Regional Pulse: 5 March 2024
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
Acindar steel producer halts operations on lower demand
Milei uses congressional opening speech to attack the ‘political caste’
Canadian firm estimates Salta project may have one of the world’s largest lithium deposits
BRAZIL
Brazil’s economy becomes ninth-largest globally, surpassing Canada’s
New Supreme Court justice votes to extend sentences for 8 January rioters
Two of South America’s largest airlines in US court dispute
Acre suffers flooding weeks after wildfires blaze through region
CHILE
Venezuelan government critic found dead in Maipú
Scientists warn wildfires could get worse once El Niño ends
Saudi-owned petroleum company Aramco arrives in Chile
COLOMBIA
IBM report highlights Colombia cyberattacks in 2023
ELN releases hostages as part of peace talks
Migrants resume journeys through Darién Gap after five-day interruption
ECUADOR
Noboa tours US and Canada after confirming 2025 reelection bid
Oil trader Gunvor settles with US and Swiss authorities in Petroecuador corruption case
Panama seizes five tons of cocaine hidden in banana shipment leaving Guayaquil
MEXICO
Presidential campaigns officially kick off
Mexico threatens to retaliate against Canada for new visa requirement
Government considers up to a 25% increase in tariffs on Asian imports
PERU
China interested in funding bi-oceanic train to connect Chancay Port with Brazil
Mining minister denies conflict of interest in Tía María mining project
Attorney General opens investigation against political party linked to mutiny leader
KEY DEVELOPMENTS IN FULL
ARGENTINA
Acindar steel producer halts operations on lower demand
On 27 February 2024, Argentine steel producer Acindar announced it would halt production between 18 March and 15 April due to a 40% fall in demand. Acindar is owned by the world’s second-largest steel producer, Luxembourg-based ArcelorMittal. The lower demand is mainly due to President Javier Milei suspending all public works projects when he took office in December 2023, annual inflation hitting 250% in January, and forecasts that the economy will contract by 2.8% in 2024. The company will close five sites across the provinces of Buenos Aires, Santa Fe, and San Luis, although it has stated that no jobs will be lost.
Milei uses congressional opening speech to attack the ‘political caste’
On 1 March 2024, President Javier Milei marked the opening of the 2024 congressional session with a speech announcing measures to crack down on what he calls the “political caste”. Milei has used the phrase to refer to established politicians since the campaign trail. During the hour-long speech, Milei said he would introduce new proposals to crack down on the political elite that would go beyond proposals in previous legislative packages. Among the new proposed laws is a measure that would make printing money to finance state spending a crime. He also proposed banning anyone convicted of corruption from running for political office. Milei also announced that the government news agency Télam would be shut down, accusing the agency of a leftist bias. On 3 March, federal police sealed the entrance to Télam's headquarters in Buenos Aires, and its website went offline. The president will also seek to cut state spending by reducing the number of advisors deputies and senators can hire, abolishing special pensions for former presidents and vice presidents, and eliminating public funding of political parties. Milei took on Argentina’s powerful trade unions, declaring that he would introduce leadership elections monitored by the justice system and reduce union leadership mandates to a four-year term that can only be renewed once. Milei also proposed a pact intended to win the support of provincial governors so that they lobby lawmakers to support his “Omnibus Bill” legislative package.
Canadian firm estimates Salta project may have one of the world’s largest lithium deposits
On 26 February 2024, Econojournal reported on a new estimate from Canadian mining company NOA Lithium showing that the Río Grande project in Salta province could yield more than 1.9 million tons of lithium carbonate equivalent (LCE). That means the Río Grande project would have about the same amount of resources as one of the world’s primary lithium sources, the Salar del Hombre Muerto. Salar del Hombre Muerto is also within the lithium triangle, situated on the border between Salta and Catamarca provinces. So far, NOA Lithium has explored just 12% of the 37,000 hectares of the Río Grande project. On 3 March, NOA Lithium was listed on the Toronto Stock Exchange.
