Regional Pulse: 20 December 2022

Southern Pulse’s weekly review of need-to-know events curated for people who do business in Latin America.
We help our clients operate successfully throughout the region with enhanced due diligence services, risk assessments, threat monitoring, strategic advisory and executive support. Get in touch here to learn how we can help you.
This is our last Regional Pulse of 2022. Our weekly briefings return on 11 January 2023.
KEY DEVELOPMENTS
ARGENTINA
- Price controls extended to tennis shoes and medicine
- Sovereign default fears averted, temporarily
- Low-paid workers get additional public cash transfer
- Drought may worsen USD shortage
BRAZIL
- Pre-salt block auctions flop
- Treasury warns welfare bill will have larger debt impact than forecast
- Petrobras’ stocks fall amid fears political appointments will return
CHILE
- Chinese lithium giant meets government and opposition
- Codelco cuts production goal for 2025
- Lawmakers agree on rules for new constitutional convention
COLOMBIA
- Crime rises in Bogota in December, reports El Tiempo
- Minimum wage to increase by 16%
- Medellin utilities provider suffers ransomware attack
ECUADOR
- Colombia-Ecuador to begin joint anti-crime operations
- FTA negotiations with China finalized
- IMF to transfer USD700 mln immediately due to COVID-19 fallout
MEXICO
- Government wants increased domestic access for foreign airlines
- AMLO restates “pause” in relations with Spain
- Big electoral reforms delayed until at least February
- Prominent news anchor survives assassination attempt
PERU
- Boluarte refuses to resign after early elections motion rejected
- Two cabinet ministers resign after protest deaths
- Peru’s largest mining company halts operations following protests
KEY DEVELOPMENTS IN FULL
ARGENTINA
Price controls extended to tennis shoes and medicine
On 15 December 2022 Minister of Economy Sergio Massa announced an agreement with pharmaceutical companies to limit medicine price rises to 3.8% until May 2023. A deal with tennis shoe producers to cut prices by 20% was announced by Massa the previous day and covers the same time period. The government is trying to curb 76.6% annual inflation by negotiating prices with business conglomerates.
Sovereign default fears averted, temporarily
On 15 December 2022 the Minister of Economy Sergio Massa announced that negotiations with private creditors to renew USD4.4 billion in sovereign debt were successful, averting fears of a default this year. The deal does not touch Central Bank reserves, but has a short-term profile, maturing in April 2023.
Low-paid workers get additional public cash transfer
On 14 December 2022 the Ministers of Labor, Raquel Olmos, and Social Development, Victoria Tolosa Paz, announced an end of year cash transfer of USD138 to low-paid workers in an attempt to meet increasing social demands amid the rising cost of living. The payment is aimed at non-unionised workers, who are not covered by the wage raises negotiated between unions and business. However, prominent far-left social movement leader Juan Grabois criticized the measure, asking for higher subsidies.
Drought may worsen USD shortage
On 12 December, the Rosario Stock Exchange reported that an ongoing drought might cause a 27% drop in the USD reserves received by agriculture producers, in a worrisome trend for a national economy that struggles to keep its foreign currency reserves afloat. In the baseline scenario, the agricultural sector will earn USD33.1 billion in revenue, against the USD45.6 billion from the previous harvest. The drought is affecting 360 millions of acres in some of the country’s most important agriculture provinces and worsened over the last 3 years. Agricultural goods are Argentina’s main source of foreign reserves.
BRAZIL
Pre-salt block auctions flop
On 16 December 2022, the National Oil, Gas and Biofuels Agency (ANP) conducted an auction of 11 pre-salt oil fields off the southeast coast, in the Campos Basin, but drew interest in only four. The geological risks of the ultradeep pre-salt layers, the government transition and the compulsory oil quota to the ANP likely contributed to the poor result, which brought in over BRL1.4 billion (USD 261 million) in investment and BRL916 million (USD172 million) in upfront profit for the ANP.
