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The South American countries making up most of the UN 'stabilisation' force in Haiti have been showing that their involvement goes beyond providing peacekeepers. Argentina has used its presidency of the UN Security Council to get that body to put political pressure on the Latortue government, while Brazil has got UN endorsement for a plan to disarm the Haitian public through a 'buyback' scheme modelled on its own recently extended one.

On 12 January Argentina used its debut as president of the UN Security Council to call a debate on Haiti. It issued a presidential declaration calling on the Latortue government to initiate a political dialogue with the pro-Aristide camp ('a process of dialogue and national reconciliation of a broad and inclusive nature'), respect human rights (an allusion to the detention without charge of Aristide administration officials like former prime minister Yvon Neptune), and to stop dithering over action to disarm the public ('establish without delay a national commission on disarmament, demobilisation and reinsertion of the armed groups').

The Security Council also stated its willingness to stay on in Haiti for as long as necessary, and decided to send, before 1 June, a joint mission with Ecosoc's special consultative group on Haiti to give additional impulse to the political dialogue aimed at the celebration of elections towards the end of the year.

On 14 January Brazil's justice ministry announced that the UN (and the interim Haitian government) had agreed to a disarmament scheme proposed by foreign minister Celso Amorim during a recent visit to the country. It is modelled on the buyback programme put into effect last year in Brazil. Initially designed to last six months and expected to collect about 80,000 firearms, by the end of 2004 it had rounded up about 210,000 guns, plus an assortment of grenades, bombs and other weapons - which prompted its extension for a further six months in the hope of collecting a total of about 400,000 weapons.

The idea is to offer Haitians payment of US$30-$100 for each weapon surrendered, according to calibre. The Haitian government is now looking at the necessary legal framework, and donors are being urged to provide the US$100m considered necessary to fund the plan. Marcelo Behar, special adviser to the Brazilian justice ministry, reckons that the scheme could be launched in April.

The Haitian government has estimated that there are about 300,000 illegal weapons in the hands of the public - mainly, but not exclusively, held by the 'armed groups': the anti-Aristide rebels and the pro-Aristide chimí¨res. So far a few combined Minustah/national-police operations have been conducted against the latter, but chiefly to restore central government control over certain areas, and only incidentally resulting in the seizure of weapons. With one category of anti-Aristide rebels - the former members of the army - the government has chosen negotiation, which has already included the payment of compensation for the loss of pay since the army was disbanded by Aristide.

Worth noting: the UN Security Council also urged donors to honour their pledges of more than US$1bn in aid to Haiti. Brazil has entered an agreement with the World Bank to provide aid, but overall the flow has been well below the pledged amounts, and there is growing concern that the more recent preoccupation with the catastrophic Indian Ocean tsunami may be leading donors to downgrade the priority granted to Haiti.

An incident which resulted in two fatalities might trigger a new wave of confrontations between organised landless peasants and landowners in Paraguay's rich soya-producing areas. Both sides appear to be losing patience at the government's slow response - to the promised redistribution of land on one side, and to protect landowners from squatters on the other.

The incident took place at a 500-hectare farm in Vaquerí­a, 280 kilometres west of Asunción . The farm - owned by Ademir Aloisio Opperman, a Brazilian like many others in this line of occupation - had been invaded by some 50 families of landless peasants about three years ago. They had been driven to frustration, they said, by the non-fulfilment of an assurance by the Instituto Nacional de Desarrollo Rural y de la Tierra, the land reform agency, that the idle portions of the land would be redistributed.

On 5 July the squatters were forcibly evicted. One group clashed with a party headed by Opperman and in the ensuing fracas two of the peasants were shot dead. Opperman claimed that his party had only fired warning shots when attacked. Andrés Craig, a Canadian anthropologist who was with the peasants, refutes this, saying that Opperman's party fired directly down into the group of peasants from the truck in which they were travelling. The police arrested Opperman and 29 of his employees, but was awaiting the results of the autopsies before filing any charges. This was the first violent incident this year in soya country, where landowners complain of constant harassment by the landless.

 

In Washington's most overt intervention in a Latin American electoral process since 1946, US Deputy Secretary of State Robert Zoellick went to Nicaragua to throw his country's weight behind what he called the 'third way' - represented by Eduardo Montealegre and Herty Lewites - and against the Sandinistas led by Daniel Ortega and the Liberals led by Arnoldo Alemán.

Zoellick turned up in Managua on 4 October accompanied by the State Department's new number-one Western Hemisphere official, Tom Shannon. At a press conference attended by President Enrique Bolaños he said that Nicaragua's 'promising future' was in danger: 'This promising future is threatened. It's threatened by a creeping coup. It's threatened by corruption, it's threatened by a clique of caudillos. This is the way of the corrupt "Pacto". The people of Nicaragua seem to recognise the choice. The "Movimiento" has put tens of thousands of people in the streets. The polls show that the people of Nicaragua want democracy, want opportunity, want development.'

'I am heartened,' he said, 'to see that there's a Third Way movement in Nicaragua, and I'm going to meet some of the leaders of that movement [...] because it is vital that my country and others support fair and free elections in Nicaragua [...] I'm going to be seeing some individuals, Mr Montealegre, Mr Alvarado, who are setting a different course. Some of them have been associated with the Liberal Party in the past. That's the choice of people in the Liberal Party that they'll be making over the course of the next months. Similarly, I'm going to see Mr Lewites, who has broken with some of the old leaders of the Sandinistas about the "Pacto", because he recognises that it's corrupt.' Zoellick also announced that the US was granting US$4.5m 'to support the National Democratic Institute, the International Republican Institute, to work with the OAS and other organisations to make sure that these elections are free and fair'.

