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Colombia: During a visit to Colombia, US national drug control policy director John P Walters told the local press that he hoped for better cooperation with Venezuela in the fight against drug-trafficking.
Accompanied by the outgoing administrator of the US Drug Enforcement Administration, Karen Tandy he met Colombia's President Alvaro Uribe, Defence Minister Juan Manuel Santos and police chief, Oscar Naranjo to discuss developments in the fight against drugs.
Walters said the US-backed campaign and more cooperation between Colombia and Mexico had disrupted the flow of cocaine sufficiently to push up prices by 44% - one sign of scarce supply. He said the jump was accompanied by a 15 percent decline in the average purity of cocaine, another key indicator of supply.
Santos added that in 2007, the authorities had confiscated 92 tonnes of cocaine and 328 of heroin.
Nevertheless, drug policy analysts have questioned Walters positive appraisal with a drug intelligence report recently released by the Justice Department suggesting that since July, prices have started to fall.

Colombia: Colombian Trade Minister Luis Guillermo Plata made a three-day trip to Washington on 12 November to lobby for the approval of the Free Trade Agreement with the United States. The accord has been stalled since the Democrats took control of congress because of strong opposition from the AFL-CIO labour federation, which calls Colombia the most dangerous country in the world for trade unionists.
Plata told reporters that Colombia already is working as hard as it can to cut violence against trade unionists.
Colombia has already changed the Free Trade Agreement to incorporate tougher labour and environmental provisions requested by Democrats.

Brazil: During an international trade mission to Brazil, US governor of Florida Charlie Crist cancelled a meeting on 7 November with executives at Petrobras, the state-controlled energy company due to the company's ties with Iran.
He said that any agreement with Petrobras would have violated the spirit of a bill he signed in June that forbids the state from investing its US$140bn pension fund in companies that do business with Iran. "I am deeply committed to showing the world that Florida will not support companies that threaten our nation or our allies," Crist said in a written release. "We will continue to follow the moral and prudent path by not doing business with companies that sponsor terror and by setting an example for all other states and nations." Florida and Petrobras are key to the bilateral agreement between Brazil and the US, which seeks to promote the production and marketing of ethanol globally.

Cuba: The case of Luis Posada Carriles, the anti-Castro militant wanted in Cuba and Venezuela for the 1976 bombing of a Cuban airliner, will be discussed today (15 November) before a congressional audience in Washington. Entitled Diplomatic guarantees regarding tortures - why some are accepted and other rejected, the meeting was convened by the Democrat leadership of the chamber of representatives and takes place a week after the Justice Department appealed the decision by Texan judge Kathleen Cordone to dismiss immigration fraud charges against Carriles.

Central America: John Feeley, director of the Central America office for the US Department of State met deputy foreign ministers of the countries comprising the Central American Integration System (SICA) (Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica) on 13 November in Guatemala. He expressed concern that as a result of the success of Colombian President Alvaro Uribe in the fight against drugs, Central America is becoming a "refuge" for Colombian drug traffickers who are increasingly using Costa Rica and Panama as transit routes. Feeley said that the US government "recognised the suffering of the Central American people" caused by the increase in violence resulting from drug trafficking and said that the Bush administration was aware that US support for the regional alliance was necessary for it to be "efficient and effective". The White House has already approved US$16m to finance the regional security strategy, with US Congress expected to approve a further US$50m project for the region.

Development: The Venezuelan government is to relax price controls of foodstuffs, it was reported on 18 December.

Significance: Finance minister Rodrigo Cabezas seemed to recognise, in an interview with the Associated Press, that the policy of price controls is failing to curb inflation and is instead leading to shortages of food supplies in Venezuela. Cabezas said that the government was working on an "extraordinary plan" to have the problem solved, and that this included a relaxation of price controls. He did not give more details.

The Venezuelan government has imposed price controls on foodstuffs (and several services) since 2003 in a bid to curb speculation and inflation. This policy, however, has helped to fuel a black market and has so far failed to curb inflation. Last month inflation was up 4.4%, bringing the accumulated rate from January to November up to 18.9%. Worse still, price controls are leading to a shortage of supply which has, according to Cabezas, "reached a rate of over 60% in some products" such as cooking oil and sugar. In the case of milk the shortage is of "90%".

Bolivia: On 28 January the US embassy denied accusations by Bolivia's interior minister, Alfredo Rada, that the US had supported an "irregular" police intelligence structure operating in the country. The US embassy assured him that its "long tradition of supporting the Bolivian police" had always been undertaken with the full knowledge and under the control of the country's governments.

