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Development: On 13 September, Colombia's interior and justice minister, Germán Vargas Lleras, proposed declassifying intelligence documents produced by the Departamento Administrativo de Seguridad (DAS), especially those related to the 'chuzadas' scandal, centred on the illegal monitoring of supreme justice court (CSJ) magistrates, politicians, NGO workers, human rights advocates, journalists and trade unionists.

Significance: The proposal has widespread support from within the government as among the opposition. However, there is a question mark over the legality of any such move, which is being analysed by Vargas and the national police director, General Oscar Naranjo. If the information was declassified, it might help shed some light on who exactly ordered the surveillance operations and put an end to the debate over the presidential responsibility or otherwise of the former president Alvaro Uribe (2002-2010).

The 'Chuzadas' scandal first broke in 2008 and since then 12 high ranking members of the intelligence community and Uribe's administration have been charged in connection with the case.

On Sunday (12 September), a special edition of the TV current affairs programme 'Noticias Uno' revealed that Vargas, previously a senator for Cambio Radical, one of the parties in Uribe's ruling coalition, had also been monitored by the DAS because of his political differences with the Uribe administration. “I always knew that they were following me, that I was being listened to", Vargas said in response to the show.

The show also claimed that the DAS had opened a political file on President Juan Manuel Santos, then Uribe's minister of defence, detailing his supposed strengths and weaknesses. These public revelations by the media have undoubtedly played a crucial role in the show of support given by the Santos administration to the proposed declassification. Vice-President Angelino Garzón said the practice was “fascist", adding that “it's not good for a democracy that intelligence lists include people who are political opponents, or hold opinions critical of the government and who do not belong to any illegal armed group."

In the case of the opposition Pólo Democrático Alternativo (PDA), the DAS infiltrated the meetings of its national leadership as well as the security detail of its presidential candidate, Gustavo Petro. Petro's wife, parents and close friends were also spied upon by DAS agents. “There is no doubt that [the person] politically responsible for this...was the president himself...It wouldn't have crossed anyone's mind to do it without the highest authorization", said Petro.

Development: Over the weekend of 22-24 October, 32 people were killed in Mexico in four different incidents.
 
Significance: Three of the incidents occurred in northern Mexico; two of which were said to be attacks perpetuated by warring factions of the Juárez cartel, which the government led by President Felipe Calderón vowed to confront directly by dispatching 10,000 federal police and military personnel to Ciudad Juárez, Chihuahua. The latest weekend of violence underlines the extent to which Calderón's strategy in the war against organized crime has failed, not only to reduce gang-related violence, but also to attempt to protect the general population.

 “[T]here is no doubt that the strategies used against the violence have failed" said Miguel Fernández Iturriza, the director of the 'Plan Estratégico de Juárez', a prominent local civil group.Thirty of the latest victims were civilians, including at least five minors. In addition, three of the victims in northern Mexico were mistakenly killed by the security forces. Another two were government security officials assassinated in Michoacán, central Mexico, presumably by the La Familia drug gang.  

On Friday (22 October), 14 people were killed in Ciudad Juárez after a group of heavily armed men stormed into a birthday party looking for 'El Ratón' (the mouse). They opened fire on the guests, killing 14 people, including two teenage girls and two teenage boys.
 
The attack was followed by an incident in Tijuana, Baja California Norte, where on Sunday (23 October) a group of hired assassins broke into the 'El Camino' drug rehab centre and executed 13 patients. The massacre has been linked to the recent marijuana major seizure by state authorities on 18 September. According to the police, minutes after the incident an unknown group interfered with a police radio frequency and broadcast a warning, “this is an example of what Juárez can do", and threatening that “there will be 135 murders", in allusion to the 134 tonnes of marijuana seized.

In Saltillo, Coahuila, two women and a minor were killed by security forces at a checkpoint after their vehicle was confused with another being chased by the police. The victims were the daughter and two grandchildren of the recently deceased former Saltillo councillor, Eleazar Galindo Vara.

Development: On 7 December, in a reception attended by President Cristina Fernández and opposition leaders alike, Repsol-YPF announced the discovery of an important shale gas field in the Patagonian province of Neuquén.

Significance:President Fernández and several opposition leaders, including Ernesto Sanz (President of the Unión Cí­vica Radical [UCR]) and Mauricio Macri (Mayor of Buenos Aires and president of the Propuesta Republicana [PRO]), attended the event in which Sebastián Eskenazi, YPF executive vice-president, announced the discovery of the estimated deposit of 4.5tn cubic feet of shale gas. This would increase Argentina's gas reserves by over a third and could elevate YPF's total gas reserves from six to 16 years. YPF stocks on the New York and Madrid stock exchanges rose strongly yesterday.

Enrique Eskenazi, Sebastián's father and the owner of Argentina's Petersen Group, which holds 14.9% of YPF stocks, announced that he will seek to acquire a further 10% stake in the company before year end.

Currently, the Petersen Group is the only Argentine stakeholder in the company and was praised by Fernández during her address for “the change in management [triggered] by the incorporation of a local partner... This should encourage others, but without wasting [the input of] the foreigners."

An agreement signed between trade unions, provincial governments and the ministry of planning has established a price band for the shale gas of between US$4.5 and US$7.5 per one million BTUs. The floor price matches the one set under the state sponsored incentive programme, Gas Plus, established in 2008 to stimulate exploration in new or untapped, hard-to-reach gas reserves. The ceiling price is the cost of gas imported from Bolivia.

Part of the gas extracted from the Loma La Lata deposits will be used by the Brazilian mining giant Vale to develop a potassium extraction project in the western province of Mendoza. Vale will pay between US$4-US$5 per million BTUs, below the import price but above the current market price for gas in Argentina. As part of the arrangement, the two companies will invest US$150m to produce 2m cubic metres of gas per day.

