Regional Pulse: 25 October 2022

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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

BRAZIL

CHILE

COLOMBIA

ECUADOR

MEXICO

PERU

ARGENTINA

Whirlpool opens new USD52 million factory

On 21 October 2022, home appliance manufacturer Whirlpool said it would invest USD52 million in the country during the opening ceremony of a new factory in the province of Buenos Aires. Whirlpool plans to export 70% of local production, mainly to Brazil, while the other 30% will be destined for the local market. With this announcement, Whirlpool becomes the largest exporter of household appliances in the country.

Brazilian petrochemical firm sets eyes on lithium and renewables

On 19 October 2022, Brazilian petrochemical company Unipar said it would invest more than USD100 million in lithium production and renewable energy projects in the country within the next three years. Construction of a lithium plant, set to be built in the northwest, will begin early next year. Unipar expects the plant to generate more than 200 direct jobs.

Modified income tax arrangement to benefit workers

On 17 October 2022, the Economy Ministry announced the figure at which income tax is charged will rise on 1 November 2022, and will affect people earning more than ARS330,000 (USD2,176) a month.

Price freeze program announced amid inflationary pressures

On 17 October 2022, government officials began talks with major consumer goods companies to establish “fair prices” through a 90-day price freeze program. Participating companies will receive benefits, such as reduced red tape when importing raw materials. However, Commerce Secretary Matías Tombolini, who is leading the talks, said the government will negotiate these benefits on a case by case basis. Consumers should see more than 1,000 products become part of the program in the coming months. Annual inflation is currently around 66%.

BRAZIL

TSE grants Lula extra air time after drug gang accusations

On 22 October 2022, the Superior Electoral Court (TSE) reinstated a 19 October decision that grants presidential contender Luiz Inácio Lula da Silva 164 campaign commercials in response to campaign adverts in which his rival accuses him of colluding with organized crime. The TSE’s decision was criticized by supporters of President Jair Bolsonaro who claim the TSE is favoring Lula’s candidacy. There are calls by some pro-Bolsonaro lawmakers in Congress, including Vice President Hamilton Mourão, to impeach TSE president Alexandre de Moraes and reduce the court’s power to oversee elections.

Lula and Bolsonaro environmental agenda released

On 21 October 2021, O Globo newspaper published the environmental agendas of President Jair Bolsonaro and former president Luiz Inácio Lula da Silva, both of whom have promised to honor Brazil’s Paris Agreement commitments. However, Bolsonaro has said that he will not increase protective areas for indigenous peoples in the Amazon, citing food insecurity risks. Conversely, Lula has proposed the state should actively protect indigenous communities.

New polls show statistical dead-heat

On 20 October 2022, Datafolha and Exame/Ideia released polls for the upcoming second round showing a statistical dead heat between candidates President Jair Bolsonaro and former president Luiz Inácio Lula da Silva. Both polls showed Lula at 52% and Bolsonaro at 48% — within the margin of error. While the former president’s numbers have remained steady since the first round, support for Bolsonaro has slowly risen, pointing to a much closer election than expected.

CHILE

Police arrest 12 for large-scale lumber theft in Araucanía

On 20 October 2022, police captured 12 lumber thieves allegedly linked to the extremist indigenous group Coordinadora Arauco-Malleco in the southern Araucanía region. Six lumber trucks and three pickup trucks were impounded.

“Patriot militia” under investigation amid rising insecurity

On 20 October 2022, the Prosecutor’s Office said it would investigate a video where a nationalist “patriot militia” claims to have installed themselves in the Araucanía region to protect local people from extremist groups by “doing what security forces won’t”. The Araucanía region has seen rising violence and theft from extremist indigenous groups and criminal organizations.

Looting and violence in capital during protest anniversary

On 18 October 2022, there were multiple lootings and clashes with police in Santiago’s Plaza Baquedano during a gathering to commemorate the anniversary of massive protests in 2019. Eight people were arrested.

Boric’s approval rating hits new low

On 16 October 2022, President Gabriel Boric’s approval rating fell to a record low of 26%, according to a Cadem poll. The poll also measured perceptions on the third anniversary of the 18 October 2019 mass protests. Results suggest most feel nothing has improved concerning violence, the economy, poverty, politics and a myriad of other topics related to the unrest.

COLOMBIA

Petro walks back O&G pledge and says exploration will continue

On 20 October 2022, President Gustavo Petro announced the exploration of oil and gas would continue despite pledging to suspend it during his campaign for the presidency. The announcement comes after months of speculation which saw several government officials, including the Energy Minister, say hydrocarbon exploration would be halted and exploitation reduced. Analysts claim the uncertainty surrounding the oil, gas, and coal industries, all instrumental to the economy, have contributed to the Colombian Peso’s record low against the US Dollar.

Coca production at record high, reports the UN

On 20 October 2022, the UN Office on Drugs and Crime released its annual coca monitoring report for Colombia showing record coca cultivation and cocaine production numbers. Hectares of coca crop grew by 43% to reach 204,000, while cocaine production increased 38% to reach 1,400 tons, most of which leaves the country for the US and Europe. The increases are largely due to territorial vulnerabilities and rising demand worldwide.