Colombia: US Secretary of State Condoleezza Rice concluded a two-day visit to Medellí­n, Colombia, on 25 January. The trip did not achieve its primary objective, which was to persuade the nine Democratic congressmen in the delegation to support the US-Colombia free-trade agreement. Upon arriving back in the US, the Democrats maintained that they had not made up their mind about whether to support the agreement (whose progress through Congress has stalled due to opposition from their party), but several of their aides suggested that they are unlikely to change their vote. Rice also refused to get drawn into the spat between Venezuela's President Hugo Chávez and President Álvaro Uribe of Colombia: "We leave Colombia's relations with Venezuela to Colombia," she said.

Ecuador: US Defence Secretary Robert Gates praised Ecuador's anti-drugs effort during a visit by the Ecuadorean defence minister Wellington Sandoval to Washington on 25 January. Sandoval attributed Ecuador's success to the fact that it neither refines nor grows drugs, highlighting that in the past couple of years, Ecuador has seized 35t of drugs. During his visit, Sandoval also discussed with Gates and Christy McCampbell, the assistant secretary in the international narcotics department at the State Department, the way Ecuador is policing its border with Colombia. Sandoval called this 'Plan Ecuador' and implied that, rather than military force, it depended on "soft force", such as cross-border partnerships and economic development, to achieve its objectives. Meanwhile, the Ecuadorean government's decision to publicise the praise given to it from the US demonstrates that President Rafael Correa is determined to keep his distance from President Hugo Chávez of Venezuela and his Alternativa Bolivariana para los Pueblos de Nuestra América (Alba) initiative.

Mexico: On 24 January a senior official at the US State Department, David T Johnson, denied that US military aid to Mexico depended on Mexico continuing to extradite gangsters to the US. This statement effectively reversed what he had said the previous day and what many political commentators suspect is the truth - that US$1.4bn in anti-drug aid is contingent on extraditions. What made his original statement so controversial is that the current government of President Felipe Calderón Hinojosa has stepped up the pace of extraditions to the US. Under his government, which started on 1 December 2006, 102 people have been extradited, 98 of them to the US. Mexico still refuses to extradite people who could face the death penalty. In his clarification, Johnson said that what he meant was that the US$1.4bn package would increase US-Mexican cooperation and extraditions.

Panama: The US donated four rapid boats, communication systems and radars worth US$7.5m as part of the "Enduring Friendship" initiative against drug trafficking. The US Southern Command-led initiative is aimed at assisting partner nations with strengthening their maritime domain awareness and operational capabilities to better anticipate and respond to drug trafficking and other threats. Jamaica, the Bahamas, and the Dominican Republic also receive similar assistance.

Region: On 28 January the US presidential spokesperson confirmed that President George W Bush would not seek to reform immigration laws during the remainder of his mandate. As immigration, along with the economy, has become a key issue in the presidential primaries, the government could not hope to achieve the bipartisan support to get a reform through congress. Bush said that immigration, along with social security reform, were the two most important challenges facing the US government. "America needs to secure [its] borders," he said. "And with [congress's] help, my administration is taking steps to do so. We're increasing worksite enforcement, deploying fences and advanced technologies to stop illegal crossings. We've effectively ended the policy of "catch and release" at the border, and by the end of this year, we will have doubled the number of border patrol agents. "Yet we also need to acknowledge that we will never fully secure our border until we create a lawful way for foreign workers to come here and support our economy. This will take pressure off the border and allow law enforcement to concentrate on those who mean us harm. We must also find a sensible and humane way to deal with people here illegally. Illegal immigration is complicated, but it can be resolved. And it must be resolved in a way that upholds both our laws and our highest ideals."

Development: On 4 March Venezuela moved troops to the Colombian border.

Significance: The move is sabre-rattling because Venezuela's armed forces are a fraction the size of Colombia's. And Colombia's regulars are battle hardened after years of anti-guerrilla operations.

Venezuela's army commander, Major General Carlos José Mata Figueroa, confirmed that the army was moving troops to the border. On 2 March President Hugo Chávez had called for 10 battalions to be deployed on the border.

A lot of those being deployed are national guardsmen, as the regular Venezuelan army numbers only 7,000. The army is also moving battle tanks and armoured personnel carriers to the border area.