Development: On 26 January, Roberto Rodrí­guez, the treasurer of the teachers' union, Sindicato de Obreros de la Maestranza (SOM) and director of its medical insurance (OSPM), was kidnapped from a sports club in Villa Devoto, city of Buenos Aires, and found dying with a shot to the back of the head, hours later in Bella Vista, in the municipality of San Miguel in the province of Buenos Aires.

Significance: The OSPM's offices were part of some 80 trade union medical insurance offices searched by the police late last year as requested by federal judge Norberto Oyarbide as part of the so-called 'medicines mafia' investigation. Although Rodrí­guez's co-workers tried to downplay the possible relationship between the investigation and his assassination, judicial sources close to the investigation told the local press that the OSPM's situation was “very delicate".

Key points:

The SOM is aligned with the dissident Confederación General del Trabajo (CGT) Azul y Blanca, led by Luis Barrionuevo and opposed to the CGT of Hugo Moyano.

Since 2006, seven trade unionists have been assassinated in Argentina; four of them were the treasurers of their unions.

Rodrí­guez's daughter has suggested that her father's death may be related to a personal family matter; a few weeks ago he was involved in a fist fight with people trying to blackmail her and later hired private security to guard his home.

Development: The latest opinion polls, published on 20 March, show the race for the presidency opening up with less than three weeks to go to the first round on 10 April.

Significance: The latest polls indicate three changes. The most important is a sharp slide in support for the established poll leader, former president Alejandro Toledo (2001-2006). Also notable, however, is the surge in support for two of the outsider candidates, Ollanta Humala, a radical Leftist, and Pedro Pablo Kuczynski, from the liberal Right. Going by the polls, any two of five candidates could make it through to a second round run-off. The previous assumption by pollsters, political commentators (and the other candidates) - that Toledo was guaranteed a place in the run-off - is now very much up in the air.

Key points:

If Toledo fails to make it through to the second round, the chances of Peru's next government making a sharp swerve, either to the Left or to the Right, increase. Both Humala and the Toledo's closest challenger, Keiko Fujimori, the daughter of the jailed former president, Alberto (1990-2000), have as much negative support as positive. This is optimistic news for Kuczynski, who is running the best campaign. 

The two main polls published on 20 March were from Datum and Ipsos Apoyo. Both showed Toledo's support slipping back towards the rest of the pack. A month ago, Toledo was well out in front, with a margin of between seven and nine percentage points over the rest. Now, his lead is down to three or four points (or half that, taking into account the polls' error margins).

The Datum poll was the most striking. It put Toledo at 20.2%, nine points down on a poll published on 6 March. Humala was second on 18.5%, ahead of Keiko Fujimori.

Ipsos has Toledo on 23%, Keiko in second place on 19%, and Humala clearly in third (on 17%). Both polls show hardening support for Kuczynski, who was Toledo's finance minister and prime minister. Ipsos has him on 14%, while Datum has him on 12.7%.

Both polls also suggest that support for Luis Castañeda Lossio, a former mayor of Lima, ebbing away. When the campaign opened, Castañeda was vying for top place. Now he is on a par with Kuczynski. Yet, he is still the only candidate, according to the polls, who can beat Toledo in a second round.

One of the no-hopers among the other six candidates for the presidency, Manuel Rodrí­guez Cuadros, gave up on 18 March. He said that his candidacy, for the left-wing Partido Descentralista Fuerza Social, had been marginalised. He had not broken above 1% support in the opinion polls. The final straw for him was the decision by Transparencia, an NGO, and the Asociación Nacional de Radio y Televisión to invite only the five leading candidates to the TV debate on 27 March.

Pointer:  On 19 March the prime minister, José Antonio Chang, resigned, saying that he wanted to go back to running the university of San Martí­n de Porres. He became prime minister last September. The justice minister, Rosario Fernández, will take over as prime minister for the remaining four months of President Alan Garcí­a's term.

Development: On 9 May the latest count of votes in the 10 question national referendum suggested that the government has probably lost on at least two issues.

Significance: The problem areas are the two most controversial: judicial reform and control of the media. Just as importantly, even where the government appears to be winning, it is doing so only narrowly. Furthermore, if blanks and spoilt ballots are included, a clear majority of voters is in favour of only four of the government's 10 proposals. This effective defeat means that President Rafael Correa's use of populist votes to steam-roller his opponents has come to an end. Rashly, President Correa had threatened during the campaign to resign if voters rejected his 10 proposed reforms. Technically, they may not have done so, but the public has signalled that it wants a change in the way Correa governs.

Key points:

The government appears to be preparing to accept its defeat, though it's grumbling about the slow count. President Correa argues, correctly, that the opposition media is jumping the gun by claiming that he has been defeated on at least two questions; pointing out that a majority of votes has not yet even been counted. Embarrassingly for the government however, it's clear that the exit poll it used to claim victory immediately after the polls closed on 7 May was badly wrong.

Correa's defeat has implications for both Venezuela and Bolivia, whose controversial and charismatic leaders also use national referenda to give them the political and moral authority to push through radical change. In 2007 President Hugo Chávez of Venezuela accepted defeat in a national referendum on constitutional reform, including a proposal for indefinite re-election, but went back to the voters in 2009 and got the result he wanted. The scale and complexity of Correa's May 2011 referendum means that it would be difficult for him to do what Chávez did.  

So far, the Consejo Nacional Electoral (CNE) has counted 47.5% of the ballot boxes. Strangely, the count has been fastest in opposition areas, but in the heavily populated states like Guayas, Pichincha, Los Rí­os, Manabí­ and Esmeraldas, fewer than a third of the boxes have been counted. The opposition and the government are complaining about the CNE's scrupulous refusal to include ballot boxes in the count where it has found anomalies. In Guayas, where the opposition mayor of Guayaquil, Jaime Nebot, claims that the “No" campaign defeated the government on at least five questions, the count is only up to 30% of ballot boxes.

