The council had to be expanded after the government legally recognised two new trade unions.

At the time, Lupi tried to end the agreement to have a rotating management for the FAT. However, under pressure, it was decided that the council should expand to 18 seats, so two other seats were given to the government and two to businesses. Several business associations tried to get on to the council, but for that they needed official recognition - which Lupi granted to the CNS in December and is thus described on the CNS's website as its “godfather."

In June, Brazil's long-established business associations, the CNI (industry), CAN (agriculture), CNC (commerce) and the CNIF (banks) agreed on a nominee from the trade unions to take on the FAT's management. But the CNS decided to launch its own candidate, its president, Luigi Nese, who was then elected with the votes of the government and trade unions.

• Ethanol tariff

The White House has issued a statement declaring it has no intention to change the US government's position in relation to the US$0.54-per-gallon tariff charged on Brazilian-produced ethanol. During a senatorial hearing on 8 July the newly appointed US ambassador to Brazil, Thomas Shannon, had declared that scrapping the tariff would be “beneficial" to the two nations. But this angered the US ethanol lobby, leading Republican senators to threaten not to confirm Shannon for the post if the White House failed to make its position on the tariff clear. The US ethanol industry is dependent on government subsidies, while Brazil's is not.

“All the political corpses are being resuscitated, including a member of the Jewish community, who has been transformed from suspected arms dealer into a terrorising cog of the Left's shady machinations."

- José Mujica, Uruguayan presidential candidate, on his rival's claims that he was connected to the late owner of an arsenal discovered by the police.

“In order to get hold of this mineral governments have been ousted and political leaders have been assassinated in Africa. It is a strategic mineral."

- Ramón Carrizález, Vice-President of Venezuela, explaining why a large contingent of national guard troops was deployed next to the border with Brazil to prevent the illegal export of coltan (columbite-tantalite), an ore used in the manufacture of a number of consumer electronic products.

“It is as if a band of murderers and robbers entered a neighbourhood and one should summon one's children and tell them to take special precautions to safeguard lives - and then to have those threatened condemning us as aggressors. This is the world upside down."

- Hugo Chávez , president of Venezuela, defending himself from charges of having ordered his military to prepare for war when he paraphrased the Latin adage, 'Si vis pacem para bellum'.

The ongoing investigation into the bankrupt Bancoop (Cooperativa Habitacional dos Bancários de São Paulo), a small savings fund linked to the ruling Partido dos Trabalhadores (PT) through trade unions, has cast new light on the scheme mounted by the party to finance its campaigns illegally and also pay bribes to guarantee support for the government in congress. This scheme, which came to be known in Brazil as mensalão, irreversibly blackened the PT's “whiter-than-white" reputation.

The Bancoop investigation shed light on the role of João Vaccari [WR-10-10] - who was the cooperative's president appointed by the PT and recently chosen by Lula as the PT's new treasurer - in the mensalão scheme. According to the current affairs magazine Veja, which had access to parts of the investigation, Vaccari was also one of the middlemen between public pension funds and banks that supply the money for the scheme. The other one was Marcelo Sereno, who once served as an aide for the presidency.

The investigation is largely based on the testimony and documents presented by stock market broker Lúcio Funaro, who negotiated juridical privileges with Brazilian authorities after being implicated in the mensalão scheme. Funaro's testimony and documents allowed the police and the ombudsman to target their investigations and were subsequently used in the denunciation made by the attorney general's office against several PT and PT-allied politicians, not least Lula's one-time chief of staff, José Dirceu. The supreme court accepted the suit and a trial is expected to take place in 2011 or 2012.

According to Funaro, Vaccari negotiated investments from PT-controlled public pension funds - notably Petrus of Petrobras, Previ of Banco do Brasil and Funcef of Caixa Econômica Federal - in private banks and companies in exchange for a percentage of between 5% and 15% to be paid to the party. The contributions were made either in the form of donations or loans.

Together these funds control a staggering R$190bn (US$107bn). Investigations revealed that between 2003 and 2004 public pension funds controlled by the PT invested R$600m (US$340m) in banks BMG, Rural and Santos. The figure was 17 times bigger than the amount invested by the funds in the same banks in previous years.

