All Categories

Date: 31 May. If no presidential candidate secures an absolute majority of the valid votes in the first round, a second round run-off will be held on 21 June.

Type: Presidential and congressional. Congressional elections will be held on 8 March for the lower chamber of congress and senate.

Main contenders: Iván Cepeda (ruling left-wing coalition Pacto Histórico); Abelardo De la Espriella (far-right Defensores de la Patria); Sergio Fajardo (centrist Dignidad y Compromiso). One candidate to emerge from a consultation being held concurrently with congressional elections to represent the Gran Consulta por Colombia coalition from Senator Paloma Valencia (right-wing Centro Democrático [CD]); Juan Carlos Pinzón (unaffiliated); Juan Daniel Oviedo (unaffiliated); Aníbal Gaviria (centrist Partido Liberal [PL]); Juan Manuel Galán, centrist Nuevo Liberalismo; David Luna, right-of-centre Cambio Radical [CR]); Vicky Dávila (unaffiliated); and Mauricio Cárdenas, centre-right Partido Conservador [PC]).

Colombia will hold potentially its most consequential elections in a generation on 31 May. Much the same could have been written ahead of the 2022 contest which saw the country’s first genuine left-wing candidate, Gustavo Petro, a former M-19 guerrilla, come to power. Petro’s victory and the challenge he posed to the political establishment ultimately pushed most right-wing and centrist parties to form an electoral alliance to try and prevent his continuity candidate (Petro is constitutionally barred from seeking re-election), Senator Iván Cepeda, from succeeding him. But they risk being outflanked by a media-savvy far-right populist, Abelardo De la Espriella, who has shot to prominence.

There is a huge amount at stake. President Petro’s combative rhetoric has seen him engage in spiralling spats on social media with US President Donald Trump, upending years of close bilateral diplomatic relations. This was thrown into sharp relief by the US military operation to seize Venezuela’s leader Nicolás Maduro on 3 January, after which Trump publicly mooted intervention in Colombia, telling Petro to “watch his ass”. Colombia now finds itself in a new geopolitical reality with a more muscular US bent on reassertion of its primacy in the region, rewarding ideological allies, such as Argentina’s President Javier Milei and El Salvador’s President Nayib Bukele, and wielding the big stick for those that do not share this affinity. Against this backdrop and with the two frontrunners, Cepeda and De la Espriella, situated on either extreme of the political spectrum, these elections eclipse those of 2022 in significance for Colombia and its future.

Clearly concerned that the prospect of his suffering the same fate as Maduro might not be as far-fetched as it would have seemed, Petro put in a call to Trump to try and defuse tensions on 7 January and they spoke for over an hour. Trump said he appreciated the gesture and the two heads of state even agreed to meet in the White House (a date of 3 February was subsequently agreed), but even if this goes comparatively well, relations could still sour in the months ahead, especially if Cepeda falls back in the polls and Petro suspects US electoral interference in favour of his right-wing rivals.

Cepeda enjoyed a decent lead in electoral surveys published in late 2025 but in the most recent survey, by AtlasIntel, carried out in the days following the US military operation in Venezuela, De la Espriella moved ahead, polling 28% to 26.5% for Cepeda. While they were separated by little, the survey projected an emphatic victory for De la Espriella over Cepeda in a likely second round on 21 June of 44.2% to 34.9%.

A separate survey released a week later by Spanish pollster GAD3 suggested Cepeda retained an advantage over De la Espriella of 30%-22% and would defeat him in a run-off by 40%-32%. The sample was smaller, however, with only some 1,200 respondents compared with over 4,500 in the AtlasIntel poll. Where both polls agreed was that nobody else is in contention – for now. AtlasIntel had Sergio Fajardo, a centrist former mayor of Medellín and former governor of Antioquia, in third place on 9.4% followed by Senator Paloma Valencia, of the right-wing Centro Democrático (CD), and Juan Carlos Pinzón, a former defence minister and ambassador to the US, tied in fourth on 5.1%. The GAD3 poll had the third-place candidate, Valencia, even further adrift on 3%.

The race could still be shaken up by developments on 8 March, however, when the Gran Consulta por Colombia coalition will hold a consultation featuring eight candidates ranging from the centre to the right of the spectrum. Both surveys suggested that Valencia is the favourite to emerge triumphant in this contest. If the support for the other seven candidates predominantly transferred to her afterwards, she would shoot up the polls.

Together with Pinzón’s support, Valencia would reach 10.2% and while none of the other candidates competing in the consultation polled more than 1.8% in the AtlasIntel survey, for instance, altogether their combined support comes to 6.4%, bringing a grand total of 16.6%. Even if all of this support were to transfer to Valencia en masse, it would still leave her some way off the frontrunners, but she would be transformed into a viable contender and would benefit from the well-oiled party machinery of traditional parties such as the centrist Partido Liberal (PL) and centre-right Partido Conservador (PC).

The more moderate right and centrist coalition will hope that whichever candidate emerges from their consultation on 8 March will be able to pick up traction rapidly and overhaul De la Espriella when voters’ minds are more concentrated. However, he or she would only have just over two months to rally support among a disparate group of parties united only by their opposition to Petro and determination to prevent Cepeda from coming to power. As a corollary, if the victor in the consultation fails to make much of an impression on the polls, these parties could switch their support behind De la Espriella, despite some reservations, and could certainly be relied upon to do so should he make it through to a run-off against Cepeda, in order to thwart Petro.

The established political class, much of which was prepared to cooperate with Petro at the outset of his term, with the PL and PC initially part of his grand coalition, now views him as a dangerous liability. It views him as having set Colombia onto a collision course with its powerful ally in the north due to his inability to subordinate ideological conviction to pragmatic diplomacy; as having threatened democracy by encouraging supporters to take to the streets to intimidate congress to approve his government’s reform agenda, and by constantly flirting with convening a constituent assembly to bypass institutional checks and balances; as having allowed the country to become overrun by drug trafficking through a failed ‘total peace’ initiative with the country’s illegal armed groups; and as having presided over a slump in investment due to his anti-fossil fuel policies and hostility to the private sector.

For all these reasons, the establishment sees Cepeda as unpalatable even though his discourse is more moderate than Petro’s. The rise of De la Espriella, a charismatic lawyer with a strong social media presence, however, raises the prospect of a repeat of the 2022 election, in which the conservative establishment was muscled out by populist right-wing outsider Rodolfo Hernández, who lost to Petro in the second round. De la Espriella would bring his own brand of uncertainty and unpredictability. Centrist and right-of-centre parties thought they could contain and influence Argentina’s far-right president, Javier Milei, but he has kept them at arm’s length, taking their support and giving back little in return.

US relations

Points of agreement in the White House meeting between Presidents Petro and Trump are possible. There is scope, for instance, for a joint military strike on the Colombian guerrilla group Ejército de Liberación Nacional (ELN), much of which is based across the border in Venezuela. But given Trump’s propensity for interfering in regional electoral processes in favour of right-wing allies, there is a strong possibility of a return to the acrimonious exchanges which have characterised relations between Petro and Trump on social media.

Cepeda

Iván Cepeda has been deeply impacted by Colombia’s long-running internal armed conflict. His family was often in exile. His father, Manuel Cepeda Vargas, president and secretary general of the Partido Comunista Colombiano (PCC), was a senator for the far-left Unión Patriótica (UP) when he was killed by right-wing paramilitaries in August 1994. Iván Cepeda has campaigned for years in defence of human rights and to support the victims of the country’s political violence.  