Nationally, the government is losing on Question Four, which would effectively have given the government 18 months of complete power over the appointment and sacking of judges. It is narrowly behind on question nine, which assigns the government the power to regulate the media.

The surprising success of the opposition is prompting opposition leaders to compete for the credit. On 8 May Gustavo Larrea, who was formerly Correa's security minister but opposed the changes the president advocated, argued that a narrow victory for the government was as good as a defeat. Larrea, who headed the 'Esta Vez No' ('This time no') campaign, said that the referendum had weakened the government and compromised its mandate to push through reform.

Pointer: The four questions on which the government has clearly won are the first two (which, taken together, would end automatic release of suspects accused of serious crimes from prison after 12 months if they have not been convicted); question six (which calls for a new criminal category of 'non-justified enrichment') and question 10, which would have criminalised employers who fail to make social security payments.

Over the last two decades China has managed to develop what can only be described as a stranglehold on the supply of rare earths critical to the US defence industry.

Rare earth elements (REE) play a vital role in a wide range of electronics and environmental technologies. They are also critical for military applications. The US military uses REE in precision-guided munitions, lasers, communication systems, radar systems, avionics, night vision equipment and satellites. Other off-the-shelf products used in defence systems also require REE, such as computer hard drives. They are not something the military can do without.

The REE are a group of 17 chemically similar metallic elements, comprising the 15 lanthanides and the non-lanthanides scandium and yttrium. The term 'rare' is actually a misnomer, as the REE are quite abundant in the Earth's crust (with the exception of promethium), but they are typically widely dispersed and not often found in concentrated and economically exploitable deposits. REE can be divided into three groups according to their atomic weight and their position in the periodic table of elements: the non-lanthanides, scandium and yttrium; the light REE (LREE) such as neodymium, lanthanum and cerium; and the heavy REE (HREE) such as dysprosium and terbium.

Current supply
For most of the 20th century REE were sourced from India, Brazil and South Africa, and later the USA. But as demand for different REE has fluctuated, and environmental concerns caused various mines to close, China became the major supplier. China has 37% of the worlds proven recoverable deposits, but now produces approximately 96% of the supply, including 100% of the HREE (exact supply percentages are difficult to determine due to the prevalence of smuggling). Total reported world production of rare earth oxide (REO) in 2008 was 126,000 tonnes, a four per cent increase compared to 2007 (121,000 tonnes). World production has more than doubled in the last 15 years, but with consumption of rare earth oxides forecast to reach 190,000-210,000 tonnes by 2015 it is predicted that demand will outstrip supply for certain elements by 40,000 tonnes per year, particularly for neodymium, dysprosium and terbium.

The REE market is more complicated than for many others metals because of the large number of elements, and their broad range of applications for which demand fluctuates over time, largely as a result of technological developments. While prices of other industrial elements have soared in recent years, REE prices have remained low due to the lack of interest in developing mines outside China. But recently there has been growing awareness that precisely because there are only a small number of mines outside China there is a threat to the supply. This threat has become realised as China has begun severely restricting the production and export of REO, and has increased export taxes on all REE to within a range of 15%-25%. Chinese export quotas have been dropping for several years, but the quota slash in 2010, from 50,100 tonnes down to 30,300 tonnes, caused consternation for investors and manufacturers around the world. The final quotas for 2011 are not yet clear.

Chinese export quota of REO (by thousand tonnes)
2004: 65.6
2005: 65.6
2006: 61.8
2007: 59.6
2008: 56.9
2009: 50.1
2010: 30.3
2011: ?

Aggressive policy
Publicly, China has said that its policy of slashing quotas is driven by the need to improve resource management and conservation, improve the efficiency of resource exploitation, and to protect the environment. But China's actions demonstrate an intention to increase its monopoly and to dominate the rare-earths market for decades. This would also give China control of much of the development and manufacture of vital technology for the rest of this century at least.

The strategy appears to be threefold. The first stage is to limit exports. This year's export quota is likely to be the smallest yet, and there is no indication they are going to increase in the future.

The second phase is to force manufacturers that use rare earths to move to China. Beijing is no longer content to dominate the market as an exporter of raw materials. China already accounts for about 60% of the REE consumed each year, and the plan is to increase that percentage. China wants to retain as much of the REE as possible, and force the world to buy Chinese manufactured components, thus boosting the economy not only in terms of GDP, but also by increasing education and training to support a manufacturing industry that requires more skilled labour.

Thirdly, China seems determined to control the markets by gaining influence over deposits in other countries. Two Australian companies, Lynas Corp and Arafura Resources, planned to open mines that would have a combined production equal to a quarter of the annual global output of REE. When the credit markets collapsed in 2008 both companies lost their financing. China seized the opportunity and stepped in with the funds and resources required to finish the construction of the mines and ore-processing factories, provided by Chinese state-owned companies. In return the Chinese companies received 51.7% of Lynas and 25% of Arafura.

The response
Rare earth materials have to go through five distinct processing stages. These are mining, separating, refining, forming and manufacturing. The US used to perform all stages in the REE supply chain, but now most REE processing occurs in China. Industry experts estimate that it will take about 15 years to rebuild a complete US based REE supply chain from mining through to manufacturing. This would require securing capital investment in infrastructure, developing new technologies, and acquiring patents currently held by non-US companies. The US' Department of Defense (DOD) is in the process of assessing the current reliance on REE, and will soon be ready to start taking steps to reduce future dependency, but the need for REE cannot be diminished quickly. Even though a 2010 United States Geological Survey (USGS) study found that the United States had 13m metric tons of REE, the US still lacks deposits of vital HREE. Also environmental concerns have prevented these reserves been tapped, as much of lies beneath various National Parks.

