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MEXICO | US truck deal. The US government signed a deal with Mexico on 6 July that will allow Mexican trucks to deliver goods across the US. The deal was signed without any fanfare and ends one of the longest running problems in the North American Free Trade Agreement (Nafta) which came into force in 1994. The US agreed to liberalise the trucking market under Nafta but it has taken 17 years to sort out the terms of the deal. The deal should sharpen Mexico's competitive edge in its capacity to make goods available to the US supply chain.
In return for free access for Mexican trucks to the US, Mexico will halve its retaliatory tariffs by 8 July. Introduced in 2009, these tariffs are worth US$2.3bn a year and are levied on US goods and agricultural products. The other half will come off when the US issues the first permits to Mexican truckers.
In the US Congress, politicians suspicious of freer trade from both the Democratic and the Republican parties are threatening to nix the agreement by refusing to approve the budget allocation the US government needs to pay for the inspection of Mexican trucks to ensure that they meet US safety standards.

MEXICO | The war on crime. On 5 July two junior officers in the army were arrested and accused, before a military court, of killing one civilian, Jethro Ramsés Sánchez Santana, and torturing another. Sánchez Santana disappeared on 1 May in Cuernavaca after he was arrested by the state police and handed over to the army. On 6 July the Mexico City police arrested seven federal policemen after they were caught apparently red-handed, holding up a truck. The federal attorney general said that the federal officers would be prosecuted.

Development: Today, 9 July, most of Peru's trade unions are backing a general strike.

Significance: The key decision for the government is how to use the army to police the marches. Some radicals hope that the government will respond heavy-handedly to the strike and thus set off a wider conflict.

The strike, which will almost certainly produce roadblocks, is being called to protest against the government's economic policies. As an overture, around 2,000 peasants protested in Cuzco on 8 July against the agricultural elements of the new free-trade agreement with the US. The peasants argue that they will be unable to compete with a flood of cheaper US agri-products, which have easier access to the local market in Peru under the new agreement.

Today's strike has been called by the Confederación General de Trabajadores de Perú. The main complaint is about high inflation (3.5% in the first six months of 2008), privatization, the threat to rural producers from freer trade in agricultural products, and the government's increasingly intolerant attitude towards "social protests". The government said that those breaking the law risk eight years in prison.

Public buildings in Lima have been plastered with posters since Monday proclaiming "No to the strike, No to terror".

Development: On 2 May Peru announced that it accepted Ecuador's map of where the maritime border between the two countries runs.

Significance: Peru's decision weakens its case against Chile, over their bilateral maritime border line. This dispute is currently before the International Court of Justice (ICJ) at The Hague. In the announcement of its agreement with Ecuador, Peru has accepted the 1952 and 1954 agreements on its maritime border, which Chile also signed. In its dispute with Chile, Peru has been arguing that the 1952 and 1954 agreements were not border treaties but covered only fishing rights.

Key points:

• Peru's decision may be an electoral move to tempt the leftwing nationalist candidate, Ollanta Humala, into saying something aggressive about Chile. Humala in his 2006 campaign was virulently anti-Chile, this time round he has somewhat softened his tone. Such a statement could tilt the second round of the presidential election, on 5 June, away from him.

• Ecuador sent its versions of the 1952 and 1954 maps of the maritime border to the UN in March. Peru has accepted and approved the Ecuadorean versions but argues that this decision has no bearing on the dispute with Chile.

• Chile's government said that it will comment formally on the Peruvian decision today. Ecuador's president, Rafael Correa, said that he thought Peru's decision on its maritime border with Ecuador was important for its dispute with Chile, but did not go any further. 

• Technically, Peru accepts that the maritime border with Ecuador runs along a line of latitude. This is what Chile has been arguing at The Hague, but Peru has been arguing that the maritime border should continue along the angle at which the land border between the two countries meets the sea

A Santo Domingo judge has ordered Editora Listí­n Diario, the holding company of jailed banker Ramón Báez Romano, returned immediately to its legal owners - in this case, Báez's father. The media conglomerate, the biggest in the country and including its oldest news paper, Listí­n Diario, was placed under administration after the collapse, due to fraud, of Báez's bank, Baninter (WR-03-22). This led to the dismissal of dozens of journalists and the closure of two newspapers.  

The government, claiming that it had ordered the takeover of the media outlets under the country's anti-laundering legislation, has said it will appeal. The prosecutor handling the case has already begun the restitution process.

The death toll associated with Brazil's land disputes (WR-03-34) rose to 45 last week, with the murder of Luciano Alves da Silva, an MST leader in the northeastern state of Alagoas who heads a local association of 300 families of landless peasants. Alves was gunned down by a hitman riding pillion on a motorcycle as he was walking home after dark. Days earlier, charges had been filed against Alves for having instigated roadblocks and hijackings on a rural road. For his part, Alves had publicly denounced threatening actions by `gunmen linked to landowners in the region.'