*Chile has signed a protocol of amendment to modernise its free trade agreement (FTA) with the European Free Trade Association (Efta), comprising Iceland, Liechtenstein, Norway, and Switzerland. The updated agreement eliminates duties on all industrial goods and provides duty-free access to 99% of agricultural imports into Chile from Efta countries, and 95% of Chilean exports to Efta countries. Trade between Efta countries and Chile reached €970m (US$1.04bn) in 2023. The modernised FTA was signed by Efta representatives: Iceland’s Foreign Minister Thórdís Kolbrún Reykfjörd Gylfadóttir, Liechtenstein’s Foreign Minister Dominique Hasler, Norway’s Trade and Industry Minister Cecilie Myrseth, and Guy Parmelin, a Swiss federal councillor. Parmelin expressed gratitude to all parties involved, highlighting that the renewed agreement improves market access for goods and services, including financial services, and strengthens the intellectual property rights (IPR) chapter, providing greater legal certainty for exporters. Chile was represented by its foreign minister, Alberto van Klaveren, who emphasised the expanded market access for Chilean goods, services, and public procurement, along with new provisions on trade and sustainable development. Originally signed in 2003 and effective from 2004, the FTA’s remodeling process began in 2019 and concluded in January 2024 after seven negotiation rounds.

Development: On 7 April President Evo Morales reiterated that he would not declare a state of emergency in Santa Cruz.

Significance: The statement is a response to media speculation regarding growing tension in Santa Cruz, where local leaders are preparing for a 4 May vote on autonomy despite the fact that both the national congress and the Corte Nacional Electoral (CNE) have refused to authorise the vote.

Morales has insisted on various occasions that all governance changes remain within the constitutional framework. This strategy would appear to be paying off in terms of isolating the opposition prefects, given that even the political opposition party Podemos would appear to support this view.

In any case Bolivia's armed forces (FFAA) once again underlined support for Morales yesterday (7 April), stressing the need for the country to remain "united" - a reference to the attempts by the autonomists.

Nevertheless, the opposition prefects refuse to budge; after a meeting which lasted nearly four hours yesterday between prefects from Santa Cruz, Beni, Pando, Cochabamba and Tarija and the cardinal archbishop, Julio Terrazas who had offered to mediate in the dispute, the only concrete result was a statement by Santa Cruz prefect Rubén Costas that the 4 May vote would go ahead.

Development: The 71 days of national debate on the government's proposed reforms to the state oil company Petróleos Mexicanos (Pemex) began on 13 May.

Significance: The debate, which was demanded by the leftwing Frente Amplio Progresista (FAP) and its radical leader, Andrés Manuel López Obrador, has attracted little public interest. At one site, erected by the FAP with seating for up to 900 people in Mexico City, a traditional hotbed of support for López Obardor, only 36 people showed up to watch the start of the debate in the senate.

The lack of public interest probably has three reasons. The first is that most Mexicans accept President Felipe Calderón Hinojosa's promise that his government is not privatising Pemex but making technical changes to the way the company operates: these changes do not need a change to the constitution.

The second reason is that the Left has been diminished because of the inability of López Obrador's Partido de la Revolución Democrática (PRD) to pick a new party president. The party held elections on 16 March but still has not counted all the votes and declared a winner. Party committees oscillate between declaring that Alejandro Encinas, loyal to López Obrador, and Jesús Ortega, more of a moderate, has won.

The third reason for the lack of interest is that Mexicans believe that the Pemex debate is irrelevant. Their big concern is the murderous three-sided war between the government and the two main drug gangs, Sinaloa and Golfo.

This war killed 100 people last week, including three senior policemen, and, unless one side wins, is likely to kill a further 2,000 people this year, according to police estimates.

ARGENTINA: GDP rose by 8.4% in the first quarter of 2008 from a year earlier according to Indec, the state statistics department.

PANAMA: GDP grew by 8.4% in the first quarter of 2008 from a year earlier according to the government.

Development: On 21 July President Luiz Inácio Lula da Silva, said that Brazil “had" to take on the responsibility for integrating the countries of South America.

Significance: Lula was speaking after his trips to Bolivia and Colombia on 18 and 20 July respectively. The trip underlined how easy it is for Lula, a moderate and effective leftwinger, to deal with more radical, democratic Marxists and also with free-marketeering rightwingers.

In Bolivia Lula met President Hugo Chávez of Venezuela as well as President Evo Morales. At this summit, Lula and Chávez agreed to use public money to speed up the integration of the region. Lula agreed to commit US$530m to roadbuilding in Amazonia, in partnership with Chávez . The goal is to link Bolivia's remote northern departments with the rest of the region.

In Colombia, where Lula went to celebrate 198 years of Colombian independence, Lula hailed the decision by Colombia to join the new Unasur alliance. Colombia had been the only country in the region to stand outside this. President Alvaro Uribe of Colombia announced the change of policy on 19 July.

