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Development: On 12 May, the supreme court authoris the prosecutor-general, Cláudio Fonteles, to investigate supposed irregularities committed by the president of the Brazilian central bank, Henrique Meirelles.

Significance: Meirelles is accused of committing crimes against the national financial system and of sending funds to offshore accounts illegally while in command of BankBoston in the late 1990's. Meirelles came under suspicion after a parliamentary commission started an investigation on the Banestado financial scandal, leading to the resignation of the central bank's monetary-policy director, Luiz Augusto Candiota, last July. To avoid the scandal staining the government's economic team and undermine its policies, President Lula da Silva issued a decree in September promoting Meirelles to minister, protecting him from further investigations from congress.

The supreme court ruling authorises Fonteles to override Meirelles's right to bank confidentiality and to investigate the activities of nine companies with which the president of the central bank had business links. In particular, Fonteles wants to know if Meirelles used Biscay Trading Limited to send money to offshore accounts without communicating to the central bank as required by the Brazilian law. The prosecutor-general also wants Meirelles to explain how his declared assets increased from R$1.8m (US$720,000) in 1996 to R$104.4m (US$41.7m) in 2001.

According to the supreme court ruling, the public-prosecutors office has 60 days to present its conclusions to the supreme court. The investigations will be carried out in absolute secrecy, including from the federal police, and only the supreme court and Meirelles' team will be granted information during this period. The ruling has also affected the Brazilian stockmarket: it fell 2.35% on 12 May. This was the fourth consecutive lower close.

The president of the lower chamber of congress, Severino Cavalcanti, said Meirelles should take a leave from his office while the investigations are carried out. Severino is supported by opposition leaders in congress. The government, however, says Meirelles will stay at the central bank because nothing has been proved. According to the government's supporters in congress, the investigations are "a great opportunity" for Meirelles to show he is innocent. So far Meirelles said he was "comfortable" in his office.

In another development, Fonteles requested the supreme court to allow another minister, this time the social security minister, Romero Jucá, to be investigated. Fonteles wants to know how Frangonorte, a food company which Jucá was a partner, was allowed to borrow money from Banco da Amazônia despite having not repaid a previous R$13m (US$5.2m) loan from the bank. Jucá is suspected of given the bank seven non-existent farms as a guarantee for the loan. Jucá denies it, saying that if any irregularity was committed, his former partner in Frangonorte was to blame. Jucá is also accused of utilising resources from his home town, Boa Vista in the northern state of Roraima, which is administered by his wife, for his electoral campaign for congress.

Development: Japan announced on 16 June that it needed Peru to supply more evidence with its extradition requests for former president Alberto Fujimori as what had been presented so far was insufficient.

Significance: The Peruvian government argues that Japan is stalling on extraditing Fujimori. It made its second extradition request on November 2004 after Japan said that the first one, made in August 2003, lacked sufficient evidence. Peru is clinging on to the hope that Japan's response at least suggests it is considering Fujimori's extradition. Fujimori has dual Japanese and Peruvian citizenship.

The Japanese authorities sent a document to Peru posing 22 questions relating to Peru's claim that Fujimori gave his former security adviser Vladimiro Montesinos US$15m in 2000. Japan raised doubts that Fujimori had anything to do with the resolution approved by the treasury to give Montesinos his US$15m cheque. It also wants to know if the Peruvian authorities have managed to identify the Swiss bank account in which Montesinos is alleged to have put the cheque. Japan also sent seven questions relating to the accusation in the first extradition request that Fujimori was involved in the killing of 15 people in the neighbourhood of Barrios Altos in Lima in 1991, and the disappearance of nine students and a professor of La Cantuta University in 1992.

Development: On 20 July Michelle Bachelet, the frontrunner in the race for the presidency, completed a four-day visit to Spain during which she set out her vision for governing Chile.

Significance: Bachelet stressed the need to foster and stimulate Chile's steady economic growth, but also to distribute the wealth created more equally. The candidate from the Partido Socialista also reiterated her opposition to abortion, emphasising instead the need to develop prevention and planning strategies. She also talked about address the unfairness of the Pinochet-designed binominal election system.