Overreaction to Chávez 's remarks has resulted in what Chile least wanted: multilateral involvement in Bolivia's maritime claim.

The government of President Ricardo Lagos has been trying hard to push back into the bottle the genie released when it overreacted to Venezuelan President Hugo Chávez 's by now well-known remark about dreaming of bathing on a Bolivian beach (WR-03-46). An early attempt to ignore the issue — always difficult after a tit-for-tat mutual withdrawal of ambassadors — was partly abandoned after pundits in several countries began to talk about Chile's disdain for Latin America and its `isolation' from its neighbours.

Lagos has started using every available opportunity to highlight Chile's Latin American vocation. A typical statement: `Foreign policy is conducted by each country from its own reality, and our reality is Latin America and Mexico.' His interior minister, José Miguel Insulza, added a more politically specific observation: `The Concertación [the ruling coalition] has always been, and will continue to be, Latin-Americanist.'

Meanwhile, foreign minister Soledad Alvear has been rushing about trying to keep aloft the `principle' that had motivated the reaction to Chávez 's remarks: that the issue of Bolivia's claim for an outlet to the Pacific is a bilateral matter, and that outsiders have no business interfering. The issue, however, was being multilateralised by the day. When UN secretary-general Kofi Annan visited Bolivia, he offered his good offices to help find a solution to Bolivia's maritime demand. Alvear later got him to rephrase his offer to make it sound less pro-Bolivian.

Enter Peru
Then the Peruvians were dragged in. Bolivia's defence minister, Gonzalo Arredondo, stated, `The maritime issue has ceased to be bilateral to become one of regionwide interest, so Peru must take a position on it, because as a country it took part in the problem.' This was echoed by Admiral Luis Aranda, commander of Bolivia's armed forces: `We'll have to see what Peru says. After all, wasn't it involved in the problem? Historically that was the case.'

Peruvian President Alejandro Toledo's immediate reaction was to agree with the Chilean that the issue was bilateral, but his government quickly toned this down when reminded that a 1929 treaty between Chile and Peru stipulates that the latter must be consulted on any solution to the issue reached by Chile and Bolivia, if that solution involves territory that used to belong to Peru before 1879. Bolivians describe this as `a Chilean padlock in Peruvian hands.' Peru's deputy foreign minister, Manuel Rodrí­guez Cuadros, restated his country's stance as supporting `Bolivia's just aspiration' to a sovereign outlet to the Pacific, while underlining that the matter should be discussed `within the principle of respect for the treaties.'

Stirring it up
Beyond the government, the mood in Peru was stirred up by a press report, in the newspaper Expreso, which used a minor topical peg (the US Congress authorising the sale to Chile of the destroyer USS Fletcher) to trot out older details of Chile's military procurement plans, giving them a menacing tilt. Its headline: `Chile Insists on Arms Race.'

The cue was promptly picked up in congress by Luis Gonzales, an outspoken member of the defence committee, who wrote in La República that `the Chilean purchases are in open contradiction with South American integration.' Retired Admiral Javier Pinillos sounded a more alarmist note: `Why is Chile arming itself? Before the war of 1879 it was the same: Chile armed itself and Peru disarmed itself — and we know what the outcome was.'

All this gave a gleeful Hugo Chávez the opportunity to proclaim, `I'm still dreaming of bathing someday on a Bolivian beach [...] If we were to conduct a survey among the peoples of the continent, we'd find that all think alike; that we'd want to bathe on a Bolivian beach. That includes the Chilean people, which is aware of the brotherhood of the South American peoples.'

On that last point he was almost prescient. A survey conducted in Chile by the Fundación Futuro showed 47% of respondents in favour of granting Bolivia greater access to Chilean ports — but without ceding sovereignty. The next-biggest group, 27%, preferred not doing anything about the issue.

Bolivia-Chile: key points

Both Peru and Bolivia lost territory to Chile in the War of the Pacific (1879-83); the latter losing its access to the ocean. Apart from a brief interlude between 1975 and 1978, Chile and Bolivia have not had full diplomatic relations (though they do have consular links). In 1993 Chile and Bolivia signed an agreement of economic complementation, which was scheduled to become a free-trade agreement this year. This last step was suspended by the Bolivian government that succeeded President Gonzalo Sánchez de Lozada, in whose ouster anti-Chilean sentiment played an important role.

VENEZUELA | Rebound in late 2003. In the last quarter of 2003, GDP was 9% higher than a year earlier. This was largely driven by a 25% expansion of the oil economy, boosted by improved world prices as well as the recovery in output levels (still below pre-crisis levels). The non-oil economy grew by 3.9%, largely thanks to a 16% expansion of manufacturing offsetting a 15% fall in construction. The latter has meant a slower-than-expected improvement of the unemployment rate, which stood at 16.8% at the end of the year, 2.4% lower than at end-June.

