Regional Pulse: 26 July 2022
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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
- USD black market FX rate breaks records
BRAZIL
- Census data shows workforce is ageing
- US expresses faith in electoral system
- Bolsonaro tells diplomats upcoming elections may be stolen
- Superior Electoral Court president rebuffs Bolsonaro’s elections claims
CHILE
- Police capture Tren de Aragua crime boss
- Boric administration accused of meddling in constitutional vote
COLOMBIA
- Petro picks anti-corruption expert as defense minister
- Indigenous leaders given top jobs in historic move
ECUADOR
- Government loses leadership positions in Congress
- Private equity firm says oil prospects are good
- Lasso makes concessions to protestors
MEXICO
- AMLO dismisses US-Canada trade dispute claims
PERU
- Fired interior minister says president is obstructing justice
- COVID-19 increased perceptions of inequality, finds study
- Amendment tabled to change election date from 2026 to 2023
ARGENTINA
USD black market FX rate breaks records
On 22 July 2022, the US currency reached a historic high in parallel black market trading at ARS338 for USD1. The parallel exchange rate exists because many citizens save their money in USD due to rampant inflation, but capital controls make it virtually impossible to get USD at the official exchange rate. Currencies across Latin America have fallen sharply against the USD this year.
BRAZIL
Census data shows workforce is ageing
On 22 July 2022, the Census Bureau (IBGE) announced that, for the first time in the country’s history, people over 30 accounted for more than 55% of the total population. According to the IBGE, this confirms the trend that the overall population structure is ageing.
US expresses faith in electoral system
On July 19 2022, the US government, following recent claims by President Jair Bolsonaro that the electronic electoral system was open to external interference and fraud, reiterated its trust in the country’s electoral integrity. According to the US State Department, the system is safe, secure and a model for other systems worldwide.
Bolsonaro tells diplomats upcoming elections may be stolen
On 18 July 2022, President Jair Bolsonaro hosted a meeting at the Palácio do Planalto (the presidential palace) in Brasília with some 70 foreign diplomatic officials to express his concerns about the integrity of the electoral system. One of his main allegations is that the electronic vote tallying system was invaded by a hacker in 2018, altering the final vote count.
Superior Electoral Court president rebuffs Bolsonaro’s elections claims
On 18 July 2022, the president of the Superior Electoral Court (TSE), Edson Fachin, rejected President Jair Bolsonaro accusation that the upcoming elections might be stolen, saying that the country’s electoral system was one of the safest in the world and that no evidence of widespread voter fraud was found in 2018. Fachin added that the electronic voting machines were not susceptible to external interference because they are not connected to outside servers.
CHILE
Police capture Tren de Aragua crime boss
On 21 July 2022, police captured an unnamed leader of the Tren de Aragua criminal gang as he attempted to escape the country. The leader will be tried for drug trafficking and kidnapping. Tren de Aragua is a large Venezuelan criminal outfit dedicated to human, weapon, and drug trafficking. It has expanded throughout the continent with recent Venezuelan migration, including to Chile where it has an especially strong presence in Arica province which is currently seeing record homicide rates.
Boric administration accused of meddling in constitutional vote
On 19 July 2022, former presidential candidate José Antonio Kast and other members of the Republican Party asked the Comptroller’s Office to investigate the Boric administration for undue interference in the referendum to pass a new constitution. Kast claims Boric and his government have asked ministers and mayors to campaign for the vote’s approval instead of governing. Other opposition parties have made similar accusations.
COLOMBIA
Petro picks anti-corruption expert as defense minister
On 22 July 2022, President-elect Gustavo Petro designated jurist and former Supreme Court judge Iván Velasquez as his defense minister. Velasquez is an anti-corruption expert known for investigating collusion between paramilitaries, security forces, and politicians that sought to swing elections through murder and intimidation. He also led the International Commission Against Impunity in Guatemala where a massive corruption network was discovered, forcing then President Otto Pérez Molina to resign.
