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Development: The Brazilian government was caught by surprise by the Bolivian government's decision to nationalise oil and gas fields on 1 May, including the ones owned by the Brazilian state-owned Petrobras. 

Significance: The Brazilian “perplexity" with the Bolivian decision was expressed by the foreign minister, Celso Amorim. The Brazilian mines and energy minister, Silas Rondeau, was more emphatic considering the decision “hostile". The news is a bucket of cold water to Lula's foreign policy, which is trying to drive forward the integration process in Latin America. According to several cabinet members, the Brazilian government expected the Bolivians would “negotiate" the impasse with foreign energy companies operating in the country, especially Petrobras which is the single largest investor in Bolivia.

The news prompted alarm in the Brazilian press which cited specialists to contradict the government's pronouncement that the Bolivian decision will not affect Brazilian gas supplies. According to specialists, so far there has been no rationing of gas to domestic Brazilian consumers because the government has cut supply to the Petrobras' refineries. The south and south-east regions of Brazil, where most of the industrial activity is concentrated, depend on Bolivian gas for as much as 72% of their total demand. The president of Petrobras, Sérgio Gabrielli, said that the Bolivian government's decision makes the company's activities in that country “unviable". 

President Lula da Silva called an emergency cabinet meeting to discuss the situation today (2 May). After the meeting, Lula is expected to call his Bolivian counterpart, Evo Morales. According to sources in the Planalto Palace, Lula will be “tough" and say Brazil considers Bolivia's decision “unacceptable". The Brazilian government's line is that it “understands" the Bolivian plight to protect its natural wealth, but is expected to reach an agreement on the matter. 

The Brazilian opposition took the opportunity to criticise Lula's foreign policy. According to an opposition leader, Lula “messed up" politics in Latin America. Others agreed saying that the current foreign policy for the region is creating “chaos". For Senator Tasso Jereissati, the situation with Bolivia shows that the government “does not defend Brazilian interests". Congressmen linked to the government said they still expect a “negotiated solution". Senator Aloizio Mercadante believes that Morales “will treat Petrobras differently" to other companies.

Development: Defence Minister Carlos Ospina announced on 5 June that the police force will be expanded by 10,000 men per year for the next four years.

Significance: The expansion of the police force during President Alvaro Uribe's first four years in office played a crucial role in his security policies. Uribe enlarged the police force by 27% between 2002 and 2006, from 97,000 to 123,000, which helped the president to claim the security forces had a presence in all of Colombia's 1,098 municipalities.

Under the plans outlined by Ospina, the police force will grow to 163,000 members by 2010, when Uribe's second term comes to an end. The defence minister said the expansion was necessary for "entering into areas where there have been demobilisations and where there is a danger that drug traffickers are operating". Ospina also admitted that there were 400 or so settlements which were not adequately protected by government forces.

Development: Andrés Manuel López Obrador, the defeated candidate in the 2 July presidential election, produced two videos on 10 July which, he claimed, showed major electoral fraud and warranted a full recount of all the votes cast.

Significance: López Obrador is challenging the result of the elections, which gave a narrow (0.58%) victory to the rightwing candidate, Felipe Calderón Hinojosa from the Partido Acción Nacional (PAN). At various times in the past few days López Obrador has called for either a complete recount of all the votes or a partial recount. On 10 July his campaign coordinator, Jesús Ortega, appeared to suggest that the supreme court, or the Tribunal Electoral del Poder Judicial de la Federación (TEPJF), should rule that the elections were so flawed that they were worthless.

Whether López Obrador and his supporters actually want the elections to be re-run is unclear. The two precedents of gubernatorial elections being re-run, in Tabasco in 2000 and Colima and 2003, produced the same result as the first elections. It is also not obvious whether López Obrador will persevere with legal methods to challenge the result.

López Obrador's lack of clarity and precision about what he wants is dangerous. It justifies the Right's fears that López Obrador is not interested in staying within the legal framework that allows specific challenges to specific results but is preparing the ground for a revolutionary challenge to Calderón's victory. The Right is playing up the marches López Obrador's campaign is organising this week to protest against the results; the Right doubts that the marches will be peaceful although the López Obrador campaign is adamant that they will be.

