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Two separate reports last week highlighted the scale of the food crisis afflicting Central America.

In Guatemala, the Instituto de Nutrición de Centroamérica y Panamá (Incap) revealed that 102 of the country's 331 municipalities show high rates of malnourishment, and that at least 15,000 children are at risk — despite the annual outlay of US$37.9m to feed 1m children attending school. Guatemala's health ministry says that between 30% and 40% of the population suffer anaemia because of poor nutrition.

The cause is not too hard to find: 3m Guatemalans live on US$1 a day, while the basic basket of essential goods costs US$5.26 a day — which adds up to more than the US$100 a month minimum salary.

Incap has been urging the adoption of preventive measures, warning that the imminent celebration of a free-trade agreement between Central America and the US could have negative effects on the segment of the population living in extreme poverty.

The FAO reported that 1.2m Nicaraguans are directly suffering hunger, while another 1.4m, in a population of 5.5m, face malnourishment.

NICARAGUA | `Debt write-off at risk'. Finance minister Eduardo Montealegre used a press conference on 17 October to warn congress that if it introduced substantial changes in next year's draft budget, Nicaragua runs the risk of losing the 80% debt write-off under the Highly Indebted Poor Countries (HIPC) scheme. Certification of entitlement is due on 19 December. The budget submitted to the assembly is already overtight, as it envisages a deficit of 7.2% of GDP, as against a target of 6.9%. If Nicaragua misses its chance in December, said Montealegre, from next year it faces interest payments of US$195.3m on its US$6.5bn external debt.

COSTA RICA | Agricultural upturn continues. The turnaround in agricultural output which began in April last year has continued into this year: overall production in January-August was 3.6% up on the same period of 2002. Leading the expansion were pineapples, with exports rising 22%, to US$121m; coffee, up 13%, to US$159m; and bananas, up 9%, to US$353m.

TRINIDAD & TOBAGO | More taxes ahead for oil & gas. Prime minister (and finance minister) Patrick Manning announced last week that a review of the existing oil and gas taxation régime is underway, with a view to eliminating `certain anomalies' and ensuring that the country `gets its fair share of economic rent from these non-renewable resources.' An international consulting firm working on this has already submitted an interim report; the final one is due within a month, and the new régime should be implemented on 1 January 2004. Industry sources say that this announcement could lead to a temporary suspension of planned investments, until the nature of the revised régime becomes clear.

CUBA | Debt-reduction request to Argentina. Argentine foreign minister Rafael Bielsa announced that during his recent visit to Cuba he was presented with a request for a 75% write-down of that country's US$1.9bn bilateral debt with Argentina. The cut is the same as Argentina has asked of its creditors.

The indigenous peoples of Veracruz of the Movimiento de los 400 Pueblos have hit upon a novel way of pressing their demand for the fulfilment of a government promise. The menfolk have been marching through the streets of Mexico city and mounting watch in front of congress — in the nude. This has attracted a fair number of onlookers over the past month, but no action on their demand for lands that they had been promised during the government of President Carlos Salinas de Gortari (1988-94).

In an attempt to spur the authorities into action, the womenfolk of the movement joined the protest last week, slipping past the security guards and racing through the corridors of congress — also in the nude. They have at least succeeded in attracting the support of women politicians who were celebrating the 50th anniversary of the granting of the vote to women.

`We have discovered that we are poor, but also that we won't get anywhere on our own.'

Lula da Silva, President of Brazil, outlining his `strategic alliance' scheme to the Argentine congress.


`The US and our neighbours are worried that there might appear [in Bolivia] a narco-terrorist state.'

Gonzalo Sánchez de Lozada, President of Bolivia, the day before he was persuaded to resign.


`In the next congress we are going to have more former military men than ever. They come from the ranks, from the parties of the landowners and the Bourgeoisie.'

Tom Koenigs, head of Minugua, the UN verification mission in Guatemala.

LATIN AMERICAN REGIONAL REPORTS: MEXICO & NAFTA - NOW AVAILABLE

In this report we look at the political problems confronting the government. It has decided to push for a reform in the electricity industry, but it is far from clear that congress will support it. The biggest party in congress, the PRI, has a powerful nationalist wing which does not want to see any changes to the state-dominated electricity industry. Low politics also come into the PRI's calculations. It wants Fox and his government to pay a political price for their temerity in depriving the PRI of the presidency in 2000. We also look at the increasingly troubled state of the economy and analyse its vulnerability to falling oil prices. Our Nafta coverage looks at the failure of the free-trade deal with Japan and how Mexican manufacturers are responding to the threat from China. We also report on the investigation into the money laundering accusations lodged against Cardinal Juan Sandoval Iñiguez. For more information or to subscribe call +44 (0)20 7251 0012 or send an email to [email protected]

