Regional Pulse: 11 October 2022
Southern Pulse’s weekly review of need-to-know events curated for people who work in Latin America.
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Key developments
ARGENTINA
- Presidential cabinet loses three ministers in less than a week
- Mapuche group evicted in Patagonia after recent clash with police
- Government creates “tech dollar” to incentivize industry growth
BRAZIL
- Lula and Bolsonaro get key support for second round vote
- Calls for polling institutes to be criminalized after Bolsonaro outperforms
- Post election audits find voting machines were safe
CHILE
- Armed men rob copper train at gunpoint
- Police arrest Tren de Aragua sex trafficking boss
- Opposition forms rival bloc as plans for new constitutional rewrite gather pace
- Anarchist group says Amazon is next after arson attack
COLOMBIA
- COP hits new low against USD after Petro questions interest rate rise
- Year-to-date inflation rise hits 23 year high
- Tax bill passes first debate in Congress, but with concessions
ECUADOR
- Request to recall Lasso denied
- Oil field back in operation following protests
- Latest prison riot kills 15
MEXICO
- Cartel rivalry leaves 20 dead in Guerrero
- Formal employment hits record high
- National Guard’s public security remit extended
- Only one in eight cases of alleged National Guard wrongdoing investigated
- Interamerican court to hear case against US weapon makers
PERU
- Far-right makes big gains in local elections
- Leftist Perú Libre wins towns near critical mining area
ARGENTINA
Presidential cabinet loses three ministers in less than a week
On 9 October 2022, President Alberto Fernández began reshuffling his cabinet after three top-tier government ministers, Elizabeth Gómez Alcorta (Ministry of Women, Gender and Diversity), Juan Zabaleta (Ministry of Social Development), and Claudio Moroni (Ministry of Labor, Employment and Social Security) resigned in the space of five days. Medical reasons and policy disagreements were reportedly to blame for the early departures. President Fernández has seen five ministers go in the last 100 days.
Mapuche group evicted in Patagonia after recent clash with police
On 4 October 2022, a task force of various federal police forces executed a mass eviction of indigenous Mapuche activists who had seized 40 hectares of land in the Patagonian town of Villa Mascardi. There were 12 arrests in the early morning raid, which reportedly involved members of the Lof Lafken Winkul Mapu Mapuche group. The eviction comes shortly after the same group attacked a police outpost on 26 September in Río Negro province.
Government creates “tech dollar” to incentivize industry growth
On 3 October 2022, Economy Minister Sergio Massa announced new measures to incentivize growth in technology-intensive industries by giving businesses the opportunity to retain 20% of the US dollars earned through export in return for local investments of at least USD3 million. The measure is meant to benefit a variety of companies, ranging from firms in the IT and telecommunications space to companies in the biotechnology sector. Government officials hope the measure will aid in strengthening the country’s low foreign currency reserves.
BRAZIL
Lula and Bolsonaro get key support for second round vote
On 5 October 2022, presidential contender Luiz Inacio Lula da Silva was endorsed by his former competitors for the top job, Simone Tebet and Ciro Gomes, while President Jair Bolsonaro was backed by the reelected governor of Minas Gerais, a key swing state. Tebet and Gomes together won around 7% of the total votes in the first round, which makes their endorsement important. However, Minas Gerais governor Romeu Zema heads the state with the country’s largest electoral college vote. This may put Lula’s first-round five percentage point victory in the state at risk.
Calls for polling institutes to be criminalized after Bolsonaro outperforms
On 3 October 2022, President Jair Bolsonaro and other prominent figures from the Liberal Party (PL) criticized opinion poll companies, such as DATAFOLHA and IPEC, for significantly underestimating Bolsonaro’s performance in the first round of elections, with some calling for their criminalization. The outcry comes after Bolsonaro significantly outperformed pollster predictions. Some of the last polls prior to the first round vote on 2 October had Bolsonaro at around 36% and his main contender, Luiz Inacio Lula da SIlva, at around 51%. The actual tally was 48.43% for Lula and 43.2% for the president.