ECUADOR | Despidos compulsivos. El gobierno ha despedido a 2.700 empleados públicos, con paquetes de compensación, en los ministerios de salud, interior, vivienda, transporte y agricultura, como también en instituciones del estado como la prisión de rehabilitación. El ministro para las relaciones laborales, Richard Espinoza, dijo que el gobierno estaba realizando una gran reestructuración del Estado: hay 470.000 empleados del sector público en Ecuador, que tiene una población de solamente 14,3m. El dijo que 2.000 empleados públicos más llegarán a la edad de la jubilación para fines de año y sus posiciones no serían cubiertas. Dijo la modernización del Estado apunta a “optimizar el talento humano”, cortando la innecesaria burocracia y mejorando la eficiencia. No hizo mención de la reubicación de aquellos que perdieron sus empleos. Los sindicatos están prometiendo marchas al palacio presidencial Carondelet en las próximas semanas.

VENEZUELA | Más grande que Bolívar. “Hemos logrado lo que Bolívar no pudo lograr: la verdadera independencia,” dijo el Presidente Hugo Chávez a los miembros reunidos de las fuerzas armadas nacionales Bolivarianas (FANB) durante su aparición televisada la semana pasada para anunciar un masivo 50% de aumento salarial para los militares.

Además del incremento salarial, que será aplicado retroactivamente desde setiembre, Chávez también anunció beneficios especiales, como tasas de bajo interés en la compra de casas y autos, y la provisión de apartamentos para unos 800 miembros de las fuerzas armadas en un complejo militar de vivienda.

El incremento del salario está bastante por encima de la inflación, que está camino a llegar a casi 30% este año, y destaca la necesidad de mantener a los militares a los que Chávez ha trabajado duramente para politizarlos firmemente de su lado ante las próximas elecciones de octubre. Chávez insistió que la oposición “odia” a las fuerzas armadas, acusándolas de “terrorismo y corrupción”.

GUATEMALA | Pérez Molina salva el primer obstáculo. El Presidente electo de Guatemala, Otto Pérez Molina ha logrado una de sus principales prioridades antes de asumir el poder en enero –la aprobación del presupuesto del Estado 2012. Días antes de la fecha tope constitucional del 30 de noviembre, los 158 miembros del congreso aprobaron el presupuesto de Q$59,5bn (US$7,6bn) subiendo de Q$54,4bn (US$6,96bn) en 2010 (que fue incrementado a US$7,2bn en junio de 2011).

El proyecto de ley fue aprobado por 110 a 37 votos. Se opusieron la gobernante Unidad Nacional de la Esperanza (UNE) y Libertad Democrática Renovada (Líder) del rival de Pérez Molina en la segunda ronda, Manuel Baldizón, el proyecto de ley de 2012 (que es equivalente a 15,2% del PIB) fue sellado con el acuerdo que el gobierno no haría transferencias para permitir a las ONG llevar adelante proyectos de infraestructura –una provisión que apuntaba a estimular la transparencia. Con 64,5% del gasto que irá a costos de operaciones, 20,3% en inversiones y 15,2% en pagos del servicio de la deuda pública, el presupuesto está basado sobre un crecimiento proyectado de 3,7% para 2011, de acuerdo con el banco central, una inflación de 4%-6% para 2011, como fue proyectada por el FMI y una toma fiscal de Q$43,6bn (US$5,58bn). Unos Q$4,72bn (US$605m) provendrán de préstamos extranjeros.

ECUADOR| Crecimiento record. La economía creció por un 7,8% en el 2011. La prensa local, la cual predominantemente hostil al gobierno, claramente encontró difícil reportar esta noticia, proveyendo poca cobertura de lo que fue la expansión de crecimiento económico más impresionante desde que el Presidente Rafael Correa asumió el poder en el 2007. Se enfoco en el hecho de que la cifra del crecimiento del PIB fue menor a la proyección oficial para el año del 9%, y vino después de años de crecimiento modesto (0,4% en el 2009 y 3,6% en el 2010). Los precios más altos del petróleo y un incremento en la producción ayudaron al sector petrolero a crecer un 4,2% año en año, recuperándose de una contracción del 2,7% en el 2010.

PERU| Gaseoducto. El Presidente Ollanta Humala inauguró un gaseoducto de 1.000 Kms en el sureño pueblo de Quillabamba la semana pasada. Humala dijo que el gaseoducto de US$3mm,  que transportará gas natural desde el enorme yacimiento de gas de Camisea en Cusco a la sureña región de Arequipa, constituye el proyecto de infraestructura más importante del Perú del último siglo. Una de las promesas electorales de Humala fue la reducción del costo del gas en el país, alegando que los gobiernos anteriores habían priorizado la exportación del gas de Camisea. El gaseoducto, el cual será construido por el consorcio Kultur-Odebrecht desde abril, enviara gas natural del yacimiento Camisea a un complejo petroquímico en la costa del Pacifico que será construido por el gigante energético brasilero Petrobras. Humala dijo que el proyecto proporcionaría 40.000 empleos, y podría general un crecimiento del PBI del 2%. El 3 de abril el gobierno lego a un acuerdo con el consorcio Camisea asegurando que el gas natural del Lote 88, el bloque mas grande, sea usado exclusivamente para el mercado interno y no para las exportaciones.

ARGENTINA | Difunden cifras de comercio positivas tempranamente. La Presidenta de Argentina, Cristina Fernández, dijo esta semana que Argentina había registrado un superávit comercial de US$12,6mm en el 2012, un incremento del 26% sobre el año anterior. Según Fernández, la cifra positiva fue el resultado de las varias políticas adoptadas por su gobierno el año pasado, lo que permitió que el país reduzca las importaciones en general por un 8%, por lo tanto compensando la reducción del 5% en las exportaciones.

Desde el 2011, Argentina ha adoptado una serie de medidas restrictivas del comercio que apuntan a mantener positiva la balanza comercial del país. Sin embargo, estas medidas han sido criticadas en el exterior como siendo abiertamente proteccionistas, y en el país debido a que las mismas restringen la provisión de bienes al mercado local y reducen la competitividad de Argentina. De todos modos, Fernández, quien presentó las cifras durante un discurso televisado nacionalmente, antes de embarcarse en una gira por Asia, dijo que ella quería presentar las cifras antes de que fueran publicadas por el ministerio de economía, para mostrar que la política económica de su gobierno estaba produciendo resultados. Con toda probabilidad, el deseo de Fernández de transmitir los resultados positivos estaba motivado por la conciencia de que otros resultados económicos, más notablemente la inflación de dos dígitos, no han sido vistos con una luz positiva.

CHILE | Turismo récord. El 14 de enero, el vice ministerio de turismo de Chile reveló que 3,5m de visitantes extranjeros llegaron al país en el 2012, un incremento del 13% sobre el 2011, y un nuevo récord. La Viceministra Jacqueline Plass señaló que el incremento del 13% estaba bastante por encima del promedio regional del 6%, lo que significa que el interés en el país es actualmente uno de de los más altos en la región. Plass agregó que las cifras muestran que en dos años el número de visitantes saltó de 2,7m a más de 3m en sólo dos años, destacando que “el país no ha visto tales cifras de crecimiento [en turistas] desde el 2005, cuando el crecimiento fue del 13,4%”. Ella atribuyó esto al hecho de que después de la crisis financiera global, el número de visitantes de la región está de nuevo creciendo.

De acuerdo con las cifras del vice ministerio, los argentinos aún son los visitantes más asiduos, representando el 40% de todos los visitantes, seguidos por los brasileros, colombianos, y australianos. De hecho, la viceministra señaló que el mayor incremento de turistas observados en el año fue de América del Sur (15,2%); seguidos por Asia (15%); Europa (4,5%) y América del Norte (4,3%).

Tomando en consideración la desaceleración económica en curso, que afecta a Europa, Plass dijo que en el 2013 las autoridades se concentrarían en promover más el turismo en América del Norte para así atraer más visitantes de una región donde hay espacio para crecer. Ella revelo luego que su objetivo era llegar a la meta de los 4m de turistas este año.