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Exchange rates
Local currency per US$1
COUNTRY	CURRENCY	Year ago	Previous	Current
		18.10.02	10.10.03	17.10.03
Argentina	peso	3.58	2.86	2.87
Barbados	dollar	2.00	2.00	2.00
Belize	dollar	2.00	2.00	2.00
Bolivia	boliviano	7.38	_	_
Brazil	real	3.87	2.83	2.86
Chile	peso	747.00	649.00	650.00
Colombia	peso	2,854.27	2,878.51	2,867.92
Costa Rica	colón	371.21	410.19	411.10
Cuba	peso	1.00	1.00	1.00
Dominican Rep.	peso	_	35.87	35.37
Ecuador	dollar	1.00	1.00	1.00
El Salvador	colón	8.75	8.75	8.75
Grenada	EC dollar	2.70	2.70	2.70
Guatemala	quetzal	7.75	8.05	8.07
Honduras	lempira	16.93	17.78	17.81
Mexico	nuevo peso	10.08	11.27	11.30
Nicaragua	córdoba oro	14.49	15.52	15.55
Panama	balboa	1.00	1.00	1.00
Paraguay	guaraní­	6,480.00	6,220.00	6,220.00
Peru	nuevo sol	3.63	3.48	3.48
Uruguay	nuevo peso	27.75	28.80	28.80
Venezuela	bolí­var	1,430.00	1,600.00	1,600.00
Sources: EFE; Bank of America.

Inflation in the region
Country	Source	July	August	September	Last 12m	Jan-Dec 2002
Argentina	Indec	0.40	0.00	0.00	3.50	41.00
Bolivia	INE	0.60	0.64	0.23	3.62	2.45
Brazil	FGV	-0.20	0.62	1.05	20.13	26.41
Chile	INE	-0.10	0.20	0.20	2.20	2.80
Colombia	Dane	-0.14	0.31	0.22	7.11	6.99
Costa Rica	DGEC	0.80	0.70	0.13	8.36	9.68
Ecuador	Inec	0.03	0.06	0.73	7.54	9.36
El Salvador	Min.Ec.	-0.40	0.30	0.10	2.10	2.80
Guatemala	BCG	0.27	0.28	0.42	5.68	6.33
Honduras	BCH	0.40	0.90	0.40	7.90	8.10
Mexico	Bco.Mx.	0.14	-0.07	0.60	4.04	5.70
Nicaragua	BCN	-0.08	0.30	_	4.04	3.87
Paraguay	BCP	-0.70	-0.20	0.20	8.10	14.60
Peru	INE	0.15	0.01	0.56	1.89	1.52
Uruguay	DGEC	0.50	1.16	0.80	11.63	25.94
Venezuela	BCV	1.80	1.30	1.30	26.60	31.20
US	DOL	0.10	0.40	0.30	2.30	1.60
Previous: WR-03-40

The stockmarket in figures
Market	Index	10.10.03	17.10.03	Variation (%)
Buenos Aires	Merval	863.44	877.84	1.67
São Paulo	Bovespa	17676.14	17790.71	0.65
Santiago	IPSA	1519.15	1560.32	2.71
Bogotá	IGBC	2149.35	2130.10	-0.90
San José	BCT	12497.86	12681.40	1.47
Quito & Guayaquil	Interinvest	69.52	67.46	-2.96
Mexico	BMV	7949.03	7859.82	-1.12
Lima	ISVBL	2064.42	2090.26	1.25
Caracas	BC	18081.41	18628.24	3.02
Source: Daily market reports.

New President creates breathing-space by ostensibly not posing a threat to any of the country's political forces.

Within three days of taking office, President Carlos Mesa chalked up his first achievement: a three-month `truce' granted by the peasant movement, which was followed by a more cautious one-month waiting period mentioned to the press by Evo Morales, leader of the Movimiento al Socialismo (MAS).

Mesa's coup was won by his impromptu appearance at a rally of several thousand peasants in central La Paz. He patiently listened to Felipe Quispe, leader of the umbrella peasants' union, CSUTCB, as he recited the demands he had made of the previous two presidents and his warning, `I intend to collect this bill from you, because you are the President.' The two embraced, and Rufo Calle, head of the La Paz peasants' federation, rushed around the crowd polling other leaders on the truce, which was promptly announced.

