Welcome to your ☕️ Cafecito where we cut through the noise and identify what’s shaping the hemisphere. Today we focus on the newly inaugurated President Abelardo De La Espriella’s response to yesterday’s devastating earthquake in Colombia — and how the crisis could shape his presidency. Our usual roundup of stories from across Latin America will return later this week.

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Today in Latin America

The 7.4 magnitude earthquake that struck western Colombia yesterday morning has already produced a devastating human toll. As of 8am local time today, at least 169 people were dead according to the Colombian Association of Capital Cities — most of them in five of the cities worst affected by the quake: Pereira, Cali, Quibdó, Manizales and Armenia.

More than 900 are injured, 1,500 homes were affected, and 67 buildings collapsed. Sadly, the death toll will inevitably rise in the days and weeks to come, with hundreds still reported missing, 188 of whom in the city of Cali alone.

The epicentre was near San José del Palmar in the Andean mountains of the department of Chocó in western Colombia, but the violent shaking was also felt in Bogotá and Medellín (and as far away as Ecuador, Venezuela and Panama) at a time when Colombia was getting ready for the day ahead.

Disaster struck at 7.34am, right in the middle of La Fm’s noticiero morning programme. Having a permanent network of local correspondents in every city, town and corner of rural Colombia really proved its worth. By 7.39am, the significance and magnitude of this earthquake were becoming apparent, well before news outlets could write anything meaningful on their website. It was a reminder of the enduring power of good, old-fashioned live radio.

What surprised many yesterday was the duration of the quake — several minutes in some locations. Colombia, like Turkey, is one of the few countries in the world where three tectonic plates converge — the South American, Nazca and Caribbean plates. The country’s vulnerability is also shaped by the numerous active faults running through the Andes.

Cities in western Colombia, such as Cali, Quibdó and Popayán, face particularly high seismic risk because of their proximity to the Pacific Ring of Fire and major geological faults. Each year, Colombia’s geological service registers thousands of earthquakes. Most are minor. But yesterday’s wasn’t.

The most recent earthquake to devastate a Colombian city struck Armenia in January 1999. At a magnitude of 6.2, it was considerably weaker. Yet its shallow depth and proximity to populated areas contributed to the deaths of more than 1,000 people.

A Tale of Two Earthquakes: Colombia vs. Venezuela

Monday’s tragedy inevitably invites comparisons to the devastating twin earthquakes that struck neighbouring Venezuela in June. Despite sharing similar magnitudes (7.2 and 7.5 in Venezuela, 7.4 in Colombia), the outcomes have been drastically different.

Venezuela’s twin quakes were incredibly shallow, originating just 10 to 22 kilometres below the surface. They also occurred only 39 seconds apart, meaning that the second shock struck structures already weakened by the first. In contrast, yesterday’s quake in Colombia struck at an intermediate depth of 110 kilometres. Because the energy was released far deeper underground, the shockwaves thankfully lost much of their destructive power before reaching the surface.

Venezuela therefore faced a shallower double shock that affected densely populated areas around Caracas and La Guaira. Colombia experienced a single, deeper event, with the worst damage spread across several cities and regions. The physical characteristics of the disasters therefore mattered enormously.

Beyond the geology, the contrast in state responses has been stark, reflecting the vastly different institutional capacities of the two nations.

Venezuela’s response was rapidly overwhelmed. The scale of the destruction, the country’s economic crisis and the weakness of its emergency infrastructure after decades of chavismo forced the government to depend heavily on international rescue teams, UN agencies and external aid — prompting the government to beg for the release of frozen international assets just to fund relief operations.

Colombia’s response, however, has so far been more self-sufficient, reflecting a stronger state apparatus. Colombia was able to mobilise its domestic emergency institutions quickly, with De La Espriella assuming political responsibility for the response.

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Today in Latin America

🇨🇴 The 'Iron Fist' Takes Power: De La Espriella’s Blueprint for Colombia

[In the run-up to the inauguration ceremony, we published an assessment of four years of “change” under Gustavo Petro, and the challenges that await the new administration]

In his highly anticipated inaugural address in Cali, President Abelardo De La Espriella outlined a radical course correction for Colombia, delivering a speech steeped in religious fervour, military reverence, and an unrestricted embrace of free-market capitalism.

Delivering his speech in front of the military (rather than the traditional political elite), the message was unambiguous: the era of Gustavo Petro is over, and an “iron fist” is back in charge.

The speech lasted an hour and a half. But the weekend proved more symbolic than eventful — with none of the promised 90 sweeping decrees he claimed would be waiting to be formalised on Day One actually signed. While he announced an immediate freeze on public spending during his speech, the only decrees he physically signed over the weekend formalised the nomination of his cabinet and senior roles.

For the rest of the promised shock therapy, we will have to wait. Indeed, despite projecting the image of an uncompromising strongman, De La Espriella’s sweeping agenda is already facing a harsh reality: his lack of an independent majority in Congress means his governance is heavily conditioned by a fragile, transactional alliance with former President Álvaro Uribe’s Centro Democrático party.

In the absence of a flurry of immediate legislation, we must rely on his speech. The immediate takeaway is that his administration plans to rapidly dismantle the progressive legacy of his predecessor, substituting Petro’s focus on social justice (under which poverty and extreme poverty fell sharply, albeit at the expense of the country’s finances) and “total peace” with a hardline strategy built on four pillars: fiscal austerity, aggressive security, a revival of fossil fuels, and a tight alignment with the United States.

1. Fiscal Shock Therapy
Faced with a ballooning 7.8% fiscal deficit, De La Espriella announced an immediate freeze on public spending. He pledged a structural tax reform aimed at attracting foreign capital, which includes the elimination of the wealth tax introduced by Petro in 2022. Passing this reform will be the first major litmus test of his precarious congressional alliances.

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Welcome to your ☕️ Cafecito where we cut through the noise and identify what’s shaping the hemisphere.

Having assessed four years of “Change” in Colombia under Gustavo Petro yesterday, we focus today on the inauguration of President Aberlado de La Espriella in Cali, and the challenges that await the new administration. As always, paid readers have access to every ☕️ Cafecito in full, with a free preview for everyone. Subscribe here.

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🇨🇴 A Boycotted Inauguration, A Broken Economy: The De La Espriella Era Begins

At 3:00 p.m. today local time, Colombia makes history, and with it a sharp political pivot. In a break from tradition, Abelardo De La Espriella will be sworn in as Colombia’s 61st president — not in the capital of Bogotá, but in Cali.

A Historic Pivot in a Locked-Down Cali

The symbolic choice of the southwestern city, a traditional left-wing enclave severely impacted by outgoing President Gustavo Petro’s “total peace” flagship policy, spotlights the region's security crisis and signals that restoring order and governing for the regions are the immediate priorities.

The scene on the ground is tense. The outgoing Defence Minister Pedro Sanchez told Colombia’s RCN Radio that authorities were tracking a “threat” against Friday’s inauguration event. On Wednesday this week, a bus loaded with 420 kgs of explosives was intercepted in the Cauca department during a police check. The city is locked down under a strict drone ban, dry law, and a car-free mandate.

The inauguration itself is being actively boycotted by outgoing President Petro and his party allies. Petro even used his executive power to forbid the military from hosting the ceremony at a local garrison, as De La Espriella initially requested.

De La Espriella, an outsider who campaigned on restoring security and technocracy, takes the helm following a fiercely polarised election, narrowly defeating Iván Cepeda — by 0.96%.

LATIN AMERICA ¡SIN FILTRO!