PARAGUAY | Promoción de Moody’s. La agencia de ratings de EU, Moody’s, elevó de grado los bonos del gobierno paraguayo, de B1 a Ba3 en su primera revisión de las finanzas del país este año. Moody’s justificó la promoción citando factores como la sostenida acumulación de reservas extranjeras y la proyección de un incrementado gasto en infraestructura que permitiría al gobierno paraguayo mantener la cifras en concordancia con la calificación de Ba3 a pesar de la reciente volatilidad del crecimiento económico

La agencia destaco como un hecho positivo que el congreso haya aprobado recientemente una ley que obliga al gobierno a invertir la mayor parte (80%) de los royalties extras que el país recibirá por la energía producida en la planta hidroeléctrica de Itaipú que cede a su socio, Brasil, en gastos de infraestructura y educación. Además, señala que el país podría potencialmente ser beneficiario de importantes niveles de inversión extranjera directa (IED) vinculadas con el desarrollo de proyectos de extracción de titanio y de producción de aluminio que no solamente “contribuirían a diversificar la economía paraguaya en el mediano plazo [...]” sino también “proveerían protección contra impactos negativos sufridos por el sector agrícola”. Esto, después de que el gobierno paraguayo, liderado por el Presidente Federico Franco anunciará el 21 de diciembre que había firmado un memorándum de entendimiento con la firma Británica-Canadiense, Río Tinto Alcan, con relación a la instalación de una planta de aluminio de US$4mm en el país.

La promoción de Moody’s será una buena noticia para el gobierno de Franco, no solamente porque ha impulsado la llegada de Río Tinto al país, sino también porque ha anunciado que emitiría más bonos este año, para financiar el desequilibrado presupuesto heredado de la administración previa.

• Trump desembarca en Uruguay

El 15 de enero, Eric e Ivanka Trump, los hijos del magnate en bienes raíces, Donald Trump, lanzaron la construcción de la ‘Torre Trump’, una torre residencial de lujo en Punta del Este, Uruguay. La Torre Trump, de US$100m es el primer proyecto llevado adelante por la familia Trump en América del Sur, y solamente el segundo en la región después del recientemente concluido Trump Ocean Club Tower, en Ciudad de Panamá. La nueva torre estará ubicada en la exclusiva playa de Barra Brava de la popular ciudad turística y, según Eric los 129 apartamentos (con un precio de entre US$750.000 y US$3m) marcarán “un antes y un después” en alojamiento de lujo en Punta del Este. Los Trump estaban acompañados de la ministra de turismo, Liliam Kechichián, y la embajadora de EU en Uruguay, Julysa Reynoso.

Con la ayuda de un pequeño “bono” por valor de R$2m (US$860.000) en enmiendas para los miembros de la comisión presupuestaria del congreso, la legislatura aprobó el presupuesto 2014 del gobierno, de R$2,48trn (US$1,06trn) en las tempranas horas del 18 de diciembre. Mostrando una notable indiferencia ante la disminuida tolerancia del electorado brasilero por los fondos discrecionarios de los partidos políticos, los legisladores agregaron R$100m (US$42m) a los R$264m asignados para las campañas electorales de los partidos políticos, un incremento del 37,9%. Cuatro grandes proyectos de obras públicas también recibieron la luz verde de aprobación del congreso, pero el programa de Aceleração do Crescimento (PAC), vio su financiamiento recortado levemente. El salario mínimo también fue aumentado marginalmente.

El presupuesto estaba basado en un crecimiento del PIB del 3,8% en el 2014, una evaluación optimista de acuerdo con la mayoría de los economistas (que predicen que el crecimiento será de alrededor del 2%), pero cayendo de la proyección original del gobierno del 4,5%. También asume una inflación del 5,8% a finales de año, y un promedio de R$2,3 por dólar para todo el 2014. El presupuesto también establece una meta de superávit del sector público del 3,17% del PIB, requiriendo un ahorro de R$167,3mm (US$71mm). Este año el superávit luce fijado en alrededor del 1,6%, bastante por debajo de el del 2013 de 2,3%.

El salario mínimo subirá a R$724 (US$311) de su actual nivel de R$678. El PAC, introducido por primera vez por el ex presidente Lula da Silva (2003-2010), tendría su presupuesto  recortado por R$1,3mm (US$500m): tendrá un presupuesto de R$61,8mm en el 2014. El PAC comprende inversiones del gobierno federal, empresas estatales, y del sector privado en la construcción, obras sanitarias, energía, transporte, y logística. “Hemos optado por un presupuesto más dirigido a fin de estar dentro de los límites de la realidad económica del país”, dijo Miguel Corrêa, un diputado del PT en la comisión del presupuesto. “No queríamos desacreditar los números del presupuesto a medidas que aparezcan incontingencias”.

La comisión suspendió el financiamiento de dos grandes proyectos de infraestructura en los cuales se sospechan serias irregularidades. En cambio, se optó por liberar los fondos para construir el ferrocarril de integración Este-Oeste en Bahia; la autopista BR-448 en Rio Grande do Sul; y la construcción de una gran instalación deportiva en Paranaíba, Piauí. El  proyecto final incluye la construcción de un puente de R$77m en el estado norteño de Pará.

Legisladores de la oposición también trataron de implementar una ley forzando a la presidenta a aprobar cualquier enmienda al presupuesto hecha por el congreso. Al final, el gobierno se resistió; en el futuro el presidente retendrá el derecho al veto.

Cambios ministeriales a comienzos del 2014

En una entrevista con los medios locales el 18 de diciembre, la Presidenta Dilma Rousseff dijo que ella hará una reorganización ministerial a fines de enero. Sin embargo, no dio ninguna pista acerca de quienes serían reemplazados. En particular, ella respondió con cierta aparente frustración a una pregunta acerca del futuro de Guido Mantega, el ministro de finanzas. “Por la vigésima o trigésima vez, reitero que el ministro está haciendo perfectamente bien en su posición actual”, ella dijo.

Alrededor de 12 de los 39 ministros del gabinete se presentarán a elecciones en el 2014 y, por lo tanto, deberán dejar sus cargos. Entre ellos esta la jefa de gabinete, Gleisi Hoffmann, quien competirá en su estado natal de Paraná; y Alexandre Padilha, el ministro de salud, quien competirá por la gobernación de São Paulo.

Rousseff también se mostró reluctante para hablar acerca de sus rivales para la presidencia el año próximo. “Las elecciones aún  no están en mi agenda”, ella dijo a los periodistas.

• “Dos piernas cojas”

En comentarios a la prensa, el 16 de diciembre, el ministro de finanzas, Guido Mantega, describió la economía brasilera como caminando sobre “dos piernas cojas”. Él cargó la culpa del desempeño insatisfactorio de Brasil al crecimiento lento en los países desarrollados y la falta de crédito para respaldar el gasto del consumidor, pero también dijo que Brasil estaba en la senda de la recuperación, que continuaría en el 2014.

ECUADOR-VENEZUELA | Plummeting bilateral trade. In an interview with the Ecuadorean daily, El Comercio, published on 4 March, the president of the Ecuadorean-Venezuelan chamber of commerce (Caceven), Milton Ortega, said that Ecuadorean exports to Venezuela fell by 49% in 2013.

The negative result is particularly surprising given the close ideological and political ties linking the governments led by Ecuador’s President Rafael Correa and his Venezuelan counterpart, Nicolás Maduro. Ecuador is a member of the Alianza Bolivariana para los Pueblos de Nuestra América (Alba), the Venezuelan-led regional economic integration initiative, but despite the various pledges to promote greater integration between the two nations, Ortega said that Ecuadorean businessmen do not feel confident enough to export to Venezuela due to the domestic economic problems the country faces.

In particular, Ortega explained that as a result of the difficulties Venezuelan business have in securing US dollars to pay for exports in the state-controlled foreign currency markets, Venezuelan importers currently owe Ecuadorean exporters US$170m. Indeed Ortega said that Caceven calculates that 20% of the fall in exports last year is the result of Venezuelan importers’ inability to meet payments.