The new President harvested warm applause when he compared himself with Andrés Santa Cruz de Calahumana, the mestizo [half-breed] President who ruled from 1829 to 1839. `I am,' he said, `a mestizo who loves Bolivia.' Even more rapturous was the reception of his closing cry in Aymara, `Jallalla Tupaj Katari!' (`Long live Tupaj Katari'), in memory of the indigenous leader who rose against the Spaniards in the 18th century, laying siege to La Paz — the pattern followed by the recent protest movement, with the big difference that this one was successful.

From the beginning, Mesa had said that he would form a non-party cabinet, departing from the practice of sharing out ministries and top positions among political partners. His cabinet, he said, would be drawn from among independents, experts and intellectuals. This did not mean, as some initially understood, that only people without known political sympathies would be appointed — only that they would not be representing any political party.

This has helped Mesa obtain his `truces', as the allocation of cabinet posts does not appear threatening to anyone in particular. One innovation in the Mesa cabinet is the creation of two new `portfolios': indigenous and originary peoples' affairs, and popular participation. Two of the ministers were drawn from indigenous communities: Justo Seoane (for the first of the two new posts) and Donato Ayma Rojas (education, culture and sport). The interior ministry went to an experienced political operator, Alfonso Ferrufino, successively affiliated with the Movimiento de la Izquierda Revolucionaria (MIR) and the Movimiento Bolivia Libre (MBL), and most recently Mesa's adviser on constitutional reform. Javier Nogales, in charge of economic development, is the only one with prior top-level government experience, as central bank director in the 1960s and housing minister under President Jorge Quiroga in 2002.

How long will Mesa rule?
There has already been a suggestion, from senate president Hormando Vaca Dí­ez, that Mesa should serve out the entire remainder of Sánchez de Lozada's term, which runs until 2007. This, indeed, is what he is constitutionally mandated to do, but Mesa has said that he intends to head a `transitional' government, hinting that it will last until a constituent assembly is elected.

This could take some time, as the rules of the game have to be changed in order to entrust constitutional reform to a constituent assembly — it is now entrusted to congress. The Mesa government has already asked the OAS for assistance in taking this step.

Mesa knows full well that the honeymoon he is presently enjoying depends to a large extent on not appearing as a threat to any of those who aspire to the presidency — and particularly to the man who thinks he has the presidency within easy reach, Evo Morales.

Morales has already started sounding a more statesmanlike note on the issue which was raised as a banner for the protests that unseated Sánchez de Lozada: the export of natural gas. His new line is that he his not against exporting per se: `We are not in favour of not exporting, but of selling when we have recovered legal ownership and we can process the gas,' he said last week. This, he added, might postpone exports for `about three years.'

Where he remains defiant is on the coca issue: eradication, he says, must stop. In similar vein, Quispe has restated that each peasant must be free to plant with coca one cato [1,600 square metres] `regardless of whether the US considers it illegal.' Mesa has not yet stated his position on this matter, where the potential for confrontation with the US is high.

Carlos Mesa's cabinet

Foreign relations: Juan Ignacio Siles del Valle

Presidency: José Antonio Galindo Nedder

Interior: Alfonso Ferrufino Balderrama

Defence: Gonzalo Arredondo Millán

Finance: Javier Gonzalo Cuevas Argote

Sustainable development: Jorge Cortés Rodrí­guez

Economic development: Javier Nogales Iturri

Public services & works: Jorge Urquidi Barrau

Mining & hydrocarbons: Alvaro Rí­os Roca

Labour: Luis Fernández Fagalde

Peasant, indigenous and agricultural affairs: Diego Montenegro Ernest

Popular participation*: Roberto Barbery Anaya

Indigenous and originary peoples' affairs*: Justo Seoane Parapaí­no

Education, culture & sport: Donato Ayma Rojas

Presidential anticorruption delegate: Guadalupe Cají­as de la Vega

*Technically, ministers without portfolio.

At least one pollster in Caracas, Indaga, reports that President Hugo Chávez is recovering ground lost to the opposition. Its latest survey shows that support for him in the referendum on revocation of his mandate rose in the first week of October, from 43% to 45% — while backing for the opposition slipped a point, to 50%, and the proportion of undecided respondents shrank to 5%.

In opposition quarters the point is made that Indaga has consistently come up with the most favourable results for Chávez , but then it is also true that the leading pollsters have done the exact opposite. Indaga director Ana Irene Méndez ventures that Chávez 's standing may continue to rise between now and the referendum if there is a measure of economic reactivation and the social programmes his government has launched begin to show tangible results.

ELN reverses stance and agrees to phased release, strengthening the view that this was all about resuming contact.

Church mediators have persuaded the leaders of the Ejército de Liberación Nacional (ELN) to accept a staged release of the seven foreigners they have been holding hostage since their abduction in the Sierra Nevada de Santa Marta on 12 September.