🇨🇴 Waiting for a Miracle: The Gruelling Road Ahead for De la Espriella

Colombia just pulled off one of the most nail-biting elections in its history, with ultra-right outsider Abelardo De la Espriella narrowly edging out leftist Iván Cepeda. The self-proclaimed “showman” is heading to the Casa de Nariño, inheriting a country that is holding its breath and split right down the middle…

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2 months ago · 3 likes · Nicolas Forsans

While his victory has awakened profound hope among the nearly 13 million voters who backed his promise of a sweeping course correction, he steps immediately into a hostile political arena. Petro is still refusing to recognise the results, floating baseless claims of electoral fraud, and preparing to lead a radical opposition

To balance his own disruptive, histrionic style, De La Espriella is leaning heavily on his Vice President, José Manuel Restrepo. A respected orthodox economist and former finance minister, Restrepo is tasked with calming the markets and traditional conservatives while De La Espriella tours the regions to combat “Bogocentrism”, including a plan to make his native Barranquilla an alternate capital.

Inheriting an Economic Wreckage

Restrepo’s steady hand will be vital, as the political drama pales in comparison to the economic wreckage awaiting the new government. De La Espriella is inheriting five glaring “red flags”, writes La Republica.

Chief among them is a calamitous fiscal reality. Incoming Finance Minister Gómez claims that the true fiscal deficit sits at a staggering 7.8% of GDP, vastly contradicting the outgoing government’s 5.5% claim.

Closing this gap is priority number one, alongside De La Espriella’s radical campaign pledge to slash the size of the state by 40%.

Gómez is pushing for an immediate spending cut of at least 1% of GDP (about US$6.2 billion). He must execute this while navigating a heavy debt burden (60.5% of GDP), inflation that has rebounded past 6%, and Foreign Direct Investment that has languished below the US$1 billion mark for 14 consecutive months.

Compounding these structural headaches are immediate fires to put out: an impending energy shortage exacerbated by El Niño, a critical healthcare system, and US$117 million in allegedly irregular government contracts already flagged by the transition team.

Despite the daunting road ahead, markets are signalling early optimism. The Colombian peso recently hit a 52-week high, and the country’s risk premium has sharply dropped on the promise of renewed fiscal orthodoxy.

De La Espriella’s mandate for change is clear, but executing a painful economic adjustment while managing a combative opposition will test whether his government can truly stabilise the country.

The Regional Ripple Effect: Washington, Ecuador, and the "Iron Fist"

Beyond Colombia’s borders, the sharp rightward pivot is being welcomed with open arms in neighbouring Ecuador — and beyond.

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Latin America Today

🇧🇷 Brazil’s Election Becomes a Geopolitical Proxy War

Brazil finds itself navigating simultaneous diplomatic crises with its two most important hemispheric partners, namely Argentina and the United States, just as its polarised October presidential election kicks into high gear.

This week, Brasília made the unprecedented move of downgrading its diplomatic relations with Argentina to the chargé d’affaires level, with its ambassador being “indefinitely recalled”.

The trigger? Argentine President Javier Milei repeatedly insulting Brazil’s President Lula Da Silva and publicly backing Lula’s conservative election rival, Senator Flávio Bolsonaro, the brother of Jair Bolsonaro, currently serving a 27-year prison sentence for a coup attempt following his loss to Lula in 2022. While Buenos Aires announced it will not retaliate diplomatically, relations between South America’s two largest economies have effectively frozen.

Meanwhile, tensions with Washington are boiling over. The Trump administration just revoked the visa of Brazil’s top diplomat in the USA. The State Department framed the move as a reciprocal action for Brazil stalling the approval of the US ambassador nominee and denying entry to American diplomats. Brasília, however, forcefully pushed back, accusing the US envoys of attempting to meddle in its upcoming elections and cast doubt on the integrity of its electronic voting system.

What to make of it?

These diplomatic ruptures are inextricably linked to Brazil’s domestic politics. The October race is tightening, with the most recent Nexus/BTG poll showing Lula’s lead over Flávio Bolsonaro narrowing to just five percentage points in the first round, with a tiny lead for Lula in a simulated second round (46 vs. 45%). Too close to call, and therefore everything is to play for.

It is in this context that we are witnessing the internationalisation of Brazil’s election. Milei and Trump appear to be forming a transnational conservative bloc to boost the younger Bolsonaro, while Lula’s Workers’ Party is leveraging these diplomatic incidents to rally its base against foreign interference. As is too often the case, regional diplomacy in Latin America is dictated by domestic ideological warfare, threatening to sacrifice crucial bilateral trade and policy cooperation at the altar of electoral politics. This is nothing new — but in a highly polarised hemisphere, we are seeing ideology take over everything else.

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🇨🇱 Kast’s Economic Mega-Reform Inches Closer to Reality

Chilean President José Antonio Kast’s flagship tax and economic mega-reform has cleared a major legislative hurdle, with EFE reporting that the Senate approved its final outstanding article. But there is still a way to go for the reform to be validated.

At the heart of Kast’s plan is a supply-side shock designed to revive Chile’s economy. The core measures include slashing the corporate tax rate from 27% to 23%, offering VAT exemptions on home purchases, and introducing a controversial clause that guarantees tax stability (i.e. effectively freezing rates) for large investments. The final Senate battle revolved around how to compensate local municipalities for a significant revenue shortfall caused by the reform’s property tax reductions for seniors.

Kast is betting that these business-friendly measures will boost economic growth to 4% by the end of his term. However, the math is raising eyebrows. Both Chile’s autonomous Fiscal Council and the IMF have warned the reform will generate a “net negative fiscal impact”, complicating efforts to meet deficit targets.

The legislation must now survive two final bottlenecks: opposition challenges in the Constitutional Court, and Kast’s own planned executive vetoes to strip out opposition amendments. If Kast can navigate this final stretch by September, it will fundamentally reshape Chile’s economic model..

🇻🇪 Washington Pours Cold Water on Venezuela's Election Hopes

In declarations reported by Newsweek, U.S. Secretary of State Marco Rubio stressed that rebuilding Venezuela’s democratic machinery will still take “months and weeks” of complex groundwork. He established strict pre-conditions for any future elections, demanding a free press, broad multi-party participation, and a reliable electoral commission, while conditioning political stability to the strengthening of the economy.

Yet, the most striking element of Rubio’s declaration was his assertion that Venezuela’s next elected government will inherit a “functional state” rather than a disaster. This is surely a bold rhetorical reframing for a country still recovering from nearly three decades of Chavismo, a US military intervention in January, and the devastating June earthquakes.

Rubio’s calls for patience underscore a sobering reality: eight months after the capture of Nicolás Maduro’s, the rapid turnaround promised by the Trump administration has stalled. Anticipated US oil investments remain caught in bureaucratic red tape. Even more critically, while Washington facilitates renewed talks between acting President Delcy Rodríguez’s government and certain opposition figures, the glaring absence of Nobel laureate María Corina Machado and Edmundo González from the negotiating table threatens to hollow out the legitimacy of the democratic transition Washington is trying to engineer.

Patience is also wearing thin on Capitol Hill. A bipartisan group of US senators introduced a resolution this week demanding expeditious elections, the release of political prisoners, and the safe return of Machado. The move signals growing bipartisan frustration over the Trump administration's failure to push Rodríguez's interim government toward a credible vote, highlighting the widening gap between Washington's stated democratic goals and the slow realities on the ground in Caracas.

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🇨🇴 Petro’s Mixed Legacy: Four Years of ‘Change’ in Colombia

Today, Gustavo Petro completes his four-year term, ending a presidency that fundamentally altered Colombia’s political landscape, even if its grandest promises have fallen short of reality.

As the country’s first progressive, left-wing president, Petro took office in 2022 vowing to shatter decades of conservative, elitist rule. In many ways, he succeeded in democratising power. The elevation of figures like Afro-Colombian activist Francia Márquez to the vice presidency, alongside indigenous and marginalised leaders across the cabinet, permanently broadened the face of the Colombian state and finally gave representation to those Márquez called “the nobodies”.