More worryingly, Ortega attributed the remaining 40% of the drop to a revision of official export figures as a consequence of the irregularities discovered in Ecuadorean export transactions to Venezuela conducted under the Sistema Unitario de Compensación Regional (Sucre) virtual currency exchange system created by the Venezuelan government in 2010 as a way of bypassing its foreign currency liquidity problems and promoting more trade between Alba members.

To date only Ecuador and Venezuela regularly use the Sucre system to conduct commercial transactions. But last year Ecuadorean and Venezuelan authorities announced the launch of a joint investigation into a series of irregularities discovered in some Sucre transactions dating all the way back to 2010 [WR-13-27]. The evidence seems to suggest that some of the transactions were not only significantly overvalued but ‘fake’, resulting in millions of dollars irregularly drawn out of the system. While last year the Ecuadorean government reported that after conducting a review of the Sucre there were now no “outstanding commercial debts” between the two countries, following the review the value of bilateral transactions made via the Sucre shrank by US$81.8m between 2012 and 2013.

VENEZUELA | Oil exports to US hit record low. On 27 February the US Energy Information Administration (EIA) released its latest crude oil import figures which showed that Venezuelan oil imports averaged 796,000 barrels per day (bpd) in 2013, 17% less than in 2012 and the lowest average figure since 1988.

Oil is Venezuela’s main export and source of revenue. Despite all the anti-US rhetoric emanating from the Venezuelan government since the late former president, Hugo Chávez (1999-2013) first came to power (and which has continued under his successor, Nicolás Maduro) the US remains Venezuela’s main oil export market. Consequently, the EIA’s figures have increased concerns in Venezuela that the country’s vast oil riches and its key oil industry, which is dominated by the state-owned oil firm Petróleos de Venezuela (Pdvsa), has been seriously mismanaged by the successive Chavista governments.

An article published in the local daily, El Nacional, after the release of the EIA’s figures, on 1 March, pointed out that the historic peak of Venezuelan oil exports to the US came back in 1998, a year before Chávez assumed power, when the Andean country shipped an average of 1.7m bpd to the US. However, since the onset of Chávez’s ‘Bolivarian Revolution’, there has been greater milking of the Pdvsa ‘cash cow’ than ever before: it is expected to finance a wide array of domestic and regional political projects, leaving little left to reinvest in the firm in order to ensure increased production capacity in the future.

Unsurprisingly Pdvsa’s production levels have largely remained stagnant; resulting not only in decreasing oil exports but also rising refined fuel imports as Pdvsa’s refining capacity is no longer able to satisfy domestic demand. According to EIA’s figures, on average last year Venezuela imported 84,000 bpd of refined fuels from the US, just 1,000 bpd less than in 2012, when Pdvsa’s refining capacity was severely limited following an explosion at its Amuay refinery.

• Coffee production bounces back in Colombia

On 4 March Colombia’s national coffee growers’ federation (FNC) announced that national coffee production for the March 2013-February 2014 period amounted to 11.3m (60-kg) sacks, 38% more than in the previous comparable period. In recent years coffee production in Colombia, the world’s third largest coffee producer, has been declining due to an outbreak of the coffee leaf rust disease. To address this Colombia’s coffee growers joined forces with the government to launch a coffee plantation renewal programme in 2012, introducing new more disease resistant plant varieties across the country’s coffee-producing region. An FNC statement linked the latest successful results to the programme, which “allowed for the introduction of new younger coffee plants resistant to diseases […] a key factor in increasing productivity”.

HONDURAS | Trade rebounds

The first half trade deficit for the year was US$2.5bn, an increase of 5.7% over the US$2.4bn reported by the central bank in the equivalent year-earlier period. Exports came in at US$2.3bn, up by 4.4% annually, thanks in particular to stronger coffee sales, as Honduras and other small producers benefit from a poor harvest in Brazil.

As such, coffee exports rose by over a third to reach US$829m in the first half, with a very sizeable 25% increase in volumes shipped and a 9% increase in prices. Coffee exports are destined mostly for Europe and the US. Meanwhile total agri-industrial exports, which also include things like palm oil, shrimp, sugar and tilapia, were worth US$1.3bn in the first half, making up 56% of the Honduran export basket, and underlining its reliance on this sector.  Traditional agricultural exports were worth US$329m in the first half, a rise of 2.4%, thanks largely to a 7.8% increase in sales of bananas (to US$242m). Sales of other products (melons, watermelons and vegetables) fell, amid a severe drought in Central America that has affected harvests this year.

Elsewhere manufacturing exports, valued at US$530m, accounted for 23.1% of the first half total, with increased sales of manufactured iron products, paper & carton and textiles; most Honduran textile exports are produced in local off-shore assembly factories (maquiladoras) for re-export to US.

First half imports came in at US$4.8bn, up 5.1% annually. While the stronger US dollar likely pushed up the import bill, the broad-based increase in imports also reflects the rebounding domestic economy. As such, primary and intermediate goods imports (some of these will be maquila inputs for re-export) rose by almost a quarter to US$1.6bn, while capital goods were up by 14% to US$763m and consumer goods by 7.6% to US$1.4bn.  There was also a significant increase in imports of construction goods, which surged by 51.2% year on year (to US$223.5m). This was due to one-off purchases for the new solar energy farms being constructed in the country.

Finally, thanks to the fall in global oil prices energy imports (fuel, lubricants and electricity) came down by 32.4%, which will help to bring down the large deficit on the external account (the current account deficit typically averages 7%-8% of GDP), while also giving local Honduran producers an important breathing space as they get back on their feet.

Bolivia’s left-wing Movimiento al Socialismo (MAS) government has been forced to deny that it is using export restrictions to “suffocate” the opposition stronghold of Santa Cruz department, where anti-government protests have caused daily disruption since 22 October. This followed a 26 October announcement by the minister of productive development, Néstor Huanca, that sweeping restrictions were to be introduced on the export of a wide range of agricultural products. Whilst President Luis Arce’s administration insists that the restrictions are purely aimed at guaranteeing domestic food supplies during the unrest, Santa Cruz-based business lobbies have interpreted the measures as punishment for the protests, given that Santa Cruz is Bolivia’s main agricultural hub.

Huanca said on 26 October that the government had been forced to “temporarily suspend the export” of “soya grain, soybean meal, soy flour, sugar, cooking oil, and beef” as a “preventive measure” to prevent food shortages linked to the unrest. Adding to opposition suspicions that the measures were aimed at inflicting economic pain on Santa Cruz in retaliation for the anti-government protests, he claimed that strikes and roadblocks had been organised by “oligarchical groups that are trying once again to break the democratic order and destabilise the democratically elected government”.

The reaction from Santa Cruz’s business community was furious. Road blockades were threatened in retaliation by a number of departmental unions and lobby groups representing the transport and agricultural sectors, including the Cámara de Transporte del Oriente (CTO), the Cámara de Exportadores, Logística y Promoción de Inversiones de Santa Cruz (Cadex), and the Cámara Agropecuaria del Oriente (CAO). More significantly, the restrictions risked spreading the disruption in Santa Cruz around the country; Alfredo Borjas, the president of the Bolivian chamber of national and international transport (CBTN), warned on 27 October that if the restrictions were not lifted within 24 hours, “heavy international transport vehicles will be closing borders and blocking roads”.

That threat appears to have prompted a change of course by the government. Signs of an imminent U-turn were already apparent on 27 October, when Huanca insisted that “in no way are we suffocating Santa Cruz” and said that the restrictions had only been introduced “momentarily”. Following a meeting with Santa Cruz agricultural producers the following day, Huanca announced that the restrictions on the export of soy-based products had been lifted. However, he warned that restrictions could be reimposed in the event of domestic shortages.

