Brazil & Southern Cone - January 2026

This January edition of the Latin American Regional Report: Brazil & Southern Cone begins with a look at the apparent signals from Chile’s far-right President-elect José Antonio Kast that he might moderate his stance and seek unity in order to pass reforms for his security agenda. He made promises throughout his campaign to enact hardline measures including mass deportations. However, during his victory speech, his tone struck a somewhat less polarising note, suggesting a willingness to work with other political parties. Still focusing on Chile, the next piece also considers how Kast will likely need to compromise on his more radical campaign promises to ensure governability, as well as outlining some of the economic challenges facing the incoming Kast government.

Moving to Brazil, the following article looks at a high-profile fraud case which has rocked the country’s financial and political establishment and will likely continue to reverberate in the coming months – the collapse of Banco Master. This mid-sized lender enjoyed a meteoric rise due to strategies such as selling risky, high-yield bonds on investment platforms. However, it came crashing down last year, with the bank being liquidated in November and its executives under investigation for fraud. Multiple institutions, including the central bank (BCB), supreme court (STF), and federal audit court (TCU), have launched probes and carried out other actions in relation to the bank and its collapse.

The next article analyses the efforts of President Luiz Inácio Lula da Silva to promote Brazil as a global leader on climate action and diplomacy. The United Nations climate change conference (COP30) hosted in the Brazilian city of Belém in November was supposed to be the top highlight of Brazil’s foreign policy calendar in 2025 and the main stage on which Lula could boost the country’s green credentials. However, his lofty ambitions, including calls for a clear plan to phase out fossil fuels, fell short, with government delegations reaching a mild agreement that avoided addressing the controversial topic.

Afterwards, we look at how Argentina’s President Javier Milei is leveraging his new-found majority in congress to push a host of free-market economic reforms but has also seen the limits of what he can achieve with his new legislative powers. Before the end of the year, Milei scored a double victory in congress with the approval of the 2026 budget and a ‘fiscal innocence law’. The final piece in this edition analyses Milei’s controversial decision to appoint Lieutenant General Carlos Alberto Presti, who had been serving as the chief of the general staff of the army, as his new defence minister. The move has broken with the country’s decades-long political tradition of not appointing a military official to the civilian government role of defence minister.