BRAZIL
Brazil’s economy becomes ninth-largest globally, surpassing Canada’s
On 1 March 2024, the state-run statistical bureau IBGE released Brazil’s official GDP growth figures for 2023. The Brazilian economy grew by 2.9%, the second-highest growth rate after Mexico (3.2%) among Latin American large economies. Brazil surpassed Canada as the world’s ninth-largest economy. Driving growth were agricultural commodity exports, including an all-time high harvest of soybeans and maize. This GDP growth rate beat early 2023 forecasts from the International Monetary Fund (IMF) and local banks. Household consumption also increased, mostly due to an increase in the monthly government cash transfer program Bolsa Familia which reaches 21 million families countrywide. On the other hand, the manufacturing, construction, and private investment sectors remained sluggish, raising concerns about the long-term sustainability of Brazil’s economic performance.
New Supreme Court justice votes to extend sentences for 8 January rioters
On 29 February 2024, the Supreme Court’s newest justice Flávio Dino voted in favor of handing out longer sentences for insurrectionists who tried to overturn the 2022 presidential election results on 8 January 2023. Dino served as justice minister during the first year of President Luiz Inácio Lula da Silva’s presidency. He voted in alignment with Justice Alexandre de Moraes, the leader of the investigation into Bolsonaro’s alleged involvement in planning a coup in the event of losing the 2022 election. Moraes and his allies in the Supreme Court have handed down sentences of between 14 and 17 years for those allegedly involved in the January 8 coup attempt, charging them with crimes against the constitution and an attempt to overthrow the state. Kássio Nunes Marques and André Luiz de Almeida Mendonça, the two Bolsonaro-appointed justices, believe the accused should only be condemned for the latter charge and therefore receive shorter sentences of as little as nine months. Bolsonaro and his supporters say Dino should abstain from the hearings, as he served as President Lula’s Justice Minister at the time of the coup attempt.
Two of South America’s largest airlines in US court dispute
On 28 February 2024, lawyers for Brazil’s largest airline, Gol, began court proceedings against rival LATAM for allegedly trying to deliberately derail Gol’s recovery from bankruptcy. On 12 February, Bloomberg and Reuters reported that Gol won approval to bring the case to US courts. Chile-based LATAM Airlines and Gol, are, respectively South America’s first- and second-largest airlines by market capitalization. Gol, which has USD4 billion in debt, claims that LATAM took advantage of Gol’s bankruptcy when it tried to acquire Gol’s leased Boeing 737 fleet, despite LATAM not operating those aircraft. Gol has also accused LATAM of an aggressive campaign to poach its pilots and discourage travel agents from booking Gol flights. Gol argues that LATAM is violating US bankruptcy laws. Brazil’s airline industry is currently seeking government support to overcome financial hardships, only worsened by the COVID-19 pandemic.
Acre suffers flooding weeks after wildfires blaze through region
On 2 March 2024, Brazilian outlet g1 reported that 86% of cities in the Amazonian state of Acre were under a state of emergency as the Acre River’s level nearly doubled in 24 hours. In early February, Acre authorities declared a state of emergency due to widespread wildfires. By the middle of the month, widespread flooding had affected 100,000 people—more than 10% of the state’s population. Acre governor Gladson Cameli, a supporter of former president Jair Bolsonaro, advocates for deforestation and exploiting the Amazon region. Cameli counts on the support of evangelical voters, who make up about 40% of the population. However, deforestation and subsequent climate change pose a major threat to the region. Man-made climate change and warmer average temperatures have delayed the rainy season, meaning wildfires go uncontrolled for longer. Warming ocean temperatures mean heavier rainfall in the region when the rainy season does begin, causing widespread flooding. In 2023, Acre had the third-lowest GDP of any Brazilian state and was ill-equipped to deal with the effects of climate change and El Niño, which have also affected weather patterns this year.
CHILE
Venezuelan government critic found dead in Maipú
On 1 March 2024, Chilean police found the body of former Venezuelan lieutenant Ronald Ojeda, a critic of President Nicolás Maduro’s regime in Venezuela, in a deprived area of the Maipú commune of Santiago. Ojeda was kidnapped from his Santiago home on 21 February by a group of men disguised as investigative police officers (PDI), who drove away in what appeared to be a PDI vehicle. Authorities found his body in a suitcase buried in cement—a similar modus operandi seen in other killings in the north of Chile carried out by the Los Gallegos gang. That group is tied to the Venezuelan trafficking organization, Tren de Aragua. In an interview with Channel 13 on 3 March, the lawyer for Ojeda’s widow said that the reason for Ojeda’s kidnapping and murder is unknown, and the criminals did not make contact with the family during the 10 days Ojeda was missing. The case has caused panic in Chile due to the kidnapping’s sophisticated nature and the kidnappers’ ability to pass as police.