The three banks were at the heart of the mensalão scheme. Evidence uncovered by investigators suggest that middlemen such as the advertisement tycoon Marcos Valério de Souza, whose lawyers unsuccessfully attempted to negotiate juridical privileges in exchange for incriminating testimonies, withdrew cash in the banks to pay for bribes to allied congressmen. And documents also revealed that BMG and Rural donated R$55m (US$31m) to the PT - money that was used to pay the party's 2002 campaign debts, including Lula's, and to pay for fake dossiers against opposition politicians.

Funaro's role in the scheme was to conceal the embezzled money by using his broker expertise to make the shortfall in the funds' accounts appear like normal losses in the stock market. Significantly, Funaro's testimony also seemed to spoil the view held by some PT supporters that the scandal was different than those involving other Brazilian politicians because it was not about personal enrichment. According to newspaper O Estado de São Paulo, Funaro accused Dirceu and other PT leaders of taking part of the embezzled money for themselves, alleging that R$5.5m (US$3.2m) were deposited in Cayman Islands accounts belonging to Dirceu.

• New supreme court president
  Cezar Peluso was elected to replace Gilmar Mendes to preside over Brazil's supreme court for the next two years. The election is largely ceremonial, since according to tradition the post rotates between the court's members according to seniority. Peluzo directed the case in which the supreme court annulled the controversial political asylum granted by former justice minister, Tarso Genro, to Cesare Battisti, a former member of an Italian left-wing terrorist cell who was convicted for common murder in Italy.

President Alan Garcí­a has refused to ratify a law approved by congress on 19 May under which the State would be compelled to consult indigenous communities about issues relating to their territories - specifically planned oil and mining projects. The Asociación Interétnica de Desarrollo de la Amazoní­a Peruana (Aidesep), the umbrella indigenous group in Peru's Amazon, complained that the executive was making “a serious mistake, contravening the rule of law", and flying in the face of a broad consensus at the level of political and civil society.

The law had sailed through congress with a simple majority days before the first anniversary of the bloody debacle in the Amazon province of Bagua, where 24 police officers and 10 indigenous protesters were killed on 5 June, 2009, in violent clashes [WR-10-21]. It complies with stipulations in Convention 169 of the International Labour Organization (ILO) on indigenous rights.

The executive, however, returned the law to congress with eight 'observations', the main one being that it should make it clear that the indigenous communities do not have the right to veto projects the State considers to be in the national interest. The government raised this caveat to underline its full sovereignty over national territory and natural resources. The trouble is the protests which culminated in the Bagua violence were triggered precisely because Aidesep disagreed with planned development projects in the Amazon which the State deemed to be in the national interest. Garcí­a's return of the law to congress demonstrates that his government has still not managed to reconcile indigenous rights and economic development.

This week, Alberto Pizango, the leader of Aidesep, called on the UN special rapporteur for indigenous affairs, James Anaya, to come to Peru to try and resolve the impasse. Anaya is expected to visit shortly. Pizango said the eight observations made by the government were “racist" and designed to “generate conflicts". Aidesep's lawyer, Javier Mujica, claimed that they contravened two articles in Convention 169.

Mujica said that the decision to send the law back to congress was part of a deliberate stalling strategy by the government so that it can continue to award concessions to oil and mining companies in the Amazon (see sidebar). Congress is in recess until August and will then be caught up in preparations for regional elections in October, meaning the law could well be mired there for up to six months.

Morales faces indigenous unrest in Bolivia
Spearheaded by influential organizations such as the Confederación de Pueblos Indí­genas del Oriente Boliviano (Cidob), indigenous groups are increasingly venting frustration with President Evo Morales' failure to deliver on certain demands. Echoing tensions between Morales and his support base over the minimum wage increase [WR-10-19], the renewed threat of protests stems from three main complaints: a recently approved electoral law which falls short of their quota demands (indigenous groups are calling for 18 indigenous seats in the 158-seat legislature rather than the current seven); the government's extractivist policy; and its failure to grant full autonomy to indigenous communities. As regards the quotas, Morales offered by way of appeasement the possibility of reviewing them after the 2011 census. The dispute over the other issues, however, looks set to continue: the government has yet to address the environmental concerns, while the legislature is currently discussing the autonomy framework law with little indication that the autonomy demands have been incorporated.