It must be kept in mind that the baseline for these figures was very low: GDP in the last quarter of 2002 was 17% lower than a year earlier, mainly because of the early impact of the opposition's strike-cum-lockout. For 2003 as a whole, GDP was down 9.2% (a slightly steeper fall than the 8.9% recorded in 2002). For this year the government is predicting a growth rate of 6.5%. Full recovery remains a fair distance away: per-capita GDP is currently at the same level as back in 1958.

BOLIVIA | Business divided over Mesa plan. Business associations are divided over President Carlos Mesa's fiscal plans, which include austerity in the public sector, eliminating the subsidy on fuel prices, tightening taxation of the oil sector, and introducing two taxes (one of 0.3% on financial transactions and one of 1.5% on assets of more than US$50,000).

The umbrella private-sector body, Confederación de Empresarios Privados de Bolivia (CEPB), has expressed support for the plan but one of its most important members, the Cámara de Industria, Comercio, Servicios y Turismo (Coinco) of Santa Cruz, openly voiced its dissent, claiming that its effects will be recessive and describing it as part of `a plot by the Altiplano [the highlands] against the productive regions' of the country. The Cámara Nacional de Comercio, for its part, criticised the two new taxes as having a dampening effect on growth.

GROWTH | Quarter closes with signs of upturn. Though industrial production in the first quarter was only 3.2% up year-on-year (at the lower end of official expectations for this year), the March figure was up 6.4%. The most dynamic sector was manufacturing, up 6.9% (with `transformation' industries rising 7.2% and the maquiladoras up only 3.2%).
Not all indicators, though, were looking good. Exports of vehicles were down 7.3% year-on-year in the first four months of this year, with April showing a slight slowdown instead of acceleration. Sales on the domestic market, very depressed last year, were up 10.3%. Three-quarters of all cars produced in Mexico went to the export market.

EMPLOYMENT | Jobless rate below 2003 peak. The official open unemployment rate for the first quarter was 2.9% for the country as a whole (1.2m people) not reaching, as many had feared, the peak level of last year. In the main cities, though, the rate rose to 3.9% (861,000 people, or 69% of all the officially jobless keeping in mind that the definition is very narrow).

 

The official statistical institute puts the number of people in employment at 41.6m. Of these, about 12m work in the informal sector.

The state oil company, Pemex, is about to swell the ranks of the unemployed by about 25%, when it dismisses about 3,000 of its personnel in a major streamlining operation which was announced last week.

OIL | Pemex fears price rebound. Pemex director Raúl Muñoz Leos has warned that the current high oil prices could rebound in a wave of market instability. He said that a reasonable price would be within Opec's range of US$22-28 per barrel, which Mexico helped support last year. He also complained that Pemex is being starved of capital, since its take of the oil export earnings is less than 40%.

On 29 July the commander of the Uruguayan army's second division, General Francisco Winters, decided to hang the portrait of retired General Lí­ber Seregni next to those of all past chiefs of the unit. Seregni was renowned for having risen to commander-in-chief of the service, and then retired to found the left-of-centre Frente Amplio (FA), whose first (unsuccessful) presidential candidate he was in 1969.*

Come the military coup of 1973, Seregni was court-martialled, convicted of subversion and treason and sentenced to 14 years' imprisonment. All told he spent 10 years behind bars, until his release in March 1984, as the restoration of elected rule was being prepared. Like other members of the military who faced similar charges, Seregni became a non-person in the armed forces.

For hanging his portrait without permission, General Winters was sanctioned by the commander of the army, General Santiago Pomoli. This caused an uproar that provoked the intervention of defence minister Yamandú Fau and even of President Jorge Batlle. They acknowledged Pomoli's right to sanction Winters for his procedural omission - but ordered that Seregni's portrait should remain on the wall. Indeed, Fau followed up with the announcement that a second portrait of Seregni might be hung in the headquarters of another unit he commanded, and that other military non-persons might merit similar treatment. On 31 July, having heard of the public vindication of his memory, Lí­ber Seregni died, at the age of 88. The government ordered that his body lie in state in the palace of congress and that he be buried with the honours of a cabinet minister.

*Few know that this artillery officer also studied engineering, surveying and astrophysics, headed the Montevideo meteorological observatory and, after his retirement, founded Uruguay's first teleprinter company.

The recent experience of having to wait for months on end to see how the ruling Partido Justicialista (PJ) had fared in gubernatorial elections appears to have persuaded President Néstor Kirchner that next year's federal legislative elections should be held on the same day throughout the country. Riding on still-high personal approval ratings Kirchner is expecting a big win, and several political analysts have ventured that he wants to be able to maximise the impact of the good news.

Next year comes the mid-term renewal of the federal congress: at stake will be half the seats in the chamber of deputies and a third of the senate. The date on which each province selects its representatives is determined to suit the province's convenience, and over the past decade these have been drifting steadily apart. Unifying them all requires an amendment of the electoral code, which should not be too much of a problem for Kirchner in the lower chamber, particularly if the idea is endorsed by the other big PJ power-broker, former President Eduardo Duhalde, whose powerbase is in the country's biggest constituency, Buenos Aires province.

