Regional Pulse: 13 September 2022
Southern Pulse helps businesses operate successfully in Latin America.
Follow us on Twitter and LinkedIn.
Our weekly review of need-to-know events curated by the Southern Pulse team for people who work in Latin America. Looking for something more tailored to your needs? Let’s chat.
Key developments
ARGENTINA
- AFIP and IRS renew tax evasion efforts
- Massa courts US oil and gas industry
- IDB lends another USD5 billion
- New special “soy dollar” hits the market
BRAZIL
- Guedes promises to end production tax if Bolsonaro re-elected
- Army will not feature in political acts
CHILE
- Student protestors burn buses and block roads
- Interest rates hit 24 year high
- Boric reshuffles cabinet after new constitution rejected
COLOMBIA
- Government tightens environmental permitting for mining
- Largest guerrilla group rejects Petro’s peace plans
- Gangs litter body parts across Bogotá
ECUADOR
- New mining operations on hold and oil drilling suspended
- Petition to oust President Lasso will be re-examined
- Referendum puts government’s oil plans in doubt
MEXICO
- PEMEX reports millions lost to oil rig piracy
- Migrant deaths on US border hit record high
- Cartel de Juárez guns down state-owned CFE employees
PERU
- Castillo loses his fourth foreign minister
- Leader of Congress leader removed after graft scandal
ARGENTINA
AFIP and IRS renew tax evasion efforts
On 9 September 2022, Argentina’s internal revenue service (AFIP), and its US equivalent, the IRS, began talks to automatically exchange information regarding taxpayers to combat tax evasion. The new policy would expand on a 2016 deal that was struck between AFIP and the US Department of the Treasury which provided taxpayers’ information on request.
Massa courts US oil and gas industry
On 9 September 2022, representatives of some of the US’ largest oil and gas companies met with Economy Minister Sergio Massa at the Baker Institute in Houston. Massa announced various plans meant to incentivize foreign oil and gas production, such as guaranteeing companies access to foreign currency, and a new regulatory framework for liquified natural gas and hydrogen.
IDB lends another USD5 billion
On 6 September 2022, the Inter-American Development Bank (IDB) agreed to loan the country around USD5 billion in the coming months. The announcement was made after Economy Minister Sergio Massa met with top IDB officials in Washington DC, just one stop of many on his official visit to the US. According to government officials, these disbursements will help expand international reserves while also strengthening the Argentine Peso.
New special “soy dollar” hits the market
On 5 September 2022, Economy Minister Sergio Massa announced a new, month-long special exchange rate for soy producers meant to boost exports of the country’s top commodity and replenish currency reserves. The move will allow exporters of soy to sell at a rate of ARS200 to USD1, much better than the official rate, which stands at ARS139 per dollar.
BRAZIL
Guedes promises to end production tax if Bolsonaro re-elected
On 8 September 2022, Economy Minister Paulo Guedes announced that the Tax on Industrial Production (IPI) would end if President Jair Bolsonaro is re-elected in October. Every industrial good is taxed before it is produced, but is also hit with a sales tax after it is sold. Some analysts believe the production tax makes it needlessly expensive to make industrial goods in the country, contributing to a de-industrialization of the economy.
Army will not feature in political acts
On 6 September 2022, the Army High Command assured the Federal Prosecutor’s office (MPF) that military personnel will not feature in any political protests or campaigning during the current electoral cycle. The High Command’s comments came ahead of bicentenary independence celebrations on 7 September which traditionally feature military parades, but were also used to hold pro Bolsonaro rallies. Opposition groups had expressed concerns the president would use these celebrations to court and co-opt the Army for political purposes.
CHILE
Student protestors burn buses and block roads
On 8 September 2022, student protestors burnt two buses, blocked subway stations and barricaded multiple roads. Thousands of students demanded better access to public education and reproductive health as well as sexual misconduct laws.
Interest rates hit 24 year high
On 6 September 2022, the Central Bank raised interest rates from 9.75% to 10.75% — the highest rate in 24 years. The measure comes amid rising inflation, volatile international markets, and a weak national job market.