Zoellick contrived to give the impression that Nicaragua would be ostracised and cut off from US aid if either of the Pacto parties were to win the elections next year - though a careful examination of his statements reveals that these threats referred only to the possibility that the opposition should 'remove a democratically elected President from power'. His refrain was that Nicaragua faced a threat to the 'legitimate, democratically elected' Bolaños government, without making any reference to the fact that the challenge comes from a legislature which is equally legitimate and democratically elected.

'I want to be frank,' said Zoellick, 'there's a corrupt pact by Alemán and Ortega, and that is Nicaragua's past. It's not its future. That's a path that will lead Nicaragua to lose the Millennium Challenge Account assistance, to lose the opportunity of CAFTA, to lose the opportunities of investment, to lose the opportunities of integration with your neighbours, and of course, as a result, those that are most poor, most hurt, will be the poor of Nicaragua who desperately need an opportunity to get a leg up and to have a future of hope.'

In its press release on Zoellick's visit, the State Department chose to quote from the US press to make its case. It said: 'The Washington Post, in an editorial published October 3, recalled Ortega's "ruinous attempt to install a Marxist dictatorship" in Nicaragua 15 years ago and noted that "allegations of corruption and child molestation" continue to haunt Ortega. But neither Ortega's two electoral defeats in Nicaragua, nor his "single-digit rating in opinion polls", has prevented him from insinuating himself into Nicaragua's political process, the Post said. "Thanks to the weakness of the country's new democratic institutions, Mr Ortega is close to regaining power and to broadening the Latin alliance of undemocratic states now composed [of] Cuba and Venezuela".'

The Partido Liberal Constitucionalista (PLC) issued a communiqué on 5 October castigating Zoellick's statements as 'offensive, unjust and obfuscated [...], a clear humiliation and outrage by a foreign power determined to interfere and exercise decisive influence on the destinies [of Nicaragua].' Two days later US ambassador Paul Trivelli was predicting, however, that Zoellick's message would begin to show results in the short term. 'We will continue,' he said, 'trying to push, together with the OAS and the donors, for the democratic forces to unite before the elections.' Actually, at least one response had already taken place. On 6 October two PLC congressmen, Carlos Noguera and David Castillo, held a meeting with Eduardo Montealegre, the Liberal dissident hailed by Zoellick as representative of the 'third way', to discuss the possibility of uniting all 'democratic forces' against the Sandinistas.

The OAS track
On 7 October the president of the national assembly, René Núñez, delivered to OAS envoy Dante Caputo a letter taking up the proposal made by OAS Secretary-General José Miguel Insulza for a 'broad dialogue', with the assurance that the legislature was willing to enter such a dialogue without any conditions. This was followed by a plea to President Bolaños from the umbrella business association, the Consejo Superior de la Empresa Privada (Cosep), for him to call urgently a non-exclusive broad dialogue. Bolaños, who had not yet responded to Insulza's urging, said he would be giving a 'serious answer' to Cosep's plea. Caputo said: 'There are conditions for negotiation which I hope will become concrete; I have reasonable expectations that this will happen.'

 

• Belligerence grows towards Costa Rica
  
  President Enrique Bolaños has continued to raise the temperature on the dispute with Costa Rica over navigation on the San Juan river [WR-05-39]. On 5 October, after touring the troops stationed along the waterway, he announced: 'Costa Rica has insisted that they have the right to navigate the river armed to supply their police, from one end to the other of the stretch where they enjoy the right to navigate. Nicaragua will never recognise nor permit that [...] We hope that Costa Rica will keep calm, as we are.' 
  
  In an interview with the Costa Rican newspaper La Nación Bolaños said that the country's recourse to the International Court of Justice 'breaks the traditional harmony between the two nations somewhat'.
  
  The Costa Rican government has so far made no movement to match the military mobilisation on the Nicaraguan side. Nicaragua's national assembly announced on 6 October that it would approve an 'emergency' increase in the 2006 defence budget so that the army can establish permanent vigilance on the San Juan river. No figure was mentioned but assembly president René Núñez said it would be substantial.
  
  The newspaper La Prensa contributed to the prevailing atmosphere by underlining that Costa Rica's security budget is the second-biggest in Central America (after Guatemala's defence budget). Its 2006 budget envisages an appropriation of US$100m, whereas Nicaragua's 2005 budget only allocated US$33m for defence.

Nobody in officialdom, on either side of the border, appears willing to go on the record about the thorny issue of how many deserters from the military have been recruited by Mexico's warring drug cartels. When a US newspaper hyped up off-the-record comments on Mexico's vulnerability in this area, the Mexican presidency dodged the issue, referring enquirers to the military. These did respond in due course - anonymously.

Just before Christmas the Dallas Morning News cited interviews with 'four senior US officials, a senior Mexican intelligence official and three independent analysts' - the first five of them speaking on condition of anonymity - who said they were concerned about the expanding role of the Mexican military in the drug war. 'Some,' the article noted, 'said low pay among the middle and lower ranks makes military personnel vulnerable to offers from cartel leaders who may double or triple their pay.' The US officials said that two 'new' paramilitary groups, Los Negros and Los Números, 'may seek to bolster their forces with military personnel and federal agents'. One of them noted that 'frustration [in military ranks] is clearly indicated by the high desertion rate'.