Meanwhile, the protests and strikes show no sign of abating. Several large counter-protests have been organised in Santa Cruz by MAS supporters, with clashes taking place between protesters and government loyalists attempting to clear roadblocks. Clashes also broke out outside the Palmasola oil refinery in Santa Cruz on 29 October, as groups opposed to the protests demanded the lifting of roadblocks that have caused fuel shortages in the department.

The government may be inching towards agreeing the protesters’ central demand of holding a national census this year, as originally planned, rather than pushing it back to 2024. This was suggested by an official government statement rebuking Interior Minister Eduardo del Castillo for saying that holding a census this year would be “impossible”. The government statement clarified that Del Castillo’s comments “do not reflect the official position of the government”.

Journalist attacked

Bolivian journalist Mario Rocabado, from the television network Unitel, suffered a “brutal attack” at the hands of pro-government demonstrators on 1 November, according to the national association of Bolivian journalists (ANPB), which noted that Rocabado is “not the only journalist to have been verbally or physically attacked during social unrest in recent weeks in La Paz and Santa Cruz”. Rocabado said that the protesters “took my microphone, began to kick me, hit me with rocks, and stole my phones and my wallet”. 

Since 2023 the federal police (PF) has been investigating a faction of the national intelligence agency (Abin) which it suspects had spied on political opponents of former president Jair Bolsonaro (2019-2023) during his administration. On 17 June the PF concluded its probe into the so-called ‘Abin paralela’ and submitted a report to the supreme court (STF). The report did not suggest criminal charges against Bolsonaro himself but recommended indicting some of his closest allies, such as federal deputy Alexandre Ramagem, who served as Abin director from 2019-2022, and his second son, Rio de Janeiro city councillor Carlos Bolsonaro.

The PF’s report implicated 36 individuals, including allies of Bolsonaro as well as current and former Abin personnel. The police confirmed details that the national press had been reporting in recent years, suspicions that the ‘Abin paralela’ had spied on STF justices, members of congress, journalists, activists, and PF detectives investigating the alleged corruption of Bolsonaro’s sons.

Bolsonaro is listed among the implicated individuals, described in the report as the main beneficiary of the alleged illegal surveillance. The police investigation found evidence suggesting that the Abin paralela allegedly spied on officials and electoral authorities and submitted dossiers to Jair Bolsonaro and Carlos Bolsonaro, who helped to manage his father’s social media presence. With the information from the Abin dossiers, Bolsonaro allegedly tried to undermine public trust in judicial officials, possibly seeking to build a narrative about crooked institutions and processes that could lead to electoral fraud in the 2022 presidential race. The PF does not recommend pressing charges against Bolsonaro for this because he is already facing charges for these crimes in a different STF case regarding an alleged plot in 2022 by Bolsonaro and his allies to launch a military coup to help him stay in power [WR-25-12].

However, the report implicated not only allies of Bolsonaro but also the current Abin director, Luiz Fernando Corrêa, who was appointed to lead the agency by President Luiz Inácio Lula da Silva in May 2023. The PF alleges that, in his efforts to contain the scandal, Corrêa obstructed investigations and protected Abin agents with possible ties to the Abin paralela.

Alleged targets of espionage

According to the federal police, Abin allegedly used surveillance software to monitor around 1,800 phones from 2019-2021. Among the targets were figures from across the political spectrum. These included allies of Lula such as left-wing senator Randolfe Rodrigues and centrist senator Renan Calheiros, as well as right-of-centre figures such as the former governor of São Paulo state, João Doria (2019-2022), and the former president of the lower chamber of congress, Rodrigo Maia (2016-2021).

COLOMBIA | Budget approved. Economic commissions in both chambers of Colombia’s congress voted on 14 September to approve the Col$634.9tn (US$203.9bn) budget presented by the new government, although there will be further debates on how this amount is to be divided between regions and sectors. 

Spending is up by Col$59.3tn compared with the 2026 budget approved under President De la Espriella’s left-wing predecessor, Gustavo Petro (2022-2026). The finance ministry justified the increase by saying that the 2027 budget accounts for spending obligations which were not detailed in the 2026 budget, including around Col$6.5tn in pension costs, Col$2tn on healthcare, Col$4.5tn for public sector salaries, Col$9.6tn to cover a deficit in the fuel price stabilisation fund (FEPC), and Col$700bn for public universities.

VENEZUELA | Oil and mining deals. US energy company Continental Resources signed a memorandum of understanding on 16 September with Venezuelan state oil firm Pdvsa to operate and develop the Ayacucho 2 block in the Orinoco Belt, with a full agreement expected to be signed in the coming weeks.

On the same day, US investment firm Heeney Capital and Swiss commodity trading company Mercuria reportedly signed a 30-year deal with the Venezuelan government for operational and export rights at the Choco gold mine in Bolívar state. Newswire Reuters cited a Heeney Capital spokesperson as saying that initial investment in the mine is expected to be up to US$1bn.

ECUADOR | Growing trade with Mexico. On 24 February Ecuador’s investment promotion agency, Pro Ecuador, released new figures showing that trade between Ecuador and Mexico has been steadily increasing since 2007. The figures, released during the ‘Business and investment opportunities in Ecuador’ seminar organised by Pro Ecuador, its Mexican counterpart ProMéxico, and the Mexico-Ecuador business committee (Comce) in Ecuador’s capital, Quito, showed that bilateral trade increased by 70% in the last 10 years to reach US$700m in 2015. Citing data from Ecuador’s central bank, Pro Ecuador’s report also highlighted that between 2007 and 2014, “Mexico was the country that invested the most in Ecuador”. This was echoed by ProMéxico general director Francisco González Díaz, who said that bilateral investment flows “have mainly increased from Mexico to Ecuador” in recent years as result of closer economic ties. Meanwhile Ecuador’s deputy minister for foreign trade policy and services, Silvana Vallejo, presented 125 investment projects that the Ecuadorean government is looking to promote in the areas of oil, mining, basic industries, petrochemical and steel, electricity, and telecommunications.

PERU | Tapping international markets again. Peru’s finance & economy ministry (MEF) has successfully placed €1bn in sovereign bonds in international capital markets. This is the second time that Peru has issued bonds in international markets since October 2015, when the Bono Global 2026 issue set a new reference point for Peruvian Euro-denominated bonds for 11 years. It is also the fifth time that Peru has turned to international capital markets in the last 16 months to issue new debt or restructure old foreign-currency denominated letters as part of its efforts to improve its foreign debt profile.

An MEF statement noted that the 14-year bonds offered a 3.75% coupon and 3.77% yield after the high level of demand allowed the bonds to be placed at just 295 basis points above the European area benchmark bonds. The MEF statement says that the operation answers to the government’s ‘pre-funding’ policy by which it seeks to partially pre-finance Peru’s 2017 debt payments due in 2017 and leave the incoming government, which is due to take office on 28 July following the 10 April general elections, in a comfortable financial position. But the big question is whether this will provide enough of a financial cushion for the incoming government, which will have to deal with the current adverse international economic scenario marked by lower commodity prices and slower growth in China, one of Peru’s main trading partners.

VENEZUELA | Seeking Chinese investment to help rebuild economy. On 29 February Venezuela’s planning vice-president, Ricardo Menéndez, held a meeting in Beijing with the president and the vice-president of China’s National Development and Reform Commission, Xu Shaoshi and Ning Jizhe, respectively, to discuss the prospect of Chinese cooperation in various economic sectors as part of the Venezuelan government’s plans to stimulate increased economic activity so as to overcome the country’s current domestic economic crisis. In an official statement by Venezuela’s energy ministry, Menéndez said that he had discussed Chinese participation in sectors including pharmaceutical, industrial, petrochemical, hydrocarbon and mining. According to Menéndez, “China will invest in the development of these sectors in Venezuela, which are highly important to consolidate the union between our countries and China’s direct participation in the things like the Arco Minero and the Orinoco belt”.