Boric reshuffles cabinet after new constitution rejected
On 6 September 2022, President Gabriel Boric announced he would be changing six cabinet positions after the rejection of the new constitution draft. Interior Minister Izkia Siches will be replaced by Carolina Tohá, Presidential Secretary Giorgio Jackson will be replaced by Ana Lya Uriarte, Social Development Minister Paula Poblete will be replaced by Giorgio Jackson, Health Minister María Begoña Yarza will be replaced by Ximena Aguilera, Energy Minister Claudio Huepe will be replaced by Diego Pardow, and Science Minister Flavio Salazar will be replaced by Silvia Diaz. All of the departures were strong advocates of the new constitution and close to Boric while the new appointees represent a wider coalition of traditional center-left parties
COLOMBIA
Government tightens environmental permitting for mining
On 13 September 2022, Environment Minister Susana Muhamad announced mining companies would now need environmental permits for exploration, where previously they were only required for extraction and production. Likewise, mining concessions previously given without proper environmental scrutiny would be revised. The announcement comes after President Gustavo Petro backtracked on his campaign proposal to halt further mining and oil exploration. The government now says it favors the exploration of minerals necessary for green technology and the country’s transition to clean energy.
Largest guerrilla group rejects Petro’s peace plans
On 5 September 2022, the ELN, the country’s largest guerilla group, rejected the “Total Peace” policy proposed by President Gustavo Petro because it places all parties under the auspices of International Humanitarian Law, equating the insurgents’ self-proclaimed political struggle with the activities of criminal organizations and paramilitary groups. The group also rejected the standard Demobilization, Disarmament and Reintegration model applied in the 2016 peace accord with FARC guerillas because over 300 FARC members have been murdered since laying down their weapons. Peace negotiations with the ELN resumed shortly after Petro began his presidency on 7 August 2022.
Gangs litter body parts across Bogotá
On 5 September 2022, multiple trash bags filled with the body parts of at least 23 people were found across the capital Bogotá. Mayor Claudia López blamed rival gangs fighting for control of the city’s illicit economy. López said one of the groups involved was the transnational Venezuelan organized crime group Tren de Aragua. She called for judicial cooperation between the two countries to dismantle its operations.
ECUADOR
New mining operations on hold and oil drilling suspended
On 9 September 2022, President Guillermo Lasso signed an agreement with representatives of indigenous movement (CONAIE) that will temporarily halt oil production at 15 drilling sites and suspend any new mining contracts until a new indigenous peoples consultation law is enacted. This is part of the government’s effort to avoid a new round of civil unrest following mass protests in June 2022.
Petition to oust President Lasso will be re-examined
On 8 September 2022, the Electoral Disputes Court (TCE) overturned a decision by the National Electoral Council (CNE), which dismissed a Congressional petition calling for the impeachment of President Guillermo Lasso following civil unrest in June. With this decision by the TCE, the petition will once again be analyzed by Congress, raising the prospect of Lasso’s removal by the legislature.
Referendum puts government’s oil plans in doubt
On 6 September 2022, the Electoral Disputes Court (TCE) accepted a public petition for a referendum over the government’s plans to explore oil reserves under the National Yasuní Park in the Ecuadorian Amazon. The TCE´s decision comes after eight years of litigation and a petition signed by over 800,000 citizens calling for the park to be protected. The region is believed to contain around 1.6 billion barrels of crude oil and is essential for the government’s plan to double oil production by 2025, but is also the country’s most biodiverse habitat and is home to several indigenous groups.
MEXICO
PEMEX reports millions lost to oil rig piracy
On 10 September 2022, state-owned oil company PEMEX reported it has lost around USD12 million to 226 armed pirate robberies of equipment, technology and oil from its offshore rigs since 2018. The risk of environmental disasters during pirate robberies is exponential and President Andrés Manuel López Obrador has called for expedited investigations to stop the robberies.
Migrant deaths on US border hit record high
On 7 September 2022, US authorities reported 2022 has broken records for migrant deaths along the Mexico-US border, with 748 bodies found. Experts agree migrant deaths are massively underreported, especially by US authorities.
Cártel de Juárez guns down state-owned CFE employees
On 6 September 2022, Cártel de Juárez hitmen killed three employees from state-owned electricity provider CFE in Sonora. Their vehicle was torched and one of the four men survived. Police believe the workers were killed because they were confused with a rival armed group.
PERU
Castillo loses his fourth foreign minister
On 10 September 2022, Rodriguéz Mackay resigned from his post as Foreign Minister after less than two months in the role. His resignation, according to newspaper La República, resulted from disagreements over President Pedro Castillo’s foreign policy positions, such as the recognition of Western Sahara as a sovereign nation and his support of a comprehensive environmental agreement with other South American nations. Mackay is the fourth foreign minister in President Castillo’s government to resign.
Congressional President removed after graft scandal
On 5 September 2022, members of parliament voted to remove the Congressional President, Lady Camones, after leaked recordings implicated her in a graft scandal. Camones previously led the push in the lower house to impeach President Pedro Castillo, who faces multiple corruption allegations.