Acceptance was signalled on 28 October by radiotelephone to Francisco Galán, the ELN spokesman who has been fronting the negotiations from his cell in the Itagüí­ prison, close to Medellí­n. As relayed later by the archbishop of Medellí­n, Alberto Giraldo, `The COCE [acronym of the ELN's central command] has decided to free the seven foreign citizens, starting with the Basque citizen [sic] at the beginning of next week.' 

The Basque in question, Asier Huegun Etxeberrí­a, is to be handed over to a `humanitarian committee' formed by representatives of the church and the UN, and ELN spokesmen Galán and Felipe Torres — the latter out on parole since 7 October.

ELN climbdown
This final agreement represents two climbdowns for the ELN. First, from its stance of a week earlier, that the liberation of the hostages would be delayed as a result of `government intransigence'. Second, from a later demand that the reception committee for Huegun Etxeberrí­a should include representatives of three Basque nationalist parties, including Socialista Abertzaleak, heir to the recently proscribed Batasuna.

The latter had been dismissed out of hand by President Alvaro Uribe, who said that he would not contribute to the `internationalisation of terrorism'.

The only thing the ELN appears to have got in return is the church's pledge to `verify' the `humanitarian crisis' in the area of the Sierra Nevada. This has strengthened speculation that the real objective of the kidnapping had been to reopen contacts with the government, which could now be made easier by the fact that one of the ELN's chief negotiators is free.

Shutting down the Lost City
Just before the hostage-release agreement was announced, a communiqué from the Colombian institute of anthropology and history, Icanh, informed the public that the Sierra Nevada de Santa Marta was being `temporarily' closed to all visitors. Its main attraction is the Ciudad Perdida (`Lost City') pre-Columbian ruins where the foreign tourists were kidnapped. Though the Icanh invoked the need to `reorganise' the tourist facilities, several local analysts have interpreted the decision as linked to impending military operations in the area.

Protecting the visitors from the threat of kidnapping does not appear to be the reason. The 12 September snatch is widely considered a one-off. The eight foreigners kidnapped then actually skewed abduction statistics, as they accounted for 30% of all foreigners seized in Colombia since the beginning of the year. They also make the Sierra Nevada, previously absent, loom large on Colombia's kidnapping map. The places where foreigners are likeliest to be kidnapped are the southern departments of Caquetá and Cauca, followed by Arauca in the east and Valle in the southwest.

Scheme has been redesigned, with four separate subsidies unified as a single `family grant' — and funding has been doubled.

Almost 10 months into his presidency, Lula da Silva has announced what amounts to a relaunch of the Zero Fome (`zero hunger') programme that he had promised during his electoral campaign, but was forced to trim back and postpone because of severe budget constraints.

The relaunch comes with an element of redesign, which takes into account some of the criticism levelled at the scheme when it was first announced. the most important change is the consolidation of welfare schemes: what has been going out as four separate subsidies — for food, healthcare, education and fuel — will now become a single `family grant'. Ministers have been ordered to coordinate their various social programmes aimed at the same target segments of the population, in order to maximise their impact.

This responds to a growing awareness that `social' funds were not always going where intended, or failed to achieve their purpose because they were not complemented by other actions. Ricardo Henriques, executive secretary of the social welfare ministry, gives the following example: `Some families are trained to administer micro-enterprises, but not the soft loans needed to start up their businesses — while their neighbours may be receiving the opposite.' Overall, says Henriques, `a few received too much and the many, too little.'

More money, with some limits
In the expectation of an improved economic climate (see page 9), funding for the `family grant' in next year's budget has been set at R$5.3bn (US$1.86bn), more than double the amount allocated this year to the four separate schemes (R$2.6bn, or US$912m).

So as to keep overall social spending balanced, the federal government has reached an agreement with the state governments to limit the amount of support allocated to a single family to between R$100 and R$120 (US$35-42) a month. Also, claimants will have to enter a series of commitments: their children must attend school and be vaccinated, and recipients must undergo regular health checks, and attend classes on nutrition, literacy and job skills.

Despite the constraints and shortcomings, the Lula administration has already met its target for this year of distributing R$50 (US$17.50) apiece in food aid from the `zero hunger' scheme. The new target for the unified `family grant' is R$75 (US$26.30) for 3.5m families. Lula says he remains committed to his overall target of ensuring by the end of his mandate that no Brazilian should suffer hunger, and that 50m people should enjoy a `decent and independent life'.

As Lula was relaunching Zero Fome, the statistical institute, Ibge, was reporting that average earnings in the main cities had fallen in September by 2.4% (to a level 14.6% lower than a year earlier).