In the current system two legislators contest any district, but the winning alliance takes both positions only if its vote is double that of the person in second place. As this scenario rarely occurs, the system has resulted in greater congressional representation for Chile's rightwing parties than a more proportionally representational method.

Bachelet's trip was designed to raise her international profile, but the socially conservative part of her message was intended for a Chilean audience. Prior to her withdrawal from the presidential race, Soledad Alvear, Bachelet's rival from within the Concertación coalition, had tried to outflank her on family values, a vote-winning issue in a country where divorce was only legalised last year.

Development: The government issued fresh arrest warrants for the leadership of the Fuerzas Armadas Revolucionarias de Colombia (Farc) on 23 August, this time on drugs charges.

Significance: Although the government has issued 20 or so arrest warrants for senior leaders of the Farc in the last five years alone this is the first time they have been charged with drugs offences. Prosecutors said the warrants were based on an investigation by the army which found the Farc had been involved in “the cultivation, processing, refining and trade of cocaine and heroine".

The Farc's links to the drugs trade as an important source of financing are no secret and the government has given no indication of why it is only now pursuing the group's leadership on these charges. One theory is that the government is trying to eliminate a possible loophole in the recently ratified legal framework for the paramilitary peace process.

The legislation protects political criminals from prosecution if they agree to disarm; by accusing the Farc's leaders of drugs offences the government is making sure that they cannot be treated purely as political criminals and therefore will not able to use the paramilitary legislation to evade justice.

Development: The government of President Alejandro Toledo delivered its third extradition request for former president Alberto Fujimori to Japan on 26 September.

Significance: The foreign and interior ministries threatened, not for the first time, to take the case to the International Court of Justice at The Hague if Japan failed to respond soon. Ideally the government would like to resolve the issue before the end of 2005 to preclude Fujimori from competing in the presidential elections in April 2006. The third extradition request included documentation from the supreme court related to the Japanese government's request in June for more evidence. Peru's first two extradition requests, made in November 2004 and August 2003, accused Fujimori of murder and embezzlement.

While the government is stepping up its bid to see Fujimori extradited the judiciary on 26 September began the civilian retrial of Abimael Guzmán, the head of the guerrilla group Sendero Luminoso which Fujimori dismantled. Guzmán was sentenced to life in prison for treason in 1992 under Fujimori's tough anti-terror laws. His retrial was ordered in 2003 after the laws were repealed but it collapsed in November that year. The prosecution argues that Guzmán was the head of a criminal group while the defence claims he was the head of a subversive group defending Peru's poor.

Development: The dispute between Uruguay and Argentina over Uruguay's construction of two cellulose plants near the border between the two countries became a diplomatic spat on 30 October after President Tabaré Vázquez reacted angrily to remarks by the Argentine governor of Entre Rí­os, Jorge Busti, that Uruguayan officials might have received “incentives" to back the construction of the plants.

Significance: Up until now it has mainly been the Argentine and Uruguayan media that has sought to stoke up the tension over the two cellulose plants, which would be located next to Entre Rí­os. However, the Uruguayan government was incensed by Busti's remarks on national radio on 29 October, which he later insisted had been misinterpreted. Vázquez instructed Uruguay's foreign minister, Reinaldo Gargano, to contact Uruguay's ambassador in Buenos Aires on 30 October to seek an explanation from the Argentine government. This prompted Gargano's Argentine counterpart Rafael Bielsa to put in a call to his ambassador in Montevideo. 

Gargano accused Busti of overstepping the mark: “We have to know the opinion of the Argentine government, if it shares the opinion of the governor of Entre Rí­os, which we consider an insult," Gargano said. 

Uruguay has approved the construction of the two cellulose plants by the Finnish company Botnia and Spanish firm Ence in the city of Fray Bentos. The project will bring investment worth US$1.8bn, the largest in Uruguay's history. The World Bank is supporting the scheme. Argentina is opposed to the building of the plants, at least until a study of the associated environmental impact is carried out. It claims to be worried that the plants will pollute the Rí­o Uruguay which forms the border between the two countries.