• Constitutional tribunal

The Constitutional tribunal unanimously ruled on 30 June against a suit brought by Aidesep seeking to suspend or annul various oil exploration concessions granted in the northern Amazonian department of Loreto. It ruled in favour of the principle of juridical security for investments in Peru. Aidesep had claimed that the concessions violated its ancestral territorial rights and would damage the environment.

Any foreign tour that takes in Moscow, Minsk, Teheran, Damascus and Tripoli is bound to cause a stir. Throw in discussions over nuclear technology transfer and headlines in the international media are assured. President Hugo Chávez revels in ruffling feathers in the West, particularly in Washington, but while he successfully took the spotlight, the Venezuelan state media was virtually alone in reporting on a much-needed boost for his government in the social sphere: the UN Food and Agriculture (FAO) praised Venezuela for setting an example in the region for sharply reducing the number of people suffering from hunger.

“Venezuela is on its way to getting nuclear power," Chávez said in Moscow, the first port of call on his 10-day foreign itinerary. Among other accords, Chávez struck a deal with his Russian peer Dmitry Medvedev to build a 500MW nuclear power station. No timescale was given but it is likely to take between 10 and 15 years. Diversifying Venezuela's energy matrix was the reason Chávez gave to Russian Prime Minister Vladimir Putin for developing a nuclear energy plan when he visited Caracas in April. Venezuela is highly dependent on hydroelectric energy and, as a result of a severe drought and poor investment, was compelled to implement significant power rationing in 2009 and this year.

“They'll say that we are going to build atomic bombs. No, we are not [...] nothing is going to stop us, we are free, sovereign and independent," Chávez said. The US State Department spokesman Philip Crowley deflected several questions on the issue with restrained steeliness: “It is certainly a right of any country to pursue civilian nuclear energy, but with that right comes responsibilities […] to meet all international obligations." He also said, however, that there were no specific concerns about Venezuela's nuclear ambitions: “Certainly nothing that rivals Iran." President Barack Obama repeated this line to the Spanish media at the White House on 19 October, stressing that “our attitude is that Venezuela has rights to peacefully develop nuclear power." He added that the US had “no incentive nor interest in increasing friction between Venezuela and the US, but we do think Venezuela needs to act responsibly." (See sidebar).

Still, in addition to Venezuela's close ties with Iran, the State Department will be uneasy with the growing body of evidence suggesting that members of two organisations on its list of terrorist groups - the Fuerzas Armadas Revolucionarias de Colombia (Farc) and the Basque separatist group ETA - trained together in Venezuela. On 20 October Spain's judiciary accepted the attorney general's request for the extradition of Arturo Cubillas, after two suspected ETA terrorists named him as the man who trained them. It also accused Cubillas back in March of organising the training of Farc guerrillas by ETA explosives experts [WR-10-12]. A Spaniard, Cubillas became a naturalised Venezuelan in 1993, which in theory shields him from extradition, and is an official at the Venezuelan agriculture ministry.

On 11 October Chávez called for the allegations against Cubillas to be investigated but how thorough these will be is a moot point: Chávez appeared to pre-empt the results by dismissing the allegations as fabrications designed to discredit his government. Spain has sought to handle the topic delicately through diplomatic channels. Spain's deputy prime minister Marí­a Teresa de la Vega stressed that her government is convinced that Venezuelan authorities were unaware of the training of ETA militants, but the Chávez administration is not ready to play ball. It reacted to pressure from Spain by seeking the extradition of General Néstor González, a Venezuelan it claims took part in the 2002 coup.

