Regional Pulse: 30 November 2022
Southern Pulse’s weekly review of need-to-know events curated for people who do business in Latin America.
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KEY DEVELOPMENTS
ARGENTINA
BRAZIL
CHILE
COLOMBIA
ECUADOR
MEXICO
PERU
KEY DEVELOPMENTS IN FULL
ARGENTINA
IRS agrees to share citizens' tax info starting next year?
On 24 November 2022, the US government and Argentine authorities reached an agreement to begin sharing citizens' financial information to improve tax enforcement. Financial data was previously shared on a case by case basis, usually at the request of Argentine officials, but will now be shared automatically for all new and existing accounts starting next year. Talks between the US tax authority and its Argentine counterpart had been ongoing for months.
Energy exchange MoU struck with Brazil
On 24 November 2022, Argentina signed a memorandum of understanding with Brazil that allows both countries to use local currency when buying or selling electricity to each other. Government officials hope the agreement will ease off foreign currency reserve spending and strengthen the country’s local energy supply for the coming summer months. The MoU has an end date of 2025.
OECD forecasts economic slowdown for 2023
On 22 November 2022, the Organization for Economic Co-operation and Development (OECD) announced a possible deceleration of GDP going into next year. The country’s economy is expected to end 2022 with 4.4% growth, but analysts warn this may slow to only 0.5% for 2023. This is much lower than the government's IMF-backed estimate of 2% growth. OECD experts blame high inflation, low international currency reserves and import restrictions for the possible slowdown.?
Two-month trade surplus reported
On 22 November 2022, the National Institute of Statistics and Censuses (INDEC) released data showing a trade surplus of almost USD2 billion. Since September, the country has seen two consecutive months with a positive trade balance. This follows a three month trade deficit.?
BRAZIL
Market jitters as Haddad tipped to be finance minister?
On 25 November 2022,the Sao Paulo Stock Exchange index (IBOVESPA) fell over 2.5% and the Brazilian Real (BRL) lost over 2% of its value amid rumors that prominent PT politician Fernando Haddad will be the next finance minister. The economic shock came after a speech Haddad delivered to the National Banking Association, and comes as concerns grow that Haddad and President-elect Luiz Inacio Lula da Silva have not shown a commitment to fiscal responsibility.?
Bolsonaro’s party fined for electoral complaint?
On 23 November 2022, the Superior Electoral Court (TSE) fined President Jair Bolsonaro’s Partido Liberal party (PL) over BRL22 million (USD4 million) for filing a baseless report over election irregularities. On 22 November 2022, PL President Waldemar da Costa Neto filed a complaint with the TSE requesting the votes cast in older voting machine models be thrown out, but provided no credible evidence, according to the TSE. Additionally, Neto only asked votes to be thrown out from the second round. The TSE concluded the complaint was designed to nullify votes in areas which voted heavily for President-elect Luiz Inacio Lula da Silva.?
China’s CNOOC gets production sharing deal in Buzios oil basin?
On 24 November 2022, Chinese oil and gas company CNOOC signed a USD1.9 billion deal with state-owned Petrobras that gives it a 5% stake in production rights in the Buzio basin, located just off the coast of Rio de Janeiro. The field belongs to the wider Campos basin, where most of the deepwater pre-salt layer crude oil production occurs.?
CHILE
领英推荐
Boric’s approval rating continues to flounder
On 27 November 2022, President Gabriel Boric’s approval rating continued to fall, hitting 24.6% according to an Activa poll. Regarding his recent pension reform plan , which would see the state play a greater role in provision, 40.1% approve, 27.7% disapprove, and 32.3% are undecided.
Government resumes talks with striking truckers
On 27 November 2022, the government refused to lower fuel prices after resuming negotiations with truck drivers who had been protesting across the country since 20 November. Truckers have called for safer working conditions and a 30% decrease in fuel prices lasting six months. Negotiations broke down after the government invoked a special security law to break blockades that had begun to affect mobility and food supplies. The government has offered to freeze fuel prices for the next four months, but said it had no plans to use public funds to finance a private sector issue.?
Mapuche separatists carry out new attacks in Araucanía
On 22 November 2022, the Coordinadora Arauco Malleco (CAM), a Mapuche separatist group, carried out several attacks in the Araucanía southern region to commemorate the group’s foundation. The attacks involved burning a forestry camp and its equipment, the attempted burning of a train, and the robbery of a government agricultural research lab. Pelentaro Llaitul, the son of CAM leader Hector Llaitul, was later arrested in connection with the attacks.