The Orinoco belt is the 55,314km² area in northern Venezuela under which much of the country’s oil reserves – some of the world’s largest – are located and where Chinese oil firms have a presence. Meanwhile the ‘Arco Minero’ (‘mining arch’) is an 111,000km² area in central Venezuela that goes from the country’s border with Guyana in the east to its border with Colombia in the west. The Venezuelan government believes that the Arco Minero may contain high quantities of gold, coltan, diamonds, bauxite, iron ore and other minerals, all of which the government is seeking to exploit as part of its bid to diversify its economic promote growth after Venezuela’s GDP contracted by 5.7% in 2015 on the back of the fall in international oil prices.

Menéndez said that attracting Chinese investment was part of the “government’s strategy to boost the country’s economic rebuilding”. Venezuela hosted a forum on 2 March entitled ‘the 14 engines of productive economy’ in which investment opportunities were presented to over 50 Chinese companies.

• Bolivian remittances grow

On 23 February Bolivia’s central bank (BCB) reported that the country received US$1.18bn in remittances from Bolivian nationals living abroad in 2015. The figure is 1.28% higher than the US$1.16bn reported by the BCB in 2014. Although small, the increase in remittances is positive as it comes amid subdued global economic growth and suggests that in spite of this Bolivian workers abroad are still able to send some money back home. According to the BCB report 41.7% of total remittances came from Spain; 16.5% from the US; 10% from Argentina; 8.7% from Brazil; and 5.8% from Chile.

In our October issue [EB-21-10] we reported in brief on the call by United Nations (UN) Secretary General António Guterres to address the developing crisis of debt distress, which he described at the 15^th session of the UN Conference for Trade and Development (Unctad) as the “dagger through the heart of global recovery”. In any discussion of over-indebtedness, the Caribbean nations feature heavily, and back in March 2021 the UN was forthright in its warning that “the severe fiscal impacts of the [Covid-19] crisis are triggering debt distress in a growing number of countries”. Such warnings and calls for action have continued, but so far with little concrete result.

At the Unctad conference in Bridgetown, Barbados, in early October, the secretary-general of the Caribbean Community (Caricom), Carla Bennett, used her presentation to highlight, in particular, the “issues and concerns” of Small Island and Low-lying Coastal Developing States (SIDS). According to Bennett, SIDS in 2020 suffered GDP contractions that were on average three times worse than the global average. As a result of the Covid-19 pandemic, she argued: “We applied funds that were budgeted for other purposes to meet the needs of the health sector for PPEs, medical equipment, testing supplies, and vaccines. We shifted funds to meet basic social safety nets. We repurposed loans and borrowed additional funds. Already high debt burdens grew even higher.”

She added: “New debt arising from the need to address the Covid-19 crisis, together with existing debt stock, will continue to appropriate a significant proportion of public resources in debt repayments while strangling critical infrastructural public investments required for economic rehabilitation…With the reality of our vulnerabilities exposed by the Covid and climate crises, the call for a more appropriate basis for determining access to concessional financing takes on greater urgency.”

The Caricom secretary-general highlighted in particular that defining lending criteria on the basis of GDP per capita was unfair. Her proposal was to continue with the development and acceptance of the Multi-Dimensional Vulnerability Index (MVI). She said that until new options are developed, “multilateral support is on the basis of the same traditional policy menu and funding instruments that have been used to handle economic imbalances in the past. That policy menu does not adequately address our inherent vulnerabilities.”

At the same time as the Unctad conference, the World Bank issued a report on Recovering Growth, Rebuilding Dynamic Post COVID Economies Amid Fiscal Constraints. On the release of the report, the World Bank’s chief economist for Latin America and the Caribbean (LAC), William Maloney, pointed out that average public debt in the region had risen by 15 points to 75.38% of GDP during a year and a half of the crisis. He warned: “This is one area we need to be very closely following just because the amounts [have] suddenly jump[ed] so much and in the context of international interest rates, potentially it could become a problem.”

Maloney pointed out that for many countries in the Caribbean, the Covid crisis had become so problematic because of the extreme reliance of some of the economies on tourism. Yet, he warned, for many of these small island states diversifying away from their one comparative advantage would be problematic. He said: “So, yes, diversifying is important, but we have to be honest about what’s possible.”

On 21 October, it was the turn of the International Monetary Fund (IMF) to step into the ring, this time with its latest Regional Economic Outlook for Latin America and the Caribbean. It was not very encouraging. It noted that for the tourism-dependent countries of the Caribbean economic growth for this year would be just 2.3% after the Caribbean’s contraction of -9% in 2020. Among the downside risks it noted, along with the possibility of more deadly and transmissible Covid variants, were those related to the region’s burgeoning debt. It warned about a potential “tightening of global financial conditions, sovereign debt rollover risks, and social unrest…”

The Bridgetown Covenant issued at the end of the Unctad conference in early October included an acknowledgement of the G20’s Debt Service Suspension Initiative (DSSI). But the limitations of this initiative were highlighted by the UN in its March 2021 report Liquidity and debt solutions to invest in the SDGs: the time to act is now. The report noted that the financial impact of the DSSI “has been blunted by the lack of participation of private creditors, to whom DSSI eligible countries collectively owe about one third of their total debt service obligations in 2021”.

Another gap in the DSSI scheme, the UN noted, was that “eligibility criteria exclude nine of the 34 countries with a substantial risk of debt default”. In addition, and of particular significance for the Caribbean, “middle-income countries not eligible to the DSSI have US$31bn in bilateral debt service due in 2021 compared to US$16.6bn for eligible countries”.

According to the communique at the end of the 30-31 October G20 summit in Rome, the DSSI will have deferred at least US$12.7bn of total debt service between May 2020 and December 2021, benefitting 50 countries. Of these 50, however, only four are in the Commonwealth Caribbean: Dominica, St Lucia, Grenada, and St Vincent & the Grenadines.

The Bridgetown Covenant called for “further efforts…to examine ways to improve the architecture for sovereign debt restructuring involving private sector creditors…” But this continues to be an illusive goal. All the G20 communique could say was that “we stress the importance for private creditors and other bilateral creditors to provide debt treatments on terms at least as favourable [as the DSSI]…”

On 19 November, President Andrés Manuel López Obrador attended the IX Summit of North American Leaders alongside his US President Joe Biden and Canada’s Prime Minister Justin Trudeau. The three issued a joint declaration stating their intention of strengthening the trilateral relationship.

In the economic sphere they vowed to ensure that North America remains the most competitive and dynamic region of the world, particularly vis-à-vis China’s growing influence. Calling for greater economic integration, President López Obrador highlighted the fact that over the last 30 years China has made huge progress at the expense of the region, currently dominating 14.4% of global trade after having only a share of 1.7% in 1990. Meanwhile, North America’s share has remained unchanged during the same period at 13%.

In addition to promising to take action to tackle the coronavirus (Covid-19) pandemic more effectively and to address the problem of migration within the region, López Obrador and his counterparts agreed to undertake measures to boost competitiveness and economic growth. These included:

• supporting labour rights, including those of migrant workers regardless of their legal status;
• strengthening supply chains within the region through the creation of a trilateral coordination mechanism, with the aim of identifying essential industries in order to minimise future disruption;
• strengthening links between small and medium-size enterprises (SMEs), connecting SME centres throughout the region, and boosting entrepreneurship amongst women;
• conduct a trilateral meeting of cybernetic experts to fight cybercrime and the hijacking of files from a multilateral perspective;
• create the North American Commitment on Methane and Black Carbon, which would include a strategy to control and reduce methane emissions among the most polluting sectors of the economy;
• accelerate the share of renewable energy throughout North America;
• promote policies to reduce greenhouse gas emissions from transport; and
• reduce deforestation rates to zero and conserve 30% of land and water in North America by 2030.