Treasury warns welfare bill will have larger debt impact than forecast
On 16 December 2022, the National Treasury announced that a welfare amendment proposed by President-elect Luiz Inácio Lula da Silva’s transition team would increase government spending by BRL193 billion (USD36 billion) over the next fours years — more than the BRL168 billion (USD31.7 billion) previously indicated. Additionally, the amendment will increase the GDP-to-debt ratio from the current 73.9% to over 81% by 2026.
Petrobras’ stocks fall amid fears political appointments will return
On 13 December 2022, the Chamber of Deputies approved a bill that would revoke the 2016 State-owned Companies’ Law, which prohibited individuals linked directly to a political party from assuming leadership positions in state-owned companies. It also established high technical qualifications standards for executives. After the announcement, Petrobras stocks fell by nearly 10%. Markets fear the new bill will let the next administration interfere with the oil giant’s pricing policies.
CHILE
Chinese lithium giant meets government and opposition
On 15 December 2022 the daily newspaper La Tercera reported that the CEO of Chinese mining company Tianqi met the Minister of Mining, the Executive Vice President of financial development institution CORFO and the opposition senator José Manuel Ossandon in Santiago to discuss Tianqui’s future investments in Chile. The meeting was described by La Tercera as a lobbying effort. Tianqi is the largest Chinese investor in the country and has a 23% stake in the Salar de Atacama lithium project, which is majority-owned by Chile’s SQM.
Codelco cuts production goal for 2025
On 15 December 2022 state-run Codelco, the world’s largest copper producer, announced that it would not meet its 2025 production targets because of 15-month operational delays at the Rajo Inca project, an open pit mine in the northern Atacama region. The mine is being reformed to extend its operation lifetime, but construction work was disrupted due to the pandemic and a fatal accident. Codelco said the delay will reduce copper output over the next two years by 80,000 tons and reduce its revenues by USD150 million.
Lawmakers agree on rules for new constitutional convention
On 13 December 2022 the government and opposition agreed that a new national constitution would be drafted by a constitutional convention made up of 24 experts appointed by lawmakers, and 50 representatives elected by popular vote. The election for representatives will be in April 2023. The deadline for the assembly to present the final text is 21 October 2023. However, the new constitution will enter into force only if approved in a national referendum, scheduled for 26 November 2023. The deal follows six months of government negotiations with the opposition and comes after voters rejected an earlier draft constitution written entirely by elected convention members.
COLOMBIA
Crime rises in Bogota in December, reports El Tiempo
On 15 December 2022, newspaper El Tiempo reported that elevated crime levels were typical in December in Bogota. It claimed criminals are aware that there is more circulation of money in the streets at year-end because many companies make higher payments to finalize contracts. El Tiempo advised visitors to be careful when withdrawing money from ATMs.
Minimum wage to increase by 16%
On 15 December 2022, the government, unions and business agreed the national minimum wage should increase 16% in 2023 following three-way talks. Unions originally demanded a 20% rise, while business wanted 13%. Central Bank estimates predict the consumer price index will close the year with a 12.6% rise, meaning that real wages have increased by 3.4% following this deal.
Medellin utilities provider suffers ransomware attack
On 12 December 2022, Medellin utilities provider EPM, which is one of the country’s largest companies, suffered a ransomware attack by the BlackCat hacking group. Essential services were not disrupted by the attack, but client communication channels temporarily stopped operating and information was stolen. Colombia is cited by national newspaper La República as one of the most vulnerable countries for cybersecurity risks in the region.
ECUADOR
Colombia-Ecuador to begin joint anti-crime operations
On 14 December 2022, President Guillermo Lasso and Colombian President Gustavo Petro announced that both countries will begin joint operations to curb drug smuggling and narco violence occurring along their shared border. The border region has seen a significant uptick in violence as drug cartels from Colombia increasingly use Ecuador as a route to smuggle drugs to Europe and the US.