COLOMBIA
ELN and government formalize peace talks in Caracas
On 21 November 2022, the ELN, Colombia’s largest guerilla group, and the government, formally began fresh peace talks in Caracas, Venezuela. The host country will act as a guarantor along with Cuba, Norway, and the UN Verification Mission. Otty Pati?o, chief negotiator for the demobilized M-19 guerilla group, will represent the government as chief negotiator along with Peace Commissioner Danilo Rueda. Negotiations will reportedly be based on ample civil society participation, but how this will be achieved is unclear. Talks are set to begin proper in mid December.
Dissident FARC clash with Border Commando near Ecuador border
On 20 November 2022, the Border Commando criminal armed group and FARC dissidents from the Carolina Ramirez Front clashed over control of the Colombia-Ecuador border, leaving 18 dead. The Border Commando comprises guerilla and paramilitary personnel focused on the drug trade. The Carolina Ramirez block, or the FARC’s First Front, is also involved in the drug trade. Both groups have fought over the southern Putumayo department since the FARC left a power vacuum in the area where coca is planted and cocaine is made for export into Ecuador.
ECUADOR
Electricity grid to get a boost from Peru
On 24 November 2022, state-owned electricity provider CELEC announced a USD263 million investment in a new power grid connecting the country’s electrical system with Peru’s. This will allow Ecuador’s notoriously unstable and expensive power system to get more energy, at a lower cost, by utilizing Peru’s considerable hydroelectric output.
Violence decreases in three provinces after torrid year
On 22 November 2022, President Guillermo Lasso reduced the state of emergency in the provinces of Guayas, Esmerladas, and Santo Domingo, citing a welcome reduction in violence. The region has been plagued with bombings and murders in the past months as criminal gangs fight for drug trafficking routes. Lasso’s government has been strongly criticized for the rise in crime throughout the country.?
Gang violence threatens 2023 elections, reports major newspaper
On 21 November 2022, national newspaper El Comercio cited organized crime as a serious? threat to the integrity of the upcoming February 2023 provincial elections. It notes several mayoral candidates have already been threatened or attacked by organized crime. Additionally, the National Electoral Council (CNE) has found instances where organized crime and narco gangs have been funding the campaigns of candidates.?
MEXICO
GDP recovers to pre-pandemic levels
On 28 November 2022, the National Institute of Statistics and Geography (INEGI) reported a GDP year-on-year increase of 0.28% in the third quarter. The increase in GDP pushes the country’s economy back above pre-pandemic levels for the first time. Recent growth was chiefly driven by wholesale trade, retail and manufacturing.?
AMLO pushes for more powers to tackle tax fraud?
On 28 November 2022, President Andrés Manuel López Obrador said he would seek to push through a constitutional reform to make tax fraud a serious crime. The announcement comes after the Supreme Court last week ruled unconstitutional the use of pre-trial detention for people accused of tax crimes, such as issuing false invoices and committing tax fraud, because they cannot be considered “organized crime”.?
Deadline for new anti-contraband documentation extended
On 28 November 2022, the Tax Administration Service (SAT) extended the deadline for the Carta Porte, a new anti-contraband document filed by freight transport companies which records the origin, destination and legal possession of all merchandise. The Carta Porte was first introduced in May 2021 to tackle smuggling, but meant many transport providers needed new compliance training and equipment, such as printers. The deadline, extended to 31 July 2023, gives affected parties more time to comply with the procedure.
AMLO leads demonstration in favor of electoral reform
On 27 November 2022, President Andrés Manuel López Obrador led a massive demonstration in Mexico City in favor of his proposed political-electoral reform. The mobilization came ahead of next week’s discussion of the reform in Congress. Because the day also marked nearly four years of his presidency, he also delivered an address highlighting his administration’s successes. López Obrador also announced that the minimum wage will increase 20% in 2023.?
PERU
Castillo accused of offering top jobs for votes
On 25 November 2022, The National Prosecutor’s Office announced that one of its yet to be named informants alleged President Pedro Castillo ordered an official to offer lawmakers ministerial and other high ranking positions in return for not voting for his impeachment. The official in question, Auner Vásquez, is currently under arrest and a supposed member of Castillo’s “shadow cabinet.”
PM resigns after tensions with Congress?
On 25 November 2022, Prime Minister Anibal Torres resigned after Congress refused to hold a confidence vote in his mandate. Earlier this month, Torres had attempted to use a confidence vote to force a legislative election and renew Congress. Tension between the opposition-led Congress and President Pedro Castillo remains high, with the leader of the executive having survived two impeachment votes to date.
Roadblocks over fuel and fertilizer hit LNG transport
On 24 November 2022, truckers started several roadblocks in central and southern regions of the country to protest high fuel costs and low fertilizer supplies. The price hikes and shortages are a direct result of the war in the Ukraine, which has increased fertilizer and fuel costs. The roadblocks, according to the Peruvian Hydrocarbons Society, are already slowing down the transportation of much-needed liquified natural gas across the country.
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