High-ranking Gulf Clan members detained

On 20 October 2022, two high-ranking members of the Gulf Clan criminal group, Jesús Albeiro Cardona Borja, alias ‘Chulo’, and Amando de Jesús Manco Cano, alias ‘Camilo’, were captured. Chulo is said to be the boss of the 300-strong “Carlos Vázquez” substructure and a key leader of the Clan’s cocaine trafficking operation in the Uraba Gulf. Camilo is reportedly the mastermind behind the “pistol plan” that killed over 30 policemen in June and July 2022.

Petro’s approval rating drops 10% in two months

On 19 October 2022, President Gustavo Petro’s approval rating had dropped from 56% to 46% during his first two months in office, according to an Invamer poll. His declining popularity comes amid rising inflation, a weakening of the Colombian Peso against the US Dollar, and controversial policy announcements, including a major tax reform proposal and cannabis regulation.

Indigenous activist try to storm Avianca HQ

On 19 October 2022, a group of 15 indigenous communities tried to take over Avianca Airlines headquarters during protests in Bogotá that saw 14 policemen, eight government officials, and five civilians injured. The Indigenous Authorities in Bacatá (AIB), a confederation of indigenous groups, said it was protesting the inhumane conditions their communities are subject to in their ancestral lands, surrounded by armed groups and state abandonment. It is unclear whether Avianca’s offices were targeted intentionally.

ECUADOR

US senate delegations arrives ahead of Chinese FTA

On 20 October 2022, a delegation of five US Senators visited the country ahead of a planned free trade agreement with China this December. Under discussion were proposals to boost bilateral trade, hasten the green energy transition, reduce inequality, and actions to reduce violence associated with drug gangs. Two delegation members, Senators Robert Menendez and Ben Cardin, are co-authors of a bill in the US Senate to boost the bilateral relationship. Analysts have noted the trip comes amid increasingly close Chinese-Ecuadorian relations.

Narco gang weapons from other Andean countries, say police

On 20 October 2022, the police reported that most of the explosives used by narco gangs in a string of attacks across the country this year came from Peru, while the weapons entered via the border with Colombia. The rise in drug-related violence has destabilized President Guillermo Lasso’s government in recent weeks and increased calls for ample security reforms.

Government to tender hydro projects worth USD4.3 billion

On 20 October 2022, Energy Minister Xavier Vera said the government would call a USD1.3 billion international tender for the Cardenillo Hydroelectric project in Azuay province. The minister added that another USD3 billion tender for a hydroelectric project in the province of Morona Santiago was also planned.

MEXICO

Court ruling clears way for National Guard-SEDENA merger

On 19 October 2022, a federal tribunal in Guanajuato overturned a decision which declared the National Guard’s incorporation into the Defense Secretariat (SEDENA) as unconstitutional, clearing the way for the public security entity to become part of the military apparatus. The judge said the earlier decision was invalid because the plaintiff, a human rights activist and lawyer, would not be directly impacted by the transition.

No tax incentives available for private lithium miners, says Sonora governor

On 19 October 2022, Sonora governor Alfonso Durazo, who is a member of the ruling MORENA party, said there would be no tax incentives for private companies working with state-owned mining company LitioMX to exploit lithium. Although the mining cluster in Sonora has shown interest in partnering with the state entity, there is a lack of clarity on how they can associate. Sonora is the only state with lithium reserves.

Twelve civilians killed in Guanajuato as local security deteriorates

On 18 October 2022, 12 civilians were murdered by eight men in a bar in Irapuato, Guanajuato, due to cartel violence. The area is under dispute by three cartels: the Cártel Jalisco Nueva Generación (CJNG), which had made the area a stronghold, the Cártel de Sinaloa, and the Cártel de Santa Rosa de Lima. Irapuato is suffering a security crisis due to a high number of security forces quitting, being murdered or not carrying out investigative work.

AMLO warns supermarkets not to abandon fixed prices

On 17 October 2022, President Andrés Mauel López Obrador warned supermarket chains to stick to previously negotiated fixed prices on staple foods. The price fixing agreements are meant to combat 8.5% inflation and have not yet come into effect because of bureaucracy, according to the president.

PERU

OAS calls for rule of law and will send observer mission

On 20 October 2022, the Organization of American States (OAS) passed a resolution expressing support for President Pedro Castillo’s government and called on all parties to respect the rule of law. The development comes after Castillo claimed the opposition was planning a coup over “unfounded corruption allegations” and called on the OAS to take action. The OAS has said it will send an observer mission to the country to analyze the situation soon.

Prosecutor’s Office says it has evidence linking Castillo to corruption

On 19 October 2022, the General Prosecutor’s Office said it had 190 pieces of evidence confirming its claim that President Pedro Castillo is the head of a criminal organization which coordinated a large-scale corruption scheme. No further details were given regarding the evidence.

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