The mood of indigenous assertiveness that has been enhanced by recent events in Bolivia appears to have encouraged members of Peru's non-white ethnic groups to challenge the pervasive racism in Peruvian society. The challengers are legislators, and their immediate target is racism within the legislature.

On 23 October, José Luis Risco, of the small Grupo Democrático, announced that he would no longer attend the sessions of the justice & human rights committee, to which he belongs. This, because he was fed up with the jokes and mistreatment of which he has been the butt because of his skin colour — he is black. `In congress,' he said, `there is a racism masked by hypocrisy.'

The next day, Aymara legislator Paulina Arpassi, of the ruling Perú Posible, complained during a radio broadcast that she is unable to participate fully in the work of the legislature because she suffers discrimination on account of `being a woman, being indigenous and speaking my mother tongue.' The constitution, she says, stipulates that there must be no discrimination on account of race or religious belief — `but we do not see that law fulfilled in practice.' Though Peru's indigenous population is about 45% of the total, only recently have indigenous parties similar to those of Ecuador, Bolivia and Colombia begun to appear.

COLOMBIA | Utilities ordered to cut rates. The Colombian government has ordered municipal water and sanitation companies to cut their rates by up to 58% — with the biggest cuts benefiting the lower-income clients. This comes after an audit of their accounts, which showed them setting against costs items which should have been set against profits, and applying rate increases in breach of the statutory ceiling for lower-income clients. President Alvaro Uribe has been criticising utilities for inflating their current outlays.

ECUADOR | Power sector declared in emergency. President Lucio Gutiérrez last week declared a state of emergency in the electricity sector. This is not an unusual occurrence, but this time its distinctive feature is that it has been declared preventively, before any sign that the reservoir of the Paute hydro complex — responsible for about 60% of the supply — is being depleted, as has tended to happen towards the end of the year. 

What the declaration means is that public funds are set aside to cover oil-fired generation should the rains not come and Paute fail to deliver. Over the past three years the system has been able to offset the decline in supply from Paute during the dry period, but there has been a tendency to react late to the effect of drought on the reservoirs.

BOLIVIA | IMF eyes fiscal accounts. Commenting on the situation in Bolivia after the recent change of government, IMF chief spokesman Thomas Dawson noted that before these events `the budget deficit was at a level that I think raised questions of sustainability.' Now, he added, `obviously things have gotten even more difficult.' Dawson said that the next foreseeable step is the despatch of an IMF mission to Bolivia. `We will continue to follow a flexible approach that takes into account the country's social needs and constraints,' he said. `And there is a framework in place for continuing Fund assistance in the context of the current standby.'

First step will be cooperation in nuclear power generation; Brazil plans fuel self-sufficiency by 2012, exports shortly afterwards.

Brazil will be sending a mission to China in November to explore the possibility of striking a nuclear cooperation deal with Beijing, maybe even setting up a joint venture in the field of nuclear power generation.

The Brazilians have their eyes on China's plans to build four new nuclear power plants right away, and another 16 between now and 2020. `We have knowhow and experience to offer and exchange,' says science & technology minister Roberto Amaral, who has already broached the subject of cooperation with the Chinese authorities.

Uranium enrichment
This announcement comes of the heels of another according to which Brazil will start enriching uranium next year, in a US$40m joint endeavour of the navy and Nuclebrás. The purpose of the scheme is twofold. First, it aims at providing a cheaper supply of fuel to Brazil's existing nuclear power plants, in the hope of achieving complete self-sufficiency by 2012. Second, it seeks to open up, by 2014, a new export line. 

Brazil currently spends US$20-30m a year sending its uranium to Canada for gasification, then on to Britain for enrichment, then back to fuel the power plants at home. It has the world's sixth-largest uranium deposits, with proven reserves of 310,000 tonnes (and two-thirds of its territory still unsurveyed).

Aerospace
Brazil already has in place an aerospace agreement with China, under which they jointly launched, on 21 October, their second communications satellite from Taiyuan, Shanxi. They have plans to launch another two satellites in the coming few years.

Legal proceedings ordered against protesters who kept the labour minister blocked in his office overnight.

President Néstor Kirchner has taken on another of Argentina's sacred cows, surprising many who though that his left-of-centre leanings would rule this out. The target: the piqueteros, organised groups originally formed by the unemployed, who got their name from the pickets they set up to block the country's highways — their favourite and usually highly effective way of getting attention from the authorities.

