Peru's military fret about Sendero
On 2 January Francisco Contreras, the new commander of the armed forces, said that the military’s principal objective was the “definitive defeat” of the Sendero Luminoso. Contreras’s statement is a clear answer to a suggestion, made by Sendero’s last recognised commander, Artemio, in a radio interview on 23 December, that there should be a negotiated end to the conflict. The government and the army seem determined to defeat Sendero and to show that they were not shaken by Sendero’s ground-to-air attack on a helicopter on 28 December..

Funes in pole position to claim historic win in El Salvador
The presidential candidate for the left-wing opposition Frente Farabundo Martí para la Liberación Nacional (FMLN), Mauricio Funes, holds a commanding lead over his rival from the Alianza Republicana Nacionalista (Arena), Rodrigo Avila, with only three months to go until the presidential elections. The FMLN has never been in such a good position since it took shape as a political party in 1992 shortly after the end of the civil war. Two separate polls released in mid December show Funes winning the presidential elections on 15 March by a comfortable margin. Funes holds a 10-percentage point lead over Avila - 43% to 33% - according to a survey released by the US pollster, Greenberg Research. The margin of victory actually increases to 12 points (47% to 35%) when probable votes are taken into account. This relates to undecided voters who nevertheless are intent on casting their ballots.

A dose of Realism

Brazil under the centre-left administration of President Lula da Silva has positioned itself as the voice of the developing world and a force for the common good on the international stage. However, the country’s growing economic and, by extension, political power may force the next president to adopt a more realistic approach to international relations, as Brasilia inevitably must begin to take a more hardnosed look at its future foreign policy priorities. It may not have to look too far to see that a tougher approach may be required sooner rather than later: a recent diplomatic spat with Ecuador has already prompted a tactical revision of Lula’s so-called “Diplomacy of Generosity”, which has long been criticised by the traditional centre-right opposition.

Medvedev works on Latin American links beyond Chávez and his allies

The media devoted considerable attention in late November to a visit by Russia’s President Dmitri Medvedev to Venezuela, timed to coincide with the arrival of a Russian naval task force in the Caribbean Sea. The fleet was due to begin planned joint manoeuvres with the Venezuelan navy, its first ever joint exercise with a Latin American country in western hemisphere waters. While Venezuela’s President Hugo Chávez presented the event as a strengthening of his ‘strategic alliance’ with Moscow, Medvedev spent less than two of his nine day tour of the region in Venezuela.

The big change

The big change in the market for illegal drugs in the past decade is the decline in cocaine consumption in the US. The US remains the world’s biggest cocaine market, but its relative decline means that South America, Western Europe, and Western and Southern Africa have become more important destinations for cocaine produced in South America. This development is one of the themes in this report. The other big change in the past decade is the drug gangs growing power in the countries along the drug smuggling routes. This forms the second main theme of this Special Report.

China overtakes Canada as main source of US imports
China overtook Canada to become the US's biggest source of imports for the first time, according to US official figures published last month. The figures, which are for the first nine months of 2007, come from the US Census Bureau and they put Chinese exports to the US at US$234.4bn for the first nine months, just ahead of Canada's US$232.6bn.