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A 15-month operation to track down and break a drug gang came to a spectacular head on Wednesday night (28 January) with the arrest of 15 drug traffickers and the seizure of 2 tonnes of cocaine. The drugs, which the Mexican authorities claim were bought from the Fuerzas Armadas Revolucionarias de Colombia, were destined for the US and the local market.

The gang was headed by Juan Pablo Rojas López, the Procurador General de la República, General Rafael Macedo de la Concha, said. Rojas López was arrested. The gang (and Rojas López ) is known as El Halcón. Both have links with virtually all the big gangs in Mexico and the US. It also had policemen on its payroll, most probably in Mexico City.

Besides being a wholesaler, El Halcón also retailed cocaine products in and around Mexico City, especially in the sprawling conurbations of Nezahualcóyot, Ecatepec and Chalco. The street value of the 2t of cocaine is around US$40m.

The R$ 32.2bn (US$ 11.1bn) merger of the Brazilian brewer Ambev with the Belgian Interbrew last week is causing turmoil in the Brazilian stock market. Although the deal is being made through the exchange of shares between the two companies, it involves the exchange of ordinary shares, with voting rights. Yesterday, 8 March, Ambev's preferred shares fell for a fifth session. Since the announcement of the deal last week, this category of shares has lost a quarter of their value.

The deal between the two breweries is prompting investors to avoid non-voting shares in Brazilian companies. Previ, the pension fund for workers of Banco do Brasil, and a holder of 15% of Ambev's preferred shares, took the bulk of the losses. According to the fund's investment director, Luiz Carlos Aguiar, 'people will be now reluctant to buy preferred shares of companies'.

On the other hand, the prices of ordinary shares across the market have surged. Ordinary shares in Tele Norte Leste, the biggest telephone company in the country, rose 13% last week: its preferred shares have risen by just 1.6% in the same period. Ambev's ordinary shares rose 39% since the exchange of shares with Interbrew started.

A proposal from the European Union sent to the Mercosur countries is causing them a dilemma. Under the proposal, the EU will open parts of its agricultural market to Brazil, Argentina, Uruguay and Paraguay in exchange for more access to Mercosur's financial and service sectors. However, the European scheme requires that the Mercosur countries stop pressuring the EU for the complete opening of its agricultural market under the stage of the Doha round of the World Trade Organization talks.

The EU scheme suggests the creation of a 'special trading zone' between the two blocks. According to sources in Brussels, the EU is prepared to open its meat, sugar and dairy products markets. Yet, the proposal will not affect the market-distorting subsidies the EU offers to European farmers when they export their products. The EU offer is clearly designed to split the Brazilian-led G-20, a group of developing nations which includes China, India and South Africa.

The European proposal does not meet Mercosur's initial request that EU should open its agricultural market. Yet, the Argentines have showed they are ready to negotiate with the EU. According to Martí­n Redrado, the Argentine secretary for international economic relations, Mercosur 'will examine the European proposal'.

The Brazilian foreign minister, Celso Amorim takes a different tack. He said: 'there would not be any negotiation that could undermine the unity of the G-20'. The acceptance of the European proposal, however, would mean Brazil having to abandon its policy of creating a 'developing nations union'. Instead it would have to go the way of other developing countries and cut deals which gave preference to Mercosur exports to developed countries

An unprecedented demonstration took place in departmental capitals across the country yesterday as senior members of the police force, accompanied by thousands of officers, called for peace between all Nicaraguans and an end to violence.

President Enrique Bolaños joined heads of the police force and some 1000 officers in the south of the capital Managua, the scene of recent violent clashes between police officers and university students that claimed the life of one police officer and resulted in several other officers and students being injured. Police chief Edwin Cordero said that the demonstration was designed to send out a clear message: 'no to violence, yes to peace'.

Students also demonstrated yesterday. They are demanding that the government stump up the 6% of the budget earmarked for universities under the constitution. The government has put this figure at US$46m; students claim it is closer to US$60m.