Arms and hunger
Venezuela's arms acquisitions from Russia, put at US$4.4bn by Putin, who announced that 35 of 92 T-72 tanks ordered would soon be delivered, are frequently cited in the press. Peru is spearheading a regional campaign to reduce arms spending, devoting the savings to eradicating poverty, and Peru's President Alan Garcí­a has singled out Venezuela for excessive spending. And yet, if the FAO representative in Caracas is to be believed, arms expenditure is not being sustained in Venezuela by diverting money away from key social projects.

Alfredo Missair, the representative of the FAO in Venezuela, claimed this week that Venezuela was “on the right track" to surpass the target of halving the number of people suffering from hunger, part of the Millennium Development Goals, by 2015. He said government initiatives meant 5m people received some form of help, and a further 14m had access to meals at fair prices through the Mercal, the state-run company providing subsidised groceries. He said the percentage of the population suffering from hunger had fallen from 7.7% in the 1990s to 3.7% now, below the 6% average for Latin America as a whole. He added that malnutrition in children under five had fallen from 5.3% to 3.25% in the last decade, meaning that Venezuela ranked fifth in Latin America.

Missair went on to argue that gaining “food sovereignty" to reduce dependency on food imports was essential and “Venezuela is doing it". This paints a rosy picture. Venezuela might be trying to do this but not only does it remain highly dependent on food imports, but also price controls have provided disincentives for producers. As have the strong-arm tactics of forced nationalisation of food production and distribution firms as part of the drive to achieve food sovereignty. The Chávez -created food production and distribution firm Pdval is not exactly a byword for efficiency: it was at the heart of a scandal last May when more than 22,000 tonnes of decomposing food were found at a port.

• Obama
  “The antagonism between our two countries is not inevitable," President Obama told the Spanish media at the White House, a point he said he had made to President Chávez on the sidelines of the Summit of the Americas in Trinidad last year. “We want the people of Venezuela to be thriving economically, we also want the people of Venezuela to have a voice in their own government, that's something we cannot impose externally," he added.

 

• Extradition
  Spain's foreign minister Miguel Ángel Moratinos claimed this week that the bilateral extradition law with Venezuela made it clear that if for reasons of nationality an individual could not be extradited, he would be put on trial in Venezuela.

Two very different events have brought Mexico to the attention of European nations. The first incident involved the request for an official apology from the British Broadcasting Corporation (BBC) by the Mexican ambassador in London, Eduardo Medina-Mora Icaza, for the “outrageous, vulgar and inexcusable" remarks about Mexican people made by the presenters of car show, Top Gear, on 29 January. More importantly, the second incident involved the announcement on 14 February by French President Nicolas Sarkozy that the cultural event, “Mexican year in France", scheduled for this year, would be dedicated to Florence Cassez, a French woman currently serving a 60-year prison sentence in Mexico for her involvement in a 2005 kidnapping case. Mexico's ambassador in France, Carlos de Icaza, protested Sarkozy's proposal and threatened to cancel all previously scheduled events.

Both incidents come at a sensitive time for the Mexican government as the security situation continues to worsen and the country prepares itself for next year's presidential elections. It could really do with solidarity from rather than antagonism with the international community.

While the first incident can be classified as a minor one, and has largely been resolved after a prompt intervention by the British Parliament, and a quick apology, it may still have the potential to produce negative repercussions for Mexico. In particular, should the diplomatic row with France escalate, Mexican diplomacy could find little support in Europe.

The Cassez case has the potential of turning into a major problem for the Mexican government, not least because Cassez, who has always denied the charges, has also expressly accused a high ranking officer in president Felipe Calderón's government of framing her arrest. The case's relevance has been compounded by the fact that President Sarkozy, who has met with Cassez's parents in France no less than 10 times, appears to have taken a personal interest in it.

It is worth remembering that under Sarkozy's guidance, France successfully mounted pressure on the Colombian government by lobbying for the release of prominent Franco-Colombian politician, Ingrid Betancourt, during the six years that she was held hostage by the Fuerzas Armadas Revolucionarias de Colombia (FARC). In the end, the international pressure spurred the Colombian authorities to stage a risky hostage release operation in 2008 that resulted in the capture of some Farc guerrillas and the liberation of their political prisoners, including Betancourt.