The way forward may be an international approach. Until it closed in 2002, for both environmental and economic reasons, the Mountain Pass mine in California was America's chief domestic source of REE. Mountain Pass is the largest non-Chinese REE deposit in the world, but it lacks the infrastructure to process the ore, and re-developing a complete US supply chain may turn out to be prohibitively expensive. The new owners of Mountain Pass, Molycorp, now plan to fully reopen the mine and ship the ore to Europe for processing. At the beginning of April this year Molycorp acquired over 90% of AS Silmet in Estonia, one of only two REE processing facilities in Europe. The move will provide Molycorp with its first European base of operations, and double its current rare earth production capacity to 6,000 tonnes per year. AS Silmet (now to be known as AS Molycorp Silmet) will immediately begin sourcing rare earth feed stock from Mountain Pass.

The Estonian facility, the first of its kind not to rely on rare earth materials from China, will primarily be focused on producing rare earth oxides like didymium metal, a critical component in the manufacture of rare earth magnets. The supply of niobium and tantalum will also be vastly increased.

Problem solved?
The answer is probably not. Firstly it is wrong to think of the rare earth marketplace as binary (China/not China). Every country in the world needs REE, so every country, especially those with domestic REE deposits or processing infrastructure must, first and foremost, serve their own interests. For some of them this will mean dealing with Chinese companies rather than US companies, so China's grip on the global market will not slip completely. Also, even if every other REE deposit were to be exploited China still possess more than a third of the world's recoverable supply, and so will retain a dominant market position.

Recycling has been hailed as a possibility, and big steps are being taken in this regard, especially in Japan. But recycling REE from, for example, discarded computer motherboards, is an expensive and laborious process. It is unlikely to have a significant long-term effect, and as techniques for recycling improve may even give China another advantage. Chinese domestic usage of REE is skyrocketing, so many of the components available for recycling in the future will be in China.

The only way to escape China's stranglehold on the REE market is to dramatically reduce demand. This will be difficult, as China is likely to do everything in its power to support and develop an industry that provides it with such levers over other countries and other economies.

Points to watch *** The quotas China sets for exports of REO for 2011 and 2012 will demonstrate how aggressively it intends to hold onto its dominant market position. *** Watch for reports of Chinese state controlled companies buying stakes in overseas REO mining and processing facilities. *** Acceptance of the threat to the supply chain of REE based components for military use may be signalled by a demonstrated willingness to override environmental concerns and exploit US domestic reserves.

VENEZUELA: Rice voices concerns

CHILE: Banco de Chile under investigation

REPATRIATION: 38,000 minors deported

SENATORS: Democrats attack Rice

SECRET SERVICE: Pentagon denies reports of new agency

RICE AND VENEZUELA
Speaking at her confirmation hearings last week, the incoming US Secretary of State Condoleezza Rice, did not announce any sea change in US policy towards Venezuela. "We are very concerned," she said, "about a democratically-elected leader who governs in an illiberal way, and some of the steps that have been taken against the media, against opposition, I think are really very deeply troubling." She did not touch on Venezuela's dispute with Colombia over the recent abduction of the Farc guerrilla leader, Rodrigo Granda, in Caracas. Speaking at a daily press briefing on 24 January, the deputy spokesman for the US State Department, Adam Ereli, was circumspect on the Granda issue. Asked whether the US would favour Colombia in the dispute, Ereli said: "On Rodrigo Granda, there are media reports that the recently-detained senior official of the Revolutionary Armed Forces of Colombia was residing and operating freely in Venezuela prior to his arrest in Colombia. As you know, the Farc has been designated a Foreign Terrorist Organization by the United States. We have also seen press reports that the Government of Colombia has given the Venezuelan Government specific information about the presence in Venezuela of ten major Colombian terrorists and we'd expect the Venezuelan Government to carefully examine this information and to take all required and effective law enforcement actions against the terrorists."

CHILE
Banco de Chile, the second-most important bank in Chile, is under investigation in the US because of the assets it held on behalf of former General Augusto Pinochet. Two branches of the bank are under scrutiny, the one in New York by the Office of the Comptroller of the Currency (OCC), and the one in Miami by the federal reserve of Atlanta. The accounts, which Pinochet opened in the 1980s, are also the subject of an investigation by judge Sergio Muñoz, the magistrate prosecuting the former dictator for money-laundering and tax evasion through secret multimillion dollar bank accounts held at the Riggs bank in Washington DC. A week ago Banco de Chile, a member of the Luksic group, closed the accounts of Pinochet and his family as well as that of the Pinochet Foundation, the organisation dedicated to promoting the achievements of the military regime.

REPATRIATION
The migration authorities of the US deported 38,000 undocumented minors in the first eleven months of 2004. Magdelana Carral, head of the Instituto Nacional de Migración said that over 10,000 of the children “had been sent to public and private institutions which form a network of rest stops all along the border with the US". Carral added that the number of minors caught trying to cross into the US illegally was increasing every year and that consequently working with children was an essential part of the migration authorities' work.

SENATORS
Democrat senators, led by Edward Kennedy, criticised the Secretary of State-elect, Condoleezza Rice, in a debate on 25 January. They said that she was the wrong choice and was the architect of the failed policy in Iraq. The senate foreign relations committee approved her nomination on 21 January, despite bi-partisan dissent over her disparaging comments on President Hugo Chávez of Venezuela, which were later reciprocated. The full senate is expected to approve her nomination.

SECRET SERVICE
The Defense Department denied on 23 January a report in the Washington Post that the government was preparing to set up a new secret service agency to supersede the Central Intelligence Agency (CIA). The new secret service would provide foreign intelligence to the Pentagon, which is known to be unhappy with the service provided by the CIA. The Defense Department said that there was no secret service answerable only to the US Defense Secretary, Donald Rumsfeld. The Pentagon added that there was no intention of setting up such an agency. The Washington Post claimed that the service had been operating for two years, and was active in Iraq and Afghanistan. According to a memo, seen by The Post, from the General Richard Myers, head of the joint chiefs of staff, to Rumsfeld, the Pentagon was focusing the new service on countries such as Somalia, Yemen, Indonesia, the Philippines and Georgia.