It is far from clear that the simple solution, of a complete recount, is a way forward. It is also not apparent whether a complete recount would be legal: Calderón and his campaign team assert that it is not. This issue might also have to go to the supreme court for a definitive ruling.

López Obrador's objectives should become clearer this week as his evidence of electoral malpractices is considered by the TEPJF. On 10 July he produced a couple of videos that, apparently, showed ballot boxes in a couple of polling stations being stuffed in two states, Querétaro and Guanajuato, that voted strongly for Calderón.

The PAN (and the Instituto Federal Electoral) claimed that what actually was happening in Guanajuato was that votes that had been deposited in the wrong ballot box (ie congressional ballot papers in the ballot box for presidential votes) were being put into the right piles. The PAN pointed out that the López Obrador campaign representative who took the video had not protested against what was going on.

In Querétaro the PAN said that the video was of the reconciliation (on 5 and 6 July) which sorted out anomalies. This prompted a recount of the results from particular ballot boxes and 200 more votes going to Calderón. The IFE has yet to comment on this video.

López Obrador's opening gambit appears to be to try to persuade the TEPJF to throw out enough votes for Calderón to change the result. On 9 July the López Obrador campaign challenged the results in 152 of the country's 300 electoral districts, thereby questioning the results from 52,000 polling stations.

The assumption among election observers is that if López Obrador can get results from 4,000 polling stations in Calderón-supporting areas struck out, he will win. There were 130,000 polling stations in operation on 2 July.

The PAN itself has lodged protests with the TEPJF so that it can retaliate by challenging results from López Obrador supporting areas. The secretary-general of the PAN, César Nava, refused to say at his press conference on 10 July exactly where the PAN had made its protests.

Under electoral law, the Cofipe, there are 11 criteria for excluding votes. On a narrow interpretation of the law, the honest actions by the PAN representatives in Guanajuato and Querétaro, stigmatised by the video, could lead to all the votes in those ballot boxes being excluded because, technically, the votes were cast after the electoral deadline.

Development: President Alan Garcí­a obtained an impressive 63% approval rating in a poll released by Apoyo on 13 August.

Significance: This will make pleasant reading for Garcí­a, who mustered just 21% of the vote in the first round of presidential elections in April. The poll should be treated with a certain amount of caution, however.

First, it was only carried out in 16 cities: the rural provinces voted overwhelmingly for Garcí­a's rival in April's elections, Ollanta Humala. Secondly, Garcí­a's predecessor Alejandro Toledo was also riding high in the polls shortly after his election before plummeting to single figures after his perceived failure to address issues such as widespread poverty in Peru.

The poll does show, nevertheless, that Garcí­a has won over some of the more affluent Peruvians in Lima and the coastal cities, who cautiously backed him as the lesser of two evils in the elections. This success can be attributed to a series of austerity measures implemented by Garcí­a, such as reducing both his salary and that of legislators. Also, a massive 82% of respondents agreed with his first policy initiative - the restoration of the death penalty for rapists and murderers of young children - which has been criticised by international human rights organisations.

Another poll, released by Compañí­a Peruana de Investigación de Mercados (CPI) on 11 August, gave Garcí­a a 72% approval rating. This was carried out in 14 of the country's 24 departments - again predominantly urban areas. Only 8% of respondents disapproved of Garcí­a's first two weeks in charge. A total of 59% said they felt Peru would improve under his tenure. Still, only 23% felt that Garcí­a would fulfil all of his election promises while 59% reckoned that he would partially fulfil them.

Development: The White House claimed that Venezuela has “failed demonstrably" to comply with international drug-control requirements in its annual drugs report issued on 18 September. The same report also singled out Bolivia for criticism.