The rest of this deep dive is for premium subscribers. Upgrade today to read our full assessment of Gustavo Petro’s legacy, his unprecedented cabinet turnover, and the brutal fiscal adjustments awaiting Colombia’s next president.

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Social Progress at a Fiscal Cost

Economically, Petro delivered on some of his core promises to Colombia’s most vulnerable.

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Welcome to your ☕️ Cafecito where we cut through the noise and identify what’s shaping the hemisphere. This is a longer-than-usual edition. Work commitments have prevented me from publishing a daily edition this week. I profoundly apologise.

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Latin America Today

🇻🇪 Venezuela’s Democratic Future in Washington’s Hands

A new round of negotiations between Venezuela’s Chavista government and the democratic opposition is set to begin, but the true centre of gravity has shifted from Caracas to Washington. Unlike past failed dialogues, the United States is no longer merely observing; under the Trump administration, it is acting as a vested arbiter. In other words, the opposition and the government negotiate — yet, Donald Trump will decide.

This intense US tutelage has fractured the Venezuelan opposition. Key figures like María Corina Machado and Edmundo González Urrutia are boycotting the talks, suspicious that Washington’s true priority is economic stability to facilitate oil extraction, with very little interest in genuine democratisation shown by Washington to-date. Recent moves by the U.S. Treasury to relax financial controls on the Venezuelan government have only deepened these fears of a “colonised” transition.

For the talks led by Dinorah Figuera to gain legitimacy, they must rapidly deliver concrete institutional changes, such as restoring political rights and establishing a credible electoral calendar for 2028, argues a tribune in El Pais. Ultimately, the success of this high-stakes dialogue will depend on whether Venezuelans can wrest back control of their destiny, or if their democratic aspirations will be traded away for geopolitical resource stability.

🌎 A Perfect Storm Looms: “Super El Niño” Threatens Millions in Latin America

A rapidly developing “Super El Niño” weather system is on a collision course with a region already battered by climate shocks and global economic pressure (The Guardian). The United Nations World Food Programme (WFP) and the Food and Agriculture Organization (FAO) issued a stark warning on Wednesday: the extreme weather event could push up to 50 million people worldwide into acute hunger by the end of next year. For Latin America and the Caribbean, the forecast is particularly grim.

The WFP estimates that an additional 16 million people across Latin America and the Caribbean could be pushed into severe food insecurity, compounding a crisis where 33 million people already suffer from hunger and 181 million cannot afford a healthy diet.

The threat is acute and immediate: the phenomenon is expected to bring devastating droughts to the already vulnerable Central American Dry Corridor, the Caribbean coasts of Colombia and Venezuela, and the Andean highlands. Conversely, torrential rains and flooding are projected to wipe out crops and infrastructure along the coasts of Ecuador and northern Peru.

What makes this impending crisis uniquely dangerous is its intersection with existing global pressures. The El Niño system is gathering strength just as farmers across the region grapple with the compounding effects of global heating, which is expected to make 2026 or 2027 the hottest years on record. Add to this a global fertiliser crisis exacerbated by tensions in the Middle East and taken together, these factors could decimate harvest yields, shatter agricultural supply chains, and trigger massive spikes in food prices.

In response, UN agencies have launched an urgent joint appeal for US$202 million to scale up “anticipatory actions.” By acting before the worst impacts hit, the WFP and FAO aim to distribute drought-tolerant seeds, implement water harvesting systems, and provide direct cash transfers to protect millions of vulnerable families.

However, funding shortfalls and closing time windows threaten this proactive approach. As the window for preparation narrows, Latin America braces for a climate shock that could severely erode decades of developmental progress and destabilize vulnerable rural economies.

🇨🇴 Colombia’s High-Stakes Ideological Tightrope

With just a couple of days to go before the inauguration of the new administration, Colombian soon-to-be President Abelardo de la Espriella has unveiled a cabinet that attempts to marry traditional, market-friendly technocrats with “new right” populist disruptors, assesses El Pais.

This balancing act will most likely define this administration as it attempts to pass vital economic reforms while keeping a restive, anti-establishment base energised.

The Traditional Technocrats vs. The Populist New Right

To calm the markets and project institutional stability, de la Espriella has anchored his economic and political team with conservative establishment heavyweights. Vice President José Manuel Restrepo and incoming Interior Minister Rodrigo Lara bring deep ties to former presidents Iván Duque and Álvaro Uribe. These seasoned operators are tasked with leveraging their congressional influence to navigate a fractured legislature and deliver a sharp pivot back to orthodox, market-friendly governance.

But operating right alongside the establishment wing is an injection of global populism that directly echoes the disruptive energy of leaders such as Javier Milei and Donald Trump. This ideological edge is embodied by incoming Foreign Minister Omar Bula, a vocal critic of the United Nations and “woke” agendas, along with hardline evangelical leaders taking over sensitive portfolios like Education and Housing.

This dual-track strategy satisfies his core supporters’ hunger for anti-establishment disruption and ensures the government will engage in highly symbolic culture wars. The question is: Will it last?

Looming Fiscal Shock Therapy

The new economic team faces a fiscal reality that we previously commented on, with a primary deficit expected to hit 3.5% alongside public sector debt exceeding 60% of GDP. Incoming Finance Minister Miguel Gómez promises aggressive consolidation and pro-business deregulation, targeting structural savings to be achieved by shrinking state bureaucracy and selling off unproductive assets.

To attract foreign capital and meet strict fiscal rules, the administration also plans to aggressively revitalise the mining sector, including the potential approval of “environmentally responsible” fracking.

A Fragile Governing Alliance

Yet, executing this economic shock therapy will require immense political agility, as delivering an estimated US$5.6 billion in spending cuts by 2027 promises to be explosive.

Hence the question we asked earlier: Will this balancing act last? If the fiery culture war priorities of the populist wing end up alienating the moderate lawmakers needed to pass legislation, the administration will struggle to advance its structural reforms. While we can expect a raft of decrees on, or shortly after Inauguration Day, we will wait to see if this marriage of convenience can maintain stability, or if it will most likely fracture under the weight of its own internal contradictions.

A Violent Stress Test

Meanwhile, the ELN guerrilla group detonated a truck bomb outside a police station in Cúcuta last week, injuring 12 officers and three civilians. This attack is highly significant, evidencing military strength ahead of the political transition.

The Cúcuta bombing is also a stark reminder of the security crisis inherited from the outgoing Petro administration. Under his ambitious but flawed “Total Peace” policy, Colombia’s illegal armed groups experienced a staggering 90% growth, ballooning from 15,120 members in 2022 to nearly 29,000 by July 2026. The Clan del Golfo criminal group more than doubled its ranks, while ELN membership grew by 22%, according to la FIP.

Amidst this sprawling violence, Petro’s strategy managed just one concrete disarmament success. In the Putumayo jungle, 99 ex-combatants of the dissident Comandos de la Frontera recently burned their uniforms and entered a temporary transition zone to civilian life. They represent the first and only armed faction to successfully demobilise under the outgoing government.

With intelligence agencies warning of potential strikes in major cities around the August 7 inauguration, the incoming right-wing administration faces a turbulent baptism by fire. De la Espriella must not only rebuild the state’s security apparatus to dismantle these technologically advancing armies, but he also faces an immediate dilemma regarding Petro’s sole peace success. Will the hardline administration sustain the legal protections and funding for those 99 demobilised fighters, or abandon their camp and risk driving them straight back into the lucrative illicit economies they just fled?

Below the paywall for our premium subscribers: The militarisation of Latin America’s security, and our deep-dive analysis into CEPAL's radical new geopolitical survival guide for Latin America — and why the region's current leaders are structurally incapable of executing it.