El Salvador: The Banco Central de Reserva de El Salvador recently reported that in the first five months of 2010 remittances were up by 2.6%, year-on-year, at US$1.48bn. In cash terms the rise is US$38m for the first five months of 2010 compared with the same period the previous year. The monthly average is creeping back towards US$300m: it currently stands at US$296m. In May, thanks partly, the central bank thinks, to Mother's Day, the inflow was US$327m. This was 6% above the inflow in May 2009, which was the second highest so far this year. The central bank points out that the inflow is still below 2008 levels. In the first five months of 2009 the inflow of remittances dropped by 10%, year-on-year. The bank seems to believe that remittance flows to the country will track the rate of economic growth in the US. In the first quarter of 2010 the US economy grew by 3%. The problem with this assumption is that unemployment in the US remains high: in May the overall unemployment rate was 9.7% while unemployment among Hispanics was running at 12.4%. The central bank points out that the US Bureau of Labour Statistics notes that in the first five months of 2010 the economy created 982,000 new jobs.

Haiti: On 16 June Haiti's Prime Minister Jean-Max Bellerive told a conference in Miami that Haiti's earthquake crisis should be seen as a chance to help the country rebuild, but he warned that the Caribbean nation will need the help of Haitians living abroad as well as the aid of the international community. Today (17 June) in Haiti's capital, Port-au-Prince, the first official meeting of the full Interim Haiti Reconstruction Commission (IHRC) will take place. Bellerive is co-chairing the commission along with former US President and UN Special Envoy Bill Clinton.

Uruguay: On 15 June, Uruguay's defence ministry released a press communiqué stating that it was postponing a meeting scheduled to take place on 24 June between the defence minister, Luí­s Rosadilla and Frank Mora, the US deputy undersecretary of defence for western hemisphere affairs as a result of the delay and improper questioning of a Uruguayan defence official by immigration officers at Miami's international airport. Though no details of the incident have been disclosed, the statement announced that Uruguay had requested a formal explanation from US authorities through the appropriate diplomatic channels.

FRIDAY

Honduras: Nicaragua's President Daniel Ortega will visit his counterpart Manuel Zelaya in Honduras.

Argentina: US assistant secretary for Western Hemisphere affairs, Tom Shannon will meet Argentina's foreign minister Jorge Taiana as part of his trip to the country.

Region: The International Monetary Fund will publish its report on perspectives for growth in Latin America

 

SATURDAY

El Salvador: The ruling Alianza Republicana Nacionalista (ARENA) will hold a general assembly in which it will ratify Rodrigo Ávila as presidential candidate for the March 2009 elections.

Brazil: Brazilian President Lula da Silva will travel to Prague in the first official visit to Czech Republic by a Brazilian president.

 

MONDAY

Brazil: Brazil's defence minister, Nelson Jobim, will begin the first leg of a tour of South America in an effort to drum up regional support for the proposed South American Defence Council.

The biennial meeting of hemispheric defence ministers concluded in Managua on 4 October without having sorted out one of the issues that had attracted the most heated debate during its closed-door sessions: who should continue to manage these encounters — the generals of the Inter-American Defence Board (IADB) or, as up to now, the politicians?

Managing the meetings of the defence ministers means having significant influence over the hemisphere's strategic agenda. The IADB, currently chaired by Brazilian General Jorge Armando de Almeida Ribeiro, had formally proposed that it should be entrusted with the task. This was reportedly endorsed by the US, Colombia and Ecuador, and opposed most vocally by Argentina and more parsimoniously by OAS secretary-general José Miguel Insulza. The IADB is an agency of the OAS.

Argentine defence minister Nilda Garré said her government's position on this matter was supported by the military (which has not been a very happy lot of late, as a result of the sweeping reorganisation of the defence establishment set in motion by President Néstor Kirchner). The option was presented as between control of policy by the generals or by the politicians, though it need not necessarily be so: there is nothing to prevent a member government of the OAS to appoint a civilian defence official as its representative on the IADB.

Insulza argued against the current trend towards 'extending the concept of security to all ambits of our political and social problems, which have other ways of being confronted by the democratic civilian authorities.' He said, 'We must be prudent in confining our conceptions of multi-dimensional security to what indeed constitutes a military or public security threat, and giving them the appropriate treatment.'

At the same time, however, he advocated including in the defence policies 'the risks derived from the increase of criminality in our cities, of the drugs trade and organised crime of the proliferation of gang activity, as well as other phenomena, like natural disasters.' Opinions regarding the use of the military in such areas vary considerably, as these are considered by many to be matters for the police. The defence minister who most argued in favour of military involvement was Colombia's Juan Manuel Santos, who cited his own country's experience as a successful example.

One practical result of the meeting was the creation of a regional de-mining body. A lateral one was the announcement by Pentagon officials that the US will soon restore military assistance to nine countries who suffered cuts as a result of their refusal to grant US personnel immunity from surrender to the International Criminal Court. Rather than attempt to amend the American Servicemembers Protection Act, which mandates such reprisals, the word is that President George Bush Jr will sign waivers allowing resumption of the assistance.

Support for Colombia's President Alvaro Uribe recovered in December after suffering a fall in the third quarter of 2004. An opinion poll published by Invamer-Gallup on 20 December indicated that President Alvaro Uribe's approval rating rose to 77% from 72% in September.

Even when his approval was on the decline, Uribe was Latin America's most popular leader, but this upturn in his fortunes is particularly well timed. In December the bill to allow presidents to serve a second term in office was passed, paving the way for Uribe to run for another four years in 2006.

At this stage Uribe appears a shoo-in. The legislation passed in December even contained a clause stating that the constitutional court could not overturn the bill, which removed a major obstacle for the president. Many opponents of re-election were relying on the constitutional court, which has clashed a number of times with the president, to expose the irregularities in the bill's passage.