The Cassez case is, of course, different to that of Betancourt, but it seems that the French government is prepared to adopt a hard line and impose similar pressure on Mexico as it did with Colombia in order to benefit one of its nationals. Initially, France accepted the Mexican judiciary's ruling in principle, but formally requested that Cassez be extradited to France under a common agreement to serve out her sentence. However, as the maximum prison sentence in France is of only 20 years, Mexican authorities advised against extradition. In August 2010 Cassez's defence presented an appeal against her sentence before Mexico's supreme court on the grounds that there had been irregularities in her arrest.

The supreme court turned down the appeal on 10 February pointing out that even if there were irregularities during the arrest, the defendant was found guilty in court and so the sentence must be upheld. This prompted an immediate reaction from France which, through its foreign minister Michí¨le Alliot-Marie, urged Mexican authorities to review the case and to take into consideration the account of events provided by Cassez herself during her trial, and pointed to Mexico's judicial system's poor track record of sentencing individuals that have later been found to be innocent.

Staged arrest?
Cassez claims her arrest was staged by Mexico's secretary of public security, Genaro Garcí­a Luna (see sidebar). Cassez maintains that Garcí­a Luna, then director of the federal investigation agency (AFI) ordered the televised arrest at her Cuernavaca home a day after she was detained by police on a nearby highway in an attempt to manufacture evidence to link her directly with the criminal gang responsible for the kidnapping. Furthermore, Cassez argues that Garcí­a Luna's actions were driven by the fact that he was under pressure to deliver results.

As insecurity and violence in Mexico have continued to increase steadily since Calderón appointed Garcí­a Luna in 2006, he has come under heavy criticism as opposition and civil society groups question his ability to handle the security crisis. More recently, Garcí­a Luna's credibility also came under question after he presented an official report containing controversial murder rate figures. Critics claimed that the figures were far from accurate and may even have been doctored by the government in order to paint a rosier picture.

It is within this domestic context that the French authorities have decided to question Mexico's decision in the international realm. After Sarkozy's announcement, French economy minister, Christine Lagarde revealed that as current G-20 president, France would take the opportunity to raise the issue at the group's next meeting scheduled for November in Cannes. It will be interesting to see how much support Mexico gets from the four other European representatives at the summit.    

Members of the Guyanese police are `very aggressive and hostile' and feel entitled to use their firearms `indiscriminately'. With police salaries as low as G$25,000 (US$126) a month, extortion and corruption have become `endemic'. 

This was the main thrust of the testimony given to a special five-member parliamentary commission by Cecil Kennard, chairman of the Police Complaints Authority (PCA). The commission was set up after local rights activist, Amnesty International and the US government drew attention to the high level of police violence in Guyana.

Just before Kennard testified, speculation had begun to circulate regarding the murder in neighbouring Suriname of Paul Pindleton, one of the six most wanted Guyanese fugitives, accused of a number of homicides, hold-ups and kidnappings — including that of US diplomat Steven Lesniak — over the past couple of years. The police in Georgetown were uncharacteristically circumspect about the incident, limiting themselves to a laconic version of news reports from Paramaribo.

Bolivia is often seen as a tinderbox, currently dampened by a 'social truce', which could be set ablaze in an instant. In that scenario Evo Morales, the indigenous coca-grower turned politician, is seen by many as the man capable of rallying the peasant masses behind the kind of destabilising campaigns that have forced two Bolivian presidents to step down in just under two years. The US government sees Morales as a client of Venezuelan President Hugo Chávez , bent on subversion. But Morales does not command the allegiance of more than part of Bolivia's array of militant social organisations. With the country fast approaching critical elections, discerning and distinguishing the various strands becomes crucial.