Development: A former president of Ecuador, Rosalí­a Artega, said on 30 June that industrialised countries should be asked to pay for the preservation of Amazonia. Artega is secretary general of the Organización del Tratado de Cooperación Amazónica (OTCA) .

Significance: Artega's statement is likely to incite environmentalists in industrialised countries to lobby their governments. She argues that the pollution created by the rich countries creates a debt which can only be paid by preserving Amazonia. The OTCA groups together Brazil, Bolivia, Colombia, Ecuador, Guyana, Surinam, Peru and Venezuela.

Artega's scheme calls for the world's rich countries to contribute towards the preservation of Amazonia either by making payments or by writing off debts owed by Amazonian countries. The scheme will be discussed at the OTCA summit which begins today (1 July) in Brasilia and lasts until tomorrow. One of the main goals of the meeting will be to marshal the eight Amazonian countries behind Artega's plan.

Besides the OTCA countries, Unesco, Unctad and the OAS will send representatives to the OTCA meeting. The Panamerican Health Organization and the Comunidad Andina de Naciones will also be represented. Artega's action plan for Amazonia has four elements: conservation and sustainable development; research and technology transfer; creating the infrastructure to integrate the region and the development of the OTCA as a political force. Currently the OTCA is trying to harmonise laws among its eight members to protect the region's bio-diversity and the exploitation of the region.

Development: Salvatore Mancuso, one of the leaders of the Autodefensas Unidas de Colombia (AUC), declared on 5 August that paramilitary leaders currently located in the concentration zone at Santa Fe de Ralito should be able to come and go as they please.

Significance: Mancuso's demand, issued during a radio interview, goes directly against the government's stipulation that the 33 paramilitary leaders who have gathered in the 368km2 concentration zone can only leave with special permission and only when it is on business connected with the peace process. Mancuso believes that they should be able to move in and out freely, so long as there are three of the AUC chiefs in the concentration zone at any one time.

Mancuso also reiterated his desire that the government establish more concentration zones similar to the one at Santa Fe de Ralito for the paramilitaries elsewhere in Colombia. Again, the government has refused to do this, at least until there has been far greater progress in talks with the AUC. In Mancuso's opinion, the establishment of new concentration zones will make such progress all the more possible.

In one concession to the government, the paramilitary chief said that the AUC leadership would today (Friday 6 August) publish a list of the paramilitary chiefs currently gathered in the concentration zone. It has been the source of great annoyance to the government that it doesn't even know who it is negotiating with, although it is an open secret that many of the paramilitary chiefs it has held talks with are known drug-traffickers who are wanted for extradition.

What will be less pleasing for the government is the fact that Mancuso claims the chief known as 'Jorge 40' is back in the zone. The government threw him out of the process after he kidnapped a former senator, José Gnecco, shortly prior to talks beginning in July.

Development: A credit risk rating agency Moody's raised Brazil's country risk ranking from B2 to B1 on 9 September. 

Significance: The upgrade is an important indication that the international capital markets are optimistic about the country's economy. Yet Moody's, as well as the other two big risk rating agencies Fitch Ratings and Standard & Poor, still considers investing in Brazil a high risk venture. According to Moody's ranking Brazil is still four notches bellow its 'investment grade' rank. 

Moody's mentioned the increase in exports and the reduction of the public debt linked to the dollar as the main reasons for upgrading Brazil. The agency also pointed to the government's management of a rigid fiscal policy and a flexible exchange rate regime as very positive influences on economic performance. 

The upgrade was hailed by the Brazilian treasury secretary, Joaquim Levy, in London, where he is finalising the issue of â‚ ¬750m in government bonds in the European market. The issue of the new bonds, the first in euros during President Lula da Silva's government, was considered a success. Initially the government was expected to issue bonds worth â‚ ¬500m, however because of stronger demand, which reached â‚ ¬2bn, the government decided to issue â‚ ¬250m extra. The new bonds will be due for payment in September 2012 and will pay 8.7% in interest.