Last week the newspaper received a faxed letter from 'a [Mexican] military spokesman [...] who requested anonymity'. He advanced the curious argument that 'any soldier who commits the crime of desertion and runs from the law for more than three months is discharged from the military [...] as a result of which, this ministry has no link with them, or with any activity they engage in afterwards'. Official figures show desertions running at an annual 21,640 a year, or 11.1% of total military personnel.

A brutal murder of a child which made headlines at home and abroad has highlighted the rapid rise of Trinidad and Tobago's violent crime rate. This has not, as some local media trumpeted, put the country 'among the top six homicidal nations' of the world, but it has certainly placed it in the second tier of the regional murder league. The government has attributed the spike in the murder rate to increased activity by drug gangs.

What triggered the wave of alarm and public indignation was the late March kidnap, rape and murder of a six-year-old by two youths. This took the number of murders since the beginning of the year to 106, making this period 'the bloodiest quarter' ever, as politicians and media underlined. This figure is equivalent to an annual rate of 33 homicides per 100,000 inhabitants, a considerable rise from the 29.6 per 100,000 recorded in 2005, which in turn was 49% higher than the rate of 2004.

This still leaves Trinidad and Tobago well below Jamaica's projected rate for this year, of just under 50 per 100,000. What is worrying, however, is that Jamaica's rate is heading downwards while that of T&T is climbing fast. In the first two months of this year the number of murders in Jamaica was down about 20% on 2005. The rate for the whole of 2005 is 28% lower than the projected rate for 2006.

To put this into perspective, it must be noted that the regional murder rate last year was headed by Jamaica with almost 64 per 100,000, followed by El Salvador (with 57 per 100,000), Guatemala (46 per 100,000) and Colombia (42 per 100,000). Rankings of this kind cease to make much sense in populations of less than 100,000, which leads to smaller entities in the Caribbean being left out. 

This said, countries like St Lucia, in a congratulatory mood last week because it had managed to keep its number of homicides stable between 2004 and 2005, have quite high relative murder rates. In St Lucia's case, 25 per 100,000 - higher than T&T's in 2004.

When T&T's national security minister, Martin Joseph, was quizzed at the end of last week in parliament about the measures the government was taking to curb crime, he said that most of the recent killings had been associated with gangs or the drugs trade. 

He went on to say: 'Notice that I am emphasising drug-related and gang-related [murders]. As it stands now, there are levels of homicide which we cannot take control over [at this time] and those are the domestic-related ones.' It is quite unusual for a government minister anywhere in the region to draw attention to this category of homicide, which weighs quite heavily on the headline statistics.

Joseph did not impress with his account of what was being done to confront the problem, or with his detail-free promise to put measures in place to deal with it. With President George Maxwell Richards among those who have been thundering about the unacceptability of the present situation, the likelihood is that he will have to resort to some high-profile measure soon.

MEXICO | Recovering 'diverted' public funds. The ASF, the federal auditing agency which reports to congress, announced on 20 July that it has recovered the equivalent of US$1.8bn worth of public funds misappropriated in 2002, 2003 and part of 2004. Preliminary findings for the remainder of 2004 have revealed the misappropriation of more than US$3bn.

In October the ASF's oversight commission will be submitting a full report up to end-2004, with an estimate of the amount it expects to recover from that year's irregularities, and a list of the state agencies that have not carried out the ASF's recommendations. So far, says the commission, it has managed to resolve 90% of the problems it had detected.

Commission official Dolores Padierna said that in 2004 'there was inefficiency and administrative disorder in several agencies, particularly that of health, in the supply of medicines'. The ASF says that legal procedures were ignored in public works carried out by the state oil company, Pemex, the Comisión Federal de Electricidad (CFE, the federal power utility), and the ministries of agriculture and communications and transport.

Worst of all, says Padierna, there was 'corruption and complicity' on the part of government officials in the diversion of resources in some government programmes, breaches of the law in the granting of electricity generation permits to the private sector and a lack of transparency in the granting of scholarships.

MEXICO | New gas pitch to Bolivia. On 21 July the foreign minister, Luis Ernesto Derbez, while attending the Mercosur summit in Argentina, said his country was willing to pay market prices for natural gas from Bolivia - a none-too-subtle dig at the resistance offered by Argentina, and even more by Brazil, to the price increases Bolivia has been demanding. 'We want access to Bolivian gas,' he said. 'Mexico has no difficulty as regards prices and volumes. We can accept paying at international prices.' 

Derbez noted that Mexico is already negotiating the purchase of gas from Australia, Indonesia and other countries in the Pacific. 'We have already spoken to the Peruvian government and I hope we can close a deal with them soon, within the next six months,' he added. 'We are proposing the same thing to Bolivia, with a great advantage, namely that Mexico can start out with the international price and accept it as normal for our level of consumption.' He also offered technical assistance to Bolivia's state oil company, YPFB, but did not suggest how Mexico would overcome the fact that there is at present no way of getting Bolivian gas to Mexico.