Although he enjoys considerable support, Uribe will be wishing the election could be tomorrow because 2005 threatens to be a difficult year for the president. In order to secure the passage of his re-election bill, the president used up a great deal of his political capital. It came as no surprise when the government pulled the plug on its proposed tax reforms on 7 December - the first time such a package has failed to make it through congress in 30 years.

Aside from the fact Uribe will have to devise a new package of reforms which will be no more popular this year, the president also has to push on with devising a law to cover the 20,000 or so paramilitaries currently in the process of demobilising. There is already intense pressure on the government to clarify the legal status of these paramilitaries, who belong to the Autodefensas Unidas de Colombia (AUC). Most paramilitaries have committed a crime of one sort or another, and many are accused of carrying out crimes against humanity.

The government has resisted pressure to draw up legislation at this stage, arguing in public that it is first important to allow the demobilisation process to get established as it enters its key phase. More likely the government doesn't want to put its name to legislation which might deter the AUC from disarming. This delaying tactic might well fail, however; the paramilitaries said on 21 December that 'substantive negotiations' would only begin in 2005. The implication was that the disarmament of some 2,500 fighters in the second half of 2004 was purely a goodwill gesture; the paramilitaries made it clear that the demobilisations will only continue this year if the 'political, juridical and socio-economic conditions' which the AUC has demanded are in place.

PEOPLE PROFILE is published every Tuesday and describes the professional background of key people emerging in the political and economic scenario.

Who is José Luis Machinea?
He is the new executive director of the Comisión Económica para América Latina y el Caribe (Cepal - the UN Economic Comission for Latin America and the Caribbean), challenged with promoting the social and economic development of the countries in Latin America and the Caribbean. 

Why watch him?
José Luis Machinea, Argentina's former economy minister under the government of Fernando de la Rúa, took over at Cepal against the wishes of Argentina's current president, Néstor Kirchner, who holds him responsible for the financial debacle in Argentina in 2001 that led to the downfall of the de la Rúa administration. Elsewhere, there was unqualified support for Machinea.

Born: 5 October 1946

Place of birth: Buenos Aires, Argentina.

Education: Economist at the Universidad de Buenos Aires, with a doctorate from the University of Minessota.

Public life: 
He was president of the Argentine central bank during the country's first democratic government after the military dictatorship (1976-83). During the Alfonsí­n administration, Machinea was one of the most influential economists in the ruling party. 

Timeline

1985-1988: President of Argentine central bank.
1992-1997: Director of investigation at the Instituto de Desarrollo Industrial de la Unión Industrial Argentina
1998: The Alianza is formed. A coalition comprising the Partido Radical and Frepaso, the two principal opponents of the Menem administration, which was defeated in the 1999 presidential elections. Machinea is named Alianza's chief economist.
1999-2001: Economy minister in the Alianza government under Fernando de la Rúa. Machinea decided to keep the peso tied to the dollar despite the country's problems with sustaining this.
2001-2003: Principal advisor to the president of the IDB, Enrique Iglesias, in Washington.
2003: Iglesias proposes him for the Cepal position. 
2004: Assumes the executive directorship of Cepal despite Kirchner's objections. 

Strong points:
He is a talented economist and has strong contacts with international financial organisations such as the IMF, the World Bank and the IDB. He enjoys widespread support, especially outside of Argentina. He is hardworking and should help Cepal come up with some alternative economic paradigms to replace the neoliberal dogma of the 1990s.

Weak points:
His period as economy minister in Argentina is a black mark on his record; imposing taxes on the middle and upper classes prolonged the recession that had been affecting Argentina since 1998. Machinea was afraid to remove the dollar peg, which ultimately led to the social and economic nightmare of 2001.

Prospects: 
Despite Kirchner's opposition to his nomination, Machinea will enjoy solid support. He is a capable negotiator and is aware that Cepal needs to increase its influence over Latin American governments on a practical level, moving away from the academic profile it has cultivated in recent years.

Who is he? Gabriel Silva Luján was named Colombia's new minister of defence on 27 July 2009. Since 2002 he has served as chief executive of Colombia's powerful National Coffee Growers Federation.

Why watch him? Silva's appointment brings a managerial approach to the defence ministry, arguably the most important position in President Alvaro Uribe's cabinet. Silva will be tasked with seeing through - and guaranteeing the financial viability - of the government's military offensive against the Fuerzas Armadas Revolucionarias de Colombia (Farc), which is much-weakened but not yet defeated. He takes over amid a regional row over a proposed deal which would give the US access to at least three Colombian military bases.

Age: 49 years.

Born: In the city of Baranquilla, on the Caribbean northern Colombia.

Education: Undergraduate degree in political science, with a concentration in economics, from the University of the Andes in Bogotá.

Postgraduate qualifications in economics and international relations from the Johns Hopkins University in Washington DC, where Silva was a Ford Foundation scholar.

Public life: Upon leaving university, Silva went straight into a high-level government job as a security advisor to then-President Virgilio Barco (1986-1990). He was an advisor on international affairs in the government of then-President César Gaviria (1990-1994) and, in 1993, became one of Colombia's youngest ever ambassadors to the US. He has served as chief executive of Colombia's iconic National Coffee Growers Federation since 2002.

Timeline:

1986-1990: Advisor to then-President Virgilio Barco (Partido Liberal) in security and political affairs. During this period he completed his postgraduate studies in economics and international relations at the Johns Hopkins University in Washington DC.

1990-1993: Named as advisor in international affairs to then-President César Gaviria (Partido Liberal), with whom Silva has maintained a close relationship. Contributes to the formulation of security policies, and particularly anti-drugs and anti-terrorism policies at a time when Colombia was under immense pressure from drug cartels.

1993: Appointed by Gaviria as ambassador to the United States, becoming one of the youngest ever appointees to the post. Responsible for various trade agreements, including the Andean trade preferences act (Atpa), now known as the Atpdea. Helps secure Gaviria's election as secretary-general of the Organization of American States (OAS).

