Regional Pulse: 6 December 2022

Southern Pulse’s weekly review of need-to-know events curated for people who do business in Latin America.

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  • Subsidized fuel prices rise
  • More police sent to Rosario after 260+ murders recorded
  • Protestors block roads to Vaca Muerta O&G deposit


  • Petrobras charts 15% spending increase
  • Transition team claims more fiscal headroom for spending


  • Police make record drug precursor seizure in Arica
  • Senate breaks with precedent and rejects Boric’s AG pick
  • Government ends trucker strike with concessions


  • Petro outlines plan to weather global recession
  • Hidroituango hydro plant to start operations
  • Government announces new rise in subsidized fuel price


  • CONAIE threatens action if citizens’ debts not forgiven
  • Security-focused referendum set for February 2023


  • MORENA seeks “Plan B” for electoral reform
  • Remittances hit record levels


  • OAS warns of “extreme political instability”
  • Castillo faces third impeachment on 7 December



Agriculture exports fell in November

On 2 December 2022 the Cooking Oil Industry Chamber (CIARA) and the Center for Grain Exporters (CEC) said its members’ exports fell by 17% in November, blaming drought and a negative macroeconomic outlook. The two business groups represent 48% of total agricultural exports. The most exported products were soybean flour, corn and soybean oil. This is bad news for the national economy as Argentina struggles with a shortage of US Dollars to pay government debt.

Subsidized fuel prices rise

On 1 December 2022, fuel prices increased 4% following negotiations between Finance Minister Sergio Massa and the largest oil companies operating in the country. The rise is lower than consumer price inflation from November of 6.4%. Negotiated fuel price rises are part of a wider program of government price controls meant to reduce high inflation, which in the last twelve months reached 88%.

More police sent to Rosario after 260+ murders recorded

On 30 November 2022, 200 National Gendarmerie officers were sent to the port city of Rosario, after it saw a 21% increase in crime during the first half of 2022. Since January, at least 260 homicides have been recorded, according to government figures. Drug traffickers have been known to operate in the city, taking advantage of the local port as a means of transporting narcotics.

Protestors block roads to Vaca Muerta O&G deposit

On 28 November 2022, indigenous Mapuche groups blocked multiple roads leading to the Vaca Muerta oil and gas reserves in the province of Neuquén. The Mapuche activists want land recognition, due to their ancestral presence in the region. People from the nearby town of Añelo also joined the protests. Residents want the government to solve the shortage of potable water in the town of 7,000. Local authorities have begun talks with the protesters.


Bill opens uranium market to the private sector

On 30 November 2022, the Chamber of Deputies approved a bill that allows private companies (foreign and domestic) to explore restricted minerals, such as uranium, for the first time. The current law only allows restricted minerals to be produced by the state-owned Nuclear Industries of Brazil (INB). Brazil ranks among the top 10 countries with the largest uranium reserves in the world.

Petrobras charts 15% spending increase

On 30 November 2022, Petrobras published its 2023–2027 energy investment strategy which estimates the company will have 15% more funds to spend on energy projects compared to the previous four year period. A total of USD78 billion will be set aside for investment, 64% of which will be dedicated to oil and gas exploration and production. Additionally, a record USD600 million will be invested in biofuels.

Transition team claims more fiscal headroom for spending

On 30 November 2022, President-elect Luiz Inácio Lula da Silva’s transition team said that given the latest GDP figures, the incoming government could spend an extra BRL148 billion in 2023, without increasing public debt. This number is close to the BRL198 billion the President-elect proposed to Congress in extra spending to cover social welfare programs. The comments come amid heightened market concern over Lula’s fiscal policies.


Chinese pharma fails to build first LatAm factory on time

On 1 December 2022, national media outlet La Tercera reported that Chinese pharmaceuticals company Sinovac met with the government to explain why a factory for vaccines would not be finished by Q4 2022 as scheduled. It blamed the delay on regulatory issues with Customs and the Institute of Public Health, as well as poor security and infrastructure in the municipality of Quilicura where the plant is being built. Construction of the USD100 million factory started in May 2022, but there is currently no official completion date. The factory will be Sinovac’s first in Latin America.

Police make record drug precursor seizure in Arica

On 1 December 2022, customs police seized 690 tons of chemical precursors used to process cocaine in the northern port of Arica. The chemicals en route from China to Bolivia were valued at USD9.5 million and could have been used to process 60 tons of cocaine worth some USD200 million. The seizure is thought to be the largest of its kind in Latin America.

Senate breaks with precedent and rejects Boric’s AG pick

On 30 November 2022 the Senate rejected President Gabriel Boric’s appointment of José Morales as Attorney General, marking the first time in modern history the upper house has rejected the appointment of an Attorney General. The Attorney General’s office is responsible for processing criminal cases of national relevance, like the ongoing conflict between Mapuche groups and security forces in the south. This is a focal point of public dissatisfaction with the Boric presidency.

Government ends trucker strike with concessions

On 28 November 2022, an eight day nationwide trucker strike ended after the government negotiated a deal with the various trucker unions. The deal will freeze diesel prices for 120 days, establish a negotiating table to discuss future fuel price increases, and create a security plan for the northern provinces of Arica and Coquimbo. Six rest stops will also be built. The deal did not include foregoing the criminal charges and arrests made against around 30 protest leaders.


