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REGION

Strong opposition in US threatens ratification of CAFTA

Until now, the Free Trade Agreement between Central America, the Dominican Republic and the United States (DR-CAFTA) has sidestepped various obstacles. Governments in El Salvador, Guatemala and Honduras have all ratified the agreement with overwhelming majorities, and despite the politically costly, widespread social protests, CAFTA has its foot in the door. Nevertheless, an unexpectedly strong opposition has arisen in the US, where the political importance of the agreement, far greater than its economic importance, is now putting the Bush administration under pressure. CAFTA has effectively become a referendum on US free trade policy and the presumed inevitability of its ratification, a key stage in the process towards establishing the Free Trade Agreement of the Americas (FTAA), has been shown to be premature.

CA and US ridiculed over Cuban terrorist

Following the arrest in Miami of notorious anti-communist militant, Luis Posada Carriles, on May 17, the US says it will not deport him to any country that would hand him over to Fidel Castro's regime in Cuba. Castro's earlier accusations that the US intends to grant political asylum to Carriles, undermine anti-terrorist speeches by US and Central American leaders. His presence in the US remains embarrassing for the White House, and they are looking to "re-locate" him to El Salvador or another Central American country.

 

COSTA RICA

FDI slow down expected in 2005

As part of a national strategy of economic expansion promoted by Costa Rican governments over the past two decades, much emphasis has been placed on encouraging international companies to develop part or all of their production in the country. According to various sources, Costa Rica has succeeded in establishing a favorable business climate in order to attract a wide range of companies _ in particular those seeking to lower their production costs by decentralizing services. While government officials and others involved in promoting foreign investment are pleased with Costa Rica's recent increases in FDI, they stress the changes that still need to be made in order to increase the country's economic competitiveness. Other experts consider that the country´s delay in addressing key issues, such as breaking up the state telecommunications monopoly and negotiating CAFTA with the US, will also have strong repercussions in terms of attracting more foreign companies.

GUATEMALA

Towards a new New Left?

The creation of a new left wing group, currently named "Encuentro por Guatemala", following the resignation of three deputies from New Nation Alliance Party (ANN), has been viewed with considerable optimism. According to analysts, one of the main challenges facing any leftist group is to represent the interests of all those concerned with creating a vibrant democracy. Others also cite the need for a movement capable of providing alternatives to the current economic model. While the new group has the potential to attract widespread political support, the question of financial backing remains a considerable problem for the emerging party.

 

Army focuses on internal security

The Army's modernizing program, in operation since the signing of the Peace Accords, is being hijacked by US interests. The newly restructured armed forces, still blighted by corruption and a repressive image, are under increasing pressure to follow a continent-wide security agenda drawn up by the United States. The US-driven war against terrorism and drug trafficking essentially requires Guatemala's army to focus its efforts on internal security. In doing so, certain analysts predict the new Army could find itself confronting members of the old guard, some of whom are allegedly linked with the criminal underworld.

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20 May 2005