Regional Pulse: 4 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
ARGENTINA
- Drug seizure on the shores of Misiones
- New waterway toll to affect 80% of exports
- Government report shows small drop in poverty figures
- Mapuche land tensions flare up in Patagonia
BRAZIL
- Bolsonaro outperforms expectations in first round vote
- Highest employment levels since 2015
- Lula to end government debt ceiling
CHILE
- Officials resign ahead of Interior Ministry visit to Araucanía
- Left-wing parties strike deal on new constitutional framework
- Violence up 41% since May in embattled south-central region
COLOMBIA
- Border with Venezuela re-opens as bilateral relations improve
ECUADOR
- GDP growth rate slows
- China restructuring affords fiscal headroom
- Cabinet ministers face indictment over civil unrest handling
MEXICO
- Defense Ministry hack suggests AMLO at heart attack risk
- Mexico is the most dangerous country for environmentalists, finds NGO
PERU
- Oil spill sparks protests in the Amazon
- BHP to increase mining investment
ARGENTINA
Drug seizure on the shores of Misiones
On 1 October 2022, officers with the Argentine Naval Prefecture (PNA) seized 730 kilograms of discarded marijuana in the northeast province of Misiones. The seizure came after PNA officers detected abnormal movements from two ships that had sailed in from neighboring Paraguay. Crew members were spotted throwing packages overboard before quickly sailing back across the border to avoid arrest.
New waterway toll to affect 80% of exports
On 30 September 2022, the Ministry of Transport announced the National Ports Administration (AGP) would implement a toll on the northern section of the Paraná-Paraguay waterway. Ships that transit through foreign ports will have to pay USD1.47 per net ton of cargo, while ships that transit through Argentine ports will only pay ARS1.47. Approximately 80% of the country’s exports pass through this area. AGP says the new toll will help foot the annual USD20 million waterway upkeep bill.
Government report shows small drop in poverty figures
On 28 September 2022, the National Institute of Statistics and Censuses (INDEC) reported that the number of people living below the poverty line dropped from around 37.3% to a still alarmingly high 36.5% (about 10 million people). According to the report, Patagonia and the northwestern parts of the country have the lowest poverty rates, while Greater Buenos Aires has some of the highest (nearly 28% of all homes). The poverty line is classified as having a median family income of less than ARS58,472 (USD395) per month.
Mapuche land tensions flare up in Patagonia
On 26 September 2022, members of the Lof Lafken Winkul Mapu Mapuche group attacked and set fire to a police outpost in the southern province of Río Negro. The group, which says it is reclaiming land on behalf of indigenous Mapuche, has a history of attacking police and usurping private land in the Patagonian region of the country. Argentine National Gendarmerie are now investigating the attack, and report that no officers have been harmed.
BRAZIL
Bolsonaro outperforms expectations in first round vote
On 2 October 2022, results from the first round of the general election saw former president Luiz Inácio Lula da Silva get 48.4% of the vote and incumbent President Jair Bolsonaro win 43.2%. While opinion polling for Lula’s vote share fell within the margin of error, Bolsonaro outperformed expectations by as much as 10 percentage points. The closer than expected race has made forecasting the outcome of the 30 October runoff between the two frontrunners very difficult.
Highest employment levels since 2015
On 30 September 2022, the Brazilian Institute for Statistics and Geography (IBGE) announced that unemployment hit a new low of 8.9%. This is the lowest unemployment rate since 2015.
Lula to end government debt ceiling
On 28 September 2022, Guilherme Mello, economic advisor to the Workers Party (PT), announced that if elected, former president Luiz Inácio Lula da Silva would end the public debt ceiling established in 2016 by former president Michel Temer. At that time, a Constitutional amendment approved by Congress established a strict 70% gross debt to GDP ceiling, prohibiting almost all spending increases after nearly a decade of ballooning public debt. The announcement means both Lula and President Jair Bolsonaro want the debt ceiling scrapped.
CHILE
Officials resign ahead of Interior Ministry visit to Araucanía
On 30 September 2022, representatives for President Gabriel Boric in the southern La Araucanía and Malleco regions resigned ahead of an Interior Ministry visit. No reason was given for the resignation of Raúl Allard Soto and Leandro Reyes Sanhueza, but it comes amid rising violence from indigenous groups and follows a change of Interior Minister on 6 September. Both regions have been under a state of emergency since May.