The government now expects Standard & Poor and Fitch Ratings to follow Moody's and also upgrade Brazil's rating. In an interview given recently to O Estado, Lisa Schineller, director of S&P in Brazil, said Brazil is registering better results than expected. Schineller said, however, that the agency would need more time to assess the impact of the recently announced tax cuts for business willing to invest in infrastructure and the results of the forthcoming municipal elections in October and their effect on congress. 

According to analysts Brazil stands a good chance of gaining investment grade status in the next few years. Professor Simão Davi Silber, from the university of São Paulo, believes the country will be considered investment grade within three years. For that Brazil will have to maintain a 3.5% growth rate in the GDP and keep the primary fiscal surplus under 4.5% of the GDP, reducing the ratio between public debt and GDP under 50% by 2007. 

Not all the economic news coming out is good. According to Fundação Getúlio Vargas inflation in August was higher than the market's expectation. The agency's IGP-DI index for last month was 1,31%, the highest since May. The market was hoping inflation to be 0.92%. The results may prompt the central bank's monetary committee (Copom) to increase interest rates at its meeting next week, if it is to comply with its 4.5% inflation target for next year.

Development: More than 200 members of Haiti's former army arrived in jeeps in Port-au-Prince on 13 October saying that they were expecting word from the interim prime minister, Gérard Latortue, to 'deal with the bandits'. The 'bandits' in question are supporters of former president Jean-Bertrand Aristide, known as the chimí¨res, who have participated in two weeks of violent protests against the government that have claimed the lives of 46 people.

Significance: The interior minister, Bernard Gousse, claims that the ex-soldiers are not welcome and will not be allowed to operate as a security force. It is, however, unclear who is going to stop them, even though the understaffed UN stabilisation force, Minustah, is nominally responsible for disarming them.

The spokesman for Minustah, Toussaint Tongo, said that the UN force had no control over what happened with the ex-soldiers. 'The government is negotiating with them and it is the government that will have to deal with them,' Tongo said in a press conference on 13 October. On the same day Aristide supporters delivered an ultimatum of 72 hours for the former president to be allowed to return and for imprisoned members of his party, Fanmi Lavalas, to be released or else they will 'take another step'. The government has declared a curfew in Port-au-Prince from 18.00 to 08.00.

The offer of assistance for the government was made by former sergeant Remissainthe Ravix, the unofficial leader of the ex-soldiers, who are demanding the restoration of the army as well as ten years of back pay. Ravix said that more ex soldiers would arrive over the next few days. He criticised the UN and the Haitian police for doing nothing to stop the violence. 'We see Lavalas gangsters shooting parents as they take their children to school, stores can't open, life can't continue... We can't allow it,' he said.

Minustah and the Haitian police force have, however, been active. On 13 October they arrested the catholic priest Gérard Jean-Juste. The government claims that Jean-Juste, a prominent member of Lavalas, is responsible for inciting the violence of the last two weeks.

Development: Santiago Creel, the interior minister, said on 16 November that Mexico had received 14 intelligence warnings about possible terrorist attacks since 11 September 2001.

Significance: Creel said that his officials had acted on each of these warnings, from US, Canadian, European and South American intelligence agencies, but had yet to find any evidence that groups such as al-Qaida were using Mexico as what Creel called a trampoline into the US. The US has long fretted about the vulnerability of its southern border and the huge numbers of people crossing it, both legally and illegally.

Creel said that Mexico took every warning seriously as it did not want to take any chances, and that he had worked well with Tom Ridge, the US secretary for Homeland Security, who resigned on 16 November. Creel said that he hoped that he would be able to work as well with whoever succeeded him.

Development: President Néstor Kirchner chose Darí­o Alessandro, currently sub-secretary for Latin American affairs in the foreign ministry, to be Argentina's next ambassador to Cuba on 20 December.

Significance: Alessandro will replace Raúl Taleb, who was sacked by Kirchner over the weekend. Taleb bore the brunt of Kirchner's wrath over the incident involving Hilda Molina, the Cuban dissident who sought refuge in the Argentine embassy on 15 December in the hope she might be allowed to visit her family in Argentina.