Lula said that Brazil was not interested in “being a big and economically strong country with a heap of poor people next to it. Everyone has to grow and have the opportunity to develop". 

Development: On 24 August it emerged that delegates from a senior paramilitary leader had visited the presidential palace in April to provide details of an alleged plot by the supreme court against the government.

Significance: The story, which was broken by the weekly news magazine Semana, is a major blow to the government's credibility. It will also reignite the row between President Alvaro Uribe and the supreme court at a moment when Uribe is about to announce major reforms to the judiciary.

Semana revealed that on 23 April two of Uribe's top advisors - Edmundo del Castillo (a legal expert) and César Mauricio Velásquez (the press secretary) - met two envoys sent by Diego Murillo, also known as Don Berna, one of the most important paramilitary leaders. Don Berna sent a lawyer, Diego Alvarez, and one of his commanders, Antonio López (alias Job), to the presidential palace to meet the advisors.

The paramilitary delegation was ushered in through a back door of the presidential palace. The purpose of the visit was for Don Berna's emissaries to hand over audio files indicating the existence of a plot within the supreme court against the government. Specifically, Don Berna thought the tapes incriminated Iván Velásquez, a supreme court justice who has been very active in bringing charges against politicians - usually allied to Uribe - who are alleged to have links with paramilitaries (the so-called parapolitical scandal).

Typically defiant, Uribe denied that he or his advisors had done anything wrong in meeting Alvarez and Job. In a hastily arranged press conference the president said that the meeting was not a secret: he showed registers noting the paramilitary delegation's vehicles in the palace car park and he released security-camera footage of their arrival.

Uribe said that the meeting was arranged solely to facilitate the handover of the compact discs. The president said that the audio evidence turned out to be “irrelevant" but had been handed over to the secret police for further investigation. Uribe denied that he was trying to discredit the supreme court, saying that this was the very reason why he did not disclose the meeting or Don Berna's accusations against the court.

Instead, he argued that it was the supreme court that was trying to discredit him by “trafficking witnesses" who would testify against him. “The president has the right to defend his honour," Uribe declaimed, before launching a scathing attack on his opponents from the Partido Liberal in which he questioned why the party was criticising him for the manner in which he brought the paramilitary war to an end when the Partido Liberal had done nothing to tackle the problem while it was in charge.

The president's defiance does not provide satisfactory explanations to two key questions: since when have paramilitaries and their representatives been granted audiences in the presidential palace; and why is the executive gathering evidence for a process which should be handled strictly by the judiciary.

It does not help the government that Don Berna was continuing to run his paramilitary activities from behind bars at the time of the 23 April meeting. Uribe ordered Don Berna's extradition to the US less than a month after the meeting on the grounds that the paramilitary leader was still committing crimes in violation of the peace deal with the government.

Job, who was shot dead in Medellí­n in July, was heavily involved in Don Berna's illegal operations. On behalf of the paramilitary chief Job is thought to have run Oficina de Envigado, an organization comprising drug-traffickers and assassins whose destruction Uribe has repeatedly demanded. When asked why Job wasn't arrested at the palace, Uribe's response was that there was no arrest order against him at the time.

The president of the supreme court, Francisco Javier Ricaurte, is furious. He accused Uribe and paramilitaries of working together to fabricate evidence against the supreme court as part of a wider plot to discredit the court in order to hamper its investigations into the parapolitical scandal.

The furore caused by the paramilitaries' presence has blown up at a bad time for the government. A senior prosecutor from the International Criminal Court, Luis Moreno Ocampo, arrived in Bogotá on 25 August at the start of a three-day visit. On his first day, Ocampo met Ricaurte and other members of the supreme court for three hours, during which he was told all about the obstacles the court has faced in investigating the parapolitical scandal.

Significant: Coming on the heels of Chávez 's three-day state visit to China, where he signed important new accords on energy cooperation with his Chinese counterpart Hu Jintao, the meeting with Putin had a geopolitical edge. Unlike the Chinese, Putin has expressed support for Chávez 's anti-US “multipolar" word vision and the Russians have used their growing relations with Venezuela (and Cuba) to tease the US.

The two signed new deals for the purchase of new military defence equipment and announced new oil - and nuclear - energy cooperation deals.

“Amigo Vladimir" agreed to offer Chávez US$1bn in credit to finance Venezuela's purchase of new military equipment, including air defence systems, armoured personnel carriers and more Su-35 fighter jets. Chávez has been an important customer for the Russian defence industry: by some estimates he spent US$4.4bn on Russian military purchases in the period 2005-2007 alone.

