May 18, 2006 [LINK]

Ecuador cancels oil contract

The government of Ecuador has cancelled its contract with Occidental Petroleum, on the grounds that Occidental sold part of its properties to a Canadian firm without proper autorization. The state firm PetroEcuador is taking over the oil facilities, and President Alfredo Palacio ordered troops to occupy them. In response, the United States has suspended negotiations on free trade with Ecuador. BBC. Palacio acceded to the presidency after his precedecessor Lucio Gutierrez was forced to resign after mass protests in April 2005. Since the current government is of an interim nature, it is susceptible to political pressure. It is hard to avoid the suspicion that this action by the government was aimed at placating domestic opponents who staged a strike in March. You might say this is radical populism "by default." The extent of influence by Venezuela in this remains to be seen. The country's future political direction will be decided in national elections this October.

Fujimori gets out of jail

A judge has ruled that former Peruvian President-for-Life Alberto Fujimori should be freed on bail while Chile's Supreme Court makes a decision on whether to extradite him to Peru. As a condition of his release, he must stay in Chile. See BBC. It will be interesting to see whether this affects the second round presidential campaign in Peru.

More updates

The news chronologies and the political backround sections on the Dominican Republic and Bolivia pages have been updated.