Development: Preliminary results suggest the Movimiento Quinta República (MVR), President Hugo Chávez 's party, won 114 seats in the 167-seat national assembly in the legislative elections held on 4 December. Other pro-Chávez parties won the remaining seats after the opposition withdrew.

Significance: The result has two obvious consequences. First, Chávez 's dominance of the legislature will allow the government to accelerate his Bolivarian revolution. Second, the absence of any serious opposition from the national assembly, plus the high abstention rate, has amplified the opposition's questioning of the government's democratic credentials. This was indubitably the aim of the anti-Chávez parties when they withdrew from the process.

With 79% of the voting-centre results examined, the abstention rate was around 75%; 2.9m people voted from an electorate of 14.5m. This turnout was lower than the government had expected and came despite Chávez personally exhorting Venezuelans to vote. In 1998, the year before Chávez came to power and the last time legislative elections were held separately from presidential elections, 47% of registered voters abstained. In 2000 the abstention rate was 44%. Speaking on the privately owned TV station Globovisión Henry Ramos Allup, the secretary-general of Acción Democrática (AD), the largest opposition party, said: "The new assembly might be legal, but it has no legitimacy because it does not represent the majority of Venezuelans."

AD was one of five opposition parties to pull out of the elections, despite their success in persuading the national electoral council (CNE) to block the use a fingerprint scanner they feared could have been used to identify voters. The transparency of the elections was also endorsed by monitors from the Organization of the American States and the European Union. Despite the decision by the leaderships of the five opposition parties (the AD, Copei, Proyecto Venezuela, Primero Justicia and Movimiento al Socialismo) only 10% of the parties' candidates actually withdrew their candidacies. However, votes for parties not running were considered invalid.

Consequently the MVR and pro-Chávez parties swept the board. Maria Corina Machado, one of the directors of the citizens' rights groups Súmate (which organised the recall referendum against Chávez in 2004), said, "From a pluri-party parliament we pass to a mono-party parliament that does not represent the broad sectors of the population. Today a national assembly is born that is wounded in its legitimacy." MVR director William Lara disagreed, arguing that there were independent deputies and ones who represented different social groups, although he conceded that they all share the "project for change" of Chávez . The new parliament will begin its five-year term on 5 January.

The rainy election day passed off mostly without incident. The most serious event was an explosion at an oil pipeline in Paraguaná in north-west Venezuela. Attorney general Isaí­as Rodrí­guez said an investigation had been launched into that and a number of other small bombs thrown in the run-up to Sunday's vote.

Development: Manuel Rosales, one of only two state governors opposed to President Hugo Chávez , dismissed allegations on 15 January that he had met Venezuelan dissidents and the Colombian secret police-chief in Colombia in July 2005.

Significance: The collapse of the traditional political parties in Venezuela means that Rosales is one of the most significant political opponents of President Hugo Chávez . Rosales runs the oil rich state of Zulia, in the west of the country, bordering Colombia. He went on a radio show on 15 January to dismiss the claims by the Chavista mayor of Maracaibo, Giancarlo Di Martino, that he had visited Colombia to meet Pedro Carmona Estranga, who briefly replaced President Chávez during the April 2002 coup, and Jorge Noguera, the then head of the Departamento Administrativo de Seguridad (the Colombian secret service).

Rosales was unequivocal in his denunciation: "It is an allegation from the sewer: there can't be any evidence because first I never had a meeting with either man and _ furthermore have not been to Colombia for years. I do not understand how they can fabricate a document saying that I have been to Colombia when I have not." Rosales pointed out that the supposed document did not have any official stamps.

Rosales has long been a target for Chavistas. He is independent and pragmatic: he backed the coup against Chávez but also was one of the first opposition politicians to accept that Chávez won the recall referendum in August 2004. After Rosales counterattacked, Di Martino repeated his allegation.

Di Martino claimed that with people such as Rosales about the government should lose no time in getting the legislation approved by congress that will strip governors of responsibility for running the local police.

Development: President George W Bush of the US called President Vicente Fox on 20 February to underline his concerns about security along the US-Mexico border.

Significance: The call shook the Mexican foreign ministry into issuing a statement admitting that relations between the two countries had been "unusually complex and even tense" over the past few months. The foreign ministry maintained the Mexican policy line that border security is a joint problem. The US line is that Mexico is not doing enough to police its side of the border.