Molina precipitated a crisis in relations between Argentina and Cuba. Kirchner was reluctant to turn Molina away for fear that it would cost him support at home, but he was also loathe to get involved in Cuba's internal politics. Kirchner has put a lot of effort into improving relations between Cuba and Argentina since he came to power in May 2003.

It appeared at one stage as if the affair would cost Foreign Minister Rafael Bielsa his job. However, at a meeting between Kirchner and Bielsa on 20 December the president reassured Bielsa his position was safe. Kirchner said that he needed Bielsa at what is a very important time for Argentina: it will take over the presidency of the UN Security Council in January 2005.

Alessandro might have to wait some time before he attempts to mend ties with Cuba. His appointment has to be ratified by the senate, which is unlikely to have time to discuss the issue before the summer recess. The chamber reconvenes in March.

BOLIVIA: According to a survey by Apoyo y Opinión, the approval rating of President Carlos Mesa stood at 47% in January 2005. This is the first time Mesa's support has dropped below 50% since he took office in October 2003.

BRAZIL: Bradesco's profits increased 32.7% in 2004 in relation to the previous year, totalling R$3.06bn (US$1.12bn). Bradesco is Brazil's largest private bank.

PERU: Fishing exports increased 35% to US$1.38bn in 2004, the highest since 1997. Fishmeal, of which Peru is the world's largest producer, accounted for US$956m of total fish exports.

URUGUAY: According to government figures, the primary fiscal surplus stood at US$512m in 2004, or 3.8% of GDP. The surplus was 46% higher than in 2003 and above the IMF-established target of 3.6% of GDP.

Development: On 3 March the World Trade Organization (WTO) delivered its final ruling favouring Brazil over US cotton subsidies.

Significance: Brazil won the case after the US government appealed over the WTO's previous decision, which had also favoured Brazil, last year. The US government has until 1 July to reform its credit program to cotton exporters and 15 months to eliminate domestic subsidies. If the US does not comply with the WTO's decision, the Brazilian government will be allowed to retaliate.

According to Brazilian producers, US subsidies cause annual losses of US$480m to the Brazilian cotton industry. The US, currently the largest world cotton producer, spends US$12.5bn annually to subsidise its cotton growers, meaning that for every US$1 of cotton produced, producers receive US$0.895 in credits from the government.

According to the Brazilian foreign office's statement, the WTO ruling does not only benefit Brazil, but will "influence dramatically the numbers relative to [global] poverty". The WTO accepted Brazilian arguments that US subsidies to soya, maize and rice exporters are illegal.

Development: Remissainthe Ravix, one of the most prominent leaders of the former soldiers that drove Jean-Bertrand Aristide from power in February 2004, was killed by the Haitian police on 9 April. A day later another key leader, Jean Anthony, was also killed.

Significance: Ravix, who led a string of seizures of police stations last year, had called for former soldiers to rise up against the UN stabilisation force, Minustah, after UN troops launched several operations in March to evict the former soldiers from police stations in the interior. In February the interim government of Gérard Latortue issued an arrest warrant for Ravix and Anthony, who were accused of the deaths of four Haitian police officers. 

Ravix and three of his men were killed in a gunfight with the Haitian police on the outskirts of the capital. Police spokesman Jessie Coicou said on 10 April that 18 people had been arrested. Anthony was injured during the fight but got away. He was killed on 10 April in the Delmas suburb of Port-au-Prince.

Development: Huge demonstrations brought La Paz to a halt on 16 May. Peasants from the surrounding Altiplano and teachers marched in the capital. In the centre of the country, miners squared up to cocagrowers. Today, 17 May President Carlos Mesa has to decide what to do about the hydrocarbons law, passed by congress.

Significance: The size of the demonstration and the cancellation of Mesa's national convention for Bolivian unity, scheduled for 16 May, heaps more pressure on the government. The radicals, who have been led by Evo Morales, the head of the Movimiento al Socialismo, the second biggest party in congress and also the leader of the cocagrowers, the most cohesive extraparliamentary group, are upping their demands. The MAS is undecided whether to take up the radicals' demands for the complete nationalisation of the hydrocarbons industry and the closure of congress.