Significance: The criticism of Venezuela was hardly unexpected after President Hugo Chávez ceased cooperation with the US Drug Enforcement Administration (DEA) earlier this year after accusing DEA agents of spying. That said, the Venezuelan government claims to have achieved major success in clamping down on the drugs trade: in the year to date authorities say they have seized more than 50 tonnes of illegal drugs, meaning they are on course to match their haul in 2005 of 72 tonnes. In 2004 Venezuela seized just 43 tonnes. It is unclear whether the increase in the amount of drugs intercepted is a result of better policing or a byproduct of increased trafficking.

More noteworthy was that the Bush administration used it yearly assessment of the international drugs situation to express its grave concerns “about the continued deterioration of democratic institutions in Venezuela". The White House cited “increased executive control over the other branches of government, threats to judicial independence and human rights, and attacks on press freedoms and freedom of expression".

The White House said it would continue to keep funding programs that “aid Venezuela's democratic institutions, establish selected community development projects and strengthen Venezuela's political party system".

Neither was the criticism of Bolivia's drug record a major surprise, although the White House was more circumspect in its censure of the world's third-largest cocaine producer. President George W Bush said the Bolivian government had devoted too much of its resources to trying to prevent the flow of drugs and not enough to eradicating coca crops. Bolivia's president, Evo Morales, made his name as the leader of the Chapare coca growers movement and is unlikely endorse policies which destroy his supporters' livelihoods.

Other Latin American countries cited by the report in a list of the world's 20 major production or transhipments points for the illegal narcotics trade are: Brazil, Colombia, Dominican Republic, Ecuador, Guatemala, Haiti, Jamaica, Mexico, Panama, Paraguay, and Peru. All these countries featured in the same report last year.

Development: The strike against the Uruguayan government's decision to subsidise public transport fares by raising the price of petrol paralysed the country on 23 October.

Significance: An estimated 20,000 truck drivers and 5,000 taxi drivers stopped working leading to goods supply shortages in the capital, Montevideo, and other cities. These shortages are set to become more severe as Uruguay's two main associations representing agricultural producers, the Asociación Rural and the Federación Rural de Uruguay, decided to join the protest. 

Protesters say they are in favour of lowering the price of fares for commuters, but not at their expense. The fuel price rise will boost the government's revenues by some US$1m monthly, which the authorities say will be used “exclusively" to subsidise the transport of commuters. The price hike, however, will dent the profits of producers, lorry and taxi drivers, who complain that a third of their profits is already spent on fuel.

The government claims the strike is “a rightwing manoeuvre" to destabilise the country. The agriculture and fisheries minister, José Mujica, said “important power interests are operating through the [transport and agricultural] associations" to undermine the government. This talk, however, will do little to improve the government's approval rating, which has fallen from 53% to 37% in the last 19 months according to Interconsult. The popularity of President Tabaré Vázquez has also fallen by 20 points to 49% in the period.

Development: On 29 November the former presidential candidate Horacio Serpa formally requested the lower chamber's accusation commission to investigate President Alvaro Uribe "for his relations with paramilitarism".

Significance: The start of Uribe's second term has become mired in scandal and accusation of government collusion with paramilitaries. Serpa's complaint followed a congressional debate in which the opposition demanded the resignation of the foreign minister, Marí­a Consuelo Araújo, over her brother Alvaro's links with paramilitaries. During the same debate, the attorney general, Mario Iguarán, revealed that a government senator, Miguel de la Esperiella took money from "Micky" Ramí­rez, an associate of former drug baron Pablo Escobar. On 27 November the supreme court launched investigations into six government congressmen over their links to paramilitaries.

Serpa, from the Partido Liberal, has run for president three times, and has twice been beaten by Uribe; he has also served as Colombia's ambassador to the Organization of American States. On filing his request for congress to investigate Uribe, Serpa said, "I don't know how Mr Uribe, who is a impressive sophist, is going to continue deceiving the country with his explanations like those he gave this morning to the media to avoid being investigated."