During the call, President Bush invited Fox to a summit. President Bush also said that the forthcoming (24 March) regular meeting of the Bilateral Border Commission would be important. The date of the presidential summit has not yet been fixed but it will be before Easter, either at the end of March or beginning of April. Bush also proposed getting the US Secretary of Homeland Security, Michael Cherkoff, to work more directly with the Mexican interior minister, Carlos Abascal, on what the US called border security issues. The Mexicans said that plans were discussed to improve cooperation on the fight against organised crime. Fox said that he was keen on increasing cooperation and information sharing with the US.

There may be a misunderstanding here. The Mexican presidency issued a statement saying that the two presidents' main discussion had been on the fight against organised crime and that they had also discussed immigration and border security. The Mexican presidency's implication was that the substantial discussion was about organised crime, not immigration, nor border security. The US spin on the telephone call was that it was primarily concerned with border security.

The Mexican line is that the security problems on the border are caused by criminal gangs, funded by the drug trade and armed from the US, who run areas of the border overpowering, or corrupting, local police forces. The US does not delve as far into the whys and wherefores, but simply notes that Mexico is in danger of losing control of its side of the border.

Gerónomio Gutiérrez, the senior official at the foreign ministry responsible for relations with North America, welcomed the proposed presidential summit. He said that they were always useful and that both countries had a lot of bilateral issues to discuss at the moment. What Mexico clearly wants to avoid is the proposed summit degenerating, as the one a year ago did, into a series of photo-opportunities at President Bush's ranch in Texas. Mexico will probably try to avoid involving the new, Conservative, prime minister of Canada in the summit in order to keep the discussions focussed on bilateral rather than regional issues.

Gutiérrez still hopes that there is a chance of President Bush launching a new, comprehensive scheme to enable Mexicans to work in the US and thus decriminalise migration to the US. The US congress is currently discussing a tougher, anti-immigrant bill, known as the Sesenbrenner bill, which has already been passed by the House of Representatives, and would criminalise illegal migrants who have settled in the US.

Migration is likely to be a major issue in the elections this year on both sides of the border. In the US, Republicans going into the mid-term elections want to tap into anti-migrant feeling and support tougher anti-immigrant laws. Two states, Arizona and Alabama have proposed levying taxes on remittances sent home from Mexican migrant workers. Andrés Manuel López Obrador, the front-runner in the presidential elections in Mexico, proposed on 20 February that his government would create an immigration ministry to handle issues affecting expatriate Mexicans.

Development: Ollanta Humala, the nationalist frontrunner in April's presidential race, accused rival candidates on 23 March of seeking to form an alliance "todos contra Ollanta" (everyone against Ollanta) to prevent him from coming to power.

Significance: Humala topped out in his third poll of the week on 23 March. The poll, conducted by Universidad Nacional de Ingenierí­a (UNI), put him on 28.8% ahead of the conservative candidate Lourdes Flores, 24.8%, and former president Alan Garcí­a, 16.3%. Humala's charge is not unfounded. As we suspected Flores is knocking on the door of former interim president Valentí­n Paniagua, who lies in fourth place in the polls, although an alliance will probably not take shape until the second round. Paniagua would be a natural ally: he is the only other candidate attracting the votes of wealthier Peruvians.

"If the system is corruption, the insensibility of the political class, handing the country over to transnationals, then I feel proud to be the anti-system candidate," Humala said. He said that democracy was the dictatorship of the powerful. Humala is starting to campaign in the department of Cajamarca in the north of the country, where he is yet to make much of an impact.

ARGENTINA: Exports in March rose by 16% from the same period a year earlier to US$3.54bn. Imports increased by 24% to US$2.72bn.

ARGENTINA: Argentina posted a trade surplus of US$814m in March, in comparison to the US$852m posted in the same month last year. 

BRAZIL: The IGP-M inflation index registered a 0.92% deflation in the last 12-month-period, the lowest since 1944. 

BRAZIL: The Brazilian industry is expected to grow by 5% this year. According to the National Industry Confederation, the economy will grow by 3.7%, 0.4% more than its previous forecast.