Scientists warn wildfires could get worse once El Niño ends
On 29 February 2024, experts from the universities in Santiago and Talca told local newspaper La Tercera that conditions for wildfires could become more acute when El Niño is expected to end in April or May. According to climatologists Raúl Cordero from the University of Santiago and Patricio González from the University of Talca’s Irrigation and Agroclimatology Research Center, the La Niña phenomenon is likely to start in June once El Niño ends. While El Niño warms the Pacific Ocean, La Niña cools it. The cooler ocean is expected to cause a drop in Chile’s precipitation. Scientists warn it could lead to a drought lasting as long as three years. Central Chile has been experiencing increasingly hot summers, leading to more wildfires. In February 2024, more than 130 people were killed in wildfires. With the drought leading to drier conditions, there is a danger that the next few years could see even more devastating wildfires.
Saudi-owned petroleum company Aramco arrives in Chile
On 3 March 2024, Saudi Arabian state-owned oil company Aramco officially acquired Esmax, the firm licensed to operate Brazilian state-owned Petrobras gas stations across Chile. Neither party has disclosed how much Aramco paid for the acquisition. Esmax had revenues totaling about USD2.5 billion in 2022, Reuters reported. Aramco is the world’s largest petroleum company. It expressed interest in expanding to Chile in September 2023, and Chile’s financial authorities approved its full acquisition of Esmax on 9 February. Aramco has said it views Chile as a platform from which to expand further across South America.
COLOMBIA
IBM report highlights Colombia cyberattacks in 2023
On 21 February, IBM released the 2024 X-Force Threat Intelligence Index, which shows Colombia as ranking second among Latin American countries affected by cyberattacks in 2023. Colombia received 17% of the total Latin America-based attacks recorded by IBM. Brazil remained the most-attacked country in the region, with 68% of all cases. IBM X-Force found Latin America to be the world’s fourth-most-affected region for cyberattacks in 2023, accounting for 12% of the incidents it addressed. The report found ransomware to be the top cybercriminal tactic in Latin America, with 31% of all attacks recorded in the region. Colombia suffered one of the country’s biggest cyberattacks in September 2023 when internet service provider IFX Networks was hit by ransomware. The attack affected more than 700 public and private organizations in Colombia, Chile, and Panama, including several areas of the Colombian government.
ELN releases hostages as part of peace talks
On 1 March, the Ejército de Liberación Nacional (ELN) announced it had released all the hostages it was holding as part of an agreement reached with the government during the last round of peace talks in Havana, Cuba. The February agreement included a 180-day ceasefire extension and the release of those kidnapped by the ELN for extortion. The head of the Colombian delegation for the ELN peace talks, Vera Grabe, said 29 people were released. However, Norte de Santander Peace Councilor Luis Fernando Niño said the exact number of hostages ELN was holding is unknown. Niño added that there are discrepancies in the number of kidnapped people recorded in the Norte de Santander region bordering Venezuela—particularly in the Ocaña municipality—that no group has claimed responsibility for. The peace talks between the government and ELN will resume in April in Venezuela.
Migrants resume journeys through Darién Gap after five-day interruption
On March 1, maritime companies resumed operations to transport migrants from Colombia to the US via the Darién Gap in Panama after a five-day strike protesting the arrest of two captains. On 26 February, Colombian authorities arrested two boat captains transporting migrants to Panama in Turbo and Necoclí, two coastal municipalities in the Antioquia department. The arrests interrupted the flow of migrants through the Darién Gap, a dangerous and roadless jungle crossing between Colombia and Panama that migrants use to reach the US. The boat company employing the captains suspended their services in protest. The action left about 8,000 people stranded, based on figures from Colombia’s Ombudsman’s Office, the Associated Press (AP) reported. AP reported that 500,000 people crossed the Darién Gap in 2023, noting that Colombia’s Gulf Clan criminal group largely controls the area. The International Organization for Migration (OIM) said in its latest report that an average of 2,643 migrants irregularly enter Panama’s Darién province daily. Southern Pulse Consultant Marco Bastos reported that Latin America’s economic stagnation over the past decade has been a major factor contributing to the migrant crisis in the Darién Gap. Colombia has also seen an increase in migration over the past year through a “luxury” alternative route from West African countries that involves flying into Bogotá’s El Dorado International Airport and paying traffickers up to $10,000 to reach the US without crossing the jungle.