Duhalde and Kirchner have lately been making a big show of their friendly relations, though there have been clashes over such matters as Duhalde's proposal that the military be given certain policing roles. There has also been a hint of presidential irritation over Duhalde's high-profile handling of his role as chairman of Mercosur's council of permanent representatives.

Colombia has made good on its promise to send Caracas a list of terrorists living in Venezuela; Venezuela has reciprocated by promising to reply with a list of terrorists living in Colombia. Meanwhile, Brazil's President Lula da Silva and Peru's foreign minister, Manuel Rodrí­guez Cuadros, have been trying to defuse the crisis. The US government is officially remaining aloof, but has reportedly been lobbying Latin American governments to put pressure on Venezuela.

On 21 January the Colombian government announced that it had sent Caracas a list of seven terrorists living in Venezuela. Foreign minister Carolina Barco said that this was a confidential communication between governments, so the names would not be made public. The Colombian media, however, hazarded that the list included ELN leader Nicolás Rodrí­guez ('Gabino'), the Farc's chief international negotiator, Luis Edgar Devia ('Raúl Reyes'), and possibly also Luciano Marín ('Iván Márquez') and Germán Briceño ('Grannobles') of the Farc and Erlington Chamorro ('Antonio Garcí­a') of the ELN.

That same day the Venezuelan government said it would be sending its own list, which according to interior minister Jesse Chacón will include retired national guard general Felipe Rodrí­guez, wanted inter alia for a 2003 bombing of Colombia's consulate in Caracas. The Venezuelan media suggest that Pedro Carmona, the businessman who briefly occupied the presidency during the 2002 coup against Chávez , would also be on the list.

Unclear US stance
Meanwhile in Washington government spokesmen denied reports that the US had come out in support of Colombia, even claiming ignorance of ambassador William Wood's '100%' statement [WR-05-03]. The Brazilian newspaper Folha de São Paulo reported on 22 January that the US State Department had sent a note to South American governments expressing concern over Venezuela's stance in the confrontation with Colombia and urging pressure on Caracas to sever contacts with Colombian guerrillas.

Venezuela, says the report, is described as having distanced itself from its commitment to cooperate with its hemispheric neighbours to prevent and suppress terrorism. Governments are urged to persuade Venezuela to adopt a more conciliatory tone and to put pressure on its government to sever relations with the Farc and other Colombian groups like the ELN and AUC, which the US considers to be terrorist organisations. 

It is worth noting that most South American countries have not adopted the US and Colombian classification of these groups as terrorist organisations, and have opposed initiatives that the OAS should do so. For his part Chávez , far from becoming more conciliatory, proclaimed on 23 January that the crisis was planned by the US 'as part of its strategy to go on blocking [Latin American] integration'. He went on, 'The only government that has come out in defence of this gross outrage, apart from Colombia, is the imperialist government of the US [...] This event was not planned in Bogotá [...] I am aware that the provocation comes from Washington.'

This line has been adopted by many in the Latin American left, as well as their sympathisers in the US, who claim that the aim of the Bush administration is to create a casus belli that will allow armed intervention against Venezuela. So far none of the various versions of this claim have contributed any specific evidence as to how the US was involved in the Granda incident.

With Mexico City mayor Andrés Manuel López Obrador not yet completely out of the race, his rival within the Partido de la Revolución Democrática (PRD), Cuauhtémoc Cárdenas, is beginning to act as if he has already taken his place. One message Cárdenas's campaign managers have been trying hard to put across is that he is far more 'palatable' to the business community than López Obrador.

On 14 April Cárdenas appeared before the Consejo Coordinador Empresarial (CCE), the umbrella private-sector association, to outline his plans for Mexico, particularly in the economic and business areas. He persisted with the message he had delivered when he launched his candidacy in late January [WR-05-04]: that he represented a 'modern left' and would work to strengthen Mexico's links with the US and, while retaining state control, reform the energy sector.

He appears to have been persuasive. After the meeting, CCE president Luis Barraza said that Cárdenas had clearly been 'evolving with the passage of time' and that 'many of his theses' coincided with those of the private sector. 'We perceive,' he said, 'that Engineer Cárdenas has a very clear vision of a socially responsible market economy, of competitiveness and of fiscal reform.'

Analysts agree that Cárdenas is liked by businessmen. Economics professor Juan Alvarez says that businessmen 'perceive Cárdenas as more moderate than López Obrador, so they would feel more comfortable if he were to win the July 2006 presidential elections [...] Many even compare him with [Brazilian President] Lula da Silva'. Political scientist Gabriel Gutiérrez concurs: 'It is obvious that the businessmen trust Cárdenas more than López Obrador, who has adopted a radical stance against privatisation and has announced that he would review the bank bailout operation.' The latter is an allusion to the state bailout of the banks hit by the 1995 financial crisis.

