Regional Pulse: 30 August 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
- India signs mining memorandum and backs BRICS admission
- Drug bust worth USD60 million in Rosario
- New import blacklist enforced
- Massa chooses veteran economist as right-hand man
BRAZIL
- Police search houses of business leaders suspected of supporting coup
- Bolsonaro attacks election integrity on national television
- Bernie Sanders tables US senate resolution to head off coup risk
- Inflation slowdown continues
CHILE
- Seperatist Mapuche leader arrested
- Governments wants new Constitutional Convention if current draft loses vote
- Final poll suggests new constitution on course for defeat
COLOMBIA
- Petro blocks Venezuela extradition requests
- Police announce end of forced coca crop eradication
ECUADOR
- Army reports increase in criminal activity along Colombian border
- First-ever trade surplus with China recorded
MEXICO
- Security forces detain armed illegal miners using heavy machinery
- CJNG blocks five highways in Zacatecas
- Nine year high in mining investment projected
PERU
- Approval for Castillo rises slightly as support for Congress tanks
- Crackdown on outsourced workers begin
ARGENTINA
India signs mining memorandum and backs BRICS admission
On 26 August 2022, foreign affairs minister Santiago Cafiero and his Indian counterpart, Subrahmanyan Jaishankar, signed a memorandum for the joint exploitation of mineral resources, particularly in the country’s lithium rich north. Jaishankar also met with President Alberto Fernández and announced India’s support for Argentina’s entry into BRICS, an emerging market organization consisting of Brazil, Russia, India, China and South Africa. India is Argentina’s fourth largest international trade partner, with commercial ties worth USD7 billion annually.
Drug bust worth USD60 million in Rosario
On 26 August 2022, the Argentine Federal Police (PFA) seized 1.6 tons of cocaine in the city of Rosario. Authorities found the drugs hidden amongst animal feed, in a shipping container that was bound for Dubai. Mariano Giuffra, head of the PFA drugs division, calculates the cocaine found is worth almost USD60 million. So far, 12 people have been arrested in connection with the operation.
New import blacklist enforced
On 25 August 2022, government officials announced the immediate implementation of an import blacklist, aimed at slowing the depletion of the country’s foreign currency reserves. Thirty-one items make up the list of diverse products, which include yachts, waffles, whiskey, and crypto currency mining machines. The blacklisted products should still be available to most consumers, but importers must limit their import quantity.
Massa chooses veteran economist as right-hand man
On 22 August 2022, Sergio Massa, the country’s new Economy Minister, tapped veteran economist Gabriel Rubinstein to be the new Secretary of Economic Planning. Rubinstein worked in the Central Bank in the early 2000s during Néstor Kirchner’s administration. He was part of the economic team that restructured Argentina’s debt with the IMF after the 2001 economic crisis that battered the country.
BRAZIL
Police search houses of business leaders suspected of supporting coup
On 23 August 2022, the Federal Police searched the properties of eight prominent business leaders, who were allegedly promoting a coup in the event President Jair Bolsonaro lost his re-election bid. The scandal began two weeks ago when national newspaper Metropoles published a screenshot of a WhatsApp group in which the business leaders were allegedly plotting the action. This conversation generated public calls for boycotts of their respective companies. Some of the companies include shopping mall giant Multiplan, sporting goods chain Centauro, restaurant chain Coco Bambu and retail chain Lojas Havan.
Bolsonaro attacks election integrity on national television
On 22 August 2022, President Jair Bolsonaro, in a live interview with TV Globo, said he would respect the outcome of the October general elections if they were fair and transparent, but again maintained that the electronic electoral system is susceptible to widespread fraud. One of Bolsonaro’s recommendations is a return to paper ballots, sustaining that the votes would be auditable.
Bernie Sanders tables US senate resolution to head off coup risk
On 26 August 2022, US Senator Bernie Sanders tabled a bill in the country’s senate that would see the US immediately recognize the winner of the upcoming October elections in Brazil. Sanders also wants the US government to cut all military, diplomatic and economic cooperation with Brazil if there is a complete breakdown of the democratic process in the country. The Senator’s concerns stem from President Jair Bolsonaro’s repeated criticism of Brazil’s electoral system.
Inflation slowdown continues
On 24 August 2022, the Overall Price Index (IPC-15), compiled by the Brazilian Institute for Geography and Statistics (IBGE), reported the highest monthly deflation this August since 1991. The IPCA-15 is seen by many economists as a good indicator of the country’s overall inflation rate. The main drivers of this apparent deflation are lower fuel and electricity energy costs. This is the second month of deflation reported in Brazil.