In a press conference earlier that morning Uribe's rejected an opposition proposal to re-elect congress, following the investigations into nine congressmen, six of whom are affiliated to the government. Instead, Uribe called on all Colombian politicians to reveal their links to terrorist groups, including those sympathetic to the guerrillas of the Fuerzas Armadas Revolucionarias de Colombia (Farc), the Ejército de Liberación Nacional (ELN), the Movimiento 19 de Abril (M-19) as well as the paramilitary group Autodefensas Unidas de Colombia (AUC).

Uribe said that those tried by the supreme court should be replaced with other deputies from their parties' lists. "Criminal responsibility is one thing and the legislative institution is another," he said. He backed the judges to determine which of the politicians charged sought out the guerrillas and paramilitaries out of humanitarian motives and which were motivated by criminality. The president also claimed that most of the alleged meetings had taken place before his government took office and said that previous governments had not paid any attention to the problems created by paramilitaries and drug traffickers.

On the subject of the foreign minister, whose brother, Senator Alvaro Araújo, admitted to congress that he had met paramilitary chief Rodrigo Tovar ("Jorge 40"), but denied he had negotiated any deal, Uribe said the country should support her as the government supported her. In a charged congressional debate, the opposition said that keeping Marí­a Araújo in her position would damage Colombia's international image and harm its relations with the European Union.

In the same congressional sitting, the attorney general revealed that De La Espriella had received money from "Micky" Ramí­rez. On 22 November, the senator had revealed to the Bogotá daily El Tiempo that at least 40 congressmen, various other politicians and government functionaries had signed a "political agreement" with the paramilitaries. De La Espriella admitted that he had received the money from Ramí­rez, but it was after Ramí­rez had come out of prison and related to legitimate business interests, not politics.

Development: The main opposition party, the Partido da Social Democracia Brasileira (PSDB), backtracked on its support for the candidacy of Armindo Chinaglia for the presidency of the lower chamber of congress on 12 January.

Significance: The PSDB's uncertainty over its support for Chinaglia, from President Lula da Silva's Partido dos Trabalhadores (PT), reveals the disarray in the Brazilian congress caused by internal party splits. Chinaglia's candidacy was put forward by the PT's main faction, the Campo Majoritário, which is trying to regain its influence in Lula's government following last year's scandals.

Sectors of the PSDB seemed to believe that Chinaglia would destabilise Lula's second mandate and decided to support him last week. Another sector of the PSDB, however, was outraged with the prospect of supporting any PT candidate. This sector managed to push for a revision in the party's position, leading to the PSDB's U-turn.

President Lula supports the re-election of his loyal ally, Aldo Rebelo, who is a communist, for the presidency of the lower chamber. The PSDB's decision to not support Chinaglia after all may lead to two things: one is a prospective collusion between the opposition and Rebelo, who is said to be upset by Lula's inability to stop the PT's animosity towards him. The second, more serious, is the strengthening of a "third-way" candidacy, advocated by a group of deputies from different parties who want to get the lower chamber to hold the government to account.

The elections for the presidency of the lower chamber and the senate will be held next month.

Development: On 20 February an ally of President Lula da Silva, Senator José Sarney, accused the Venezuelan government of triggering an arms race in South America. 

Significance: Sarney's comments reveal a split inside Brazil's government in its policy towards Venezuela. Lula's conservative allies believe Brazil should act as a deterrent to the aggressive politics pursued by the Venezuelan President, Hugo Chávez . Lula's leftwing allies, however, believe Lula should seek closer ties with Venezuela and follow Chávez 's populist model in domestic politics. 

According to Sarney, a former Brazilian president from 1985 to 1990, the “outdated military populism" of the Venezuelan President, Hugo Chávez , is destabilising the region. Speaking to the conservative daily O Globo, Sarney said that Chávez uses oil money to feed his military might, thus creating a “military inbalance" which will compel Brazil to follow suit and rearm. 

Sarney, however, went on to say that Brazil can fulfill its leadership role in the region without “falling into the temptations of hegemony". He also said that democracy is well rooted in Brazil, meaning that populism would not win hearts even if Lula's radical allies tried to push him into this path. In any case, Sarney deemed Lula “a sensible man" who would not go down the populist route.