MEXICO | Car production reaches new high. In the first half of this year Mexico produced 1.1m motor vehicles, a record figure 40% higher than that recorded in the same period of 2005. A strong driving force for this expansion was the 81% increase in exports, in which markets other than the US played an important role. While car exports to the US increased by 43%, those to the European Union did so by 158.4%, and those to South America, by 97%.

The economy ministry reckons that car production in the whole of 2006 will surpass 2m units, compared with 1.88m in 2005.

MEXICO | Unemployment rate falls overall, rises in cities. The official unemployment rate in June for the country as a whole was 3.32%, down from 3.63% in the same month last year. Another 5.5% of the economically active population was recorded as under-employed in June. The unemployment rate in the 32 biggest cities was 4.61% in June, up from 4.58% a year earlier.

"The only path remaining is that of a military rescue of the hostages. We cannot continue the farce of a humanitarian exchange (prisoner swap) that the Farc has put forward."

Colombia's President Alvaro Uribe.

 

"We know that the Bolivian people are battling against entrenched old interests and we come, dear Evo, with open arms, to express our solidarity."

Argentina's President Néstor Kirchner, upon signing a gas deal with his Bolivian counterpart Evo Morales.

 

"I only regret that Fidel Castro did not carry out a process of political opening while he was alive."

Brazil's President Lula da Silva in an interview with the Brazilian newspaper Folha de São Paulo.

President Alvaro Uribe exchanged vicious insults with three of the most senior opposition leaders this week as the parapolitical scandal crept closer to his family. The trigger for Uribe's outburst on national radio was the announcement by Senator Gustavo Petro, of the Polo Democrático Alternativo (PDA), that in March he would begin a debate on the extent of the infiltration of the Autodefensas Unidas de Colombia (AUC) into public life in the department of Antioquia, where Uribe was governor between 1995 and 1997. Petro also alleged that Santiago Uribe, the president's brother, had belonged to a paramilitary group known as "the 12 apostles".

Petro argued that while Uribe was dedicated to fighting guerrillas as governor of Antioquia, he allowed the paramilitaries to grow. He did not link Uribe himself to the AUC but claimed that he had a clear conflict of interests because both Santiago, and his cousins, had links to the AUC.

In a clear swipe at Petro (the man who has done most to expose links between the AUC, the army and public officials), Uribe said that he could not stand by and listen to "terrorists in suits" lecturing the country on morals. He said his brother was innocent and that while it was true that the paramilitaries were rife in Antioquia when he took over in 1995 this was the legacy of former president César Gaviria, the current leader of the Partido Liberal, who left power in 1994.

Uribe also lashed out at the leader of the PDA, Carlos Gaviria who, he claimed, had never disavowed the actions of the guerrillas. "The opposition cannot base itself on calumnies and bias in favour of groups on the margin of the law," Uribe said. "What they are saying is the same as the Farc says on its website." Uribe's language prompted the president of the bishops' council, Luis Augusto Castro, to appeal to all politicians not to use "expressions of hate which will polarise Colombia more".

The ferocity of Uribe's attack owes as much to his begrudging respect for Petro as it does to the attack on his family's honour (Santiago was injured by the Farc when Uribe's father Alberto was killed in 1983). Petro is Uribe's most formidable adversary. Each of the congressmen he has accused of links to the AUC is being investigated by the supreme court. Petro has few friends in congress for his refusal to let sleeping dogs lie. He said that his family had already received death threats to warn him off continuing with the Antioquia debate, but he promised to go ahead. Petro knows that if he is successful he will have come one step closer to fulfilling his ambition to run for the presidency in 2010.

ELN agrees to hold talks
The government and the Ejército de Liberación National (ELN) agreed this week to begin a fifth round of talks in Havana on 22 February. Luis Carlos Restrepo, the peace commissioner, said that the week-long talks would include two senior members of the ELN - Pablo Beltrán, and the recently released spokesman for the group, Francisco Galán [WR-07-04]. The vicious struggle between the ELN and the Farc since March 2006 has put pressure on the ELN to seek a peace deal with the government. The ELN revealed on its website on 7 February that it never sought the "absurd confrontation" with the Farc. It said it considered them "brothers in arms" and that the two groups should put their ideological affinities before temporary differences. Both groups long ago sacrificed ideology to the pursuit of drug money, as the weekly magazine Semana spells out in a long editorial this week.

Paramilitaries rearm
Salvatore Mancuso, the head of the Autodefensas Unidas de Colombia (AUC) giving testimony under the justice and peace law, claimed this week that paramilitary groups were rearming. This is not a startling revelation in itself but Mancuso is the most senior member of the AUC to draw attention to the fact. He also provided figures: he said that some local leaders were reorganising themselves and had now enlisted more than 5,000 members. Mancuso said there was a chance that they could link up with new groups, such as the Aguilas Negras.

Members of a small opposition group have filed a case against President Hugo Chávez for allegedly introducing the slogan "Patria, socialismo o muerte" ("Homeland, socialism, or death"), recently adopted by Chávez in political life, into the armed forces. Former deputy César Pérez, along with other opposition figures, claims that Chávez is trying to politicise the military in direct contravention of the constitution. He urged the supreme court to take action.

Pérez cited article 328 of the constitution to back up his case, which states that "The national armed forces constitute an essentially professional institution, without political militancy, organised by the government to guarantee the independence and sovereignty of the nation_" Pérez submitted videos to the court apparently showing Chávez compelling officials to use the slogan, as well as details of a text given by Vice-Admiral Benigno Calvo to navy members instituting the slogan, especially when subordinates address a superior officer. 