As with his trip to China however, the more interesting accords are the energy deals. Chávez said that the two had agreed to set up a new energy consortium between Venezuela's state oil firm Pdvsa and Russia's powerful Gazprom, Lukoil and TNK-BP to work on energy projects, not only in Venezuela and Russia, but also internationally.

More worringly for the US, Putin suggested he would be willing to cooperate on “pacific atomic energy programmes" in Venezuela.

Venezuela, despite boasting of the second highest oil reserves in the western hemisphere, is seeking to diversify its sources of energy and, like Brazil, has expressed an interest in nuclear power.

The prospect of Russian nuclear technology being made available to Venezuela, however, will unsettle the US state department. (Controversially, Russia already provides such technology to Iran.)

And all of this is ahead of joint Venezuelan-Russian military manoeuvres in the Caribbean in November. While the US has sought to downplay the ratcheting up of Russia-Venezuela relations and Russia's efforts to gain a strategic foothold in the region as mere posturing, it will undoubtedly make the next US president pay better attention to the “backyard".

Development:  On 29 October, the central bank's monetary policy committee (Copom) voted unanimously to hold the benchmark Selic interest rate stable at its current rate of 13.75%.

Significance: The decision was largely expected by local markets. The Copom sensibly opted to leave rates on hold in a very uncertain environment. Brazil has been heavily buffeted by the global financial crisis and is suffering a liquidity crunch that is likely to endure until the end of the year, despite a very proactive and coordinated response by the central bank and the government. 

The fourth quarter is likely to see a broad retrenchment in domestic economic activity, and the Copom may be hoping that this will be enough to put a lid on remaining inflation pressures. However, the stickiness of inflation figures (and a weaker Real) also suggests that the bank could well be forced to resume its monetary tightening cycle early next year. The direction of Real in coming months will be crucial - in the worst case scenario, the Copom might face the uncomfortable prospect of having to lift interest rates amid slowing economic growth.

The bank statement said that “evaluating the outlook and balance of risks for inflation, in an environment of higher uncertainty, the Copom decided unanimously to keep the Selic rate for the moment at 13.75%".

The central bank and the government are working desperately to stave off an imported crisis. The main question is whether domestic demand will withstand the credit crunch - the government is depending on private consumption and investment (77% of GDP in 2007) to offset a weaker external sector next year. Growth forecasts for 2009 continue to fall, although the government remains relatively upbeat about prospects for next year - it believes real GDP growth will come in at 3.5%-4.0%, down from around 5.2% this year. Some private analysts are much more bearish, suggesting growth could fall to as low as 2.2% annually in 2009.

Certainly, investor sentiment has taken a hit. Business confidence is now running at its lowest level in three years, according to a National Confederation of Industry survey published on 21 October. President Lula da Silva yesterday announced the government would provide additional support for the auto sector, which has seen both exports and domestic sales decline in the past quarter. The government has already introduced measures to help the agriculture and construction sectors.

According to latest estimates, the authorities have injected around R$100bn (US$46bn) into the local banking system since late September, in an effort to guarantee financing needs for local firms and investors.

On 29 October, the US Federal Reserve announced it would provide Brazil with US$30bn in order to boost the supply of US dollars locally. It comes amid the revelation that local firms may have suffered losses of around US$10bn in derivative bets gone wrong on the back of the sharp depreciation of the Real since August.

The move not only underlines how quickly healthy emerging markets have become victims of the credit crunch, but also indicates that policy makers in developed countries are very aware of the importance of shoring up large developing economies like Brazil.

Development: On 1 December the interior minister, Alfredo Rada, announced plans to prosecute the president of the rightwing Comité pro Santa Cruz and opposition leader, Branko Marinkovic, for “terrorism".

Significance: The government's announcement reflects the current strength of its position and underscores the weakness of the opposition.

A business magnate and key government opponent, Marinkovic is accused of orchestrating an attack on the Yacuiba-Rí­o Grande natural gas pipeline in Tarija during the wave of opposition-instigated violence in September.

As well as threatening Marinkovic, the government has made recent moves against other opposition figures. The president of Tarija's civic committee, Reynaldo Bayard, was arrested on 1 December, along with other civic leaders from Tarija also accused of vandalizing the pipeline.

In addition, three members of the radical Unión Juvenil Cruceñista (UJC), the shock troops of the autonomists, were imprisoned for attacking a former Santa Cruz police chief, Colonel Wilge Obleas, also in September.