ECUADOR
Noboa tours US and Canada after confirming 2025 reelection bid
On 25 February, President Daniel Noboa confirmed that he would seek reelection in the 2025 presidential race. Noboa took office in November 2023 after winning a snap election. Noboa has an 81.4% approval rating, according to Ecuadorian market and public opinion research firm Cedatos—the highest for any president since 1979. On 1 March, Noboa and Finance Minister Juan Carlos Vega met with Wall Street investors to seek financing for infrastructure and renewable energy projects. On 3 March, Noboa attended the leading Prospectors & Developers Association of Canada (PDAC) mining conference in Toronto to promote Ecuador-bound investments. The meeting was part of a visit to the US and Canada between 29 February and 6 March.
Oil trader Gunvor settles with US and Swiss authorities in Petroecuador corruption case
On 2 March, Geneva-based multinational oil trading company Gunvor announced that it had reached a USD661 million settlement with US and Swiss prosecutors after being convicted of paying about USD7.5 million in bribes to officials from Ecuador’s state-owned oil company Petroecuador between February 2013 and February 2017. The US federal court in Brooklyn ordered the company to pay a criminal fine of USD374 million and forfeit more than USD287 million in “ill-gotten gains,” the Associated Press reported. A day earlier, Switzerland’s Public Ministry convicted Gunvor after Swiss authorities determined it directly benefited from bribe payments. The payments stemmed from Petroecuador awarding contracts to two Gunvor-linked companies: Chinese state-owned energy trading company Unipec, and Thai state-owned Petrotailandia.
Panama seizes five tons of cocaine hidden in banana shipment leaving Guayaquil
On 29 February, Panama Security Ministry Juan Manuel Pino announced that authorities seized five tons of cocaine hidden in a banana container from a Spain-bound ship that arrived from the port city of Guayaquil, Ecuador. Panama’s National Aeronaval Services seized the Maltese-flagged vessel when it arrived in the port of Colón, Panama, with the support of French intelligence. Panamanian authorities consider this to be one of the largest seizures the country has ever recorded. It was estimated that the sale price in European countries such as Belgium could be as high as USD90,000 per kilogram. Ecuador is the world’s largest banana exporter, exporting 6.5 million tons by sea annually. This has made the country vulnerable to drug traffickers, who use banana shipments to smuggle cocaine. European authorities made record cocaine seizures from banana shipments originating from Ecuador in 2023, the Associated Press reported, with Spain seizing nine-and-a-half tons in a single shipment and the Netherlands seizing nearly eight tons of cocaine. Greece and Italy also reported similar interceptions.
MEXICO
Presidential campaigns officially kick off
On 1 March 2024, Mexico’s three presidential candidates officially began campaigning with rallies focused on public security in three different cities. Claudia Sheinbaum, representing the MORENA-PVEM-PT alliance, started her campaign in Mexico City, highlighting her experience in reducing high-impact crime while leading Mexico City’s government. Sheinbaum is the leading candidate based on El Financiero’s latest poll. Meanwhile, opposition alliance (PAN-PRI-PRD) candidate Xóchitl Gálvez kicked off her campaign in northern Zacatecas state with a speech in Fresnillo, the Mexican city with the highest perception of insecurity. She emphasized the need to “recover peace and prosperity in Mexico”. Lastly, Citizen Movement’s (MC) candidate Javier Álvarez Máynez began his campaign in Guadalajara, a city located in the MC stronghold of Jalisco state. He presented himself as an alternative for voters, promoting an innovative approach based on “dignity, service, and the fight against injustice”. The National Electoral Institute (INE) established that electoral campaigns must end on 29 May, three days before the 2 June elections.
