Regional Pulse: 18 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









IADB finally backs national government’s economic program

On 14 October 2022, the Inter-American Development Bank (IADB) gave the country a positive evaluation regarding macroeconomic conditions after five years of negative feedback. Economists at the IADB consider Argentina’s compliance with the IMF’s debt restructuring program, and its policies aimed at strengthening foreign currency reserves, as promising developments. The announcement may facilitate access to more international loans.

South Korean group accelerates USD740 million lithium plans

On 12 October 2022, South Korean conglomerate POSCO announced plans to invest more than USD740 million in a new lithium carbonate factory that will be located between the provinces of Salta and Catamarca. According to the company, investments were scheduled to be announced next year, but the decision was taken to announce them now, due to the rapidly expanding demand for lithium. In August alone, exports of the alkali metal totaled USD47 million, becoming the country’s second most exported mineral, after gold.

Drug gang death threats put Rosario journalists on edge

On 11 October 2022, the Rosario Press Union (SPR) demanded authorities investigate the hanging of a sign near broadcaster Telefe’s Rosario branch which threatened journalists for investigating local drug trafficking organizations. ADEPA, an institution that groups together over 180 Argentine press organizations, released a statement after the incident noting the rapidly deteriorating situation for journalists in Rosario. ADEPA says its members are unable to work freely, due to ongoing threats made by organized crime. So far, no arrests have been made.

IMF: country’s GDP growth to outperform LatAm average in 2023

On 11 October 2022, the International Monetary Fund (IMF) calculated GDP will grow around 4% this year, but will slow to just 2% in 2023. The World Bank has forecast similar figures. The IMF’s forecast suggests the country will grow faster than the Latin American average of 1.6% next year.


Push to criminalize opinion polls denied

On 13 October 2022, the President of the Superior Electoral Court (TSE) Alexandre de Moraes barred the Federal Police (PF) and antitrust authority CADE from investigating opinion poll institutes, such as Datafolha and Ipec, for malfeasance. Justice Minister Aderson Torres had directed the PF and CADE to investigate polling institutes for purposefully lowering President Jair Bolsonaro’s polling numbers in the days leading up to the first round vote. Moraes said that differences between polling numbers and the actual result are not grounds to start a criminal investigation against polling institutes, given the technical difficulties and inherent uncertainties therein.

Petrobras to invest heavily in northern oil fields

On 13 October 2022, details of Petrobras’ strategic plan 2023–2027 were released, citing the oil giant’s intentions to invest heavily in offshore oil drilling and production in the country’s Equatorial zone off the country’s north coast. Although the precise amount to be invested has not been defined yet, the previous five year plan allocated USD26 billion for the same area. This number is expected to rise significantly. Experts are calling the Equatorial basin Brazil’s “new pre-salt field,” in allusion to the oil-rich Santos Basin where most of the country’s offshore production has been concentrated to date.

Datafolha poll shows steady support for Lula

On 14 October 2022, Datafolha released its latest poll for the second round of the presidential election on 30 October, showing former president Luiz Inácio Lula da Silva maintaining his lead over President Jair Bolsonaro. The poll numbers have remained relatively stable, placing Lula ahead by 6 points at 53%, while President Bolsonaro sits at 47%.


Enhanced train security announced after copper heist

On 14 October 2022, the government said it would enhance security for trains with high value cargo in the northern region of Antofagasta after a copper cathode heist last week. Notably, trains will now be monitored by air. Separately, the affected company, Ferrocaril Antofagasta, announced it would resume operations after suspending them after the robbery.

Government to fast-track deportation of criminal migrants

On 14 October 2022, the Boric administration announced proposals to facilitate migrant deportation, including the expedited deportation of migrants charged with drug trafficking. The proposed measures come as clandestine migration and violent crime increase across much of northern Chile. The proposal will go to Congress for approval.

Central Bank hikes interest rates again

On 12 October 2022, the Central Bank increased interest rates to 11.25%, up from 10.75%. The measure follows a downturn in global growth and a need to combat rising inflation currently at 13.7%. Rates were last increased on 6 September 2022.

State of emergency extended for another 15 days

On 11 October 2022, Congress approved a 15 day extension for the state of exemption over the southern macrozone of La Araucanía and Arauco del Biobío. The constitutional state of exemption was first declared on 16 May 2022 and allows security forces to respond more swiftly to security challenges in the region where criminal groups, indigenous separatists, and lumber thieves all operate. Fifteen day extensions have become regular practice for several months.


Thousands protest new government taxes on coal and oil

On 14 October 2022, thousands of miners and industry workers protested the government’s tax plans, which are currently waiting for congressional approval. Workers in Cesar and La Guajira in northern Colombia say the tax plan will cripple their employers and hurt their livelihoods due to increased taxes on oil and coal mining and limits on exploration. Over 160,000 families in Cesar alone depend on the coal industry.