Development: On 25 March President Hugo Chávez announced that the Venezuelan government would expropriate 16 private estates, covering an area of 330,796 hectares, as part of the "war on idle land". 

Significance: Since land reform began five years ago, officials have redistributed over 1.9 million hectares of land that had been classified as unproductive or lacked property documents dating back to 1847, according to a recent government census. However, after an initial rush of land-grabs in Apure and Barinas, Chávez struck a deal with some of the biggest landowners in which, in exchange for the voluntary cession of a portion of land deemed to be lying idle, the government would issue unassailable title deeds covering the remainder. Chávez claimed the land which the government is now expropriating is not in use.

Chávez announced the latest expropriations on his radio programme "Aló, Presidente!", which he broadcast from Hato Calleja, one of the estates which the government has seized, located 630 kilometres to the south of Caracas. He said that the land would be used for meat and dairy production. He also assured small landowners who cultivated their land that their property would be respected. In other areas the war on idle land has not been successful in boosting agricultural production; much of the land expropriated in 2005 now has a lower production output than it did before it was taken over by the government.

Why watch him?
He is President Néstor Kirchner's preferred candidate for the Buenos Aires mayoral elections in October 2007, and also has a pivotal role to play as education minister in settling the teachers' strikes which are causing chaos throughout the country.

Born: 3 June 1955

Place of Birth: Buenos Aires

Educated:
He studied sociology at the University of Buenos Aires, where he also became involved in Peronist politics. He spent a year in Mexico studying adult education and gained a masters degree in education at the Universidade Federal Fluminense in Rio de Janeiro. He became an academic and has written numerous books and articles on education, and is a titular professor at the university of Buenos Aires.

Public LifV:
Filmus entered public life through his specialist field of education, and his first role in public service was as the sub-secretary of education for Buenos Aires city from 1990 to 1992. He also acted as an adviser to the former education minister, Susana Decibe, in the mid-1990s. For several years he held the Argentine seat at the Latin American faculty for social sciences, an international organisation created by UNESCO, before becoming minister of education of the city of Buenos Aires under Aní­bal Ibarra in 2000. Kirchner appointed him as education minister for the federal government in 2003.

Timeline:
1983-1989: Rector of the Centro Educativo de Nivel Terciario
1989: Took a masters in education at the Universidade Federal Fluminense in Rio de Janeiro
1990-1992: Sub-secretary for education for Buenos Aires city
1992-2000: President of the Latin American Faculty for Social Sciences (Flacso)
2000-2003: Minister of education for the city of Buenos Aires
2003-present: Secretary for Education, Science and Technology

Strengths
Filmus has the weight of Kirchner's political machine behind him. In the 2003 contest for the mayoralty of Buenos Aires the Kirchner candidate, Aní­bal Ibarra, came from behind to win the runoff. The teachers' strike has done much to raise Filmus's profile, which according to pollsters was one of the factors holding him back in previous polls.

Weaknesses
His reputation was tarnished by the "escuelas and shopping" scandal, when the government sold a school to developers for a shopping centre, which occurred while he was sub-secretary for education for the Buenos Aires government headed by the menemista Carlos Grosso. Having served in this rightwing government leaves him open to accusations of political opportunism. He has faced criticism from the presidential candidate and former economy minister, Roberto Lavagna, for raising minimum wages for teachers without consulting provincial governments. This has fuelled the conflict between teachers and their respective provincial governments, many of which cannot afford to pay the new wages.

Prospects
Filmus's chances of winning the race for mayor of Buenos Aires, and holding the third most important elective post in the country, depend on his performance as education minister in Santa Cruz, where Kirchner has ordered striking teachers' unions to hold talks with the federal government. If resolved successfully, the teachers' strike could raise his profile in a positive way. Filmus is currently third in the polls, just 0.9% behind the incumbent mayor, Jorge Telerman and the leader Mauricio Macri. The election is certain to go to a second round as the leading candidate, Mauricio Macri, does not have enough support to win outright. If Filmus, who has the advantage of Kirchner's support, manages to beat Telerman to second place in the first round he should win the second round.