The demonstrations were large and rowdy. At least one politician was attacked. Congress was evacuated after demonstrators spilled into the Plaza Murillo on which congress and the presidential palace sit. The police defended this area with water cannon and tear gas. One demonstrator was arrested for carrying explosives.

The hydrocarbons bill is emblematic both for the government and the radicals. The government argues that the law as it emerged from congress, calling for an 18% royalty and a 32% tax on hydrocarbons, is too confiscatory. The government fears that such rates will deter foreign investment in the crucial gas industry: without foreign investment there will be no gas industry, the government, and the energy companies, argue. The left says that the bill, approved by congress on 5 May, is still too advantageous to the energy companies. In particular the MAS wants the restoration of the clause which gave indigenous people a veto over all hydrocarbon projects. Congress ruled that indigenous people had to be consulted about projects.

The hydrocarbons bill is not the only problem facing the government. The prosperous east of the country, which wants a milder version of the hydrocarbons law, also wants directly elected departmental governors and devolution. The poorer, Indian western highlands are less keen on this, fearing that the east will keep more of the money it earns. The west also wants devolution to be decided by a constituent assembly, where the highlanders will be dominant. Congress has failed to produce the legislation enabling the gubernatorial elections to go ahead simultaneously with a referendum on autonomy. This failure means that devolution will be delayed, infuriating secessionists in the east.

Today the president has to pick one of four options for the hydrocarbons bill: he can veto the whole bill; veto bits of the bill; approve the bill or allow congress to approve the bill. A two-thirds majority of congress overrides the presidential veto.

The buzz in La Paz is that the president will probably veto the key parts of the bill. One of his advisers said yesterday that there were three or four clauses in the bill which were life or death for the country and 20% of changes made by congress have serious implications.

The government was hinting on 16 May that it will overturn at least three key congressional amendments: one is the modification to its initial suggestion of an 18% royalty rate coupled with a progressive rate of taxation, capped at 32%. Another is the requirement that all current energy concessions are subject to the new law, without negotiation. A third is the call for the re-establishment of the state energy company, YPFB.

Development: On 20 June Blasco Peñaherrera, a former vice-president of Ecuador, accused Lucio Gutiérrez, the recently deposed president, of planning a coup to overthrow the government of Alfredo Palacio.

Significance: Peñaherrera is part of a commission sent by Palacio to the US in an attempt to gag Gutiérrez, who travelled there after rejecting exile in Brazil. Gutiérrez was invited to address investors in New York and Washington by Barclays Capital two weeks after he was ousted. The new government's fear is that the investors who reaped the benefits of Gutiérrez's orthodox fiscal policies are attempting to get their man returned to office.

Peñaherrera said that Gutiérrez was attempting to discredit the Palacio administration. Last week Gutiérrez sought an audience with José Miguel Insulza, the secretary general of the OAS. Insulza, however, refused to see him because Gutiérrez had identified himself as the president of Ecuador. Rafael Correa, the economy minister, also denounced a conspiracy last week, organised from outside of the country but involving people within Ecuador who had links to the old regime.

Meanwhile, the head of US Southern Command, General Bantz J. Craddock, visited Ecuador on 20 June, for the second time since he took up the post in November 2004. Craddock gave a press conference with the defence minister Solón Espinoza in which he said, "Ecuador is key in the fight against drug trafficking. The Manta airbase makes our work much easier, although we must improve our working method and military relations."

Craddock also took pains to point out the Manta base was specifically intended for use in the fight against drug trafficking and armed groups in Colombia, not for the interception of boats carrying illegal immigrants to the US. Last year, the US navy sunk a boat carrying Ecuadorean migrants north. The head of Southern Command was more circumspect when asked about the US's attitude to the International Criminal Court. The US has conditioned its supply of military aid to the country on Ecuador's acceptance that US soldiers acting on Ecuadorean soil will only have to answer for their actions in US courts. The Gutiérrez administration had refused to accept this, prompting China to offer military aid instead. The Palacio administration has yet to comment on the issue. Craddock merely said he hoped the matter could be resolved soon.