1994: Towards the end of his tenure has to deal with the diplomatic crisis sparked by allegations that then-President Ernesto Samper (1994-1998) had accepted campaign donations in excess of US$6m from the Cali drug cartel. Silva handled the crisis in Washington for several months before the US decided to withdraw all political assistance to Samper.

Mid-late 1990s: Distances himself from public life following the Samper scandal, although maintains links with various influential figures, including Juan Manuel Santos and César Gaviria. Runs various private businesses.

July 2002: Took over as president of the national coffee growers federation (Fedecafé), his candidacy enthusiastically supported by his friend Juan Manuel Santos. Oversaw a radical overhaul of the then-struggling organisation, and a resurgence in its profits.

Strengths: Silva is well-liked and well-connected. He is on good terms with President Alvaro Uribe, and is close to his predecessor and current favourite to replace Uribe in 2010, Juan Manuel Santos. His seven-year stint at Fedecafé proved his managerial and business abilities; one of his main tasks will be to guarantee the financial viability of Uribe's hardline “democratic security" policies in the face of a planned reduction of US military aid. His business experience should also help him to modernise and 're-brand' the armed forces, following a series of damaging scandals over human rights abuses, namely extrajudicial killings. As a former ambassador to the US, Silva has diplomatic experience and links to Washington, which should help smooth the progress of the US base deal (and the regional diplomatic fall out).

Weaknesses: Silva has a hard act to follow. His predecessor, Santos, is held up in Colombia as one of the country's most successful defence ministers, thanks to his successful offensive against the Farc. Equally, Silva's close friendship with Santos is unlikely to endear him to neighbouring Venezuela and Ecuador, who loathe the former defence minister for his outspoken defence of Colombia's controversial March 2008 raid on a Farc camp in Ecuador. Like Santos, Silva is a risk taker, which at times yielded mixed results during his Fedecafé presidency.

Prospects: Silva takes office at a critical moment. Silva will be tasked with advancing, and evolving, the government's so-called “Strategic Jump" ('salto estratégico') operation aimed at pushing the Farc to “the point of no return" and consolidating advances made thus far. At the same time, he will have to reassure Colombia's neighbours that under his watch the country's armed forces - and the mooted US military presence - do not pose a threat to regional peace. Silva also faces a new wave of violence from emerging armed groups, made up of demobilised paramilitaries and other criminal organisations, funded by drug-trafficking and organised crime.

Miguel Angel Yunes, the defeated Partido Acción Nacional (PAN) candidate for the governorship of Veracruz in 2010, turned on his patron, Elba Esther Gordillo, this week. Gordillo is the hugely influential leader of the Sindicato Nacional de Trabajadores de la Educación (SNTE, or teachers' union) and the self-styled maker and breaker of presidents.

The row will have a major effect on the 2012 presidential race and could end Gordillo's grip on Mexico's education system which has prevented education standards from rising. Teachers in Mexico still answer to the SNTE which opposes the objective evaluation of their performance and skills.

Gordillo claimed on 30 June to have won the 2006 presidential election for President Felipe Calderón, but not to have been rewarded properly. She admitted that she was given control of the Issste, (the welfare and pension fund for state employees) the national lottery and the national security system, although she left out the fact that her son-in-law was also made deputy education minister, responsible for primary education.

On 6 July Calderón admitted that he had an "understanding" with Gordillo in 2006, but claimed that the understanding was an inheritance from his predecessor, Vicente Fox (2000-2006). Calderón made his admission in an interview with ‘Foro TV' and claimed that the deal just left Gordillo with control of agencies that Fox had granted to her.

Calderón refused to admit that Gordillo swung the 2006 election for him. She argued that Calderón only won the presidency in 2006 because she, in league with Fox, helped to split the Partido Revolucionario Institucional (PRI) from 2003 to 2006, which meant that in the presidential election voters effectively had to choose between Calderón and the left-wing radical, Andrés Manuel López Obrador.

Calderón claimed, to almost universal derision, that one of the advantages of the deal was that he was able to push through an education reform. The scale and usefulness of this reform was clear from the fact that Josefina Vázquez Mota, Calderón's first education minister, preferred to take her chance as leader of the PAN bloc in congress from 2009 rather than continue to fight the SNTE for control of the education ministry. 

Yunes had responded to Gordillo's claims on 5 July, by confessing that when he was head of the Issste, which runs pensions and welfare for state employees, Gordillo demanded that he provide the Partido Nueva Alianza (Panal) with M$20m (US$2m) a month. Yunes ran the Issste from 2006, when he was appointed by Calderón, until 2010, when he ran as the PAN candidate for governor of Veracruz and was narrowly defeated by the PRI candidate.

Yunes said that he did not fall in with Gordillo's demands, made in January 2007 in San Diego (where Gordillo lives). Besides cash, according to Yunes, Gordillo also issued him with a list of people she wanted appointed to executive jobs at the Issste.

Yunes then challenged Gordillo to allow an independent audit of the teachers' union (the SNTE), which Gordillo has run since 1989. He also called for an audit of the teachers' retirement fund.

Yunes appears to be doing Calderón's dirty work. The big question is why. One clue lies in a meeting Calderón had on 6 July with one of Gordillo's long-standing enemies in the PRI, Manlio Fabio Beltrones, who is the leader of the PRI in the senate. Beltrones claimed that he did not discuss the Gordillo issue with the president and that they focused entirely on how to get legislation through congress. This is less innocent than it sounds.

One of the key bits of legislation stalled in congress is a political reform which would allow presidential candidates to stand without the nomination of a political party. Until this reform is passed, political parties and bosses, such as Gordillo, will have a big say in who will be the next president. The SNTE is one of the major lobbying groups in the country: there are over 1.25m teachers in Mexico and in rural areas the teacher, traditionally, acts as a progressive counterweight to the parish priest.

Gordillo is close to Beltrones's rival for the PRI presidential nomination, Enrique Peña Nieto, so the attack on her suggests that the government is starting to manouvre against Peña Nieto.