An editorial in the national daily El Nacional on 13 May, entitled "The spring of the patriarch", argues that the new slogan is symbolic of a worrying change in Venezuela where "the armed forces are being turned into a political party, while political parties are subordinating their diversity to_ a unique organisation of military character." This is a reference to Chávez 's new party, the Partido Socialista Unido de Venezuela (PSUV), designed to allow him to exert more control over the 21 disparate groups within the ruling coalition [WR-06-50]. Podemos, Patria Para Todos (PPT) and the Communist party (PCV) remain opposed to the idea.

Ecuadoreans are either uninterested, unsure or confused by the huge number of different candidates standing for election to the constituent assembly on 30 September: 3,229 candidates are competing for 130 seats. According to a survey carried out by the national pollster Cedatos on 16 and 17 August, several days after the campaign began, 89% of 460 respondents in a random selection from 13 of the country's 22 provinces had yet to decide for whom to vote.

Although the majority of respondents had seen a publicity spot on television or heard it on the radio (see sidebar), Cedatos reported that a total of 83% of them were unable to name any of the aspirants for the 100 national seats in the assembly, while 86% could not name any of the aspirants for the 24 provincial seats in the assembly. The current affairs magazine, Vanguardia, said that voters were getting hit by a barrage of offers from candidates, such as employment and road construction, which were more consistent with presidential and legislative elections, and many were unaware that the constituent assembly's remit was to redraft the constitution. 

President Rafael Correa has gone to great lengths to portray the elections as scrupulously fair, by assigning equal state funding to candidates for publicity spots. The opposition is accusing Correa, however, of backing government candidates through public works projects. 

• Poll results for constituent assembly 
  1. In your opinion, the publicity sports on radio, the television and in the written press are:
  a. Sufficient to get to know the candidates
  Yes 27% No 73%
  b. Sufficient to get to know the proposals of the candidates
  Yes 15% No 85%
  
  Source: Cedatos.
  

In his first visit to El Salvador since his election Alvaro Colom met El Salvador's President Tony Saca. Both leaders highlighted as a priority the need to solve once and for all the case of the three Salvadorean deputies murdered with their driver in Guatemala in February. Following revelations of the involvement of the Guatemalan police, the case triggered a security crisis for the Guatemalan government and damaged bilateral relations.

Colom pledged to forge ahead with the investigation and spoke of his hopes that the case would be solved before he takes office in January. He also mentioned his plans to increase the budget for the judicial sector by 52% during his four years in office, in order to strengthen its capacity to investigate similarly "complicated and painful" cases. Aside from the murder case, the leaders also discussed immigration. Colom congratulated Saca on his "achievements" regarding migrant benefits for Salvadorean nationals in the US and said he hoped to work together with him to develop a migration proposal to help Guatemalans living in the US, a cause of some friction when President George Bush visited Guatemala in March [WR-07-11].

The Salvadorean media preferred to focus on Colom's ideological similarities to Venezuela's President Hugo Chávez even though he has made it clear that he intends to strengthen relations with the US and would have "no special relations" with Venezuela [WR-07-44]. Colom was careful to highlight his credentials as a social-democrat rather than a socialist, reiterating his desire to build "a social democratic Guatemala with a Mayan face, smelling of maize tamales".

UNE-FMLN relations

• Alvaro Colom was also grilled by the Salvadorean press over the future relations of both countries given the alliance of his party, the Unidad Nacional de la Esperanza (UNE) and El Salvador's left-wing opposition party Frente Farabundo Martí­ para la Liberación Nacional (FMLN). In an attempt to sidestep the matter, the president-elect emphasised that with his election, he is no longer leader of a party but the country.

Fernando Lugo, the frontrunner in Paraguay's presidential elections on 20 April, visited Argentina this week. Lugo is persona non grata in Brazil because of his fierce criticism of the terms of the hydroelectric project, Itaipú, which he is threatening to take to the International Court of Justice at The Hague unless it is renegotiated. Argentina's President Cristina Fernández was slightly more welcoming. Lugo, who is also seeking to revise the terms of the Yacyretá project with Argentina, got half-an-hour of her time.

Lugo appealed to Fernández for Paraguayans living in Argentina who are eligible to vote (some 400,000) to be granted three days holiday to return to Paraguay to cast their ballots (they cannot do so in local consulates). He also thanked Argentina for having welcomed so many economic exiles. He said one of his government's priorities would be to turn Paraguay around so that they would want to return permanently - a point he made forcefully while campaigning among his compatriots during his two-day visit.

Lugo stressed that his government would ensure Paraguay was fully integrated into Mercosur but "as an equal not as a beggar". If he were to take either of the bi-national dam projects to the ICJ, however, it would leave Mercosur in a sorry state with the pulp mill dispute between Argentina and Uruguay already being deliberated upon. Lugo was the last of the principal candidates competing in the elections to meet Fernández: the other main opposition candidate, Lino Oviedo (Brazil's preferred choice), and Blanca Ovelar, who is running for the ruling Partido Colorado, had previously visited Argentina.

• Cautious on Corpus

Fernando Lugo gave a guarded response when asked by the media for his views on the proposed Corpus dam which would be situated further down the Paraná River, only a few kilometres from Yacyretá. He said that he was not against it but that the necessary environmental impact assessments would need to be carried out. He also said it was important the process should be transparent, a veiled criticism of the manner in which the terms of the current dams were agreed (especially Itaipú which was signed in secret in 1973 between the military dictatorships).