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🌎 The Militarisation of Latin American Security

Across Latin America, a troubling consensus is solidifying: when faced with spiralling crime, extortion, and cartel violence, governments are increasingly handing the keys of public security over to the military.

From sweeping states of exception to military control of prisons, this trend reflects a desperate search for order. Yet it carries profound long-term risks for civil rights and democratic institutions, argues El Pais.

The scope of this militarisation is vast. In Mexico, a process that began in 2006 under Felipe Calderón accelerated dramatically under the left-wing government of Andrés Manuel López Obrador, who transferred unprecedented power, resources, and even infrastructure projects to the armed forces.

In El Salvador, President Nayib Bukele has relied on the military to enforce a permanent state of exception since 2022, resulting in over 85,000 arrests but drawing severe international condemnation for alleged crimes against humanity, including torture and arbitrary detentions.

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Latin America Today

🌎 Regional Migration: Pressures and Payoffs

Some interesting insights from this week’s Americas Migration Brief that pulls together NGO, multilateral and media reporting to show both the payoffs and the pressures of the region’s migration experiments.

Most notably, a World Bank paper finds that Colombia’s 2018 PEP regularisation for Venezuelans produced immediate and lasting gains: eligible migrants earned around 69% higher monthly income from their work, accessed services far more easily, and invested significantly in housing quality. Also relevant is the finding that, in the medium term, migrants eligible for regularisation felt “greater belonging, had more friendships with Colombians and greater community participation and attachment”.

At the same time, Ipsos polling across 29 countries suggests that Brazil is among the most welcoming societies for refugees, as other governments in the region have moved in a more restrictive direction. The Americas Migration Brief stresses that these Latin American innovations in regularisation and labour pathways are increasingly seen as models for Europe, but warns that the political window for such ambitious schemes may be narrowing as economic and security anxieties mount.

Meanwhile, a UN Migration brief reveals that the recent decline (by 84% between the first five months of 2026 vs. the same period last year) in “irregular movements” from Cubans along the Central American Route does not imply Cubans are no longer emigrating.

Instead, the IOM notes that “many countries”, most notably Uruguay and Brazil, “continue to register evidence of sustained Cuban arrivals and migrant presence”, even if Brasilia reported a decline in asylum applications by Cubans at the start of the year.

This points to a reshaping of Cuban mobility across the hemisphere, with South America remaining an important destination and settlement region.

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🇧🇷 Brazil Combats Perceived Election Meddling

Brazilian President Luiz Inácio Lula da Silva is combating a perceived international campaign to tilt October’s election toward right-wing candidate Flávio Bolsonaro, according to the WSJ. Tensions boiled over when Brazil recalled its ambassador to Argentina after President Javier Milei attended a São Paulo rally, openly insulting Lula. Concurrently, Brazil denied visas to U.S. officials over fears the Trump administration is undermining its electoral integrity.

With regional neighbours shifting right, Brazil remains South America’s last major leftist stronghold. Crucially, this overt foreign meddling could backfire, ultimately boosting Lula by rallying nationalist sentiment and alienating the decisive centrist voters Bolsonaro needs.

🇵🇪 Peru Pivots Right Under Fujimori

Keiko Fujimori’s inauguration as Peru’s first female president cements Latin America’s accelerating rightward shift. Her razor-thin victory revives a polarising dynasty and pauses a decade of severe political instability.

Regionally, Fujimori’s ascent is highly significant: she is actively pivoting toward the United States, eagerly backing the Trump administration’s regional security initiatives. This realignment offers Washington a crucial partner to counter China’s deep economic footprint in the copper-rich nation. However, with a fragmented bicameral Congress and simmering leftist protests, Fujimori faces a brutally narrow path to govern effectively while balancing soaring domestic expectations.

🇲🇽 US Targets Mexican Politicians in Strategy Shift

The Trump administration has significantly escalated its anti-narcotics approach, shifting focus from traditional cartel capos to their alleged political enablers. According to CNN, this pivot was recently underscored when the US Treasury accused cartels of using illicit profits, such as those from oil theft, to bankroll the electoral campaigns of compliant local officials.

Meanwhile, The Atlantic reports that the new strategy goes far beyond campaign finance scrutiny; pressured Mexican politicians are now allegedly offering to become FBI informants to save their US visas, providing Washington with unprecedented intelligence.

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🔎 The Deep Dives You Might Have Missed

• 🇪🇨 U.S.-Ecuador Security Partnership: The Prototype of a Perilous Doctrine

• 🌎 Is Life Getting Better in Latin America? A 2026 Reality Check

• 🇪🇸 How Latinos Are Powering Spain’s Jobs Boom — and Its Demographic Future

🌎 Latin America This Week: The New Rules of Engagement

This week’s analyses on Mexico’s USMCA review, Brazil’s tariff shock, Colombia’s entry into the “Shield of the Americas,” and Washington’s legal choreography around Venezuela all point to a broader pattern. The United States is rebuilding its influence in Latin America not through traditional multilateral diplomacy, but through a transactional mix of trade leverage, militarised security frameworks, and selective legal recognition.

The stakes are exceptionally high because this is unfolding in a region stuck in a low‑growth equilibrium. The World Bank’s April update projects Latin American and Caribbean GDP growth of just 2.1% in 2026. As ECLAC warns, this prolonged period of limited fiscal space means external shocks and policy uncertainty can quickly translate into social frustration and political volatility.

🇺🇸 The Weaponisation of Trade

On trade, the USMCA review signals Washington’s willingness to turn rules‑based agreements into annual bargaining arenas, introducing a rolling source of uncertainty for Mexican manufacturers. Simultaneously, US tariffs aimed at Brazil show how commercial disputes over payments technology are now being bundled with sanctions and security rhetoric.

This combination is pushing Brazilian policymakers to deepen ties with China. Chinese demand and financing increasingly offer a more predictable framework than Washington’s weaponised trade policy. The more the US leans on punitive tools, the more it risks losing long‑term influence over how key South American economies integrate into global supply chains.

The Return of the Hardline

On security, Colombia’s proposed alignment with the Shield of the Americas epitomises a return to a US‑designed law‑and‑order architecture, where cross‑border operations and incarceration models are coordinated from Washington.

However, Human Rights Watch’s latest analysis which we covered on Tuesday warns that similar hard‑line approaches, such as mass detentions in El Salvador and aggressive policing in Ecuador, have produced serious rights violations without delivering sustainable security. Plugging Colombia back into a US‑led war‑on‑drugs framework risks reproducing those failures, especially if mega‑prisons replace rural development strategies.

The Double-Edged Sword of ‘Selective Legality’

The legal dimension adds a layer of what analysts call “selective legality”. By extending head‑of‑state immunity to Venezuela’s Delcy Rodríguez while prosecuting her predecessor Nicolás Maduro, Washington sends a clear signal: legal protections hinge on alignment with US interests rather than consistent principles.

For Latin American observers already wary of double standards, this reinforces the perception that global norms can be bent to accommodate geopolitical priorities. Consequently, regional governments are increasingly likely to hedge with alternative partners or pursue their own forms of legal exceptionalism at home.

Nicaragua sharpened that picture even further this week. Daniel Ortega declared that there would be no more elections in the country, prompting Marco Rubio to call on the international community to isolate what he described as the Murillo-Ortega dictatorship. But the Trump administration has not yet announced a major new sanctions package or other concrete follow-on measures tied specifically to this latest step.

The Bottom Line

International organisations have long warned that Latin America’s combination of low growth, high inequality and fragile institutions requires more cooperative and predictable governance. Instead, the emerging architecture looks fragmented: trade agreements under permanent review, tariffs used as geopolitical weapons, security coalitions with weak rights safeguards, and legal norms applied unevenly.