The government's increasing confidence reflects the changed political panorama in the country following an agreement in mid October between the ruling Movimiento al Socialismo (MAS) and the opposition alliance (Podemos).

The accord resulted in the approval of a law calling a referendum on the new constitution and signified a resounding defeat for the regional opposition prefects. The opposition alliance has since fractured.

The recent presentation of two reports on a massacre in the eastern opposition region of Pando in September, which left at least 18 government supporters dead and 70 missing, has also strengthened the government's hand.

Both reports - one by the Union of South American Nations (Unasur) and the other by the human rights ombudsman - held the local authorities responsible for the violence.

The reports' findings have negative implications for the former prefect of Pando and prominent government opponent, Leopoldo Fernández, blamed all along by the government for the violence.

Fernández is currently in a La Paz prison for the lesser charge of breaching the state of siege imposed in the region (which ended on 23 November).

The opposition used demands for his release as a rallying cry.

However, since the presentation of the reports, the president of Bolivia's national human rights assembly (APDHB), Rolando Villena, revealed plans to prosecute Fernández in relation to the violence (although did not specify the charges).

Then on 28 November, a La Paz magistrate, Carlos Guerrero, announced a further case against Fernández in relation to the murder of a sailor during the storming of Pando's airport, also during the September wave of violence.

The government will also feel emboldened by its soaring approval ratings. Arecent survey by Ipsos Apoyo, Opinión y Mercado, published in the local daily, La Razón on 29 November, indicated that Morales has an approval rating of 62% approval in November, up seven percentage points on October, while Vice President Alvaro Garcí­a Linera saw his support increase to 56%, from 51% previously.

Development: On 15 January President Rafael Correa argued that his citizens' revolution was about to enter a new phase.

Significance: Correa took office two years ago exactly: he said in a celebratory speech to the rump of the constituent assembly, the Asamblea Legislativa, that the “period of clearing the ground and sowing was over_ and that now was the time to nurture the seeds that had been sown; to help them germinate; grow and bear fruit. Soon it will be time to harvest their fruit."

Correa's quasi-biblical language reflects his strongly Roman Catholic background and education. He is almost certain to be re-elected president, under his new constitution in elections on 26 April when a new congress will also be chosen and a host of municipal and regional governments.

Correa claimed that the economy grew by 5.3% in 2008 and would do so again in 2009. He promised to increase public investment in 2009 to 13% of GDP. Inflation in 2008 was 8.8%, up from 3.3% in 2007.

Development: On 23 February President Alvaro Uribe denied that the government had ordered illegal surveillance by Colombia's intelligence service, the Departamento Administrativo del Servicio (DAS).
       
Significance: Uribe is carefully distancing himself and his office, to whom the DAS directly reports, from the scandal rocking the intelligence agency. In his first statement since the scandal broke, Uribe reiterated the government's line on the case: that the recordings of supreme court judges, opposition politicians, journalists and members of Uribe's own government were carried out by a “criminal group" that has infiltrated the DAS.

Uribe said that he too was a “victim" of the scandal and denied authorizing surveillance: “I have never given a single order to monitor the private lives of individuals". He added that he was an “honest man who plays fair with his opponents".

Uribe's statement came after Colombia's supreme court, which has repeatedly accused the DAS of pursuing its members, issued a scathing condemnation of the latest revelations, which were published by weekly news magazine, Semana on 21 February. The court is calling for a swift investigation to bring those responsible to account. The scandal has already claimed one casualty - the deputy director of counterintelligence, Alberto Lagos - but it is inevitable that more heads will roll.

Uribe is now under considerable pressure to reform the agency. Opposition leader, César Gaviria, of the Partido Liberal, yesterday described the lack of control exercised by the government over the DAS as “remarkable".

Development: On 1 April the local press reported unofficial figures suggesting a 31% annual increase in the national homicide rate in the first quarter of 2009.

Significance: Surveys indicate that the problem of violent crime and insecurity tops the list of voter complaints and, following his 15 February victory in the referendum on continuous re-election, President Hugo Chávez promised tougher new security measures. However, his administration's record on crime is unimpressive and, despite centralising police reform efforts, the country's various police forces remain disjointed, corrupt and politicised.

According to unofficial figures cited in the daily El Universal, there were 844 murders in the capital Caracas (pop 2.76m) in the first three months, up from 654 in the same period of 2008.

Nationally, there were an estimated 4,659 murders, up from 3,562 a year earlier.

The total national homicide toll for 2008 was estimated at 14,400, up from 13,156 in 2007.