Development: On 4 June 19 Mexican soldiers including three officers were arrested over the killing of two women and three children in Sinaloa on 1 June.

Significance: The speed of the arrests shows how nervous the government and the army are about losing public support for the war on organised crime. Human rights organisations and the UN as well as local politicians have warned the government about the dangers of using the army to do the police's job.

The soldiers were taken to the military prison in Mazatlán. It seems that the soldiers will be processed by the military justice system, though the Comisión Nacional de Derechos Humanos and other human rights groups would prefer the case to go through the civilian courts.

The women and children were shot when the vehicle in which they were travelling failed to stop at a checkpoint. The soldiers manning the checkpoint came from the 24th Motorised Cavalry. They opened fire at the vehicle.

CHILE: The central bank maintained its growth forecast for 2007 at 5.9%. The bank, however, rose its inflation forecast for the year to 4.1% following a 0.9% increase in the inflation rate in June.

CHILE: Chile posted a trade surplus of US$14.8bn in the first half of the year, a 28.5% increase on the same period in 2006.

COLOMBIA: Coffee exports were up 9.4% in June year-on-year.

MEXICO: Mexico's inflation was 0.12% in June month-on-month, bringing the accumulated rate for the first half of the year to 0.58%. The 12-month rate stands now at 3.98%, just slightly above the 3.95% registered in the previous 12-month period.

MEXICO: Automobile exports were down 6% in the first half of the year in comparison to the same period last year. Internal sales of automobiles were also down, 2.5% in the period.

MEXICO-URUGUAY: Bilateral trade increased by 164% in three years since the two countries signed a free-trade agreement. Last year Uruguay exported US$262m to Mexico and imported US$60m worth of goods from Mexico.

Development: On 8 August President Lula da Silva asked senators to decide the fate of his political ally, the president of Brazil's senate, Renan Calheiros, who is accused of corruption.

Significance: This is Lula's first public comment on the case, which is threatening to delay the senate's business agenda. Significantly, the declaration reveals Lula's preoccupation over the possibility that the senate's presidency could end up in the hands of a senator more sympathetic to the opposition.

Calheiros is accused of several offences but so far has managed to hang on to his post. The likelihood that he will remain, however, is diminishing by the second: the federal police claims it has evidence that he faked documents; while the supreme court recently agreed to launch an investigation, which will probably drag on. This will increase the pressure on Calheiros to resign, especially because the opposition vowed to delay votes until he does.

Speaking to journalists Lula said that "so far I am content with congress" because all bills have been voted. However, fearing that the opposition may delay voting, he said "it is time for the senate to make a decision [over Calheiros]. Either the senate decides; or let the federal police investigate, or the supreme court judge. It is about time for [the case] to end". Asked whether he believed Calheiros's innocence Lula answered rather feebly: "every Brazilian will have my support, all are innocent until the contrary is proven".

Development: The official statistics agency, the Ibge, announced its economic statistics for the second quarter of 2007 on 12 September.

Significance: According to the Ibge, Brazil's economy expanded 0.8% quarter-on-quarter between April and June. In comparison to the same period last year, Brazil's gross domestic product (GDP) was up 5.4%. Brazil's accumulated GDP growth rate stood at 4.8% in the twelve-month period between July 2006 and June 2007, very close to the government's 5% target. Market analysts forecast the Brazilian economy will expand 4.7% this year, one percentage point above the 3.7% growth registered last year.

Growth in the second quarter was pushed by an increased of 5.7% in domestic consumption. This pushed growth in the industrial sector, which expanded by 6.8% between April and June. The agricultural sector also grew strongly, by 6.6% in the period. Strong growth in both the manufacturing and agricultural sectors also led to a 13.8% expansion in investments. Significantly, an increase in investments was one of the factors that allowed the economy to grow without much inflation.