Mexico threatens to retaliate against Canada for new visa requirement
On 29 February 2024, the Canadian government announced it would require Mexican citizens to apply for visas to enter the country as a response to domestic pressure from asylum seekers arriving as tourists at Canadian airports. Canada’s government is introducing a system under which Mexican visitors who already have a US visa would be exempt from the requirement. In response, President Andrés Manuel López Obrador threatened to skip the North American Leaders’ Summit scheduled for April in Quebec province. In a press statement, Mexico’s Ministry of Foreign Affairs warned that the Mexican government could reciprocate by imposing visas on Canadians. More than 25,000 Mexicans applied for asylum in Canada in 2023, but fewer than 3,000 have been approved. In 2022, there were fewer than 7,500 applications from Mexicans.
Government considers up to a 25% increase in tariffs on Asian imports
On 27 February 2024, the Economy Ministry (SE) informed that the government is considering raising tariffs by up to 25% on at least 600 products imported from Asia due to unfair competition. SE clarified that 205 tariffs correspond to aluminum and steel products, while the rest correspond to sectors such as footwear, textiles, plastics, glass and paper, among others. According to SE, these products enter the country with a lower price than they would in the Mexican market, which is known as "dumping." SE explained that the tariff percentage increase could be from 10% to 25%, although measures will be based on World Trade Organization (WTO) rates.
PERU
China interested in funding bi-oceanic train to connect Chancay Port with Brazil
On 3 March, Gestión reported that the Peruvian-Chinese Chamber of Commerce (Capechi) indicated that the Chinese government is interested in investing in a bi-oceanic train. The train would connect ports on the Atlantic and Pacific oceans, including the new Chancay “mega port” scheduled to open later this year. The Chinese government has not provided an official statement or taken concrete steps on the issue. The train would connect and promote trade between Peru, Bolivia, and Brazil. Chancay is a USD3.5 billion mega port majority owned by China's state-owned shipping giant Cosco, with Peruvian mining company Volcan holding a minority stake. It is expected to start operating in November 2024. According to Gestión, the multi-purpose mega port about 80 kilometers north of Lima could significantly reduce export times from South America to Asia from 35 days to 10-12 days by avoiding intermediate ports. Chancay is part of China’s Silk Road initiative and will be the first port China controls in South America. It will process exports including Peruvian copper and Brazilian soy.
Mining minister denies conflict of interest in Tía María mining project
On 1 March, the recently appointed Energy and Mines Minister Rómulo Mucho denied having a conflict of interest in the Tía Maria project. The copper mine in the southern Arequipa region is owned by Southern Peru, a subsidiary of the Mexican mining conglomerate Grupo Mexico. The Tía Maria mining project has been delayed due to community opposition, but Mucho has worked to revive efforts to begin the project. On 23 February, the weekly news agency Hildebrandt en sus Trece reported that Minister Mucho is the founder and manager of Pevoex, a company that contracts with several mining companies including Southern Peru. Pevoex has also provided services to other mines such as Nexa Resources Atacocha, Pan American Silver Huaron, Minsur, Buenaventura, and Ares. These mines have recorded 801 environmental violations according to Peru’s Environmental Evaluation and Enforcement Agency (OEFA), El Buho reported in an article about Hildebrandt en sus Trece’s investigation. Mucho denied being Peovex’s current manager and said that the change of ownership in public registries was “in process.” Peruvian congressman Jaime Quito (from the leftist Peru Libre party) announced that he will submit a motion to Congress to question Minister Mucho about the conflict of interest allegations.
Attorney General opens investigation against political party linked to mutiny leader
On 29 February, the Attorney General’s office opened an investigation into allegations of undemocratic behavior against the newly registered Alianza Nacional de Trabajadores, Agricultores, Universitarios, Reservistas y Obreros (ANTAURO). The political party is led by Antauro Humala, the leader of a failed 2005 uprising. Antauro, a former army major and brother of former Peruvian President Ollanta Humala, was released from prison in 2022 after serving a 19-year sentence for the failed uprising and a police station takeover that killed four police officers. The political party received its registration in December 2023 so that it can participate in the 2026 general elections. However, the organization is not formally registered in Antauro’s name, which will pose challenges to the investigation. The Attorney General could request that the Supreme Court declare the ANTAURO political party illegal if it is found by the court to have violated fundamental rights or legitimized violence for political purposes. Antauro, a self-described “ethnonationalist,” has praised the brutal Shining Path insurgency as the “best thing” that the left has provided, El Comercio reported. In a December 2023 interview with La República, Antauro said if he came to power he would leave the American Convention on Human Rights because he plans on executing former presidents linked to corruption.
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