FTA negotiations with China finalized
On 14 December 2022, President Guillermo Lasso said negotiations for a free trade agreement (FTA) with China have finished successfully. According to Lasso, the FTA will increase exports by an additional USD1 billion annually. His remarks were made during the 15th China-Ecuador Business Forum.
IMF to transfer USD700 mln immediately due to COVID-19 fallout
On 14 December 2022, the International Monetary Fund (IMF), ended its sixth round of negotiations with the Central Bank of Ecuador, agreeing to a 27 month loan plan of USD6.5 billion to stabilize the country’s economy due to the effects of the COVID-19 pandemic. The IMF will immediately transfer USD700 million to the country as part of the plan’s first phase.
MEXICO
Government wants increased domestic access for foreign airlines
On 17 December 2022, President Andrés Manuel López Obrador filed a reform that would allow international airlines to operate more domestic flights in the country through a practice known as cabotage. This practice allows foreign airlines flying to Mexico to operate consecutive domestic flights. The proposal also seeks to grant the state authorization to manage and operate airlines, which would allow the military to launch its own. The lower house and the senate must analyze the reform during the next legislative period in February 2023 before turning it into law.
AMLO restates “pause” in relations with Spain
On 16 December 2022, President Andrés Manuel López Obrador said the “pause” in Mexico-Spanish diplomatic relationship would continue days after Foreign Secretary Marcelo Ebrard said the relations were “relaunched”. The pause was first announced by AMLO in early 2022 after he accused several Spanish energy companies of abusive business practices, and called for the King of Spain to apologize for the conquest of Mexico. While the pause does not prevent Spanish companies from entering Mexico, it has led to permitting delays and reduced access to government officials for dispute resolution.
Big electoral reforms delayed until at least February
On 16 December 2022, the lower house delayed the passage of a controversial government-backed electoral reform until February 2023 by making a last minute change to the bill. The change, which relates to the transfer of votes between parties in a coalition, means the reform must return to the Senate, which is currently in legislative recess. Its delayed passage will be welcomed by critics who fear the reform will favor the ruling MORENA party by reducing the structure and budget of the country’s election authority, the INE.
Prominent news anchor survives assassination attempt
On 15 December 2022, Ciro Gómez Leyva, one of the country’s top news anchors, survived an assassination attempt in Mexico City while driving a bulletproof SUV near his home. The attack came one day after a presidential press briefing singled out Gómez Leyva for criticism of his administration. President Andrés Manuel López Obrador has since denounced the attack.
PERU
Boluarte refuses to resign after early elections motion rejected
On 17 December 2022, President Dina Boluarte said she would not cede to pressure from Congress to resign following the resignation of two cabinet ministers and parliament’s rejection of her motion for early general elections in December 2023. According to a poll conducted by the Peruvian Institute for Statistics (IEP), over 80% of voters want early general elections.
Two cabinet ministers resign after protest deaths
On 16 December 2022, the Education Minister, Patrícia Correa, and the Culture Minister, Jair Pérez Brañez, resigned following the death of 20 protestors as a result of nationwide protests in support of former president Pedro Castillo. The protests started on 7 December 2022 following the arrest and impeachment of then president Castillo, who was accused of attempting a coup d’etat earlier that same day.
Peru’s largest mining company halts operations following protests
On 16 December 2022, Buenaventura, the country’s largest mining company, announced that it would halt operations at its Julcani and Orcopampa mines as a preventative measure due to the state of emergency declared by President Dina Boluarte. Demonstrations following the arrest of former president Pedro Castillo have blocked important highways used for the transport of minerals to the mine. Buenaventura expressed concerns mining facilities might become a target of violent groups.
Wherever you do business in Latin America, Southern Pulse has the expertise, the network, and the relationships to help solve your toughest operational challenges. Want to learn more? Let’s chat.

CC BY-ND