The leader of the right-wing opposition Partido Patriota (PP), Otto Pérez Molina, is the latest politician implicated in the financial scandal which broke last week [WR-08-23] and has shaken congress to its core. The PP leader vehemently denies the allegations and accuses President Alvaro Colom of using public institutions for his own political ends, accusations which serve only to undermine further the credibility of the country's institutions.

On 16 June the local press reported that the special investigative commission had ordered an investigation into whether a cheque for US$92,816 received by Pérez Molina from the stockbroker Mercado de Futuras SA (MDF) had been paid out of congressional funds. This follows the revelation the previous week that former congress leader Eduardo Meyer had authorised the transfer of US$10.9m of congressional funds to MDF, which is not backed by the banking superintendence of Guatemala. The allegation had led José Conde, financial director of congress, and Meyer, to stand down (the latter temporarily).

The PP leader was quick to dismiss the allegation against him as “political blackmail" engineered by Edgar Barquí­n (banking superintendent and a member of Colom's Unidad de la Esperanza Nacional). He subsequently announced he would be taking legal action against Barquí­n for abuse of authority, defamation, and libel as well as violating the banking law by disclosing classified information. Somewhat incongruously he also compared Colom with Venezuela's President Hugo Chávez , accusing him of using public institutions for his own political ends. While admitting that he did receive the cheque, he maintains it was a personal loan from MDF manager Raúl Alfonso Girón Gálvez, who has been ordered to remain in the country to face a probe.

Pérez Molina is not the only politician fighting to clear his name. Since the scandal broke last week, the attorney general's office has requested the supreme court investigate allegations against Meyer's predecessor, Rubén Darí­o Morales, who resigned from the Partido de Avanzada Nacional in mid May. Morales is accused of carrying out a similar operation in 2007 (receiving a payment of US$40,000) when he presided over congress.

• Brazil pledges cooperation

A Brazilian delegation of technical experts and representatives from the Brazilian cooperation agency arrived in Guatemala last week to outline eight projects to be undertaken over the next four years with Brazilian assistance. The Brazilians met representatives from the ministries of agriculture, education and energy and mining as well as officials from the council of social cohesion. Aimed at tackling poverty, the projects (whose budgets are as yet unspecified) are related to education, health, agriculture production and energy, with Brazil's state-owned oil company Petrobras due to send a delegation to Guatemala in coming weeks with a view to possible cooperation in oil exploitation.
 
Another area of cooperation includes production of biofuels, with Guatemala to receive assistance in implementing a programme similar to that underway in Brazil entitled “Electricity for everyone", which aims to provide rural areas with electricity. The recent visit follows accords signed in April by President Alvaro Colom and his Brazilian counterpart Lula da Silva.

Cuba's foreign minister, Felipe Pérez Roque, confirmed last week that the government had agreed to reactivate political dialogue with the European Union (EU). In late June the EU decided, in recognition of “changes initiated by Raúl Castro", to drop the sanctions it imposed on Cuba in 2003 in the wake of a crackdown on dissidents. Fidel Castro swiftly condemned the EU in one of his many published “reflections", but government silence implied a difference with Fidel. After a respectful wait, and with Cuba desperate for financial assistance after the destructive passage of Hurricanes Gustav and Ike, Pérez Roque was instructed to accept the EU proposal for talks.

A formal agreement setting out the framework for talks has yet to be approved. Pérez Roque was keen to emphasise that the talks would be based upon the “principle of non-interference in domestic affairs", suggesting that Cuba would not be prepared to discuss the human rights situation on the island. However, he appeared to qualify this by saying that, “as equals", Cuba would be prepared to discuss “any issue on the international agenda."

The talks are likely to be long and tortuous, and will immediately be complicated by the fact that the Czech Republic assumes the EU presidency in January. Not only is the Czech Republic the member state most opposed to a rapprochement with Cuba, but its foreign policy priority next year is strengthening the EU's relations with the US.

The opposition Partido Liberal Constitutionalista (PLC) announced this week that its candidates successful in the 9 November municipal elections would not attend their swearing-in ceremonies. The decision compounds the political crisis caused by the opposition's refusal to recognise the election results.

The PLC legal representative, Wilfredo Navarro, sent a letter to the supreme electoral court (CSE) declaring that the PLC members would not attend the inauguration, due to take place on 14 January, in Managua. He explained that the decision was taken in order to avoid “legitimising the fraud" which took place in the elections, in which the ruling Frente Sandinista de Liberación Nacional (FSLN) was awarded victories in 105 of the 146 municipalities in which elections took place, while the PLC won only 37. Navarro also added that the electoral officials were acting illegally by swearing in candidates as the CSE had yet to clear up appeals presented by the PLC against more than 50 electoral results in different municipalities across the country.

Congress has been inquorate since the elections, with both the opposition and the FSLN intermittently refusing to attend sessions. The lack of quorum on 9 January delayed the election of the new congressional leadership and prevented President Daniel Ortega from presenting his annual state of the nation report. The main dispute is currently over the presidency of congress, a post coveted by both the FSLN and the opposition. Neither party has the 47 votes necessary for a majority.