It is worth recalling that last month, at the annual gathering of the bankers' association, several bankers said that Mexico was ripe for a leftwing government - which, they ventured, might even carry out the 'structural reforms' that the current right-of-centre administration had not managed to get approved [WR-05-10]. The CCE has already heard the presidential aspirants of the ruling Partido Acción Nacional (PAN) and the opposition Partido Revolucionario Institucional (PRI) - but has not yet had López Obrador as a guest.

The big difficulty with the Cárdenas option is that the man who has attracted enough public support to lead in the opinion polls is López Obrador, who appeared to have a chance in the presidential race even if his party consistently ranked third in public preferences. In the polls Cárdenas, for whom this would be the fourth bid for the presidency, tends to rank worse than his party.

As for López Obrador, the prosecutors are holding off until such time as the supreme court sorts out the rival jurisdictional claims of the Mexico City legislature and the federal congress [WR-05-14]. The prospect of a presidential pardon, raised by President Vicente Fox's press office last week, was vehemently ruled out by Fox's spokesman Rubén Aguilar on 18 April.

Electioneering is already well and truly under way, following the senate's ratification of the reforms and election calendar set down by the lower chamber of congress [WR-05-26]. Absent for now, however, are any new faces: the three politicians attracting the most voter preferences are former president Jorge Quiroga, Samuel Doria Medina and Evo Morales, possibly about to be joined soon by congress president Hormando Vaca Dí­ez. A bonus is that President Eduardo Rodrí­guez appears to have persuaded the autonomists of Santa Cruz to accept his electoral calendar.

Just how Santa Cruz would react was a major concern. Formally, the autonomists will not announce a decision until 16 July - but everything points to their acceptance of a deal which will involve the appointment of one of their leaders, Rubén Darí­o Cuéllar, to the post of departmental governor (prefecto). On 11 July Rodrí­guez appointed new governors for all departments, ostensibly to place impartial people in charge until the general elections (including those of departmental governors) are held in December.

Evo Morales of the Movimiento al Socialismo (MAS) was proclaimed presidential candidate on 10 July by a plenum of the six federations of coca growers. He is currently negotiating alliances with the mayor of La Paz , Juan del Granado (leader of the new Movimiento Sin Miedo), and with the miners' cooperatives that played a key role in the unseating of former president Carlos Mesa.

Also on the campaign trail is Samuel Doria Medina, the cement entrepreneur who left the Movimiento de la Izquierda Revolucionaria (MIR) to form his own party, Unidad Nacional. For his part the leader of the MIR, former president Jaime Paz Zamora, has said that his party will probably field congress president Vaca Dí­ez as its candidate.

A much lower-key approach has been adopted by former president Jorge (Tuto) Quiroga, who left the Alianza Democrática Nacionalista (ADN) to found the Alianza Siglo XXI. He too has been quietly seeking alliances, and there is talk that the ADN may invite him to accept its nomination. Quiroga has taken the daring step of vowing that he will never be president unless voted by a majority of the electorate.

This puts the finger on the main, persistent drawback of Bolivian politics: the fragmentation of political allegiances that chronically delivers inconclusive elections, leaving the choice of a president up to horsetrading in congress. 

A recent opinion poll highlights this: the three most popular presidential aspirants jointly attract only 47% of voter preferences. Quiroga leads the field with 17%, Doria Medina follows with 16%, and Morales trails with 16%.

Last year, Quiroga and Doria Medina sought to 'reinvent' themselves (as did other established politicians) by appearing aligned with the new citizen associations which swept most of the posts in the October municipal elections. Morales heads the only one of the established parties that was able to boast of a considerable - if less than decisive - share of the vote. The big question is if anyone will attract the bulk of last year's newcomers.

While the Ecuadorean military and police remain silent on the report about the appearance of a local guerrilla movement called Ejército de Liberación Alfarista [WR-05-39], a congressional committee has decided to investigate the matter and speculation has been growing that the story was a 'plant', designed to sour Ecuador's rapprochement with Venezuela.

The congressional committee on international affairs and national defence has summoned Interior Minister Oswaldo Molestina and Defence Minister Oswaldo Jarrí­n to report on the matter as a first step in its inquiry, which committee chairman Alfredo Serrano says is important 'because peace and public security are at stake'. Government officials have granted partial credence to the report, suggesting that the ELA may be a group of 'criminals and some seditious people', but that this does not add up to saying that 'subversion' is under way. 

Former leaders of Alfaro Vive Carajo, the former guerrilla group from which the ELA was said to have drawn recruits, have denied any connection with the ELA, noting that they downed arms and 'ceased playing at war' a long time ago. Alexis Ponce, of the la Asamblea Permanente de Derechos Humanos (APDH), says the mention of a Venezuelan connection is highly suspicious, since 'no guerrillas publicly declare that they were trained in this or that country, or received logistical or other support' from abroad.