For Latin American societies, the risk is that external pressure deepens domestic polarisation, rewarding sovereignty narratives and law-and-order politics at the expense of inclusive development and rights protection.

The region still has agency, but this week’s stories suggest that exercising it will require something that remains in short supply: a more unified regional strategy.

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Latin America Today

🇲🇽 USMCA Enters Its Most Dangerous Phase Yet

Mexico and the United States have begun the first annual review of the USMCA under a cloud of growing mistrust. With the Trump administration refusing to roll the pact over for another 16 years and demanding yearly scrutiny, Washington is pushing for aggressive changes to auto content rules, agriculture, and the trade deficit.

This meeting is the start of the USMCA’s countdown: failure to reach an agreement means the pact will die in 2036. With nearly US$900 billion in annual trade and over 80% of Mexican exports bound for the US market, the uncertain outlook severely complicates Mexico’s economic activity.

For President Claudia Sheinbaum, the review is an early, vital test of whether Mexico can defend its export-led economic model against an unpredictable neighbour.

🇧🇷 Washington's Trade Pressure Pushes Brazil Toward Beijing

The Trump administration’s 25% tariff on Brazilian imports took effect this week, hitting goods that account for roughly 18% of Brazil’s exports to the United States, including industrial machinery, sugar, ethanol, and footwear. The measures stem from US allegations of unfair Brazilian practices, notably around the Pix payments system, though Washington exempted 2,100 strategically important products like oil, coffee, and aircraft parts.

Combined with recent sanctions and terrorism designations affecting Brazilian actors, the move has deepened strains in a relationship that was already deteriorating.

Brasília launched Brasil Soberano III, a US$3.65 billion credit line to help affected companies diversify their export markets, while Vice President Geraldo Alckmin has stressed negotiation over retaliation.

The bigger significance is political. Lula has weaponised the dispute to cast himself as a defender of Brazilian sovereignty against foreign pressure, a message resonating with voters who feel the domestic right is too closely tied to Trump. Ultimately, this tariff fight has a double effect: it strengthens Lula at home while accelerating Brazil’s search for more dependable partners.

The case for closer ties with China is not just ideological; it is becoming more practical. China has been Brazil’s largest trading partner since 2009, bilateral trade reached roughly US$171 billion in 2025, and Brazilian officials have shown greater openness to deeper commercial arrangements with Beijing as US tariffs disrupt established trade flows. In the first half of 2026, the US share of Brazilian exports fell to a record low 9.4% while China’s climbed to 31.5%, underscoring how quickly Brasília’s push to diversify partners is increasingly pointing toward China.

🇻🇪 Trump Shields Delcy — And Signals His Venezuela Bet

The Trump administration has asked a Miami federal court to grant interim Venezuelan president Delcy Rodríguez head-of-state immunity, seeking to shield her from a civil suit tied to alleged torture during the Maduro era. By extending one of international law’s strongest protections to Rodríguez, Washington is reinforcing its recognition of her as Venezuela’s legitimate leader and signalling that preserving a working relationship with Caracas supersedes legal accountability while she remains in office.

Trump’s Venezuela policy is increasingly transactional. Washington has restored diplomatic contact with Rodríguez’s government, framing the relationship around security, oil, and minerals rather than a democratic rupture with Chavismo. The contradiction is striking: while Washington shields Rodríguez, a New York judge has set June 1, 2027, for Nicolás Maduro’s US drug-trafficking trial, where his lawyers are expected to raise immunity arguments of their own.

🇨🇴 Colombia Rejoins Trump’s Anti-Cartel Orbit

Colombia’s president-elect, Abelardo de la Espriella, says his government will host a Medellín office for Donald Trump’s “Shield of the Americas”, formally pulling the region’s biggest cocaine producer into a US-backed anti-cartel alliance that Petro had kept at arm’s length.

De la Espriella is tying the move to a hardline agenda that includes closer military cooperation with the US and Israel, dismantling Petro’s “total peace” strategy, building mega-prisons, and returning to pesticide-based coca eradication.

For the region, this signals a decisive swing away from negotiation-based security policy and back toward a cross-border, militarised war-on-drugs model led from Washington.

LATIN AMERICA ¡SIN FILTRO!

Latin America Intel: US-Ecuador Security and the Shield of the Americas – July 21, 2026

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a month ago · 4 likes · Nicolas Forsans

🇨🇴 Colombia’s Coca Exit Plan Faces Its Toughest Test Yet

In Colombia’s coca-growing south, the Petro government’s RenHacemos programme is trying to prove that farmers can leave coca behind through voluntary substitution, technical support and broader investment in legal local economies rather than through forced eradication alone.

That makes it more than a drug-policy experiment: framed as a peace-building strategy, it has expanded into historical coca strongholds like Putumayo and Catatumbo.

But the model remains incredibly fragile.

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Latin America Today

🇻🇪 The Missing Billions: Where is Venezuela’s Oil Money?

The FT estimates that the U.S. has collected an estimated US$13bn in revenues from Venezuelan oil sales since January, but the Trump administration has remained tight-lipped on where the money is actually going.

Since capturing President Nicolás Maduro and installing Delcy Rodríguez as leader, the U.S. took control of Venezuela’s vital oil exports, which normally make up a quarter of the country’s GDP. While the ensuing sanctions relief was expected to jumpstart the Venezuelan economy — even before last month’s devastating earthquakes — the recovery has been noticeably muted. First-quarter growth has been sluggish at just 2.5%, providing evidence that the U.S. is not transferring the totality of these increased revenues back to Caracas.

Washington’s explanations have been wildly inconsistent. Initial executive orders framed the U.S. as a “custodial” holder of the funds for the Venezuelan people. However, President Donald Trump has publicly bragged that the US is “making a lot of money” from the arrangement, claiming the administration has recovered the cost of the January military operation “28 times over” through oil sales. In April, the State Department claimed around US$3bn had been sent back, but congressional Democrats say they have received zero quarterly reports or audits since.

Where does this leave Venezuela?
In a highly precarious position. The recent twin earthquakes on June 24 caused an estimated US$37bn in infrastructure damage. While the US State Department under Secretary Marco Rubio has mobilised $150 million in direct humanitarian aid and disaster relief, deploying search-and-rescue teams and military transport, this is a drop in the bucket compared to the estimated US$13bn in oil revenues floating in opaque, US-controlled accounts.

Until there is congressional transparency regarding these funds, Venezuela’s economic recovery and reconstruction efforts will remain severely bottlenecked by Washington’s control.

🇧🇷 Unforgiving Economics: Brazil’s Approaching Election and Fiscal Reality

As Brazil gears up for its October 2026 general elections, the country faces a daunting economic reality regardless of who wins. Incumbent Luiz Inácio Lula da Silva is seeking a fourth term, likely facing off against Flávio Bolsonaro, the eldest son of the ineligible former president. Both frontrunners enter the race with high disapproval ratings, setting the stage for a highly contested election.

However, the true challenge lies in the unavoidable need for fiscal consolidation. The next president will inherit a budget deficit nearing 8.5% of GDP, with over 90% of spending mandated by law. Brazil’s gross public debt sits at roughly 81% of GDP, and with the benchmark Selic interest rate currently at a punishing 14.25%, the debt burden is snowballing rapidly.

If the new administration fails to implement a credible four-year plan — such as freezing public sector hiring and capping entitlements — net debt could surge towards 75% of GDP by 2030, a scenario investors will likely refuse to finance, argues an investor in the FT.

His prescription is clear: while Brazil’s high foreign reserves offer a temporary cushion, whoever wins will have to prioritise aggressive economic management, disinflation, and growth to stabilise the country’s fragile debt math and regain market credibility.