Development: On 21 July Argentine protesters gathered outside a meeting of the Rio Group in Buenos Aires to demand Uruguay scrap plans to build two cellulose plants near the border with Argentina.

Significance: Uruguay has approved the construction of two cellulose plants by the Finnish company Botnia and Spanish firm Ence in the city of Fray Bentos. The project will bring investment worth US$1.8bn, the largest in Uruguay's history. The World Bank is supporting the scheme.

Argentina is opposed to the building of the plants, at least until a study of the associated environmental impact is carried out. It is worried that the plants will pollute the nearby Rí­o Uruguay which forms the border between the two countries. Argentina and Uruguay have agreed to research jointly the risks of contamination but the team set up to do so has yet to meet, supposedly because the Uruguayan representatives failed to turn up.

Both Argentina and Uruguay are playing down the significance of the issue in spite of the media attention it is drawing. On 21 July the Argentine embassy in Uruguay was forced to issue a statement denying reports in the Uruguayan 'La República' newspaper that Argentina had mobilised troops in Entre Rí­os (the province across the river from Fray Bentos).

On the same day, the Argentine foreign ministry issued a statement denying that the government is trying to block investment in Uruguay. There is speculation that Argentina's objections to the cellulose plants were down to sour grapes that it had lost out to Uruguay on the deal, but the foreign ministry maintained that its sole aim is "the preservation of the ecosystem".

Development: On 24 August representatives from Costa Rica's four main political parties discussed the possibility of reducing spending on electoral campaigns ahead of the presidential election in February 2006.

Significance: The meeting was hardly an unqualified success. The representatives failed to reach an agreement and fell to accusing each other of being 'demagogues'. The meeting was initiated by Ottón Solí­s, of the third-largest party in the country, the Partido Acción Ciudadana (PAC), who suggested that the state funds earmarked for campaign funding should be reduced from its constitutionally enshrined 0.19% of GDP to 0.08%.

Solí­s was the only presidential candidate who turned up. The others: Nobel laureate Oscar Arias, of the Partido Liberación Nacional (PLN), Ricardo Toledo, of the Partido Unidad Social Cristiana (PUSC) and Antonio Alavarez, of the Partido Unión para el Cambio, all sent representatives to negotiate on their behalf.

A recent opinion poll put Arias ahead of the pack, with 62% of voter preferences, enough for a first round victory. Solí­s followed with 14%; Alvarez and Toledo were tied with 7%. The crucial point is that these preferences only reflect the 15% of the electorate who have decided who they will vote for. A significant 39% of those polled said they have no intention of voting at all, which exceeds the 31% who abstained in the first round of the elections in 2002. Of the 61% who say they will vote, three-quarters have not yet made up their minds.

Development: Deputies in the lower chamber of congress will choose the chamber's new president today (28 September). The election will be held a week after the resignation of its former president, Severino Cavalcanti, who is accused of extortion.

Significance: The election is, essentially, a straight fight between the government's candidate, and former minister Aldo Rebelo, and the opposition's Thomaz Nonô, the chamber's interim president. The contest is the government's last chance to regain control of the congress' agenda, which has been almost completely taken over corruption investigations involving allied congressmen, before the next general elections in 2006. President Lula da Silva fears that an opposition victory will further obstruct the government, already paralysed by corruption allegations, thus shattering his re-election ambitions.

For that reason, Lula decided to interfere in order to tip the election's balance in favour of his favourite, the communist Rebelo. To avoid a split in the ruling coalition, the President firstly blocked the candidacy of his own Partido dos Trabalhadores' leader, Arlindo Chinaglia. Lula then held talks with the allied Partido Liberal (PL), promising to open the government's coffers to the PL-controlled ministry of transport in exchange for the party's support to Rebelo. According to the press, the president has also offered the PL another place in the cabinet. With the PL's support, Rebelo can now count with 180 votes out of the 257 he needs to become the lower chamber's president.