During the summit, President López Obrador adopted an unusually pragmatic approach that surprised many. Crucially, though, some of these commitments are unlikely to materialise if his electricity reform plans – which were notably absent from the talks - are approved. Not only would they go against the summit’s professed plans to strengthen economic integration - given that they seek to restrict private sector participation and to benefit the state power company CFE - but they also would lead to supporting highly polluting state-owned plants at the expense of the renewable energy sector.

VENEZUELA | Poverty survey. On 13 March Venezuela’s private Andrés Bello Catholic University (UCAB) released its latest nationwide annual survey of households, known as the Encuesta Condiciones de Vida (Encovi), which showed that 51.9% of Venezuelan households live in “multidimensional poverty” – measured in terms of education, employment, living conditions, services, and income. Agricultural activities tend to keep people in poverty the most, as 73.4% of Venezuelans in this sector cannot cover their basic needs. Meanwhile, 69.9% of those working in finance live in households that are “not poor”, according to the report. According to the survey, 79.5% of households have received at least one temporary bonus from the government in the last year, up from 71% in 2022, while the bonuses averaged US$11.00, an increase from US$5.50 in 2022 and US$2.50 in 2021. The survey also showed that 84.6% of bonus recipients live in “extreme poverty”. The survey also showed that, in terms of education, the volume of the school population has recovered to levels registered prior to the coronavirus (Covid-19) pandemic but the growth rate fell short of the potential demand — with potential demand of 11,597,754 school places in 2023, exceeding the school population of 7,613,237. Last year the percentage of educational coverage for those aged 3-24 years was 66%.

BOLIVIA | Waning oil reserves. The president of Bolivia’s state-owned hydrocarbons company Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), Armin Dorgathen, said on 28 February that the country’s oil revenue in 2023 was approximately US$2bn. This represented a drop from 2022, when President Luis Arce said oil revenue was over US$3bn. Dorgathen said that “we’re prioritising initiatives to increase oil income despite the natural decline in production”. The drop in oil revenue comes at a time when Bolivia is already battling a shortage of US dollars which has forced the government to loosen export restrictions and issue new dollar bonds in an effort to boost its reserves of hard currency.

Andean countries: inflation rate
Percentage variation (year-on-year)

Andean countries: GDP growth (%)
Quarterly figures are year-on-year growth

They were expected, but they did not come. Argentina’s President Javier Milei and his economy minister, Luis Caputo, were no-shows at the annual conference of the Unión Industrial Argentina (UIA) in Buenos Aires on 25 and 26 November. Although the industrialists on the one hand, and the government on the other, see themselves as champions of private enterprise, there are now some pretty big disagreements between them.

The president of the UIA conference, Martín Rappallini, made it clear that his members are unhappy. They accuse the government of cutting import tariffs and strengthening the peso in a way that unfairly squeezes industrialists’ margins. “We want a level playing field to be able to compete,” Rappallini said, adding that “we hear unfair attacks on national business leaders. We are the people who create jobs and pay taxes, we want to be respected as in other countries. We fund 30% of tax revenues and our sector is the motor of growth.”

There was no immediate formal response from the government, but José Luis Espert, a pro-government economist and member of the lower chamber of congress, hit back on social media, claiming “the industrialists always say they are lacking one thing or another to be able to compete” and that they “have had the stone-faced cheek to sell us things at high prices and low quality for decades on end”.

The dispute is about the somewhat chequered PAIS tax, which was introduced in 2019 by the previous centre-left government led by Alberto Fernández (2019-2023) and which was used to apply a 30% tax on overseas spending by Argentines in US dollars. In 2022 PAIS was extended to include a 7.5% levy on imports. When Milei took office at the end of 2023, he raised the PAIS import tax to 17.5% as part of his emergency programme to eliminate the fiscal deficit, but then brought it back down again to 7.5% in September and is now pushing it down to zero by the end of December. 

This is where the government and the UIA part company. The UIA says lower tariffs will create unfair import competition and encourage dumping by countries that subsidise their own exporters. In addition, industrialists claim that the government policy of devaluing the currency at a slower-than-inflation rate is creating a “strong peso”, which encourages imports and reduces exports.

President Milei sees import tariff cuts as a way to limit domestic inflation by bringing in cheaper imported goods and services. October inflation was 2.7%, reducing the annual rate down to 193% (from 211.4% at the end of 2023). The government’s top priority now is to keep inflation on a downward path to try and secure the beginnings of an economic recovery in time for the mid-term elections due in October 2025.

• Economy stuttering

Signs of a solid recovery in Argentina are not yet materialising. Economic activity dropped 0.3% month-on-month and 3.3% year-on-year in September. Sales remained low and the “strong peso” discouraged inward tourism, down by 30.3% in October.

There may be some scope for bridge building. Juan Pazo, the production coordination secretary and the only senior government official who did attend the UIA conference, indicated that the Milei administration is planning to introduce a new investment and employment regime addressing some of the ‘level playing field’ points raised by the UIA.

Pazo described the government approach as offering “a kind of alternative RIGI” (the acronym for large investment incentives set out by the government, known as the Regímen de Incentivos a las Grandes Inversiones). Pazo suggested that it might now be offered to small and medium sized enterprises (SMEs). Among other things it would include reduced export taxes, early value added tax (VAT) refunds and other incentives. That said, Pazo gave no firm timeline for these changes to be submitted to congress, let alone approved.

ECUADOR | South Korea FTA given green light. Ecuador’s constitutional court approved the country’s free trade agreement (FTA) with South Korea on 20 March, ruling that it was compatible with the constitution.

The FTA was signed in September 2025 in Seoul and will eventually see 98.8% of Ecuadorean exports enter South Korea tariff-free, according to Ecuador’s foreign trade and production ministry.

Key Ecuadorean exports will benefit from the gradual lifting of South Korean tariffs, including bananas, cocoa, and coffee, while 10,000 tonnes of shrimp will be allowed to enter the country tariff-free each year. In return, Ecuador has lowered some of its own trade barriers, notably regarding South Korean cars, which will benefit from a gradual elimination of tariffs over the next 15 years, with a faster tariff phaseout for hybrid vehicles.

COLOMBIA | Record breaking bond issue. On 21 January the Colombian government announced that it had successfully placed US$2bn in 30-year sovereign bonds in international markets, the largest bond issue of its kind by any Latin American country ever. The result is an unquestionable boon for the government led by President Juan Manuel Santos as it serves as evidence that investor confidence in the country’s economic management is strong. Indeed the fact that this vote of confidence comes as Colombia prepares to hold legislative elections on 9 March and presidential elections on 25 May, in which Santos is standing for re-election, is surprising. Yet Colombia’s economy is in good condition, averaging annual growth rates of over 4% in the last couple of years, and investors appear to believe that this will continue to be the case regardless of who is in the Casa de Nariño.

News of the issue was delivered by Santos himself after he arrived in Spain for a two-day visit. Santos, who conveniently was scheduled to take part in an ‘Invest in Colombia’ forum in Madrid the following day, celebrated the result stating that “Today international markets have given the Colombian economy a great vote of confidence”. He explained that originally the government had hoped to raise US$1.5bn from the issue in order to invest in the country’s infrastructure and rural development; but that the markets’ response to the bond offer far exceeded the government’s expectations and so it was decided to increase the offer by US$500m.

According to Colombia’s finance ministry the 2044 maturing bonds, which offered a yield of 5.64% and a 5.625% coupon - the lowest ever issued by Colombia - were oversubscribed, attracting some US$4.2bn in orders from 229 institutional investors from the US, Europe, Asia and Latin America. Finance Minister Mauricio Cárdenas echoed Santos and said that the better-than-expected result showed that “the Colombian economy is perceived as one of the most solid economies in Latin America”. Santos will be keen to spread this message at this year’s World Economic Forum in Davos, Switzerland, which he is scheduled to attend on 23 January.