On 22 October, members of one of the piquetero organisations, the Frente Unico de Trabajadores Ocupados y Desocupados (`single front of employed and unemployed workers') decided that, instead of a highway, they would blockade the labour ministry, in central Buenos Aires. Some 200-or-so club-wielding demonstrators took up positions in front of all accesses to the building, allowing no one to enter of leave. Among those blocked inside until the early hours of the following day was labour minister Carlos Tomada.

No action was taken against the piqueteros; at 7 am they lifted the blockade, after the authorities had agreed to acknowledge receipt of their petitions. Hours later, it was announced that Kirchner had ordered Tomada to initiate legal proceedings against the protesters, on a charge of `deprivation of liberty' (closer to false imprisonment than kidnapping).

Prime minister Alberto Fernández described the action of the piqueteros as `extortion'. It was, he said, `an indefensible event because they deprived the minister of his liberty; this is not the way to do things; this is not social protest — it is something else.'

The leader of the group of piqueteros, José Villalba, fell back on the argument that without such actions they would simply have been ignored. `We decided that nobody would enter or leave the labour ministry to force a negotiation with the government, because the situation of workers with salaries frozen for more than 14 years is grave, and nobody is even mentioning that.'

Past actions of the piqueteros have been instrumental in securing for the unemployed the distribution of food and a monthly subsidy of Arg$150 (US$52).

Six of the nine supreme court justices are to be impeached for poor performance and corruption.

Proceeding with remarkable alacrity, government and opposition legislators reached agreement on 24 October on the impeachment of six of the nine supreme court justices that had been sought by President Nicanor Duarte shortly after taking office on 15 August [WR-03-34]. The charges against them are `poor fulfilment of their duties and corruption'.

The formal charge sheets are scheduled to be presented in the chamber of deputies on 28 October; the matter will then be passed on to committees before going to a vote in the full chamber. `The intention,' said Vice-President Luis Castiglioni, `is to deal with the six accusations in a single session — and we are going to respect scrupulously all the legal procedures. They will all have a chance to defend themselves.' For all this, there is no disguising that the proceedings are political, not judicial — a fact highlighted by the Spanish term for impeachment: juicio polí­tico. Castiglioni added, `All of us — opposition leaders, the president of the [ruling] Colorado party, the President and the Vice-President — expect the charges to be processed as soon as possible.'

Opposition senator Carlos Filizzola, of the Partido Paí­s Solidario (PPS), said the agreement had required a great effort. He compared progress in Paraguay with the parallel impeachments of supreme court justices in Argentina: `They started with one, and are now dealing with the third.' Left unsaid is that the agreement called for assurances that the government would not go on to `stack' the supreme court with sympathisers. Just how that was sorted out is not yet known. Formally, the replacement of the six magistrates to be impeached will be the result of an independent selection process entrusted to the Consejo de la Magistratura, with later ratification by congress.

The six supreme court justices to be impeached are Gerónimo Irala Burgos, Carlos Fernández Gadea, Raúl Sapena Brugada, Felipe Santiago Paredes, Bonifacio Rí­os Avalos and Luis Lezcano Claude. The three who were spared are Wildo Rienzi, Antonio Fretes and Ví­ctor Núñez.

A new wave of ferment has been spreading through Mapuche territory in the centre-south of Chile. As Mapuche students stage protests in demand of tailored education for indigenous communities, a militant Mapuche organisation has decided to short-circuit the Chilean judicial process and appeal a court sentence directly to the Inter-American Human Rights Commission. More sedately but no less assertively, Mapuche leaders have informed President Ricardo Lagos that, following a decision by a national congress held days ago, they will be setting up a Mapuche `parliament'.

The sentences being appealed are five-year prison terms imposed on two Mapuche loncos (headmen), Aniceto Norí­n and Pascual Pichún, for issuing `terrorist threats'. An accompanying charge of `terrorist arson' was dropped for lack of evidence. The two were tried under Chile's antiterrorism laws for their part in a dispute with loggers and landowners occupying land the Mapuche consider an ancestral legacy.

The announced parliament, to be based in Concepción, will be chaired by Rosendo Huenumán; it will have four representatives for each of Chile's `territorial identities', and its work will be conducted in seven `portfolios': economy & finance, international relations, justice, health, housing, education, and culture.

ARGENTINA | Tussle with utilities escalates. The Argentine government is taking to court three foreign-controlled power utilities — Edenor, Edesur and Edelap — to collect fines totalling US$2.6m for deficiencies in the provision of services over the past two years. It has also announced that it is fining the water company Aguas Argentina US$469,000 for recent interruptions in the supply. Officials made it clear they believed recent cuts in the power and water supply were intended to press the authorities to grant an adjustment of utility rates, which have been frozen since the peso was devalued in January 2001. Prime minister Alberto Fernández accused the utilities of seeking `risk-free business' and challenged them to `step aside' if they could not guarantee the proper provision of services.