An NGO, the Venezuelan Crime Observatory, forecasts a total of 15,000 homicides nationally in 2009, with 3,300 in Caracas. The NGO has previously been critical of the government's security policies.

A year ago, the interior minister, Ramón Chací­n, announced a new anti-crime initiative in the capital, Plan Caracas Segura.

In April 2008, President Chávez introduced a new National Police Force law, aiming to establish, for the first time, a national force incorporating Venezuela's disparate 126 police forces.

Development: On 11 May Germán Vargas Lleras, leader of the nominally government-allied Cambio Radical, met opposition politicians César Gaviria, of the Partido Liberal (PL) and Luis Eduardo Garzón, of the Polo Democrático Alternativo (PDA).

Significance: The three men reportedly discussed a nascent inter-party coalition to oppose the re-election of President Alvaro Uribe for a third term in May 2010.

Germán Vargas Lleras, nominally a member of Uribe's ruling coalition, has been a thorn in the president's side since last year, when he openly opposed a bill to hold a referendum to allow for the re-election of President Alvaro Uribe for an unprecedented third term party. Cambio Radical has since split between supporters of Uribe and supporters of Vargas Lleras.

The senate, where Uribe's government enjoys a broad majority, is expected to approve the referendum bill on Wednesday (13 May). The opposition has promised that if the referendum is convened it will launch a national campaign to encourage voters to abstain.

Development: On 16 June one of the founders of the ruling Movimiento Al Socialismo (MAS), Román Loayza, announced he was officially resigning from the party and would stand as a candidate for the December presidential elections.

Significance: The announcement is unlikely to bother President Evo Morales, who is expected to win the elections easily. However, Loayza's announcement points to ongoing power struggles in the ruling party. He had already distanced himself from the MAS in recent weeks and said in his resignation letter that he was sick of being “used" and “discriminated against". Loayza is expected to announce his candidacy on 22 June for the Movimiento de Unidad Social Patriótica (Muspa), a pro-indigenous party.

Aside from Loayza, Peter Maldonado of the opposition Unidad Nacional (UN) party also announced his candidacy yesterday (16 June), which some consider could lead to problems with UN president, businessman Samuel Doria Medina, who is also tipped to stand.

Morales will also face competition from: Hugo San Martí­n, a former labour minister under the first Gonzalo Sánchez de Lozada administration (1993-1997) who announced the creation of a new political grouping, the “Alternativa por el Verdadero Cambio Democrático", set up with collaborators of former president Carlos Mesa (2003-2005); Ví­ctor Hugo Cárdenas, an Aymara, who also served under the first Sánchez de Lozada administration; and two Quechua candidates, Alejo Véliz and René Joaquino, who announced their candidacies earlier this year. The maverick former prefect of Cochabamba, Manfred Reyes Villa, has also said he will stand (despite being booted out of office in the August 2008 recall vote).

The deadline for registering candidates for the presidency and vice presidency is 6 September.

Petrobras enquiry starts - and stalls again

Brazil's President Lula da Silva continues to do everything in his power to prevent the opposition from opening what the Brazilian press dubs the “black box" of Petrobras - Brazil's state-controlled energy company. As soon as a senatorial enquiry requested by the opposition to investigate alleged wrongdoing in the company got off the ground earlier last week, after a two-month delay, it was halted again by government-allies. This allows Lula time to give a nationalistic spin to the government's long awaited new regulatory framework for Brazil's vast offshore hydrocarbons sector, which he hopes will move the public's attention away from the enquiry.

The government counts on an eight-to-three majority in the senatorial investigative committee looking into Petrobras and has pushed its way through to control the investigation by giving the coordination of the enquiry to Senator João Pedro Gonçalves, of Lula's Partido dos Trabalhadores (PT). It has also made Senator Romero Jucá, of the PT's main ally, the Partido do Movimento Democrático Brasileiro (PMDB), who is also the government's leader in the senate, the enquiry's recording secretary. The two men will set the tone for the enquiry and their chief mandate, as set down by Lula, is to avert the opposition's efforts to use the investigation to undermine the candidacy of his chief of staff, Dilma Rousseff, to succeed him in 2010.

Prior to becoming chief of staff, Rousseff served as mines and energy minister and, as such, appointed Petrobras's administrative body. She actually still sits on its board of directors. Under the Lula administration, Petrobras became another political apparatus for the government. The company is bankrolling much of the government's investment programme, the PAC, which is coordinated by Rousseff as a launch pad for her presidential candidacy.