Meanwhile, Nonô continued to court the leftwing opposition parties. Apart from the backing of his (right-wing) Partido da Frente Liberal, Nonô was already being fully supported by the centre-right Partido da Social Democracia Brasileira and the rightwing Prona. On 27 September the leftwing Partido Democratico Trabalhista, the Greens and Socialists also joined them. With their support, Nonô is expected to receive 156 votes. As no candidate is expected to win in the first round, a runoff vote will be carried out straight after the first round results are announced. The government hopes that other candidates will support Rebelo in the runoff contest against Nonô.

Development: On 31 October the Ecuadorean Episcopal Conference offered to mediate in the country's political crisis, as the impasse between the executive and the legislature continued.

Significance: The tide appears to be turning in the government's favour. Although the Church warned President Alfredo Palacio as well as congress to "take into account the demands of the people", its preference, as expressed by a recent opinion poll, is for Palacio's proposed constituent (unchecked) assembly rather than congress's constitutional (limited) assembly. In congress itself, the second-largest party, the Izquierda Democrática, admitted the possibility of supporting the government's proposal.

According to the latest surveys, 52% of Ecuadoreans support the constituent assembly idea, which would be composed of members of civil society as well as established political parties, and would have the power to dissolve congress, sack the president or rewrite the constitution. A constitutional assembly would only rewrite the constitution. One possible compromise floated would be to put the question as to which type of assembly the country should convoke to a referendum. Given the result of the latest polls, it would seem the country favours Palacio's proposal. However, a poll by Cedatos on 30 October revealed that 82% of Ecuadoreans did not understand the difference between the two types of assembly.

Palacio has been maintaining his hardline attitude in public, much to the consternation of both the Church and the Organization of American States, but there is a significant amount of negotiating going on behind the scenes. On 31 October Galo Chiriboga, the interim interior minister, met with Wilfrido Lucero, the president of congress, to attempt to find a way out of the crisis.

Meanwhile, today (1 November), 165 applicants selected for the decisive phase of the supreme court will begin their aptitude tests. The 31 magistrates to the new court should be chosen by 22 November. The political crisis in the country has been exacerbated by the lack of a judicial authority; Ecuador has had no supreme court since Lucio Gutiérrez dissolved it, in one of his last acts as president, in April 2005.

Development: Figures published by Centro de Recursos para el Análisis del Conflicto (Cerac) on 5 December showed that the number of civilians killed by paramilitaries during the first half of 2005 was higher than in the same periods of 2003 and 2004.

Significance: The report by Cerac, an independent think-tank, shows that paramilitaries belonging to the Autodefensas Unidas de Colombia (AUC) are still ignoring the ceasefire they signed at the start of the peace process in December 2002. It also shows that the violence perpetrated by the paramilitaries has become more frequent even as the AUC has been demobilising.

According to Cerac, 658 civilians were killed by paramilitaries between January and the end of June this year, more than double the average for the same period in the previous two years. The think-tank admitted that the number of killings by paramilitaries declined sharply in 2003 and 2004 after the government began talks with the AUC in 2002 but Cerac expressed its concern that the upswing in civilian murders had occurred when the demobilisation of the AUC's 20,000 or so members was in full swing.

The think-tank has highlighted a new trend in the murder of civilians: 72% of killings carried out in the first half of this year involved one or two victims; in previous years, 91% of homicides involved at least four victims. Attacks in which there are four or more victims are termed as massacres by the government.

Separately, the government announced on 5 December that it will hold a formal meeting with the Ejército de Liberación Nacional (ELN) on 12 December. The government's peace commissioner Luis Carlos Restrepo and Francisco Galán, the head of the ELN's central command made the deal. It will take place outside Colombia; although the location has not yet been confirmed: Norway, Switzerland, and Spain are the most likely venues.