Left-wing parties strike deal on new constitutional framework
On 28 September 2022, the government and center-left parties agreed internally on six commitments to continue the constitutional reform process after a proposed draft was rejected in a 4 September referendum. The commitments include an elected assembly, gender parity and indigenous representation, respect for institutions and the three branches of government, a participatory process whereby citizens are well informed, and a technical team of expert advisors. They have also committed to elections for a new convention in April 2023, a six month period to produce a new draft, and a referendum for December 2023.
Violence up 41% since May in embattled south-central region
On 27 September 2022, a trade group organization from La Araucanía reported a 41% increase in violent incidents since a state of emergency was declared over the southern Macrozone region in May. Violent incidents have reportedly increased 200% in the region of Los Ríos and 16% in La Araucanía, despite the deployment of security forces. Rebel indigenous Mapuche groups, drug-trafficking organizations, and lumber thieves are some of the groups targeting private industry and clashing with security forces.
COLOMBIA
Border with Venezuela re-opens as bilateral relations improve
On 26 September 2022, the Colombia-Venezuela border reopened for trade and transit after seven years. Having named ambassadors and agreed on Venezuela as a guarantor for peace negotiations with the ELN guerilla group, the reopening of the border signals a deepening of the countries’ relationship after many years of tension and diplomatic breakdown.
ECUADOR
GDP growth rate slows
On 30 September 2022, the Central Bank announced GDP growth had slowed to 1.7% during the first semester, due partly to the two weeks of civil unrest in June 2022. Subsequent negotiations to end the protests saw the government agree to a halt in oil production at 15 hydrocarbon blocks in the Amazon region. This halt will likely frustrate President Guillermo Lasso’s target of doubling oil production by 2025. It has also contributed to the Central Bank lowering GDP growth projections to 2.7% for 2022.
China restructuring affords fiscal headroom
On 29 September 2022, the Finance Ministry said the country would have an extra USD30 million to spend this year because of a debt negotiation deal reached with China last month. USD478 million would have been owed to China this year if no deal had been reached, but debt maturity dates have now been pushed back into the second half of the 2020s.
Cabinet ministers face indictment over civil unrest handling
On 27 September 2022, Congress approved a bill calling for the political indictment of Defense Minister Luis Lara, the Director of Central Intelligence Fausto Cobo, and former Interior Minister Patricio Carrillo for excessive repression during the civil unrest in June 2022. President Guillermo Lasso does not face indictment, but was cited in the bill as having possibly committed crimes against humanity due to police repression. The bill was sponsored by allies in Congress of influential former president Rafael Correa.
MEXICO
Defense Ministry hack suggests AMLO at heart attack risk
On 30 September 2022, the National Defense Secretariat (SEDENA) was hacked by the Guacamaya hacking group. SEDENA admitted the group stole sensitive information about President Andrés Manuel López Obrador’s health and classified intelligence on criminal groups, politicians, and infrastructure. Journalists shared some of the leaked documents. Among them are reports López Obrador suffers from gout, hyperthyroidism, and has a high chance of suffering a heart attack. The Guacamaya group hacked the Chilean Defense Ministry and stole over 400,000 emails last week.
Mexico is the most dangerous country for environmentalists, says NGO
On 29 September 2022, the Anglo-American NGO Global Witness reported 54 environmentalists were killed in Mexico during 2021, making it the most dangerous country in the world for environmentalists. More than half were indigenous activists opposing mining operations or were involved in land disputes. The states of Oaxaca and Sonora had the most victims.
PERU
Oil spill sparks protests in the Amazon
On 28 September 2022, a group of indigenous protesters blocked a river in the Amazon region following an oil spill on 16 September 2022. State-owned Petroperu, which owns the affected pipeline, claims the spill was caused by sabotage. Tensions have been rising in the region since President Pedro Castillo outlined his intention to increase oil production. Most of the country’s oil reserves are located in the Amazon region.
BHP to increase mining investment
On 27 September 2022, the Americas head of Australian mining giant BHP, Rag Udd, said his company would spend USD12 million on exploration in the next 10 months and was already evaluating six prospective projects. He added that demand for copper, which BHP mines extensively in the country, was likely to grow in the coming years as the world transitions away from fossil fuels. No specific locations were revealed for its potential investments.