NICARAGUA | EU agreement back on. The deputy foreign minister, Manuel Coronel Kautz, said on 20 April that Nicaragua would rejoin talks on the association agreement with the European Union (EU). Nicaragua had pulled out “temporarily" on 1 April after the EU and Costa Rica rejected its proposal for a common regional credit fund [WR-09-14], to which the EU would contribute 90% of the financing and Central America the remainder. Coronel said that Nicaragua's President Daniel Ortega is now prepared to “listen" to alternative proposals regarding a common fund. Nicaraguan officials are due to join other Central American representatives in Brussels for “informal" meetings between the two regional blocs, scheduled to take place on 22-24 April.

GUATEMALA | Remittances. Remittances in the first quarter of 2009 declined by 5.8% to US$916m compared to the same period of the previous year, according to the central bank (Banguat). Nevertheless, Banguat reported a slight increase for last month - with US$344.1m received in March 2009 (compared with US$340.5m in March 2008). This increase was attributed to unemployed Guatemalans in the US having since found temporary work in the services sector. The head of the international organization for migration (OIM) in Guatemala, Günther Müssig, stressed that March's figure was not indicative of the annual trend. The head of Banco Industrial, Luis Lara, is forecasting a 7% fall in remittances this year.

President Raúl Castro delivered a sobering speech this week to the national assembly, meeting for the first of its brief biannual sessions. He justified cuts in health and education expenditure on a worsening economic outlook, which he said would require further belt-tightening. He blamed the adverse economic conditions for his decision to postpone the long overdue Communist party conference yet again. He defiantly rejected US calls for a democratic opening but he reiterated his willingness to discuss “everything".

In the equivalent speech to the national assembly last year Castro revealed that Cubans would have to work for longer, lifting the retirement age by five years, to 65 for men and 60 for women. He dressed up the reform as a sign that the quality of the healthcare system meant Cubans were living longer. That might not be the case in future. This year Castro served notice that there would be spending cutbacks in the healthcare and education systems, the twin bedrocks of the Revolution.

Castro said he would end “unsustainable spending, which has been growing from year to year and which, besides, is not efficient, or worse still, makes some feel they do not need to work at all". “Sometimes I get the impression," Castro continued, “that we are eating socialism instead of building it and spending as if we were under communism". This last metaphor, which was meant as an indictment of corruption and worker apathy which is preventing the consolidation and consummation of communism, was in particularly poor taste - empty shelves abound in Cuba due to the expense of food imports, while foreign exchange earnings are falling sharply.

Castro announced that the economy only grew by 0.8% in the first half of the year. In April the government cut its annual growth from 6% to 2.5%. Now it has cut it again - to 1.7%. This is because the price of nickel, which accounts for 41% of Cuba's exports, has fallen by 80% to US$10,000 a tonne. Tourism faces the paradox of an increasing number of visitors but dwindling earnings from the visits.

Castro said that he had been compelled to postpone indefinitely the sixth Communist Party congress, which was due later this year. The last congress was held in 1997. Castro said a “conference" would take place instead to renovate the party's central committee because the current hierarchy was elected for five years and had been in place for 12.

Castro said that the Communist Party congress, when it is eventually held, would be hugely important to define the country's future political and economic course. “Because of the laws of life, this will be the last (congress) led by the historic leadership of the revolution," he said. Much like the Soviet Union in the 1980s the Cuban council of state and politburo is now packed with aging party grandees. Castro has spoken in the past about the role the históricos need to play to prepare the new generations for taking the revolutionary process forward.

“I was not elected president to restore capitalism in Cuba, nor to surrender the revolution. I was elected to defend, maintain and continue perfecting socialism," Castro said. He added that he was confident the younger generation felt the same way, although this confidence could well be misplaced if he presides over a tight, and protracted, squeeze on the health and education sectors.

Castro was responding to calls from the US Secretary of State, Hillary Clinton, linking dialogue with Cuba to democratic reform. “We are ready to discuss everything, I repeat everything, but we are not going to negotiate our political and social system," Castro said. “We don't ask the US to do it."

Castro did express his content, however, that the “aggressive anti-Cuban rhetoric" emanating from the US had subsided (a reference no doubt to the US's recent decision to turn off its news ticker [WR-09-30]) and that negotiations with the US on migration, in abeyance since 2003, had begun in “a serious and constructive manner".

Castro sent the deputy foreign minister Dagoberto Rodrí­guez to New York on 15 July to represent Cuba for the talks, which will continue in Cuba in December. In marked contrast to his brother Fidel, Raúl has also stopped short of accusing the US, or at least hawks left over from the Bush administrations, of masterminding the recent coup in Honduras.

The Obama administration does not appear to be willing to waive its requirement that Cuba must make a gesture on democratic opening. A State Department spokesman this week put it simply: “We're taking this step-by-step. I think we are willing to have a broader dialogue with Cuba. Clearly, Cuba has to take certain actions before we think that would be viable."

President Lula da Silva has defended his ties with Iran's President Mahmoud Ahmadinejad, who is due to arrive for a state visit to Brazil next week, as the Brazilian opposition showed support for Israel during the visit of President Shimon Peres last week. Lula hopes he can become a bridge between Iran and Israel and win a place in the Middle East peace negotiations, sealing his ambitions to be seen as a global statesman. The opposition argues that Lula's ties with Ahmadinejad cast doubt over his administration's rejection of terrorism, as the Brazilian supreme court came under heavy pressure from the justice ministry to grant asylum to Cesare Battisti, a former member of a communist terror cell whom the Italian government is seeking extradition for murder.