• Guerrero killing
  

The widow of Lucio Cabañas, a revolutionary guerrilla in Guerrero who was killed in 1974, was gunned down with her sister as they came out of church on 3 July. Their bodies were left outside the church for at least three hours, the Asamblea Popular de los Pueblos de Guerrero claimed.

• Tamaulipas mass graves
  

So far only 20 of the 193 bodies found in the 47 mass graves in Tamaulipas in April and May have been identified. This suggests that most of the bodies are those of migrants from Central America.

REGION: French group Renault released sales figures for the first half of 2008, showing that sales to Latin America had increased by 17.7%, due to sharp increases in Brazil (almost doubling) and Argentina (up by 8.3%), and despite a fall in sales in Colombia (by 23.2%), Mexico (8.5%) and Venezuela (41.7%).

Development: On 3 May, the indigenous leader and Nobel peace prize laureate Rigoberta Menchú confirmed a fresh bid for the presidency for her party, Winaq, in the scheduled September 2011 general election.

Significance:  Having taken barely 3% of the vote in the 2007 presidential contest, few believe that Menchú can fare much better this year. However, her candidacy represents the first concerted effort to unite the Guatemalan Left; on 7 May she is expected to be declared presidential candidate for the Frente Amplio de Izquierda, a broad coalition comprising Winaq along with the former guerilla-turned political party Unidad Revolucionaria Nacional Guatemalteca (URNG), the other main left-wing party, Alianza Nueva Nación (ANN), as well over 25 popular youth, indigenous and peasant organizations.

Key points:

• In the three elections since the 1996 Peace Accords which ended the 36-year bloody civil war (1999, 2003 and 2007), the Left has persistently failed to overcome internal differences and splits, costing it influence in the executive and the legislature. In the 2007 elections, the URNG and the ANN combined mustered less than 3% of the presidential vote. On 3.27% of the national vote, the URNG won just two seats in the 158-seat congress and the ANN got none.

• This is in marked contrast to the strength of former guerrilla-turned left-wing parties in El Salvador and Nicaragua. Respectively, the Frente Farabundo Martí para la Liberación Nacional (FMLN) and the Frente Sandinista de Liberación Nacional (FSLN) now govern those countries.

• Separately, the local supreme electoral court confirmed that the first round of the elections will take place on 11 September, with a presidential run-off slated for 4 November. Aside from the presidency and congress, 333 mayoral seats in 22 departments are up for grabs, along with 20 seats in the Central American parliament (Parlacen).

Despite having reversed his predecessors' policy on opposing the extradition of Argentine human rights violators, President Néstor Kirchner said on 30 July that these people 'ought to be tried in Argentina'. He followed this up by urging the supreme court to speed up its ruling on the constitutionality of the laws that have shielded them from prosecution.  

That same day a survey by Ricardo Bouvier y Asociados showed that 64.9% of respondents also believed that trials should take place in Argentina; only 25.1% approved of trials abroad.

Special federal commissioner to coordinate efforts to solve the killing of dozens of women in the state of Chihuahua.

Only weeks after a major anticrime offensive was launched in Ciudad Juárez, in response to the uproar caused by the area's inordinately high rate of murders of women (258 in the past decade), President Vicente Fox has felt compelled to upgrade the issue, appointing a special commissioner in charge of federal involvement in the matter. The trigger: the discovery of yet another female cadaver.

Of the 258 recorded cases, only 99 are officially considered solved. The lower chamber of congress had already set up a special monitoring commission, and the chief prosecutor's office (PGR) has established a multi-disciplinary group to examine all possible explanations of the crimes, including gangs of policemen or former policemen, satanic sects, organ `harvesting' and people trafficking.

The authorities of Ciudad Juárez and the state of Chihuahua have launched, with federal assistance, an `integral security programme' which involves the deployment of 1,200 municipal police, 300 officers of the federal `preventive police' (PFP), 200 of the state's judicial police, and an undisclosed number of PGR agents. The scheme, apart from focusing on the investigation, also includes a big prevention drive.

Press report `reveals' what it describes as the most radical politicisation of Brazil's administration, by Lula's party.

Within about four years Brazilian President Lula da Silva could be facing the same kind of problems his Venezuelan peer Hugo Chávez is dealing with right now. The prediction comes from Venezuelan Vice-President José Vicente Rangel, in an interview granted to the Brazilian newspaper Folha de São Paulo. According to Rangel, in Latin America there is great resistance to change and `any reform process generates almost irrational reactions.'

In Venezuela's case, that reaction began with the `demonisation' of Chávez . So far, only the far-right fringe has attempted anything similar with Lula, but this may be changing. Almost immediately after the Rangel interview was published, the influential Brazilian newsmagazine Veja led with a major report on what it described as the most radical attempt ever to politicise Brazil's state apparatus — by Lula's Partido dos Trabalhadores (PT).

The main drift of the report is that the Lula administration has been filling government agencies with ill-prepared appointees chosen solely for their loyalty to the party. Much is made of Lula's campaign tirades against technocrats, and his claims that some of their jobs could be better performed by blue-collar workers. 

The report claims that the Lula government has lowered the qualifications required for certain positions in order to facilitate the appointment of the party faithful. It does not dwell on the fact that the radical wing of the PT is highly critical of the surfeit of `technocrats' appointed to such areas as the management of the economy.

Veja also notes that PT members appointed to government posts have to contribute to the party coffers more than other members — the message being that political appointments carry a financial reward for the party. The magazine reckons that the PT will raise from members' contributions more than US$10m for next year's municipal elections. This is a considerable achievement by Brazilian standards, where campaign financing has relied considerably on private contributions with strings attached, or on corruption.

The `revelations' of the Veja article have already been picked up and featured prominently by the New York Times, in much the same manner as anti-Chávez reports in the Venezuelan press found a ready echo abroad. Lula may find that timespans have been shortened since Chávez took office.