Development: The leftwing presidential candidate Andrés Manuel López Obrador told his campaign team not to bother him over the past weekend so that he could prepare properly for the crucial TV debate on 6 June.

Significance: The debate is likely to settle the result of the election, although the elections are not until 2 July. If López Obrador, the long-time leader in the opinion polls who is now running neck and neck with the rightwing candidate, Felipe Calderón Hinojosa, does badly in the debate, he will not have time to recover.

The added complication is that the football World Cup starts at the end of this week and Mexico's team has a good chance of reaching at least the quarterfinals. TV attention from the end of this week is likely to be split between football and the elections, making it hard for the loser in the debate to recover. If Mexico's team flops, however, there could be repercussions for Calderón who has identified himself strongly with the team and as the continuity candidate.

It is hard to draw analogies from the coincidence of other World Cups with Mexican presidential elections because, until 2000, the incumbent Partido Revolucionario Institucional always won. A possible parallel is Britain in 1970 when the incumbent government lost, surprisingly, in a general election two days after the team, then World Cup holders, had been knocked out after leading 2-0.

Development: Around 280,000 supporters came to a rally in Mexico City on 8 July to launch Andrés Manuel López Obrador's legal challenge to the results of the presidential election.

Significance: López Obrador is starting to rev up his rhetoric. At the rally he said that the election was a fraud (previously he had said that there had been irregularities) and that President Vicente Fox was a traitor to democracy for allowing the fraud to take place. He accused Felipe Calderón Hinojosa, who the Instituto Federal Electoral (IFE) reported had won the election, of being just a puppet.

On 7 July, the IFE reported that Calderón had won the 2 July election by just over 243,000 votes (or 0.58% of the votes cast). Repeatedly, and emotionally, López Obrador asserted that there had been fraud in the election.

López Obrador is making two thrusts at the election result. His first attack is through the electoral appeals machinery, the Tribunal Electoral del Poder Judicial de la Federación (TEPJF). He also appears to be preparing an appeal to the supreme court on the grounds that the election breached two articles of the constitution, 41 and 97. Under Article 41, the IFE must run the elections in a clear, legal, independent, unbiased and objective fashion. It is far from clear why López Obrador believes that Article 97 is pertinent: this covers the role and functions of the supreme court.

López Obrador and his supporters delivered a 900-page document detailing the shortcomings in the election on 9 July to the TEPJF. The most compelling evidence is a video-tape which appears to show ballot tampering in one state. Less telling is evidence that election officials refused to recount ballots in the reconciliation that occurred on 5 and 6 July. According to one of López Obrador's close advisers, Manuel Camacho Solí­s, the López Obrador campaign has evidence that 50,000 of the 130,000 ballot boxes were tampered with.

Under electoral law, election officials can only recount ballots where there is clear agreement between all the parties observing the reconciliation that there is an anomaly. The Right, including Felipe Calderón himself, claims that the electoral law actually forbids any complete recount. This is moot: several lawyers say that the TEPJF could order a complete recount without invalidating the election. The Right may well go to the supreme court for a ruling on this issue.

It is clear that the legal battle will go on, probably until 31 August when the TEPJF has to settle cases. The TEPJF has until 6 September to declare a winner. So far López Obrador has been careful not to call for his supporters to try to reverse the election result through protests. He may change this policy when his legal options are exhausted.

López Obrador's big problem is that most election monitors, particularly those from the European Union, declared that the election was clean and fair. This endorsement has prompted President George W Bush, the Canadian prime minister, Stephen Harper, and, most significantly, the Spanish prime minister, José Luis Zapatero, to congratulate Calderón. Zapatero's felicitations are ominous for López Obrador, because Zapatero is left-of-centre and Calderón's campaign drew on Spanish advisers who, unavailingly, opposed Zapatero in the 2003 elections.

The only election monitors to claim that the Mexican elections were flawed were Global Exchange from the US and Alianza Cí­vica from Mexico. They said that there were irregularities in 26 states. The NGOs' criticism was similar to López Obrador's: that voters voted twice and did not have voting cards; and that the supervision of polling stations was lax.