US President Barack Obama has reportedly asked Lula to help bring Ahmadinejad to the table over the issue of Iran's nuclear programme. For Lula, gaining the confidence of such key global leaders is part of his wider ambition to secure for Brazil a permanent seat on the UN Security Council. It is also a feather in his personal cap as “global statesman" - an ambition fostered by sectors of the Brazilian foreign office which wants to insert Brazil in the Middle East peace negotiations as a counterpoint to what they perceive as the US and European bias towards Israel. Lula's ties with Ahmadinejad, however, have been the focus of heavy criticism by local Jewish organisations and opposition politicians, who claim Ahmadinejad is not interested in peace with Israel.

Queried by journalists during the visit of Peres last week, Lula defended his ties with Ahmadinejad by stressing that peace could only come about by talking to “all the political and religious forces." Peres responded by seemingly inviting Lula to join the Middle East peace process: “Come, Mr. President, and light the light of peace in the Middle East." The remark was rather unfortunate given Brazil's massive power blackout only hours earlier (see next page). For critics of the Lula administration, such as the current affairs magazine Veja, Peres's remark was seen rather as “an example of Judaic irony" that was actually meant as a criticism of Lula and some of his foreign policy advisers [WR-09-28].

The visit of Peres and Ahmadinejad was used by the opposition to criticise Lula. The governor of São Paulo and likely presidential candidate for the opposition Partido da Social Democracia Brasileira (PSDB) in 2010, José Serra, used a meeting with Peres to define clearly his different views on foreign policy. Next to Peres, Serra declared in reference to Ahmadinejad's past remarks that “Whoever denies the holocaust harms the memory of a people, harms the whole of humanity." Serra went on to say that in order to achieve peace in the Middle East, nations should recognise each other's right to exist, otherwise there was no point to negotiations. Finally, he said that “Terrorism is the negation of politics and those who condone it must be fought against."  

Lula also condemned terrorism in a vehement manner. His rejection of terror as a political tool, however, was put in doubt by his administration's pressure on the supreme court, which this week finally ruled against the legality of granting political asylum to Battisti. The justice minister Tarso Genro had granted him asylum in January, on the grounds that Battisti was “persecuted" in Italy due to his political leanings [WR-09-28]. The National Refugees Committee (Conare in the Portuguese acronym) rejected this view, saying that Battisti was condemned for common murder - of four people who had no political links. In a statement, the justice ministry suggested that if the supreme court reversed Genro's decision Brazil would undermine a UN convention on the rights of refugees. Genro has also refused to create a specific law against terrorism.

• Petrobras may leave Iran

The Brazilian press reported that the state-controlled energy company Petrobras may abandon its operations in Iran, after its search for oil in the country remained unsuccessful five years after drilling began in 2004. According to press reports, the company has already begun the process to rescind its concession rights. Petrobras sources told reporters that the decision is “technical" and not the result of continuing political pressures from US authorities. Under the previous Bush administration, Petrobras lost businesses in the US after being accused of “sponsoring terrorism" indirectly by investing in Iran.

There are signs that the institutional clash between the presidency and congress over the last two months is eroding the opposition's political capital. A poll released this week showed the approval ratings of President Cristina Fernández and her husband Néstor Kirchner climb five percentage points between February and March to 28% and 27% respectively. There was a concomitant fall in the positive image of key opposition figureheads, Vice-President Julio Cobos and the mayor of Buenos Aires, Mauricio Macri, who just announced his intention to run for the presidency in 2011.

The increase in support for the 'presidential couple' can be attributed in large part to the institutional dispute over the use of central bank reserves to repay debt, and the growing public conviction that the alternatives to Kirchnerismo are no more palatable, indeed with its manifold divisions the opposition could actually be worse. In spite of this, the opposition is refusing to drop the dispute.

On 11 March the opposition failed to muster quorum in the senate to oust the new president of the central bank, Mercedes Marcó del Pont, as recommended by a senate committee a day earlier on the grounds that she lacked the requisite independence. Two dissident Peronist senators argued that Marcó del Pont had become “a scapegoat" for the clashes between the government and the opposition. This setback, which was repeated again on 17 March, prompted another dissident Peronist, Carlos Reutemann, to proclaim that the opposition was “tremendously fragile".

The opposition has also been thwarted in its efforts to annul the 'decree of necessity and urgency' (DNU) approved by Fernández to transfer US$4.38bn of central bank reserves into a separate fund to repay private creditors. A bicameral congressional committee recommended the DNU should be annulled but a federal judge, Enrique Lavié Pico, accepted an appeal by Kirchnerista senators that the 16-strong committee's composition, with opposition majority, had been obtained irregularly (see sidebar).

• Judicialisation of politics
  Frustrated by the ruling of Judge Enrique Lavié Pico, the opposition in the lower chamber declared null and void the first 'decree of necessity and urgency' (DNU) of US$6.57bn, approved last December, even though President Fernández herself revoked this during her state-of-the-nation address to congress earlier this month [WR-10-09]. The opposition also grumbled that Fernández was guilty of hypocrisy. She directed lacerating criticism at the opposition during her address to congress for the “judicialisation of politics" - turning to the judiciary rather than accepting political defeats - only for her party to do just that.