Gone are the days when the umbrella labour organisation, the Central Obrera Boliviana (COB), was able to stage politically decisive mobilisations. Since the mid 1980s, with the demise of the big state-company unions, it has failed to gain the support of a working class that has trebled in size since the COB was founded in the 1950s. It is now largely confined to urban activity, its strength resting mainly in two public-sector unions: the teachers and the healthworkers. The COB has been reduced to piggybacking on major mobilisations chiefly mounted by the peasant-based organisations.

The weakening of the COB at a national level has to an extent been accompanied by the strengthening of some of the regional labour umbrellas, the CORs - most notably that of La Paz. The numerically strong COR of Santa Cruz, though, has tended to follow the political lead of the pro-autonomy Comité Cí­vico Pro Santa Cruz, a body dominated by the business associations - despite the fact that working conditions in Santa Cruz are notoriously poor.

The peasant unions
Of the peasant-based organisations, by far the strongest is the Confederación Sindical Única de Trabajadores Campesinos de Bolivia (CSUTCB), though it is divided into two large groups with very different traits. Arguably the most powerful is the one led by Felipe Quispe, which holds sway in a dozen or so provinces in the highland department of La Paz. 

This is the most radical group, on two planes. Ideologically it leans strongly towards the Aymara nationalism (secessionist in the last instance) advocated by Quispe. In this respect it is the only organisation aligned with a proposal to revolutionise the Bolivian state. As to practices, it has pioneered the protests via roadblocks and shown itself able to bring its home ground to a complete halt. Many recall the time in 2001 when it set up its 'capital' in Achacachi and appeared to be about to initiate a civil war. It has also successfully sought to place its leaders in elective offices. Its two main shortcomings are its limited geographic influence and the scant appeal of its Aymaran supremacist discourse to other ethnic and social groups.

The other faction of the CSUTCB is that led by Román Loayza, of the Movimiento al Socialismo (MAS) led by Evo Morales. It has a broader geographic reach, spreading out from Cochabamba to embrace parts of Potosí­, Santa Cruz and Sucre. Its discourse is more agrarian and much less indigenist (let alone pro-Aymara) and it does not propose a major overhaul of the state. On the other hand, it has proven itself less able to mobilise than Quispe's faction.

The landless
Another, newer rural organisation is the Movimiento Sin Tierra (MST-Bolivia), the 'movement of the landless', which is also divided into two big factions with different areas of influence. The one led by Angel Durán is base mainly in gas-rich Tarija and in the predominantly Aymara highlands. The other, led by Moisés Tórrez, in Santa Cruz and parts of Cochabamba. 

The 'landless' of Cochabamba are chiefly people left with too little land to eke out a decent living. In Santa Cruz these mingle with those who have no land at all and engage in seasonal agricultural work. The latter are predominant in Tarija and across the board there are those who have drifted away from joblessness in the cities. While Durán's faction relies mainly on land invasions meant to become permanent settlements, that of Tórrez functions more like a trade union. Interestingly, it is the latter that seems more able to mobilise its members. It is worth noting, though, that in the highlands many members of the MST, in their other capacity as members of Aymara communal groups, often join the mobilisations called by the CSUTCB.

The coca growers
The cocaleros of the Chapare area of Cochabamba were Evo Morales's original powerbase - and he indeed continues to lead that region's federations of coca growers. It must be noted, though, that these federations are basically engaged in defending their right to cultivate coca and resisting forcible eradication; only secondarily do they engage in politics. 

There are in Bolivia two distinct groups of coca growers, those of Cochabamba and those of the Yungas valleys north of La Paz. The latter, in whose territory are the legal coca plantations intended for traditional use, are less afflicted by forcible eradication than the former. These are mainly Aymara highlanders, while the growers of Chapare are an admixture of local Quechua, mestizo peasants and Aymara migrants from the highlands (Morales being one of these). This has given their discourse far less of an indigenist tone and consequently a broader social appeal, which is what allowed Morales to rise in national politics.

Well worth underlining is the fact that the Yungas coca-growers joined early in the wave of protest actions in 2003 that ultimately unseated President Gonzalo Sánchez de Lozada, whereas those from Chapare enlisted very much at the last minute. It has been remarked that Morales's ability to stage mass mobilisations depends largely on the state of his relations with Quispe, and this is not often predictable given their very different political agendas.