CHILE
Seperatist Mapuche leader arrested
On 24 August 2022, Héctor Llaitul, leader of radical Mapuche group Coordinadora Arauco Malleco (CAM), was arrested for timber theft, usurpation, and attacks on the authority. The southern Biobío region, where the CAM primarily operates, has seen multiple attacks against the forestry industry and its workers. The region is currently under a constitutional state of exemption due to the increase in attacks. The CAM was delcared a terrorist organization by the legislature earlier this year.
Governments wants new Constitutional Convention if current draft loses
On 21 August 2022, the government proposed the election of a new Constitutional Convention if the current constitution draft is rejected in the 4 September referendum. Polls suggest a “no” vote is the most likely outcome. A second referendum to decide if Chile needs a new constitution was deemed “redundant” by President Gabriel Boric. The proposal would have to be approved by Congress, where Boric’s coalition does not hold a majority.
Final poll suggests new constitution on course for defeat
On 20 August 2022, a Cadem poll indicated 37% of voters would vote in favor of the new constitutional draft and 46% would reject it. Trends have consistently shown a majority vote against the draft. These will be the final poll results before the 4 September referendum due to a polling ban which is being enforced two weeks prior to election day.
COLOMBIA
Petro blocks Venezuela extradition requests
On 23 August 2022, President Gustavo Petro denied the Venezualan government’s request to extradite members of the opposition currently under asylum in Colombia. President Nicolás Maduro has requested the extradition after both countries reestablished diplomatic relations.
Police announce end of forced coca crop eradication
On 23 August 2022, new police chief, Henry Sanabria Cely, said he would halt forced coca crop eradication in favor of voluntary crop substitution and alternative development. Plans by the previous administration to resume glyphosate fumigation, said to cause cancer by the WHO, have also been discarded. The country remains the largest cultivator of coca with around 150,000 hectares grown in remote regions of the country.
ECUADOR
Army reports increase in criminal activity along Colombian border
On 26 August 2022, sources from the Army’s Intelligence Division said there had been a spike in the circulation of armed criminals along the northern border with probable ties to Colombian guerrilla and drug trafficking groups. The Army said it had found abandoned guerrilla bases in the jungle areas near the Colombian border with equipment and chemicals used in the manufacturing of illicit drugs, such as cocaine. One of these bases was directly linked to the Úrias Rondon group, formed by FARC guerrilla dissidents. According to the Army, the growing insecurity in the northern border region is a result of increased drug production in neighboring Colombia.
First-ever trade surplus with China recorded
On 25 August 2022, the Central Bank announced that in the first semester of 2022, the country had recorded its first-ever trade surplus with China. Between January and June 2022, exports to China totaled USD 3.05 billion, while imports were USD2.9 billion, pushed by Chinese demand for non-oil commodities. This surplus is notable since the trade deficit with China used to be the country’s largest.
MEXICO
Security forces detain armed illegal miners using heavy machinery
On 27 August 2022, 11 people were captured illegally mining minerals in Michoacán. The men had weapons and heavy machinery to extract minerals from the Las Truchas mines in the municipality of La Mira. Operatives from the Navy and National Guard are understood to have been involved in the security operation.
CJNG blocks five highways in Zacatecas
On 27 August 2022, five highways were blocked by burning vehicles in the state of Zacatecas. The Cartel Jalisco Nueva Generación is thought to be behind the blockade, which saw at least two people killed. Local government advised citizens to avoid travel within the state. The barricades are reportedly in response to state operations against high-ranking members of the criminal groups.
Nine year high in mining investment projected
On 23 August 2022, national mining chamber of commerce Caminex estimated the country’s mining sector would receive its highest level of investment in nine years, reaching over USD5.5 billion. Although new mining concessions have been stalled, an increase in mineral prices will see investments surpass previous expectations.
PERU
Approval for Castillo rises slightly as support for Congress tanks
On 25 August 2022, the Peruvian Studies Institute (IEP) found support for President Pedro Castillo had risen from 24% in June to 29% in August, despite repeated corruption allegations and political instability. Conversely, Congress’ approval ratings have dropped from 10% to 8% in the same period. Local political analysts have pointed to President Castillo’s efforts to forge closer ties with grassroots social movements as a reason behind this positive shift in public opinion.
Crackdown on outsourced workers begin
On 22 August 2022, the Labor Ministry began applying fines to companies that outsource essential workers to third party companies. The legislation, passed earlier this year, considers essential workers to be personnel with specialized functions central to the company’s core business. The government hopes the measure will address payment disparity, with workers who are not directly hired by a company earning, on average, 80% less than direct hires. The mining sector, which outsources over 75% of its workers, is expected to be hard hit by the law change.