Alleged irregularities

The opposition requested an enquiry into Petrobras in May in order to investigate cases of fraud in tendering processes and payments of bribes to government-allied politicians. By then, the federal police had already started investigating Petrobras for irregularities in the tendering processes of two offshore oil rigs, following complaints from a losing bidder who offered the same services cheaper, and for illegal disbursements to local governments controlled by government-allied parties.

But the main trigger for the enquiry was a decision by the Inland Revenue earlier that month to open an “administrative proceeding" against Petrobras for alleged fraud in its 2008 tax return. The irregular tax accounting was said to be to the tune of R$4bn (US$2.1bn). As a response, the government sacked the Inland Revenue's director, Lina Maria Vieira, after only 11 months in the post (in which she issued million-dollar fines to several companies, including Ford and Santander, for tax irregularities). It claimed that on her watch the tax take had fallen below expectations.

The government does not appear to have taken into account the fact that in the last quarter of 2008 the country's economy suffered a severe slowdown due to the global economic crisis. For the current affairs magazine Veja, the real motive behind Vieira's sacking was her move against Petrobras. In light of the enquiry, the government also felt it more prudent to substitute her with someone who would defend the interests of the company and the government - including in future hearings in the senate - Veja said. In effect, the magazine accused the Lula administration of ignoring the independence of the Inland Revenue by interfering politically in its management.

Whether or not these allegations prove true, it is certain they have worried Lula sufficiently for him to order government-allies in the senate to stall the start of investigations into Petrobras ever since the opposition won the right to open the enquiry in May. Its start was postponed three times by the senate president - and government-ally - Senator José Sarney. In return, Lula undermined the reputation of the senate by ordering PT senators to withdraw their demands for Sarney's resignation after he found himself at the centre of several wrongdoing allegations, which included the embezzlement of a donation from Petrobras to his foundation.

“Patriotic" games

But having exhausted all avenues - not least after the opposition threatened to issue a request to the supreme court to intervene in the senate and order the start of the enquiry - Lula has resigned himself to controlling the enquiry. His tactic is to politicise the enquiry by accusing the opposition of being “unpatriotic" by seeking to damage Petrobras for electoral motives. With this aim, he has ordered Gonçalves to halt the committee's work while congress closes for winter recess (legally, the committee could continue to meet while other senators were on holiday).

This has given Lula enough time to set up a new regulatory framework for Brazil's vast offshore hydrocarbons reserves, said to hold as much as 150bn barrels of oil equivalent. The idea is to issue regulations to present the Lula administration as protecting Petrobras's position, while showing the opposition's move to investigate the company as going against national interests. According to the newspaper O Estado de São Paulo, the government will use article 177 of Brazil's constitution to nullify the Petroleum Law issued during the presidency of Fernando Henrique Cardoso, which broke Petrobras's oil exploration monopoly in the 1990s. Article 177 allows the government to grant Petrobras a “market reserve" of the recently-discovered sub-salt gas and oil offshore fields.

In effect, the government could use discretionary power to grant Petrobras exploration rights to the most profitable fields without going through the tendering process set out by the Petroleum Law. “I want to see how those who once wanted to privatise Petrobras will behave," Lula was quoted as saying in an attack on the opposition, which under Cardoso's presidency considered privatising the company. “Petrobras belongs to us all, not only to the PT," opposition figures chanted back.

Development: On 2 September a Franco-Spanish documentary maker, Christian Poveda, was shot dead just outside San Salvador.

Significance: Poveda's murder is likely to trigger renewed interest in the country's parlous security situation and its problems with gangs.

Poveda's most recent work was the film "La Vida Loca" (The Crazy Life) an portrait of members of Mara 18, one of the country's two main gangs (Mara Salvatrucha is the other).

Poveda was killed as he drove back from filming in the suburb of La Campanera, a Mara 18 stronghold. The government estimates that there could be as many as 30,000 mareros active in the country. 

President Mauricio Funes said in a statement that he was "shocked" by Poveda's murder and ordered a thorough investigation. Figures from the attorney general's office (FGR) showed a 37% increase in the murder rate in the first seven months of 2009 compared with the same period of 2008. In the first seven months of 2009, 2,428 people were murdered.

The Funes government is implementing a new plan, Batalla por la Paz, to tackle insecurity in 25 municipal crime blackspots.

The Funes government's strategy is hampered however by the unresolved struggle between the ruling Frente Farabundo Martí­ para la Liberación Nacional (FMLN) and the rightwing opposition Alianza Republicana Nacionalista (Arena) over the appointment of a new attorney general, a key anti-crime post.