 

Despondency and apprehension are the dominant moods in Port-au-Prince, where continuing violence has led many to wonder if there is any sense to the demand by many members of the international community that the new electoral calendar be held to at all costs. Business associations brought the capital to a standstill last week to demand firmer action by Minustah, while riots in the far northern city of Ouanaminthe underlined how precarious the relative peace in the interior really is.

Public transport, shops, banks, petrol stations and schools all shut down on 9 January at the behest of the CCIH, the chamber of industry and commerce, to protest against the persistent state of insecurity and call for more assertive action by the UN 'stabilisation' force. A collateral effect was the interruption of the already delayed distribution of voting documents.

The governments of six countries - Argentina, Brazil, Canada, Chile, France and the US - issued a joint statement on 11 January insisting that the elections be held on 7 February (and the eventual presidential run-off on 19 March), on the grounds that 'these dates are realistic and technically viable'. 

The communiqué also says, though, that a climate of security and stability 'is an indispensable ingredient' for the calling of the elections.

Just how this will be ensured is not clear. The deputy ministers of foreign relations and defence of the seven Latin American countries whose troops are serving with Minustah scheduled an 'urgent' meeting for 16 January in Buenos Aires with OAS Secretary-General José Miguel Insulza and the UN representative in Haiti, Juan Gabriel Valdés, to try to figure it out.

On 13 January in Haiti, Minustah forces in Ouanaminthe found themselves forced to retreat by an angry populace demanding an investigation into the deaths of 25 illegal Haitian immigrants in the north of the Dominican Republic. 

Part of a group of more than 60, these migrants had been held inside a closed container truck for four days before crossing the border and many began to die en route of asphyxiation. This was discovered on 10 January with the discovery of the bodies the drivers of the truck had dumped in two separate locations. Survivors who had been left for dead were taken to hospitals where they provided accounts of their plight.

The announcement that the bodies would be returned to Haiti for burial was interpreted across the border as an attempt to avoid a full investigation into the causes of the immigrants' death. The ensuing riot of 13 January left a toll of two dead and seven injured; the burial then took place on the Dominican side.

The Dominican authorities have arrested at least 20 people suspected of involvement in this shipment of illegal immigrants. Among them are the military who had been guarding the border where the truck entered the country. Suspicion of military involvement has been heightened by the fact that only days before the event the army had launched a reprise of Operación Vaquero, the deployment of about 5,000 troops along the border, ostensibly to act against crossborder cattle rustling and gunrunning.

It looks as if almost everyone had decided to test President Evo Morales's mettle simultaneously: unions, regional autonomists, the judiciary and the US. Over the past two weeks he has shown himself willing to take on all comers, and in several cases has seen off his challengers with considerable ease. He has even had time to show that he is determined to clamp down on corruption even among his own officials and followers.

Ignoring the unions

The scheduled strike by health workers on 12 April did not command full support of the union members (according to the deputy health minister, Juan Alberto Nogales, most of the supporters were administrators). The union has already let the government know that it is dropping most of its demands, sticking only with a call for the creation of 2,000 new jobs in the sector and the payment of a bonus to those who take part in vaccination campaigns. Officials say they will talk but, in line with Morales's tough stance [WR-06-15], are promising nothing.

The umbrella labour confederation, COB, went ahead with its announced 24-hour general strike on 21 April to press demands ranging from a minimum salary of US$187 to the nationalisation without compensation of all oil and gas operations and the arrangement of an assembly open to all instead of the constituent assembly to be elected on 2 July. Compliance was patchy, varying from one region to the other. The main event, a march headed by COB leader Jaime Solares in La Paz, mustered only 300-or-so participants. On the whole the government ignored the event, but it is preparing to challenge the COB when it holds a congress to renew its leadership in May. A 'general staff of the people' representing pro-government unions is likely to contest the leadership elections.

Parrying regional demands

On 19 April protesters in Puerto Suárez took three cabinet ministers hostage - Carlos Villegas (planning), Walter Villaroel (mining) and Celinda Sosa (economic development) - to press their demand for the proposed MMX steel mill, a subsidiary of Brazil's Grupo EBX, to go ahead. The company had started dismissing personnel after hearing that the government would take action against it for having started work without environmental permits and in violation of the law barring foreigners from owning property close to the international borders.

Within hours Morales had responded by sending an army unit to free the ministers; he then announced that MMX had only two options - to leave of its own free will or be expelled from Bolivia.

The Puerto Suárez protests were linked to a set of demands made by the governor of Santa Cruz, Rubén Costas, backed by local autonomists: rapid handover to the departmental government of education and healthcare services, privatisation of the Mutún iron ore deposits (currently on hold) and authorisation for the MMX project to go ahead. The Asamblea de la Cruceñidad threatened to go on strike (meaning a lockout) if these demands were not met by 27 April.