Indigenous leaders given top jobs in historic move
On 19 July 2022, President-elect Gustavo Petro became the first Colombian leader to appoint three indigenous leaders to senior executive positions. Arhuac indigenous leader Leonor Zabaleta Torres will represent Colombia at the UN, Truth Commission lawyer María Patricia Tobón Yarí from the Emberá ethnic group will lead the Victims Unit, and head of the Cauca Indigenous Regional Council, Giovanny Yule, will lead the Land Restitution Unit. Indigenous leaders have been excluded from senior positions in government throughout the country’s history.
ECUADOR
Government loses leadership positions in Congress
On 21 July 2022, President Guillermo Lasso’s congressional coalition (Bancada de Acuerdo Nacional) lost all its leadership positions in the parliament after opposition parties took control of the first and second vice-presidency of the National Assembly. The First Vice-Presidency went to Marcela Holguín, a member of UNES, which is a party linked to former President Rafael Correa. Darwin Pereira, a member of the so-called “Rebels of Pachakutik”, which is linked to indigenous groups, won the Second Vice-Presidency.
Private equity firm says oil prospects are good
On 20 July 2022, Juan Argento, managing partner at private equity firm Horizon Capital, voice support for the government’s efforts to increase crude oil production, despite predicting national oil reserves will only last another 47 years. He added that the price of crude oil would remain high until 2029, when a pivot toward a greener economy will ultimately decrease demand. The country should take advantage of this window of opportunity, according to Argento. Ecuador has the third largest reserves in South America (behind Venezuela and Brazil) at around 8 billion barrels of untapped crude oil.
Lasso makes concessions to protestors
On 18 July 2022, President Guillermo Lasso signed Executive Decree 456, increasing government subsidies to the agricultural and education sectors to offset the rise in the cost of living. The decree establishes a 50% increase in fertilizer subsidies for small and medium farmers, doubles spending on intercultural and bilingual education and makes USD100 million low interest credit available for small and medium farmers. This decree responds to some of the demands from the National Confederation of Indegenous Peoples of Ecuador’s (CONAIE), which is the group that led massive protests in June.
MEXICO
AMLO dismisses US-Canada trade dispute claims
On 21 July 2022, President Andrés Manuel López Obrador said he would resist calls by the US and Canada for dispute settlement negotiations and possible sanctions over pricing schemes, emission caps and contract terms that allegedly favor state-owned energy company Pemex and the Federal Electricity Commission (CFE). The US and Canada argue these measures have made it difficult for their companies to do business in the country, thereby violating the United States-Mexico-Canada Agreement and opening the door to retaliatory tariffs.
PERU
Fired interior minister says president is obstructing justice
On 20 July 2022, the recently ousted interior minister, Mariano Gonzalez, accused President Pedro Castillo of obstruction of justice, claiming the head of state was attempting to block the arrest of the president’s nephew Fray Vásquez, and of former presidential palace staffer Bruno Pacheco over corruption charges. Gonzalez also claimed that he was removed by Castillo because of his support for investigating corruption in the executive.
COVID-19 increased perceptions of inequality, finds study
On 19 July 2022, the Peruvian Studies Institute (IEP) and poverty alleviation charity Oxfam published a study which found the COVID-19 pandemic increased public perceptions that the wealth gap had worsened. According to the study, over 60% of citizens believe the wealth gap has increased since the pandemic started. Additionally, over 83% believed that access to justice was very unequal, while some 70% thought that access to proper healthcare was limited to the rich. One of the study’s key findings was that over 80% of the respondents agreed that the rich were not paying their fair share of the taxes.
Amendment tabled to change election date from 2026 to 2023
On 18 July 2022, a constitutional amendment to move forward the general election to June 2023 was discussed in parliament. Several groups are in favor of the change, which would reduce President Pedro Castillo’s term currently set to end in 2026. The proposal, tabled by former President Francisco Sagasti, would also require parties to pick their parliamentary candidates through party primary elections, and set separate dates for legislative and presidential elections.