🇲🇽 Mexico Leads Regional Pushback Against ICE

The Trump administration’s immigration crackdown has claimed at least 62 lives in 18 months, prompting Mexico to mount the region’s fiercest resistance. Following the deaths of 17 Mexican nationals in Immigration and Customs Enforcement (ICE) operations, including a recent mistaken-identity shooting in Texas, President Claudia Sheinbaum is aggressively pursuing criminal complaints through the U.S. Department of Justice and suing private detention centre operators.

While Brazil has issued restrained condemnations over the mistreatment of its citizens, Colombia’s President-elect Abelardo de la Espriella, a staunch Trump ally, has said nothing. Nor has Venezuela, a de facto U.S. protectorate. Mexico is the only nation taking active legal action.

Sheinbaum’s approach is a high-stakes geopolitical gamble. By attempting to legally hold U.S. federal agencies accountable, Mexico is risking severe retaliation. Washington has already rejected Mexico’s diplomatic protests as foreign interference. With the vital US-Mexico-Canada Agreement (USMCA) subject to upcoming reviews and Trump’s proven willingness to weaponise sweeping tariffs to force border compliance, Sheinbaum is risking Mexico’s export-dependent economy to defend national sovereignty.

It is a bold defence of human rights, but if Washington retaliates with trade barriers, the economic blowback for Mexico could be devastating.

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🇸🇻 El Salvador’s New Oligarchs: The Bukele Boom

President Nayib Bukele rose to power condemning El Salvador’s elite “20 Families” but recent financial disclosures reveal that his administration has simply replaced them with a new club of millionaires.

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Stories Shaping Latin America Today

🇨🇴 First Setback for De La Espriella

In a stunning rebuke to the incoming administration, the Colombian Congress rejected President-elect De la Espriella’s handpicked candidate for Senate president, Alfredo Deluque. Despite publicly securing 55 votes across eight parties, a secret ballot saw him fall short, defeated by the Centro Democrático’s Honorio Henríquez. The result was engineered through an improbable alliance: Alvaro Uribe’s right-wing bloc joined forces with Gustavo Petro’s leftist Pacto Histórico.

For the uribistas, it was payback for De la Espriella’s hostile campaign rhetoric and his refusal to negotiate with traditional parties. For the petristas, it was a tactical block against an incoming leader promising a sweeping judicial crackdown.

We said before De La Espriella’s campaign style had alienated the very right-wing party he would need the support of to govern, and yesterday was a warning. That defeat leaves De la Espriella with a stark choice: moderate his anti-establishment “mano dura” stance, or double down and try to govern entirely around a hostile legislature. Time will tell which route he chooses.

🇳🇮 Ortega Stops Pretending

Daniel Ortega is abandoning even the facade of democratic procedure in Nicaragua. Addressing crowds on the 47th anniversary of the Sandinista revolution, the 80-year-old leader declared there will “be no more elections”, announcing plans to legislate a “wall” to permanently block the opposition from power.

The rhetorical escalation confirms what was already effectively true: Nicaragua has transitioned into a full-fledged family dictatorship under Ortega and his “co-president” wife, Rosario Murillo.

Fearful of dissent after years of shrinking domestic support, the regime is choosing to eliminate electoral competition entirely rather than stage rigged contests. Having already dismantled civil society, stripped dissidents of citizenship, and pushed through constitutional reforms to extend presidential terms, Ortega’s declaration marks the final, formal closure of Nicaraguan democracy.

🇵🇦 Between Washington and Beijing

The Panama Canal is experiencing an unprecedented boom, and with it unprecedented geopolitical pressure, reports The Economist. With the Strait of Hormuz effectively closed by the US-Iran conflict, canal traffic has surged to near-maximum capacity, pushing transit auction prices to record highs and cementing its status as a critical energy artery.

But Administrator Ricaurte Vásquez warns this windfall is surrounded by volatility. The immediate challenge is climate change, with a multi-billion-dollar reservoir project underway to prevent the droughts that recently paralysed traffic. The more acute threat, however, is a resurgent Monroe Doctrine. Donald Trump has repeatedly threatened to “take back” the canal, pressuring President José Raúl Mulino to tear up Chinese port concessions and exit the Belt and Road Initiative. The pressure works, but Beijing is already retaliating by aggressively detaining Panama-flagged vessels. If the canal ceases to be a neutral conduit and becomes a contested geo-strategic asset, the resulting friction will inevitably drive up global supply chain costs and force Latin American states to openly choose sides in the US-China trade war.

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🇪🇨 U.S.-Ecuador Security Partnership: The Prototype of a Perilous Doctrine

Human Rights Watch’s new report, A Dangerous Partnership, arrives at a moment when Ecuador has become one of Latin America’s most closely watched security experiments.

Despite President Daniel Noboa’s declarations of an “internal armed conflict” and massive military deployments, his mano dura strategy has largely failed to contain the crisis. In fact, Ecuador closed 2025 with over 9,200 homicides — a 30% jump from the previous year, securing its place among the most violent countries in the world.

As this violence has surged, the Trump administration has rapidly deepened its cooperation with Noboa, providing equipment, intelligence, and direct military support in what is increasingly presented as a frontline case for a new hemispheric security doctrine.

However, Human Rights Watch argues this partnership is expanding just as Ecuador’s security forces commit serious human rights violations under the guise of an “internal armed conflict”. What makes this report so critical is its warning that Washington and Quito are operating with striking opacity and insufficient safeguards.

The Shield of the Americas

The implications of this partnership stretch far beyond the Andes.

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Latin America This Week

🇦🇷 How the Malvinas Took Over the World Cup

Thursday’s deep dive showed how an Argentina–England semi-final briefly became a stage for collective memory, nationalism and unfinished wars.

The match turned football into political theatre: Argentina’s vice‑president framed the game as a fight over the Malvinas, players unfurled a banned banner, and stadium chants resurrected a narrative that links wartime trauma, national identity and contemporary politics.

The episode matters because it exposes how political actors weaponise historical memory to mobilise supporters, shape foreign policy debates, and normalise symbolism as a tool of power.

• Read the full analysis for context on how this dynamic resonates across the region — where old grievances and new politics are colliding.

🌎 Latin America Reshaped by the Far Right

This deep dive looks at the region’s rightward turn, from the rise of hardline leaders and security-first politics to the ways conservative movements have learned to combine culture-war messaging, anti-establishment rhetoric and strongman symbolism into a more durable political project.

It asks not only who these leaders are, but why their style of politics has proved so effective across very different countries, and how fragile its hold to power is.

• Read the full analysis here

🇵🇪 Will Keiko Fujimori Last Five Years?

In our deep dive on Keiko Fujimori’s fragile new mandate in Peru we examined Alberto Fujimori’s political legacy and why it continues to shape Peru’s institutions, party system and public debate.

It follows the unresolved memory of authoritarian rule, the enduring appeal of order and punishment, and the way Fujimorismo remains one of the defining forces in Peruvian politics.

• Access the deep dive here

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This Week In Brief

🇧🇷 Brazil — The Tariff on Digital Sovereignty

Brazil has vowed to retaliate after Washington moved to impose 25% tariffs on imports of some Brazilian products, calling the decision a “regrettable milestone” in bilateral relations and a politically motivated move tied to pressure from the Bolsonaro family. The tariffs are scheduled to take effect on July 22, and Brasília says it will immediately invoke its Reciprocity Law to prepare countermeasures, while also rejecting the legitimacy of a US investigation it says ignored multilateral trade rules.

The dispute matters because it has become inseparable from Brazil’s domestic politics. Lula’s office says the tariffs were built on a narrative “constructed with the active collaboration” of the Bolsonaro family, and opinion polls suggest the fight has strengthened Lula rather than weakened him. A new survey this week showed him still ahead of Flávio Bolsonaro, with more than half of Brazilians blaming the Bolsonaro clan for the tariff escalation.