Morales invited cruceño leaders to La Paz for talks on 24 April, and persuaded them to suspend their strike threat. He left open the possibility of creating at least a thousand jobs in Santa Cruz hospitals and schools and of speeding up the call for tenders for the development of the Mutún deposits. As to MMX, he said the matter was a legal one to be sorted out by the courts.

Challenging the courts

After Morales openly hinted earlier in the month that the freeing of a businessman on a low bail by the supreme court suggested corruption, on 13 April the supreme court, the constitutional tribunal, the national agrarian tribunal and the nine departmental high courts issued an angry joint communiqué accusing the executive of interfering and of trampling on their autonomy and dignity.

The President responded by accusing the judiciary of not accompanying the government's efforts to stamp out corruption and hinting that the supreme court was seeking to shelve the suits against the members of the last administration responsible for handing over Bolivia's surface-to-air missiles to the US for destruction. He went on with a veiled threat that if the judges did not prove to the people that they were devoted to 'doing justice and not simply trying to protect the corrupt' then by the time the constituent assembly is called, they may find themselves out of jobs.

To prove that he means what he says about corruption, he dismissed the deputy telecommunications minister, Jorge Estrella, after he was accused of trying to extort money from a businessman, and the MAS bloc leader in the lower chamber of congress, Gustavo Torrico, when he was accused of influence trafficking.

On 21 April, just before Morales's riposte, supreme court justice Alberto Ruiz Pérez announced his resignation, stating health reasons. He thus became the fourth member of the supreme court to step down since Morales took office. He was preceded by Eduardo Rodrí­guez Veltzé (the former president of the court), Armando Villafuerte and Carlos Rocha. All three claimed personal motives. This leaves only eight justices of the court, the bare minimum required for it to continue functioning. Congress has already started inviting applications to fill the vacancies.

There have also been two departures from the constitutional tribunal and two members of the judicial oversight council have announced they will resign soon.

Visa retaliation

When a second Bolivian official, deputy minister for basic services René Orellana, was refused a visa to travel to the US last week, Morales publicly asked US ambassador David Greenlee for a list of all Bolivian legislators and members of the government who will not be granted visas, and said that 'the moment they give me that list I will send the list of the US nationals denied a visa to travel to Bolivia'. The ambassador sought to minimise the episode saying that the refusal of the visa had not been a political signal, but a problem of the 'system' (an explanation Bolivians are still trying to fathom). The previous denial of a US visa - to MAS senator Leonilda Zurita, who used to have one when she was a leader of the coca growers - was clearly on political grounds: her alleged connection with 'terrorists'.

Greenlee had earlier irritated the government by announcing that USAID would be withdrawing from development projects in Caranavi, in the tropical part of La Paz department, because of the lack of security guarantees for its personnel. Foreign Minister David Choquehuanca remarked that it was not the first time the US had announced a withdrawal of aid and that he expected cooperation to continue.

Indigenous organisations from six countries met in Cusco on 15 - 17 July for the first foundational congress of the Coordinadora Andina de Organizaciones Indí­genas (CAOI). They committed themselves to seeking the unity of indigenous organisations behind the demand for territoriality and the 'sovereignty of the original peoples', and agreed to seek alliances with the governments of Cuba, Venezuela and Bolivia.

The rationale for these alliances is that these governments espouse 'alternatives to neoliberalism' which coincide with the aspirations of the Andean indigenous peoples. Of the three potential allies, only Bolivia has a significant indigenous population.

The core co-founders of the CAOI are Ecuador's Confederación de Pueblos de la Nacionalidad Kichwa (Ecuarunari, the biggest member organisation of Conaie, the powerful umbrella indigenous confederation), Bolivia's Consejo Nacional de Ayllus y Markas del Qullasuyu (Conamaq, best described as a would-be 'shadow first peoples' government', distinct from both President Evo Morales's MAS and the CSUTCB led by Felipe Quispe) and Peru's Confederación Nacional de Comunidades afectadas por la Minerí­a (Conacami). These three have been discussing a broader cross-country alliance since 1998.

Since 2004 the discussions have also included three other co-founders: Chile's Coordinación de Identidades Territoriales Mapuche (Citem, one of several umbrella Mapuche organisations), Argentina's Organización Nacional de Pueblos Indí­gena de Argentina (ONPIA), and Colombia's Organización Nacional Indí­genas de Colombia (ONIC, perhaps the one with the longest and most successful track record in mainstream political activity).

Chile and Peru held their first 2+2 meeting of foreign and defence ministers last week since the meetings were summarily suspended in October 2005 after the government of former president Alejandro Toledo chose to redefine Peru's maritime borders to the detriment of Chile.

The thorny issue of maritime boundaries was pointedly left off the agenda for the talks, which took place in Santiago on 25 October. The four ministers agreed that Peru and Chile would create a joint military force to participate in UN peacekeeping operations and exchange details on military spending.