• Ecuador-EU talks

On 21 January Ecuador’s President Rafael Correa said that in his opinion there are now “no great differences” in the ongoing economic association agreement negotiations that his government is conducting with the European Union (EU). In 2009 Ecuador decided to pull out of the trade negotiations that the EU launched with the Andean Community (CAN) trade bloc in disagreement with the terms of the deal. However, since then the two sides decided to re-launch negotiations this year, with the first round taking place in Brussels on 13 January. Commenting on this, Correa told a local radio station that “significant progress” was made in the first round and that “practically everything is in place” for a deal to be reached in the first half of the year.

El nuevo canciller de Uruguay, Rodolfo Nin Novoa, fue recibido el 5 de marzo en Buenos Aires por su par de Argentina, Héctor Timerman. La reunión tuvo lugar cuatro días después de la investidura del Presidente de Uruguay, Tabaré Vázquez. La Presidenta de Argentina, Cristina Fernández, no asistió a la ceremonia de juramento de Vázquez.

Aunque se admita que la Presidenta Fernández está enfrentando algunas dificultades políticas en su país, no debería haber sido una ardua tarea cruzar el Río de la Plata para asistir a la asunción de Vázquez, y su no asistencia bien podría deberse al rencor por la admisión de Vázquez en octubre del 2011 (18 meses después de finalizar su primer mandato en el poder) de que él había considerado escenarios de guerra con Argentina cuando la disputa por la construcción de la planta de celulosa en el lado uruguayo del compartido Río Uruguay llegó al rojo vivo en el 2007.

La cancillería argentina difundió una declaración destacando los “tradicionales lazos de amistad” entre los dos países, pero Timerman ha ayudado a que estos lazos cayeran a un punto bajo con una sucesión de diatribas en años recientes, incluyendo la amenaza de llevar a Uruguay a la Corte Internacional de Justicia (CIJ) de La Haya, una vez más, por la planta de celulosa.

Vázquez no tendrá que pasar gran parte de su segundo mandato de cinco años tratando con Fernández, sólo los primeros nueve meses hasta que ella deje el poder en diciembre, cuando es probable que las relaciones con Argentina se vuelvan menos espinosas.

Pero algunas cuestiones sensibles permanecerán, tales como la administración del Río Uruguay y el Río de la Plata, y el proteccionismo comercial de Argentina, que ha afectado directamente a Uruguay y el bloqueo a cualquier avance en las conversaciones entre el Mercado Común del Sur (Mercosur) y la Unión Europea (UE) sobre un tratado de libre comercio (TLC), una interminable telenovela sin el drama.

• Nin Novoa sobre Venezuela

El canciller de Uruguay, Rodolfo Nin Novoa, ya ha puesto su marca en su nuevo rol con algunos francos comentarios que el ex presidente, José Mujica (2010-2015), podría haber admirado –excepto que él fue el blanco de uno de los comentarios. Nin Novoa dijo que él no caería en la tentación de “priorizar la política sobre cuestiones judiciales”, alegando que según su punto de vista eso es exactamente lo que hizo la administración Mujica para “lograr una solución política para permitir el ingreso de Venezuela al Mercosur”.

At the end of last year President Michelle Bachelet paid a visit to the region of Araucanía, the site of recent tensions stemming from the longstanding indigenous Mapuche conflict over land claims. Bachelet’s long-awaited trip – her first to the region since taking office for a second term in 2014 – made headlines for unexpected reasons: her curious failure to inform Interior Minister Jorge Burgos of the visit has re-exposed divisions within the ruling Nueva Mayoría coalition, serving as an added pressure on the government. Burgos is a veteran member of Democracia Cristiana (DC), the biggest party in the coalition and the closest to the political centre.

President Bachelet’s visit to the Araucanía on 29 December was in response to ongoing arson attacks and other tensions, despite recent government efforts to address the situation. Last October the government created a new zone in the region under the control of a senior police chief to crack down on violent crime [WR-15-42].

Bachelet’s trip followed an ultimatum issued on 8 December by the Confederación Nacional del Transporte de Carga (CNTC) truckers’ union, which threatened to call a national strike before the end of the year unless the president paid a visit to the region. The previous month the regional prosecutor for Araucanía, Cristian Paredes, alluded to this increase in violence in testimony before the security commission of the national lower chamber of deputies (see sidebar).

With Bachelet’s visit producing mainly promises of improved health care and regional development (see box), it was the omission of Burgos from her entourage that made headlines, particularly given his previous involvement in efforts to come up with a solution: at the end of November Burgos had travelled to the region, along with the deputy interior minister, Mahmud Aleuy, to discuss the situation with regional governor Andrés Jouannet, Attorney General Jorge Abbott, and the general directors of the Carabineros militarised police and the investigative police (PDI), Bruno Villalobos and Héctor Espinosa respectively. At the time Burgos told reporters that Bachelet would travel to the region when she “deemed it fit” or when her schedule permitted.

Bachelet’s decision not to inform Burgos about her trip prompted the interior minister to offer his resignation, which was rejected. Her reasoning baffled the local media and commentators alike. Some media like the national daily La Tercera noted that Bachelet had a tradition of “complicated relations” with previous interior ministers during her first mandate (2006-2010) – particularly Andrés Zaldívar (2006) and his successor Belisario Velasco (2006-2008), both from the DC. La Tercera suggested that Burgos was part of this tradition.

The same media also puts the DC’s reaction to the perceived snub down to ongoing tensions between the party and the rest of the ruling coalition, which comprises the Partido Comunista de Chile (PCCh) and quadripartite Concertación (the DC, Bachelet’s Partido Socialista [PS]; the Partido por la Democracia [PPD] and Partido Radical [formerly Partido Radical Social Demócrata, PRSD]).

These tensions have emerged over the DC’s criticism of the government’s proposed education reform and the passage of the abortion bill presented by Bachelet in January last year which, currently stuck in congress, would overturn the blanket prohibition on abortion, making it legal in certain circumstances – in the case of rape, when the life of the mother is in jeopardy, or if the foetus is unviable. The DC has been publicly calling for the bill to be voted on not as a package but for each of the separate cases.

Education

The constitutional court (TC) rejected the Bachelet administration’s education reform last month [WR-15-50] – specifically the mechanism for determining which higher education establishments should be entitled to state funds in order to provide free university education for certain students in 2016. The government has since passed a new short law. Promulgated on 23 December following its approval in both chambers of congress, the law includes various provisions such as increased access for public universities to extra funds “if they make a commitment to maintain or improve their institutional accreditation”. The new law, which various DC legislators claimed was “improvised”, also includes the allocation of some Ch$2.5bn (US$3.6m) by the education ministry in order “to allow significant progress to be made to strengthen universities”.

Araucanía promises

During her visit to Araucanía President Bachelet inaugurated a new hospital, the Dr. Abraham Godoy Peña Hospital, in Lautaro city, a project which has involved an investment of Ch$20.24bn (US$28.3m).

A presidential press release notes that as regards the budget allocated for the region, Bachelet said that “both sectorial resources, that is, the Ministry of Health, and the National Fund for Regional Development provided 28.7 billion pesos in 2015 alone. The investment scheduled for next year doubles that amount and we will be investing a total of 56.5 billion pesos in healthcare.” The same press release notes that these resources will allow 10 hospitals, six family healthcare centres (CESFAM), 10 family health community centres (CECOF), and 15 rural health centres to be built in the region.

Bachelet also announced that over the next two years the government’s efforts will focus on improving living conditions throughout the region, creating opportunities geared towards the promotion of regional productivity.

• Araucanía violence

The regional prosecutor for Araucanía, Cristian Paredes, said that between January and September 2015, 243 cases of rural violence had been registered in Araucanía, 20 more than in the same period the previous year and 10 more than between January and September 2013.

• Burgos

Interior Minister Jorge Burgos has been in the post since last May when he was transferred from the defence ministry to replace Rodrigo Peñailillo, who quit after being linked indirectly to a company investigated for illegal campaign financing.