Post election audits find voting machines were safe
On 3 October 2022, an audit conducted by the Federal Auditing Court (TCU) found that none of the electronic voting machines sampled had vote tallying inconsistencies. All the machines in question had been used in the 2 October election. The TCU was called to do the audit following repeated allegations by President Jair Bolsonaro that the vote was susceptible to fraud. The Superior Electoral Court (TSE) also ran an audit which reached the same conclusion.
CHILE
Armed men rob copper train at gunpoint
On 5 October 2022, a group of armed men stole 10 copper cathodes worth more than USD320,000 from a train traveling to BHP’s Escondida mine in the northern province of Antofagasta. Radio equipment from the train operator, FCAB, was also stolen. No one was injured. Copper cathodes are the basic product of copper production.
Police arrest Tren de Aragua sex trafficking boss
On 5 October 2022, police arrested a Venezuelan national who reportedly led sex trafficking operations for Los Gallegos, the Chilean cell of Venezualan transnational crime group Tren de Aragua. Only the individual’s initials, MYFG, and his alias, El Flaco, were revealed. Police said the detained person oversaw the trafficking of women across the Peruvian border before forcing them into sexual exploitation.
Opposition forms rival bloc as plans for new constitutional rewrite gather pace
On 4 October 2022, opposition lawmakers and independent parties formed a parallel group to discuss a new solution to the failed draft constitution after government and center-left parties formed their own group and proposal. The bloc says a new solution to the constitutional dilemma must be inclusive and legitimate, and that the government’s proposal excludes a wide swath of society. Among the group’s members are parties that reject electing a new constitutional convention or reject changing the constitution at all.
Anarchist group says Amazon is next after arson attack
On 4 October 2022, an anarchist group called Célula Insurreccional por el Maipo: nueva subversión, claimed responsibility for torching 10 trucks belonging to construction company Empresas Baeza in Puente Alto, a city near Santiago. The group said it attacked Baeza trucks to protect the Maipo river banks and threatened to attack US company Amazon if they went through with plans to build a data center in Puente Alto.
COLOMBIA
COP hits new low against USD after Petro questions interest rate rise
On 6 October 2022, the Colombian Peso hit a new low of COP4,626 against the US Dollar after President Gustavo Petro questioned the Central Bank’s interest rate rise to 10% last month. He instead proposed higher taxes on speculative short-term investments in bonds and stocks. His comments were seen by some financial institutions as a threat to the Central Bank’s independence.
Year-to-date inflation rise hits 23 year high
On 5 October 2022, the Department of National Statistics reported a 0.93% inflation increase for the month of September and a 11.4% increase for the year so far — the highest year-to-date rise since a major economic crisis in 1999. Price rises in food staples make up the largest part of inflation, rising by 30% on average. This means poor families are worst affected and face an adjusted inflation rate of 13%.
Tax bill passes first debate in Congress, but with concessions
On 4 October 2022, a bill that proposes higher taxes on oil and carbon production, the financial sector, wealth, sugary drinks, ultra processed foods, and pensions for the wealthy cleared its first hurdle after it won substantial support during its first debate in Congress. However, some concessions were made on capital gains and company profit tax, which will not increase as much as originally proposed. Not watered down are tough controls on tax evasion, which include the prospect of jail time. The government, which wants to use the funds on social programs, expects a large amount of revenue to come from the tighter tax evasion controls.
ECUADOR
Request to recall Lasso denied
On 7 October 2022, a judge for the Electoral Litigation Court (TCE) denied a request by activist Kerly Carvajal to recall President Guillermo Lasso for failing to follow the governance plan he laid out at the beginning of his presidency. This is the second request to recall Lasso since September 2022 that has been denied. According to national newspaper El Comercio, Carvajal was acting in coordination with the so-called Rebels of Pachakutik and other supporters of former president Rafael Correa in Congress.