Domestic criticism
The second point attracted far more (negative) coverage in the Peru. The nationalist former presidential candidate, Ollanta Humala, condemned what he described as President Alan Garcí­a's "kisses and hugs" approach to effecting a rapprochement between Lima and Santiago. He said the military agreement was useless because it placed no restrictions on Chile's arms spending. His remarks were echoed by the press. The Peruvian daily La República said that between 2000 and 2005 Chile's military spending dwarfed that of Peru in the first five years of the millennium: Chile invested US$2.22bn in its armed forces compared with Peru's US$60m spending over the same period, La República claimed. 

Peru's defence minister, Allan Wagner, said that the criticism was born out of a misperception of what the meeting was actually about; he said the meeting was part of a "long process of confidence building". The foreign minister, José Antonio Garcí­a Belaunde, said the meeting successfully "put mechanisms in place that will allow greater transparency in arms matters". Chile's defence minister Vivianne Blanlot promised to return books stolen from the national library in Lima during the War of the Pacific (1879-1883). Wagner said this was a powerful gesture that would change national perceptions of bilateral relations. 

Relations were marked by froideur until Alan Garcí­a came to power in July and immediately set about trying to restore ties between the two countries, starting by inviting Chile to join the Andean Community (CAN). The maritime issue will have to be broached at some point though. Chile says maritime boundaries between itself, Peru and Ecuador were settled by trilateral treaties signed in 1952 and 1954; Peru disagrees, and lays claim to some 181,000 km2 of ocean which Chile considers its own.

Brazil's President, Lula da Silva, made an official two-day visit to Paraguay this week for the first time since 2003. The visit was designed to mollify Paraguay which, like Uruguay, claims it is suffering from trade asymmetries within Mercosur. Lula offered a series of development agreements. The Paraguayan press, however, argued that the agreements failed to conceal Brazil's "imperialist attitude" and that the new promises were little more than "empty words".

Lula and his Paraguayan counterpart, Nicanor Duarte, did sign several agreements during the visit. Unsurprisingly, one of these agreements related to ethanol production, Brazil's new diplomatic weapon. The Brazilian government promised to finance and provide technology to set up an ethanol industry in Paraguay, which he said could benefit enormously from large-scale production of the biofuel. Duarte seemed thrilled with the idea. 

The Paraguayan press, however, was not entirely convinced by Lula's goodwill. Several daily newspapers ran articles criticising the Brazilian President for making similar pledges to industrialise Paraguay in 2003, with no help subsequently materialising. They also accused Brazil of behaving like an "imperial power" towards its smaller neighbours, mentioning that the Brazilian government was going to build a wall to separate the two countries. 

The proposal to build a wall had been made earlier this year by Brazilian authorities. However, the proposed wall would just surround the Friendship Bridge, the only road connecting the two countries, to help the Brazilian police to police an area where smuggling of electronic goods - and, many claim, weapons and drugs- is rife. Alert to the controversy surrounding the issue, Lula announced that the wall would not be built. He took the opportunity to say that Brazil would finance the construction of a new bridge to connect the two countries, thus ending the long queues across the Friendship Bridge.

The Itaipú sore
Lula's pledges were not enough to placate the Paraguayan press, which preferred to focus on Brazil's refusal to discuss Itaipú, the vast binational hydroelectric dam on the Paraná River. According to the terms of agreement signed 34 years ago by the military governments of the two countries, the energy produced by the dam should be equally shared. The problem is that Paraguay only consumes 7% of its half-share (enough to supply 95% of its electric energy demand) and sells the rest -at a subsidised rate- to Brazil. This is included in a clause stating that if one of the partners does not use the totality of its share, the remainder could only be sold to the other partner. 

Ramón Casco, editor of Paraguay's ABC Color, said this clause was "open to interpretation". Brazil pays US$42 per 1,000KW/h from Paraguay, well below market price, Casco says. He argues that Paraguay should be receiving US$2bn annually from Brazil, not the US$100m it gets for it now. The management of the Brazilian half of Itaipú, however, says the contract cannot be renegotiated until 2023, when the binational company pays off its debts.

The terms of the contract have become a source of national indignation, not least because Brazil's military government at the time, as Lula is now, pledged to help Paraguay to industrialise and use more of its Itaipú share. The leading candidate in Paraguay's presidential race, the former Roman Catholic bishop Fernando Lugo, is demanding that the contract be renegotiated.

 

• Nuclear energy
  The Brazilian government has decided to go ahead with plans to build a third nuclear plant in Angra dos Reis, near Rio de Janeiro. President Lula da Silva will personally preside over the next meeting of the national energy council in June. Lula will pressure councillors to give the green light to the project, which has been delayed since 1984. The government also plans to build four new nuclear plants starting in 2013. Each one will have a generating capacity of 1,000 megawatts, the same as the Angra I and Angra II plants.