Police conduct raids against Venezuelan criminal organization

On 13 October 2022, police arrested 19 members of the Tren de Aragua gang during multiple raids in Bogotá. Among those captured was a policeman. Tren de Aragua is a Venezuelan transnational criminal group. Its entry into Colombia and other countries like Chile has caused upticks in violence. The group trafficks drugs and extorts Venezualan migrants into working for them.

Petro says seized mafia assets misplaced in massive corruption scandal

On 13 October 2022, President Gustavo Petro said the country could be facing one of the worst corruption cases in recent history because the state entity in charge of handling assets seized from criminals could not produce a full inventory or identify the whereabouts of many high value assets. The involved institution, the Special Asset Association, reportedly cannot account for assets estimated to be worth around USD5 billion. The development comes after the government began plans to redistribute around 60,000 hectares in his first 100 days in office, starting with lands seized from criminals.

Record number of migrants crossing the Darien Gap

On 11 October 2022, the Human Rights Ombudsman reported more than 150,000 migrants had crossed the perilous Darien Gap between Colombia and Panama so far this year. The figure is up considerably from 2021, when 134,000 crossed over the whole 12 months. Around 21,000, or 15%, are reported to be minors in 2022. Armed groups like the Gulf Clan dominate the area and many die from exhaustion in a trek that has seen exponential growth in migrant traffic over the past five years. Most making the journey are trying to reach the US via Central America.


Petroecuador to auction country’s only offshore gas field

On 14 October 2014, Petroecuador announced it would hold an auction for the management of Ecuador’s only offshore natural gas operation. The state-owned company wants a USD500 million investment that will increase production from 24 million cubic feet per day to 100 million per day in the Amistad field, just off the northern coast. The winner of the contract will have a 20 year lease. No date for the contract auction has been established yet.

Protestor talks end with concessions, but criticism continues

On 14 October 2022, the government and representatives of indigenous group CONAIE ended 90 days of negotiations with concessions that grant fuel subsidies to vulnerable communities and the suspension — pending community consultation — of oil drilling at 15 blocks in the Amazon. However, CONAIE leader Leonidas Iza criticized the talks for only partially addressing indigenous communities’ concerns. There were significant disagreements over the flexibilization of labor laws. The talks were prompted by widespread civil unrest in June.


National Guard’s merger with Armed Forces temporarily blocked

On 14 October 2022, a Guanajuato judge declared the incorporation of the National Guard into the National Defense Secretariat as unconstitutional, momentarily halting their integration. The lawsuit was presented by multiple human rights organizations who oppose the militarization of public safety amidst thousands of cases of human rights abuses by military personnel. The government is expected to appeal this decision.

UN criticizes government for spying on civil society

On 11 October 2022, the UN High Commissioner for Human Rights denounced the government’s use of Pegasus malware to spy on activists and journalists. President Andrés Manuel López Obrador had explicitly denied his government’s use of espionage in August 2021, but evidence to the contrary was found by the Guacamaya hacking group which recently leaked documents detailing corruption, impunity and other malpractices within the security apparatus.

Army deployed to Chiapas after cartel clashes leave towns under siege

On 11 October 2022, the Defense Secretary deployed 300 military and National Guard personnel to Chiapas after massive shootouts pinned down security forces in Jiquipilas, Cintalapa and Arriaga. Confrontations between the Cártel de Sinaloa and the Cártel Jalisco Nueva Generación had nearby towns under siege for over 24 hours before security forces were caught in the confrontation. Thirteen cartel members were arrested.


Finance Minister urges tax breaks for mining and oil sectors

On 11 October 2022, Finance Minister Kurt Burneo pushed for the approval by Congress of Bill 3195/2022, which would give a series of tax credits for the next five years to mining activities and early phase hydrocarbon exploration projects. Burneo says the current volatility in commodity markets and the US Federal Reserve’s planned interest rate hike have made international investors reluctant to expand their activities in emerging markets like Peru.

Attorney General files constitutional complaint against Castillo

On 11 October 2022, Attorney General Patricia Benavides filed a constitutional complaint against President Pedro Castillo for allegedly heading a corruption ring. This action holds no real legal weight, given that the president is immune from criminal prosecution while in office, with few exceptions. This complaint, however, might be used as the basis for a future impeachment proceeding in Congress.

Mining Minister to formalize artisanal and small-scale gold mining

On 11 October 2022, Mining Minister Alessandra Herrera said the government plans to formalize small-scale and artisanal mining operations. These mining operations occur mostly without oversight, and have a significant impact on tax revenue and the industry’s reputation. This push by the government occurs at a time when international supply chains are under pressure and Peru seeks to become more competitive in the mining sector. It estimated 22% of gold production alone comes from artisanal mining in the country.



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Southern Pulse

Southern Pulse provides strategic advisory services to help businesses operate successfully in Latin America.