Oil field back in operation following protests
On 5 October 2022, state-owned Petroecuador announced that it would resume drilling operations in the Ishpingo oil field in the Yasuni National park in the Amazon following an agreement with the indigenous Waorani people. Petroecuador offered subsidies for local infrastructure, housing improvements and employment opportunities to end the protests which began just a day earlier on 4 October 2022 The region is key for President Guillermo Lasso’s plan to double oil production by 2025.
Latest prison riot kills 15
On 4 October 2022, 15 prisoners were killed in a riot between criminal gangs at Latacunga’s correctional facility, one of the country’s largest prisons. Since 2020, 400 prisoners have been killed in similar situations. These killings are part of a wider turf war between drug gangs which have been behind rising violence across the country. The severity of this turf contributed to President Guillermo Lasso declaring a state of emergency in April 2022.
MEXICO
Cartel rivalry leaves 20 dead in Guerrero
On 6 October 2022, 20 people were murdered in the town of San Miguel de Totolopan in the state of Guerrero, including the mayor and his father. Around 40 armed men shot at the city hall and mayor’s residence before fleeing the remote town. Security forces arrived three hours late to the scene, blaming roadblocks for the delay. Shortly after the attack José Alfredo Olascoaga Hurtado, alias La Fresa, leader of the Familia Michoacana cartel, posted a video saying that Los Tequileros, a rival group fighting the Familia Michoacana, was behind the massacre and had also targeted him. He claimed to have killed all those involved in the shooting.
Formal employment hits record high
On 5 October 2022, the Social Security Institute (IMSS) reported that the number of people in formal employment had hit a record high of 21.4 million after the creation of 172,492 new jobs in September. The industries with the highest growth in formal employment have been transportation, communications, construction, and company services.
National Guard’s public security remit extended
On 5 October 2022, Congress approved a military reform package that keeps the National Guard in public security for an additional five to nine years and increases police budgets. While legislation to incorporate the National Guard into the Defense Ministry was recently passed, it is also being used as an auxiliary police force under emergency measures. Its increasingly militarized role has, however, led to growing human right abuse claims.
Only one in eight cases of alleged National Guard wrongdoing investigated
On 4 October 2022, government security watchdog the Unit for Internal Affairs (UAI) said it had received 8,656 citizen reports of the National Guard’s participation in extortion, abuse of force, theft and collaboration with organized crime between 2019 and April 2022. Only 1,135 of these cases were investigated. Some 9,175 (7.7% of the total force) National Guard members have been sanctioned to date. Most reports and sanctions pertain to extortion and corruption.
Interamerican court to hear case against US weapon makers
On 4 October 2022, the Interamerican Human Rights Court agreed to a government request for an audience to assess the role of US weapon manufacturers for criminal violence in Mexico. Many of the weapons used by organized crime groups are bought legally in the US and then trafficked into the country. The development comes after a US court denied a civil suit by the Mexican government against eight arms manufacturers which called for USD10 billion in restitution.
PERU
Far-right makes big gains in local elections
On 2 October 2022, far-right parties made major gains in provincial and municipal elections held across the country, including the capital Lima where Renovación Popular’s former presidential candidate, Rafael López Aliaga, won the mayorship. Conversely, President Pedro Castillo’s former party, Perú Libre, failed to win any provincial governorships. The favorable result for right-wing parties is likely to bolster ongoing attempts to remove Castillo from office.
Leftist Perú Libre wins near critical mining area
On 2 October 2022, Perú Libre, a Marxist party previously affiliated with President Pedro Castillo, won five district mayorships in areas close to Las Bambas mine, one of the country’s largest copper production sites. Despite a poor showing in other regions and provinces, Perú Libre’s win in this strategic area is seen as a concern by some investment firms, such as Brazilian bank BTG Pactual. This is because members of Perú Libre have frequently expressed anti-mining views and have allegedly supported protests against mining companies in the area.
