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This week the domestic agenda will preoccupy President Ivan Duque in Colombia even after his successful bolstering of bilateral ties with the US. In Argentina, a sub-sovereign bond issue rears its head, while the government hopes to head off oil and gas sector problems. Chile’s government hopes to advance its new pension reform initiative despite opposition criticisms. Meanwhile, Venezuela’s Juan Guaido is drumming up international support for his cause. Finally, in Mexico a migrant caravan will keep President Andres Manuel Lopez Obrador (AMLO)’s immigration policies under intense domestic scrutiny.


Protests over perceived government policy shortcomings will recommence today, 21 January, two months after the November general strike that set off multiple demonstrations and serious unrest last year. Continuing violence and threats of violence against prominent political leaders and social activists are likely to provide the protests with fresh impetus, as will the passage in December of the controversial tax reform and the government’s recent positioning in favor of two highly controversial issues: fracking and the use of the herbicide glyphosate to eradicate coca, the raw material for cocaine.

In parallel, the government’s backing for limited glyphosate use reflects US pressure to reduce coca cultivation, which has increased significantly in recent years. As ever, the drugs issue was a major talking point in the meeting held yesterday, 20 January, between President Ivan Duque in Bogota and US Secretary of State Mike Pompeo, who was attending a regional counterterrorism conference. However, in a boost for Duque, the two countries reasserted their joint approach to the Venezuelan crisis. Duque also succeeded in obtaining regional denunciation of the National Liberation Army (ELN) guerrilla group; the parallel push by the US to obtain regional condemnation of the Hezbollah presence in Venezuela marks part of a renewed push against the Venezuelan regime’s terrorist links.


Holders of a USD 750mn ten-year Buenos Aires provincial bond have until 22 January to agree to a provincial government proposal to defer a principal payment due on 26 January until 1 May. If 75% of bondholders agree, the delay in making the payment will go ahead (albeit with questions over how the province intends to fulfill its payment obligation in May). A default would be declared if the principal payment does not materialize ten days after the 26 January deadline. Finance Minister Martin Guzman has ruled out a bailout for the province. However, Guzman will also want to avoid complicating the far larger debt restructuring talks that he is about to embark on while preventing a deterioration in macroeconomic variables that a sub-sovereign default would likely set off.

Separately, discussions between the government and oil workers’ unions will continue today, 21 January, and tomorrow, in a last-ditch effort to avoid protests scheduled for 23 January. Unions are concerned about layoffs at companies operating in the Vaca Muerta shale formation following the previous government’s fuel price freeze, which has extended into 2020 after President Alberto Fernandez ordered the state-owned state-owned Yacimientos Petroliferos Fiscales (YPF) not to raise prices as planned at the end of December. Fernandez has promised that a new regulatory framework for the hydrocarbons sector will be unveiled in February.


The government’s pension reform initiative goes to the lower house Labor Commission today, 21 January; government officials also want the initiative to advance through the Finance Commission this week so that the bill can go to a lower house vote next week before the February legislative recess. Opposition parties presented an alternative proposal yesterday, 20 January, under which the entirety of the extra 6% in employer contributions that the government has proposed would go to a state fund to boost low-income retirees; under the government proposal, 3% would go to the Solidarity Fund, with the other 3% going to individual retirement accounts. A compromise deal before the end of next week would help address one of the key issues behind the ongoing protests.


Opposition leader Juan Guaido is set to embark on an international tour after his meeting with Pompeo yesterday in Bogota. The trip will see him attend the World Economic Forum annual meeting at Davos. It is not known how long Guaido is expected to be out of the country, but the question of what will happen on his return to Venezuela will persist for as long as he is away. Maduro, meanwhile, has reacted by doubling down on his alliance with Cuba; yesterday, 20 January, Maduro said Cuba’s ambassador to Venezuela, Dagoberto Rodriguez, should have unfettered access to government ministries.


A migrant caravan mainly comprising Hondurans was blocked from entering Mexican territory yesterday, 21 January. However, the caravan – the first to form since the June 2019 migrant control deal between the US and Mexico – is likely to make another attempt to travel north from Guatemala. President Andres Manuel Lopez Obrador (AMLO)’s approach to the migration issue will therefore come under question this week, while the conduct of the new National Guard (GN) is likely to remain under particular scrutiny.

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This week the domestic agenda will preoccupy President Ivan Duque in Colombia even after his successful bolstering of bilateral ties with the US. In Argentina, a sub-sovereign