Development: On 8 July president-elect Fernando Lugo appointed Carlos Mateo Balmelli to be the new director of the Itaipú dam, which Paraguay runs jointly with Brazil.

Significance: Balmelli's appointment confirms how serious Lugo is about confronting Brazil over the price at which Brazil buys excess electricity produced by the dam. Balmelli, a former senator, is a key member of the Partido Liberal Radical Auténtico, the cornerstone of Lugo's ruling alliance.

It was a major surprise when Balmelli was not given a position in Lugo's cabinet, which the president-elect named in mid June. Balmelli had been tipped to be foreign minister, but Lugo clearly had a more specific foreign-policy role in mind.