The López Obrador campaign is also starting to claim that the leader of the teachers' union, Elba Esther Gordillo, organised a move in states controlled by the Partido Revolucionario Institucional (PRI) to switch votes from the PRI to Calderón. Gordillo admits that her new party, Nueva Alianza, had 16,000 people at polling stations on polling day and they saw that the PRI presidential candidate, Roberto Madrazo, was lagging badly. She said that she warned the López Obrador campaign what was happening.

López Obrador's campaign manager, Jesús Ortega, announced at the rally on 8 July, that he had tapes of calls that Gordillo made to PRI state governors, suggesting that they choose between López Obrador and Calderón and if they followed her advice, and went for Calderón, they should let Calderón know.

Development: Teachers called off their 10-day strike in Tegucigalpa on 10 August after reaching an agreement with the government over their salary demands.

Significance: The government was forced to come up with a more attractive offer after the strike took a violent turn on 9 August when thousands of teachers clashed with soldiers and police. The finance minister, Rebeca Santos, accompanied by President Manuel Zelaya, told a press conference that the government will set aside 7.2bn lempiras (US$381.5m) between 2007 and 2009 to meet the demands of teachers.

Santos also said that the government would offer teachers the equivalent of US$89.25 a year within the framework of a “social programme" to improve the quality of education. Santos made it clear, however, that the government could not break the terms of the agreement with the IMF to cut public spending. The president of the Colegio de Profesores de Educación Media de Honduras (Copemh), Sergio Rivera, said that 17 of the 18 departments had accepted the government's offer.

Development: On 17 September the acting manager of the state-owned company Petroecuador, René Vargas, announced an investigation into the alleged theft of crude from the pipelines in the Amazonian region.

Significance: The energy minister, Iván Rodrí­guez, claimed that up to 20,000 barrels a day were being stolen; a charge that Petroproducción, a subsidiary of Petroecuador, denies. What is clear is that oil production in Ecuador is declining slightly, but whether this is through poor maintenance, sabotage or theft is uncertain.

Rodrí­guez has ordered a restructuring of Petroproducción as he believes some of its employees may be involved in the theft of the oil. Feranando Santos, an oil expert, claims that crude is being stolen by people who work for the state company and is refined secretly in an Amazonian refinery to sell on to Colombian guerrillas.

Development: Preliminary results of the congressional elections published over the weekend show a significant change in the new parliament, with the Partido Renovador Institucional Acción National (Prian), of presidential candidate Alvaro Noboa, the big winner and the Partido Social Cristiano (PSC) the main loser. 

Significance: Regardless of the outcome of the second round of the presidential elections, due to take place on 26 November, Noboa's Prian looks set to emerge as the major political party in congress with 27 seats (out of 100), up from 10 in the last parliament. Alianza PAIS, the political party of Rafael Correa, the leftwing contender for the presidency, did not field any congressional candidates as one of Correa's main election pledges is do to away with congress in favour of a constituent assembly. Given the impressive performance of the Prian, which is resolutely opposed to such an institution, Correa may find it difficult to deliver on that promise, should he make it to office. Another factor which is as yet unclear, but could prove crucial for Correa's plans, is the number of blank votes, which in the context of this election could be interpreted as a vote for a constituent assembly. 

The results, based on a projection by the supreme electoral court, suggests the Prian will be the largest party in congress, followed by the Partido Sociedad Patriótica, of former president Lucio Gutiérrez, which won 21 seats. Gilmar Gutiérrez, the presidential candidate of the PSP who came a surprising third, has tied his party's support to whichever candidate promises to investigate President Alfredo Palacio for his part in the coup which ousted his brother in April 2005. Noboa has now pledged to support such an investigation. If the two parties form an alliance, they will be only three votes short of a majority. As the first-placed party, the Prian will hold the presidency of congress, thus influencing the congressional agenda; the PSP will hold the vice-presidency. 

In third place is the Izquierda Democrática party, with 15 seats. In fourth, down from first, is the PSC, which lost 14 seats; in 2002 it won 26. Pachakutik, the leftwing indigenous peoples' party, won 7 seats, down from 10. The Partido Roldosista Ecuatoriano, a rightwing populist, coastal based party, will have six seats. The Unión Demócrata Cristiana (UDC), formerly known as Democracia Popular (DP), will keep its five seats.