BRAZIL | `Upturn towards year-end'. Finance minister Antônio Palocci last week predicted an upturn in economic growth in November-December, and `even more successful' performance in 2004. He also said that he will be seeking a new, US$10bn agreement with the IMF, but only as `a sort of insurance' in case of upsets in the world financial markets. `We don't want to use that money because it is expensive,' he said. `We shall have it simply as a guarantee.'

CHILE | Consumer credit surges upwards. In what has been welcomed as a sign of reactivation of Chile's domestic market, consumer credit has increased in January-September by 10.6% year-on-year, with the last month recording a 14.5% increase — the biggest of its kind in almost six years. Banks are now confident that they will reach their target expansion of 12% for the year as a whole, since one of the peak borrowing months, December, still lies ahead. The number of borrowers has risen to 2m, about the same as prior to the economic crisis. This said, the evolution of lending to companies over the past year shows up flat as far as local credit is concerned and 19% down as regards borrowing from abroad.

Polls show the PLD's Leonel Fernández heading for a first-round win regardless of who ends up as the PRD candidate.

The potential rivals of former President Leonel Fernández, bidding for a comeback next year, seemed determined to make his victory a first-round walkover. President Hipólito Mejí­a has decided to ignore a `plebiscite' within his party that overwhelmingly rejected his reelection bid — and among the seven other aspirants, continuing antics erode their standing among the voters. To complete the picture, former Vice-President Jacinto Peynado is back, determined to get the annulment of Eduardo Estrella's nomination as his party's candidate.

The ruling Partido Revolucionario Democrático (PRD) held its `plebiscite' to approve or reject reelection on 19 October. Two days later a careful count confirmed that 92% had cast their vote against reelection. This did not deter the pro-Mejí­a camp, who came up with an array of attempted explanations that the results did not mean a rejection of Mejí­a's candidacy. Mejí­a took this a step further, saying that it was his rivals' interpretations that were `driving us all mad.' (He was speaking at a rally in a setting that was symbolic of his current position: the only illumination came from the TV lights, as the whole neighbourhood was undergoing a power blackout.)

Attempting to capture the absurdity of the situation, respected columnist Emilio Lapayesse summed up the outcome of the `plebiscite' as `92 against, and an admirable 6% in favour.'

The `plebiscite,' though, was only part of the picture. Days before it was held, the frontrunner among Mejí­a's PRD rivals, Rafael Suberví­, announced that he was `withdrawing' from the contest, which was difficult to do since there were no candidates. This revived speculation that Suberví­ was in negotiations with Mejí­a.

After the `plebiscite', party president Hatuey Decamps announced that Mejí­a would not be able to contest the PRD primaries, since a majority in the party had rejected reelection. However, the `plebiscite' was non-binding, and reelection is legal, so it may prove impossible to block Mejí­a's bid without precipitating another crisis that would have to be sorted out in the courts.

PRSC help and what the polls say
Also contributing to Leonel Fernández's lead was the news that Jacinto Peynado had returned from his convalescence in Miami to launch another bid to wrest the nomination of the Partido Reformista Social Cristiano (PRSC) from Eduardo Estrella. Peynado insists that the primary elections won by Estrella were fraudulent — one specific claim is that members of the PRD's pro-Mejí­a camp had masqueraded as members of the PRSC to add votes for Estrella. He has initiated legal proceedings and hopes that the supreme court will end up annulling Estrella's nomination.

That all this is indeed helping Fernández has been confirmed by two separate opinion surveys. One, by CID-Gallup, shows Fernández attracting 54% of voter preferences, to Mejí­a's 18%. Put another way, 56% of the respondents believe that Fernández will be the next President. Small comfort for Mejí­a is the finding that Suberví­ would attract 3% fewer votes if he were the candidate.

The other poll, by the US firm Penn, Schoen & Berland, shows Fernández beating Mejí­a 58% to 20%. It also shows Fernández attracting the same share of voter preferences regardless of which candidate the PRD fields. Needless to add, the pro-Mejí­a camp says the polls are mistaken.

Overwhelming vote may be reversed by a veto, but it shows a big swing of Republican legislators towards easing travel.

On 23 October the US Senate defied President George Bush Jr's threat of a veto, and ostensibly rejected his recently announced tightening of restrictions on Cuba [WR-03-40], voting by a remarkable 59:38 vote to lift the provision capping spending by US visitors to Cuba. This comes after the House of Representatives delivered a similar vote [WR-03-36].