However, there has been bad news too, according to some economists. The 0.8% quarter-on-quarter GDP growth rate was below those registered in previous periods: quarterly growth was 0.9% in the first quarter of the year, 1% in the last quarter of 2006 and 2.8% between July and September 2006. This suggests that economic growth is losing steam. Also, taxation on the productive sector increased 6.9% between April and June, well above the 4.4% growth in the aggregate value of goods and services. This suggests an "imbalance" between the pace of growth of taxation and production.

DOMINICAN REP: Inflation in September was 1.22%, bringing the accumulated rate for the first nine months of the year to 5.25%.

NICARAGUA: Inflation in the first nine months of the year reached 8.48%, above the 6.43% registered in the same period last year. The 12-month rate stands now at 11.56%.

Development: A 24 hour transport strike was heavily supported in Bolivia on 14 November.

Significance: The government said that the strike was political, and was backed by politicians from the secessionist-minded east of the country. The strike halted road and transport. The country's main airport -Viru Viru, which is in the east of the country- was closed and 84 local and international flights were cancelled.

Alex Contreras, the presidential spokesman, claimed that the truck drivers who went out of strike were being manipulated by the "oligarchs" from the east of the country. He said that the oligarchs wanted to destabilise the government.

José Luis Cardozo, the executive secretary of the Confederación de Choferes de Bolivia, said that the strike was not political but simply a protest against the rise in the price of staple foods and products; the scarcity of diesel and the government's inability to keep the country's main roads in decent repair.

The interior minister, Alfredo Rada, said that the strike was only half supported. Cardozo said 80% of his members supported the strike. The strike by workers at the Administrtación de Aeropuertos y Servicios Auxiliares a la Navegación closed the country's airspace. They claimed that they had not been paid for two months.

Development: On 19 December the opposition to President Evo Morales said that it was prepared to negotiate with him, provided it was given guarantees.

Significance: The opposition prefects have realised the weakness of their position and are trying to find a way to backdown from their threats to create an autonomous zone in the east of the country without completely losing face. The figleaf they want is international observers at the negotiations. The opposition wants ambassadors from European Union countries. The government, which has been solidly backed by all its neighbours, will almost certainly grant the request, though it is quibbling at the moment.

The prefects, from Santa Cruz, Cochabamba, Tarija, Beni and Pando, have called for fresh local referendums on autonomy: all but Cochabamba voted for increased autonomy in the national referendum in 2006. President Morales claims that these demands for autonomy camouflage a secessionist movement. Tarija and Santa Cruz are the economic powerhouses in the country: Tarija has the gas and Santa Cruz the agribusiness and financial services which have transformed the economic prospects for South America's poorest country.

On 19 December the lower chamber of congress, which is controlled by Morales's Movimiento al Socialismo, approved a budget for 2008 accounting for the expense of three referendums: one on land reform; one on the constitution; and one on whether the president and the prefects should face fresh elections. This budget now goes to the senate, which is controlled by the opposition.

Rubén Costas, the prefect for Santa Cruz, said that President Morales would have to include the issue of autonomy on the agenda for any meeting. In an interview with a local newspaper, he clearly hoped that Morales would make the elementary mistake of refusing to do so. Costas is also calling on President Morales to give up his claim that the draft constitution was approved by the constituent assembly: the government, which does not have the requisite two-thirds majority in the assembly, moved its venue for the final meeting. It is not clear whether the opposition members were given enough notice of this, because so few of them attended the final session.

ARGENTINA: According to state statistics department Indec, the construction sector grew 6.4% in 2007. This is much slower than the pace registered over the past three years.

COLOMBIA: According to the national statistics department (Dane), unemployment in Colombia declined 11.1% in 2007, 0.9 percentage points below that registered in 2006.

Argentina: Exports of Argentine vehicles increased 45.9% in the first two months of 2008 compared to the same period the previous year. In January and February this year, Argentine exported 43,871 vehicles, of which 70.5% went to Brazil and 9.6% to Mexico.