Development: On 28 November the Peruvian prime minister Jorge del Castillo, congratulated Rafael Correa on his election victory.

Significance: With 97% of the vote counted, Correa has a lead of 14 percentage points over Alvaro Noboa, the rightwing banana magnate, with the leftwinger winning 57.04% of the vote. Correa has now received congratulations from the presidents of Venezuela, Brazil, Bolivia, Chile, Argentina, Colombia and Peru as well as the US ambassador in Quito. Next week he will travel to Brazil, and then Cochabamba in Bolivia to attend the South American summit.

Peru's President Alan Garcí­a attempted to undo some of the damage done by his trade minister, Mercedes Aráoz, who said on 27 November that Correa's election could put the Andean Community's negotiations with the EU "at risk". Diplomatically, Correa said he would not respond to her statement as he had not heard it himself. Bolivia's President Evo Morales congratulated Correa, and the indigenous communities who supported him, on his election victory. The Bolivian president said that now he was not allow and the "democracies subordinate to the empire are over".

BRAZIL: The consumer price index (IPCA), the country's official inflation rate, rose 3.14% in 2006, the lowest level since 1998.

CHILE: The central bank cut the lending rate on 11 January to 5%.

COLOMBIA: Colombia exported 1.174M 60-kg sacks of coffee in December 2006 versus 1.177M sacks in December 2005.

COLOMBIA: State energy company Ecopetrol exported US$3.3bn worth of crude oil in 2006.

GUATEMALA: Coffee exports fell 21.35% year-on-year in December to 142,285 60-kg bags

MEXICO: Fixed investment rose 13.7% year-on-year in October and was up 0.96% in seasonally adjusted terms from September.

Development: On 18 February the 800 members of the army veterans' committee (CNOR) approved the choice of Cardinal Miguel Obando y Bravo to head the national peace and reconciliation council.

Significance: President Daniel Ortega is pushing for Obando to preside over the council which he created by decree. When the Sandinistas first came to power in 1979 Obando praised their overthrow of the Somoza regime, earning the nickname "Comandante Miguel". However, Obando later became very critical of Ortega's revolutionary government. 

Vice-President Jaime Morales, who was a member of the Contras fighting against the Sandinistas during Ortega's first presidential term, said that Obando was a perfect choice to head the council. He added that it should be up to those who fought on either side of the civil war to decide whether or not to approve Ortega's choice.

Obando has said that he will accept the position, but only if the Vatican allows it. The Nicaraguan Bishops' Conference advised him not to take on the role, because the Church has parishioners of diverse political views. The Vatican may take a firm line on Obando's involvement in politics; it recently refused to allow the Paraguayan bishop Fernando Lugo to return to the lay state in order to run for the presidency of the country.

This was a line that Obando himself took while the Sandinista government was in power during the 1980s; he encouraged priests who held positions in the Sandinista government to resign on the grounds that their involvement in politics threatened Church unity. Edwin Castro, an FSLN deputy and close collaborator of Ortega, said that the peace and reconciliation council was not another government ministry and that reconciliation is "not a bureaucratic apparatus".

Saturday
LATIN AMERICA: Li Changchin, a senior official of the Communist Party of China (CPC), continues his Latin American tour, which began on 19 March, to Mexico, Venezuela, Suriname and Peru. 

Tuesday
CHILE: Foreign minister Alejandro Foxley will travel to Tokyo, Japan to sign a free trade agreement, reinforcing Chile's presence in Asia, where the country already has agreements with China and South Korea. 

Thursday
ECUADOR: President Rafael Correa will meet with Peruvian President Alan Garcia in Quito to discuss funding for their Binational Border Development Plan. 

Thursday
TRINIDAD & TOBAGO: Prime Minister Patrick Manning will address a Trinidad & Tobago Constitution Conference to defend the drafting of a new constitution that replaces the post of prime minister with an executive president. 

Saturday
BRAZIL: President Luiz Inacio Lula da Silva will travel to the US to meet with President George W Bush to discuss biofuel opportunities.