The House had in the past voted to lift the restrictions on travel to Cuba, but its intentions have always been foiled by backroom manoeuvring. The last time the Senate voted on the issue, four years ago, it denied the easing of restrictions 55:43. The turnaround was largely the result of many Republican senators changing their vote. Among these are such prominent figures as John Warner (chairman of the armed services committee) and Pat Roberts (chairman of the intelligence committee). Also in that cohort are senators from agricultural states (Kay Bailey from Texas, Sam Brownback from Kansas, James Inhofe from Oklahoma) — the same crowd that two years ago supported legislation to allow the sale of foodstuffs and medicines to Cuba.

This has led some US analysts to start talking about a clear split in the ruling Republican party over policy towards Cuba: the farm-state legislators, in favour of opening up trade with the island (they have already sold US$280m under the restricted easing of 2002), and the Florida-based Cuban-Americans, who believe in maintaining a hardline policy towards Castro.

As things stand, if Bush adheres to his threat to veto the legislation (an amendment to the appropriations bill for the Treasury and Transportation Departments), it is highly unlikely that either chamber will be able to muster the two-thirds' majority needed to overturn the veto. Given the progress of voting inclinations over the past few years, though, it may not be long before that critical mass is achieved.

The travel scene nowadays
As the US Senate was voting on the travel restrictions legislation, Havana was hosting a delegation of more than 30 US travel agents, reputedly the first of its kind in 40 years. They seemed convinced that it is only a matter of time before the restrictions are lifted.

With the restrictions and all, a sizable number of US nationals (140,000 to 150,000, depending on the source) visited Cuba last year legally, with US Treasury permission. Of these, about 100,000 were Cuban-Americans visiting their families. Apart from the legal travellers, 25,000 to 30,000 US nationals visited Cuba in breach of the restrictions, `triangulating' their travel via Canada, Mexico or Caribbean countries. The travel agents took advantage of a provision that allows hosted visits in which no money is spent in Cuba.

US Secretary of State Colin Powell was not cited when Marta Lomas, minister for foreign investment and cooperation, reported last week to the national assembly in Havana, but what she said appeared to be a reply to statements made earlier in the month by him.

Lomas said that there are currently 355 ventures with the participation of foreign capital active in Cuba. The sectors that have attracted most foreign investment are tourism, energy, computing, biotechnology and sugarcane derivates. Cuba, she added, has signed investment promotion and protection agreements with 71 countries, and double-taxation accords with 11 (with another seven in the pipeline).

Economic cooperation agreements are in place with 165 countries, based on the principle that `there cannot be any political conditions attached nor interference in Cuba's internal affairs on the part of those interested in cooperating.'

Days earlier, when speaking in support of President George Bush Jr's tightening of restrictions on Cuba, Colin Powell said that Europeans, Latin Americans and Canadians who invested heavily in Cuba in the 1990s did not appreciably improve Cubans' lives. He added, `Well, guess what? They not only pulled back from those investments, they didn't help anybody: they helped the régime. And we think there is a body of evidence that suggests this is not the way to deal with Castro.'

DOMINICAN REPUBLIC | Central bank & Mejí­a at loggerheads. Central bank governor José Lois Malkum has told congress that the government, having more than doubled its spending, will have no choice but to become more austere. `The government,' he said, `is compelled to revise the budget to conform with the recommendations of the IMF, and this will entail greater sacrifice, more austerity and discipline in public sending in 2004.'

Speaking on a TV show, President Hipólito Mejí­a directly contradicted Malkum. `I don't agree,' he said. `Economists tend to believe that the best course of action is to halt everything, but there are a thousand public works that need finishing, and I will finish them. I can't make any more sacrifices.' He added that after having heeded the advice of the central bank for three years, it was now their turn for belt-tightening.

HONDURAS | On collision course with IMF. After visiting IMF mission chief Adrienne Cheasty proclaimed in Tegucigalpa that Honduras has no future without fiscal adjustment, and that this is a condition of any agreement with the Fund, the president of congress, Porfirio Lobo, said that he considered unlikely the approval of a new adjustment programme. He particularly underlined that there would be no repeal of the statutes governing the teaching and medical professions, as had been recommended by the IMF. Several legislators went further, saying that a third paquetazo (the popular term for adjustment package) in a row would create a situation of ungovernability. A second IMF mission is expected to turn up in November to discuss details of the letter of intent underpinning a new standby agreement, which is being sought as the `green light' for some US$600m in external financing. Just before leaving, Cheasty sought to drive home her point by noting that Honduras needed fiscal adjustment whether or not it closed a deal with the IMF.