The US says the measures are about unfair trade practices, including Brazil’s use of Pix, the state-run instant payment system that Washington argues hurts US credit card companies. But the broader signal is unmistakable: this is now a fight over sovereignty, elections and foreign interference, with Marco Rubio openly defending the tariffs and accusing Lula of failing to negotiate in good faith. For Lula, that gives him a nationalist argument at the centre of his reelection campaign; for the Bolsonaros, it risks turning a trade war into an electoral own goal.

🇻🇪 Venezuela — A Transition Without Machado

Formal talks aimed at “strengthening democracy” will begin on August 1, but the opposition’s best-known figure, María Corina Machado, is notably absent from the negotiating table. Instead, Dinorah Figuera, recently returned from exile with US backing, will represent the main opposition faction in discussions with the interim government, highlighting Washington’s hands‑on role in the transition and raising questions about legitimacy and unity inside the opposition.

Machado remains sidelined even as the process moves forward, which underlines the central tension in the transition: the United States wants an orderly institutional path, but the opposition still lacks a clear, unified political centre.

🇨🇴 Colombia — Dismantling the Peace

President-elect Abelardo de la Espriella is pledging to dismantle the country’s peace architecture before he even takes office, moving to close presidential peace and human-rights offices and challenge the Special Jurisdiction for Peace.

As Inauguration Day approaches (Aug. 7), the venue fight has also hardened: he has now confirmed he wants to be sworn in at a military garrison in southern Colombia, and the issue is expected to go before Congress because any change in venue requires legislative approval.

But the bigger story is that he is inheriting a security landscape that Gustavo Petro never fully brought under control. “Total Peace” bought time, yet Colombia’s largest armed group reportedly expanded its territorial reach and diversified into illegal mining, extortion and smuggling during Petro’s term, leaving behind a criminal economy that is now deeply woven into local governance and extraction zones.

That is what makes De la Espriella’s hardline turn politically potent and strategically limited at the same time. His ultimatum may satisfy voters exhausted by armed actors, but Colombia is no longer confronting a single insurgency that can be defeated by force alone.

The real challenge is a more fragmented, more embedded and more profitable system of violence — one that outlasted negotiations and will be far harder to unwind than a campaign promise.

🇸🇻 El Salvador — Bukele’s Security State

A mass trial of nearly 500 alleged MS-13 members has closed with prosecutors seeking maximum sentences across thousands of alleged crimes, underscoring how Nayib Bukele’s state of emergency has turned mass detention and collective prosecution into a governing model.

Held virtually from the mega-prison CECOT, the proceedings are popular with many Salvadorans, but they also sit inside a much larger political project: Bukele has now secured his party’s nomination for a third term after a controversial constitutional amendment effectively legalised indefinite reelection.

That combination matters. Bukele has not only built his legitimacy on relentless security crackdowns, but also dismantled institutional guardrails with little electoral cost, creating a regional blueprint in which dramatic crime control and political consolidation reinforce each other.

The result is a system where the appeal of order has become a route to uninterrupted power — and where the line between security policy and democratic rollback has all but disappeared.

🇧🇴 Bolivia — The Extractivist Pivot

President Rodrigo Paz’s administration has accelerated openings for agribusiness and mining in protected and Indigenous territories, sparking long marches and human‑shield protests from rural communities.

A controversial land‑law change was repealed after mass mobilisation, but concessions to mining cooperatives and the appointment of agribusiness figures to key ministries suggest extractive logic is embedded at the heart of policy — with serious ecological and social costs as El Niño raises fire‑risk anxieties.

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Welcome to your daily ☕️ Cafecito where we cut through the noise and identify what’s shaping the hemisphere. Today, we track the forces reshaping power across Latin America — from political transitions and peace accords to digital sovereignty and extractive conflict, before turning to a deeper dive on England, Argentina and the politics of collective memory.

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Latin America Today

🇻🇪 A Transition Without Machado

Venezuela’s interim government has announced formal talks with the opposition aimed at “strengthening democracy”, but the real story is who is, and who isn’t, at the table.

In a move that surprised many, the opposition will not be represented by Nobel laureate María Corina Machado, the country’s most popular anti-Chavista figure. Instead, the U.S.-backed negotiations will be led by Dinorah Figuera, a former exile who recently returned to Caracas at the invitation of the U.S. State Department.

The talks, set to begin on August 1, will feature Figuera’s faction of the 2015 National Assembly sitting across from Jorge Rodríguez, the powerful assembly president and brother to acting president Delcy Rodríguez.

This arrangement reveals the deep, hands-on role Washington is playing in post-Maduro Caracas. The Trump administration, driven largely by Secretary of State Marco Rubio, appears to be shaping the political roadmap from afar. The White House has actively discouraged Machado from returning to Venezuela.

The immediate challenge for this U.S.-brokered pact is legitimacy. The country is still reeling from the devastating June earthquakes, and public anger is mounting over the interim government’s sluggish recovery efforts. By sidelining Machado in favour of a more manageable opposition faction, Washington is prioritising stability and institutional control over immediate popular representation.

But with no clear timetable for new elections — and electoral reconstruction expected to take at least eight months — this top-down approach risks fracturing the opposition coalition just when a unified front is needed most.

🇨🇴 A Militaristic Pivot in Bogotá

Colombia’s hard-right president-elect Abelardo de la Espriella is moving to systematically dismantle the country’s institutional peace framework before he has even taken office.

In a fiery address to the nation, De la Espriella announced he will unilaterally close the Office of the Peace Commissioner, the Office of Human Rights, and the agency tasked with implementing the historic 2016 peace deal with the FARC, transferring their duties to existing ministries to end what he called “sham peace processes.”

He also declared his intent to dismantle the Special Jurisdiction for Peace (JEP) — the transitional justice tribunal trying both former guerrillas and military officers for war crimes — and vowed to imprison Rodrigo Londoño, the last commander of the FARC who signed the 2016 accord.

The aggressive announcements mark a radical, militaristic rupture from the policies of outgoing President Gustavo Petro.

But they also fit a broader pattern: De la Espriella’s transition is already defined by martial symbolism; he is currently locked in a bitter dispute with Petro over his insistence on holding his August 7 inauguration at a remote military garrison rather than the traditional Congress, a move Petro has strictly forbidden.

The legal reality, however, is that dismantling the 2016 peace architecture is not as simple as signing an executive decree. The peace deal and the JEP are enshrined in the constitution and protected by international treaties, prompting immediate pushback from lawmakers and former President Juan Manuel Santos, who warned that sabotaging the agreement will only embolden criminal groups.

Yet De la Espriella’s rhetoric, framing the country as a binary choice between “the people and the new order” versus the past, signals that his administration will govern through permanent confrontation, testing the very limits of Colombia’s constitutional guardrails in the name of security.

🇸🇻 Bukele’s MS-13 Mass Trial

El Salvador’s second major gang mega-trial has wrapped up with prosecutors seeking maximum sentences for 485 alleged MS-13 members, in a case covering more than 14,000 alleged crimes over a decade. The scale is the point: under Nayib Bukele’s state of emergency, the country is not just jailing suspected gang members en masse, but turning mass prosecution itself into a governing method.

Human rights groups argue that the trial offers only a thin legal veneer for a system built on arbitrary detention, weak evidence and minimal due process. Conducted virtually from CECOT, Bukele’s high-security mega-prison, the proceedings underscore how El Salvador’s security model increasingly treats collective punishment as compatible with judicial order.

The political problem is that this approach remains popular. Bukele has built legitimacy on the promise that harsh justice is better than impunity, even as rights groups document thousands of alleged abuses and hundreds of deaths in custody. That makes El Salvador one of the clearest regional examples of a broader trend: when publics lose faith in broken institutions, they may accept the spectacle of mass justice in place of the rule of law.