Energy Minister faces removal vote over O&G uncertainty

On 1 December 2022, members of the opposition called for the resignation of Mining and Energy Minister Irene Vélez, citing inexperience and mismanagement. The censure request came during a heated congressional debate in which Vélez was asked if the Petro administration would honor its campaign pledge and not sign new oil exploration and exploitation contracts in the coming years. The minister avoided answering the question directly, but continued to query the need for new fossil fuel projects, renewing fresh concerns over the government’s energy agenda. Congress will vote on her removal on 6 December 2022.

Petro outlines plan to weather global recession

On 30 November 2022, President Gustavo Petro said reducing fuel subsidy spending, restructuring government debt and new taxes would help Colombia weather a possible worldwide recession. He also pointed to the agricultural, industrial, construction and tourism sectors as the areas with the greatest job creation potential. His remarks were made to the National Association of Financial Institutions’ (ANIF) general assembly.

Hidroituango hydro plant to start operations

On 30 November 2022, state-owned utilities provider EPM announced the start of operations at its 2.4GW hydroelectric plant Hidroituango in the Antioquia department. The plant is the largest hydroelectric project countrywide and will be responsible for 17% of the electricity generated in the country. The announcement was highly anticipated after multiple construction delays.

Government announces new rise in subsidized fuel price

On 29 November 2022 the Minister of Economy José Antonio Ocampo announced a 2% rise in the subsidized price of fuel. It is the sixth rise this year. The current administration, which started in September, had established a policy of cutting fuel subsidies to reduce the fiscal deficit. The government also announced that no further increases in fuel prices will happen until June 2023.


Prison warden gunned down following riot

On 1 December 2022, the warden of Pichincha El Inca prison, Santiago Loza, was shot and killed as he was arriving to work in his car. On 18 November this same prison was the site of a deadly riot. Deadly prison riots fought between rival gangs have become increasing commonplace, but the murder of senior prison staff is rare.

CONAIE threatens action if citizens’ debts not forgiven

On 30 November 2022, Leonidas Iza, leader of the National Confederation of Indigenous Peoples (CONAIE), said social movements would mobilize if the Lasso administration does not forgive debts of up to USD10,000 owed by everyday citizens. CONAIE and the government are in the midst of tense talks following massive civil unrest back in June 2022, led by indigenous and social movements.

Security-focused referendum set for February 2023

On 29 November 2022, President Guillermo Lasso signed a decree authorizing a 5 February 2023 public referendum, which will ask citizens to approve sweeping constitutional reforms affecting security, state institutions and the environment. The two main security questions to be asked are if Ecuadorian citizens can be extradited for drug trafficking convictions (currently prohibited) and if the Attorney General’s Office should have autonomy from the judiciary. The referendum is key to Lasso’s plans to curb rampant violence across the country.


Sophisticated prison escape thwarted by police in Zacatecas

On 4 December 2022, a group of prisoners from the Cieneguillas regional penitentiary in Zacatecas attempted an elaborate prison break which was later thwarted by security forces. Secretary General of Zacatecas Gabriela Pinedo said criminals tried to distract police officers by blockading nearby roads, setting vehicles and tolls on fire, and puncturing tires with spike strips causing public chaos in the area. Local authorities have not said whether a particular criminal organization was behind the plan.

MORENA seeks “Plan B” for electoral reform

On 1 December 2022, MORENA’s whip in the lower house, Ignacio Mier, said the government was considering secondary legislation to pass President Andrés Manuel López Obrador’s controversial electoral reforms in the face of significant opposition. The “Plan B” proposal would reduce the National Electoral Institute’s (INE) operating budget by almost USD152 million and shrink the number of deputies. If presented, legislators will have until April 2023 to get the reform passed.

Remittances hit record levels

On 1 December 2022, the Bank of Mexico reported that remittances totalled USD5.36 billion in October — the highest level since records began in January 1995. The amount signifies a year-on-year increase of 11.2% and marks the sixth month of remittances above USD5 billion. According to the World Bank, remittances have benefited from the recovery of the US economy resulting in higher labor rates for Mexicans abroad.


Opposition bill calls for general elections next year

On 1 December 2022, the Congressional Constitutional Committee voted in favor of moving the next general election from 2026 to 2023, in another effort to oust President Pedro Castillo before the end of his term. Since an early general election would require a constitutional amendment, the bill would have to be approved by at least two thirds of Congress (66 votes and a popular referendum).

OAS warns of “extreme political instability”

On 1 December 2022, the Organization of American States’ (OAS) special mission to Peru released a report calling for the executive and Congress to enter a 100 day truce to avoid “extreme political instability.” The OAS will also send a delegation to monitor the situation. The report comes after President Pedro Castillo accused opposition leaders in Congress of illegally trying to oust him in November and called on the OAS to intervene. The opposition claims the report is one-sided and are continuing with their attempts to impeach him.

Castillo faces third impeachment on 7 December

On 30 November 2022, 67 Congressmembers signed a petition to impeach President Pedro Castillo on gross negligence and corruption charges. This is the third time Castillo faces an impeachment process since taking office in 2021. To be successful, the motion must be supported by at least 87 members of Congress. In the last vote, in March 2022, only 55 parliamentarians voted in favor of ousting Castillo. The vote will be held on 7 December.

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

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Southern Pulse

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