Latin America This Week: August 16, 2023

Latin America’s anti-incumbency wave rolls through Argentina. In Sunday’s system-wide primary, self-proclaimed “anarcho-capitalist” candidate Javier Milei led the field with 30 percent, edging out the center-right opposition coalition (28 percent), and the center-left ruling party (27 percent). Milei’s strong showing shocked a political system long led by political parties and party coalitions. The question is whether Milei can expand his base enough to win the Casa Rosada on October 22 (or realistically, the November 19 second round runoff). As a political outsider he stands to capitalize on widespread discontent with economics and politics as usual.  Yet turnout was low, and in the general election more traditional voters, and the party machines behind them, may temper his current momentum. With an outsider leading the pack and once-strong parties in disarray, Argentina is becoming more like its South American neighbors. 

Governments look to lithium to spur industrialization. Latin America may be headed into a new commodity boom as the region holds nearly 60 percent of the world’s lithium as well as many of the other minerals vital to electric battery and vehicle production. Many Latin American governments are actively trying to use this rising global demand to industrialize and diversify their economies. Chile has tied concessions to extract minerals to those that promise to build lithium processing plants. Argentina is focused on batteries, successfully courting Chinese automaker Chery Inc. to build an electric vehicle (EV) and battery plant, while also creating a state-owned plant that will manufacture batteries itself (the lithium sourced from U.S. mining company Livent’s local operations). Brazil too is looking to be part of global EV production, attracting Chinese EV manufacturer BYD with land and tax perks to build its first electric car plant outside Asia in Bahia state. And Bolivia has touted investments from a consortium led by Chinese battery producer CATL as progress in the country’s goal to become an EV battery manufacturer. Chinese state-supported companies are better able to meet the requirements and make the promises Latin American governments desire and require. Western companies, such as Ford and General Motors, have less leeway with investors and shareholders as they too look to secure access to raw materials.  

Assassination of Ecuadorian presidential candidate reveals state capture by organized crime. Last week, a gunman murdered presidential candidate Fernando Villavicencio while he was leaving a campaign event in Quito, marking the sixth political killing this year. An outspoken critic of organized crime and corruption, Villavicencio promised to confront both if elected and said he would “declare war on criminal economies.” Villavicencio claimed he was receiving death threats from the leader of Los Choneros, one of Ecuador’s largest gangs known for its alliance with Mexico’s Sinaloa Cartel. Ecuadorian authorities, along with their FBI and Colombian counterparts, initiated an investigation into Villavicencio’s murder, and have six suspects in custody. The assassination underscores the immense risks politicians face from organized crime, which has infiltrated Ecuadorian politics and the state. Drawing comparisons to Colombia’s descent into criminal violence in the 1990s and 2000s, criminal groups’ tightening control of ports, prisons, and parts of the judiciary and police may make violence a disturbingly normal fixture of Ecuadorian politics.