Other groups
One indigenous group which appeals to the same constituency as Quispe is the Consejo Nacional de Ayllus y Markas del Qullasuyu (Conamaq), which is built on Aymara communal structures and has declared its intention to contest this year's elections. There are also organisations that represent the minority indigenous groups, such as the Confederación de Pueblos Indí­genas de Bolivia (Cidob), strong in Beni, and the Coordinadora de Pueblos Étnicos de Santa Cruz (CPESC). These two have tended to resort to the government and the courts in pursuits of their aims, though of late Guaraní­ militants have taken to emulating their highland peers by seizing oil installations.

The picture would hardly be complete without mention of organisations which, starting out as single-issue groups, have become very militant and branched out into politics. The most notable examples are the Coordinadora de Defensa del Agua y el Gas, involved in the 'water war' in Cochabamba, and its more recent follower, the Federación de Juntas Vecinales (Fejuve) of El Alto, which from the second 'water war' moved on to play an important role in the protest mobilisations of 2003 and 2005.

President Alan Garcí­a, already facing strong protests against his decision to resume the eradication of coca plantations [SSR-07-04], has received an uncomfortable reminder of the main obstacle to success in this area: the fact that profits from coca growing have been rising astronomically over the past decade, and far outweigh what the farmers might hope to earn from alternative crops.

Since 1999 the returns on coca cultivation have increased 19-fold, according to a recently published doctoral thesis by the economist Dennis Pereyra. Coca growers in the Upper Huallaga valley are nowadays earning about US$2,760 per hectare, compared with (at best) US$146 in 1999. Indeed, in 1998 growing coca was simply not an economic proposition in most of the valley, as earnings were unlikely to reach more than US$2,244 per hectare, while costs amounted to about US$2,613.

The change has been due to two factors. Firstly, the increase in wholesale fumigation of coca plantations in Colombia meant traffickers turned again to Peru as a source of supply - the much-denied 'balloon effect' at work. Increase in demand led to a rise in the price per arroba (12.5 kilos) of coca leaf, from US$23.50 in 1999 to US$32.20, or 37% more, in 2007. 

Secondly, the traffickers have found ways to boost the yield in the Huánuco area of the Upper Huallaga valley, from a tonne of leaf per hectare in the late 1990s to about 2.8t at present, an increase of 180%. These figures have been compiled by postgraduate students of the Universidad Nacional Hermilio Valdizán.

Huánuco became the epicentre of the 'indefinite strike' launched in mid-April by the coca growers in an attempt to get the Garcí­a administration to halt the -recently resumed- coca eradication campaign. On 2 May, as police sought to clear roadblocks erected by the growers, four people were injured, one of them critically, and about 12 were arrested. The police say that the injuries (in two cases caused by gunfire, were not the result of clashes between them and the protesters, but of shots fired from among the protesters.

In mid-May, agriculture minister José Salazar endorsed a request by the coca growers of La Convención province, Cusco, for the government to consider denouncing the 1988 Vienna Convention which outlaws coca as a psychotropic substance. President Garcí­a dismissed this as 'madness'. Salazar resigned on 20 May, and the following day about a hundred coca growers of La Convención congregated in Quillabamba, the provincial capital, to launch a 72-hour strike in demand of the review.In the political arena, only Ollanta Humala's Partido Nacionalista Peruano (PNP) openly backed the call to denounce the Vienna Convention. Humala also proposed that the state should buy up all 'surplus' coca leaf.

Earlier in the month other unrelated protests broke out in other parts of the country. People in Iquitos, Loreto, took to the streets and attempted to take over the airport to demand the hiring of an additional thousand teachers, while rice and cotton farmers in Piura blocked highways in demand of higher prices for their products. The government urged regional authorities to expedite authorised public spending in order to defuse these protests. Prime minister Jorge del Castillo has suggested political evil intent in the proliferation of protest actions, announcing that an investigation will be launched into the purported existence of a plot to create a 'sensation of imbalance and uprising' throughout the country.