🇧🇷 The Tariff on Digital Sovereignty

At the centre of Donald Trump’s latest trade dispute with Brazil is a surprisingly domestic target: Pix, the free, state-run instant payment system used by 80% of Brazilians. The Trump administration is threatening a 25% tariff on Brazilian exports, arguing that the system constitutes unfair competition that disadvantages U.S. credit card giants like Visa and Mastercard. The U.S. Trade Representative alleges a conflict of interest, noting that Brazil’s central bank acts as both the system’s regulator and operator, essentially forcing local banks to promote a “national champion” over American alternatives while capping fees.

But what began as a technical dispute over payments infrastructure has quickly become an explosive electoral weapon. With presidential elections just three months away, President Luiz Inácio Lula da Silva is seizing on the U.S. threat to rally nationalist sentiment, accusing his main rival, Senator Flávio Bolsonaro, son of the jailed former president, of inviting foreign interference.

The political optics are so potent that Flávio Bolsonaro, despite his close alliance with Trump, is now actively lobbying Washington to hold off on the tariffs, warning that punishing Brazil over a beloved national asset will simply hand Lula an electoral victory.

The dispute matters because it reveals Washington’s growing anxiety over sovereign financial infrastructure. With Pix now accounting for over half of all transactions in Latin America’s largest economy, and similar systems emerging in India, Kenya, and Colombia, the U.S. is not just protecting corporate credit card revenues. It is trying to defend the traditional, dollar-centric financial architecture against a wave of state-backed digital payment networks that are rapidly making U.S. intermediaries obsolete.

🇧🇴 The Extractivist Pivot

When Rodrigo Paz assumed Bolivia’s presidency last November, his centrist victory promised a break from decades of leftist rule. But eight months into his term, his administration hasn’t just maintained the extractive policies of his predecessors, it has turbocharged them.

By appointing former leaders of powerful agribusiness lobbies to head the environment and rural development ministries, the Paz government has essentially eliminated the middleman. In Bolivia today, corporate agro-industry is no longer simply lobbying the state; it is helping run it.

This rapid deregulation has sparked fierce resistance from Indigenous and peasant communities. Activists recently marched hundreds of miles to the capital, successfully forcing the repeal of a controversial land law that threatened to expose constitutionally protected family plots to corporate buyouts and rapid deforestation.

Yet, the administration has continued to make sweeping concessions to mining cooperatives operating in protected areas. In the south, the government’s heavy-handed backing of Petrobras hydrocarbon exploration in the Tariquía national reserve has resulted in the criminalisation of local community leaders acting as human shields to protect their land.

The implications for Bolivia’s biodiversity and political stability are dire. By systematically lifting environmental barriers to capitalise on high global resource prices, the government is prioritising short-term economic gains over ecological security.

With a looming El Niño threatening to intensify the upcoming fire season, the administration’s lack of fire prevention policies leaves the Amazon dangerously vulnerable. For rural communities, defending their territories will increasingly mean directly confronting a government entirely fused with extractive capital.

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🇦🇷 When Collective Memory Walks onto the Pitch

Last night’s World Cup semifinal in Atlanta looked, on paper, like a classic clash: Messi’s Argentina, defending champions, against England’s quest for redemption in what is likely Lionel Messi's last World Cup. But the football was only half the story.

Before kick-off, Argentina’s vice president Victoria Villarruel set the tone by declaring on X that her country was “playing against pirate usurpers” and that this was “not just another game”, explicitly tying the match to the sovereignty dispute over the Malvinas (or Falkland Islands), the memory of Diego Maradona, and the 1982 war.

And minutes after the final whistle on Argentina’s 2-1 victory, the Argentine players themselves defied a pre-match stadium ban on political messaging by parading a banner that read "Las Malvinas son argentinas" ("The Falklands are Argentine") across the pitch.

The result was that a football match briefly became the loudest stage for a much older argument: who owns a remote archipelago in the South Atlantic, whose dead get remembered, and who gets to rewrite the rules of the post‑Cold War order.

Last night showed how quickly sport can turn into a barometer of deeper political shifts, from the afterlife of the Malvinas war to the collision of Trump’s foreign policy and Milei’s nationalism inside an already combustible relationship.

A History of Grievance

On the surface, Argentina and England are not obvious football enemies. They are not neighbours and do not share a confederation. The rivalry is made, not given, and its origins lie as much in politics as in sport.

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Welcome to your daily ☕️ Cafecito where we cut through the noise and identify what’s shaping the hemisphere. Today’s deep dive asks whether Peru’s freshly elected president Keiko Fujimori can do what no other recent president has done before her: complete her five-year mandate.

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Latin America Today

🌎 The Uneven Cost of the Middle East War

The war involving the United States, Israel and Iran is creating a deeply asymmetric economic shock across Latin America. A new special report from ECLAC calculates that the disruption of the Strait of Hormuz and the resulting spike in energy and fertiliser prices will be felt throughout 2026, even if recent diplomatic progress holds.

But the impact is not uniform. Latin America is effectively splitting into two camps: a handful of hydrocarbon exporters (like Guyana, Trinidad and Tobago, and Ecuador) who will see their trade balances improve, and a vast majority of energy-importing nations facing a severe squeeze. For the importing majority, including Central America and the non-oil Caribbean, the consequences are stark. ECLAC warns that the conflict acts as a powerful inflationary tax, forcing governments to choose between absorbing the higher fuel costs with public money or passing them on to consumers. And because the Gulf concentrates a massive share of global fertiliser exports, the agricultural shock is still working its way through the system.

For a region already trapped in what ECLAC calls a “low-growth trap”, the Middle East conflict is less a distant geopolitical crisis than a direct hit to local purchasing power, food security, and fiscal space.

🇨🇱 When the Growth Story Breaks

Chile’s new right-wing government is discovering that market confidence and economic recovery are not the same thing. José Antonio Kast came to office promising a rapid pro-business revival built on deregulation, tax cuts and restored order, but instead faces rising disapproval as growth stalls, unemployment climbs and the threat of recession hangs over his first year in office. Bloomberg’s reporting suggests the real danger is not simply weak data, but the collapse of the story Kast sold to voters and investors alike: that a conservative turn would automatically unlock growth.

That matters beyond Chile. With new right-wing governments or candidates also promising investor-friendly shocks in Peru, Colombia and Argentina, Chile is becoming an early test of whether the region’s new conservative wave can actually deliver material results, rather than just ideological confidence. If Kast cannot quickly convert political momentum into jobs and investment, his presidency may become the first warning that Latin America’s resurgent right is far better at winning power than at restoring growth.

🇨🇴 Total Peace Meets Its Limit

Gustavo Petro is leaving office with Colombia’s largest armed group not weakened but expanded. Even as his government ends with renewed airstrikes and military pressure against the Clan del Golfo, the broader verdict on “total peace” is becoming harder to escape: negotiations bought time, but not control. The group reportedly doubled its territorial reach during Petro’s term while evolving into a diversified criminal conglomerate built not just on drug trafficking, but on illegal mining, extortion and smuggling.

That matters because Petro is handing his successor a security landscape that is both more fragmented and more economically entrenched than the one he inherited.

Abelardo de la Espriella’s hardline ultimatum may satisfy a public exhausted by armed actors, but this story suggests the deeper problem is structural: Colombia is no longer confronting a single insurgent logic, but a criminal economy deeply woven into local governance and extraction zones. Petro’s “total peace” did not dismantle that model; it merely exposed how resilient it has become.

🇲🇽 The Limits of Cooperation

Mexico’s security partnership with Washington is moving toward its most dangerous test yet. After months of stepped-up cooperation against traffickers, Claudia Sheinbaum is now drawing a hard line against U.S. efforts to extradite Mexican officials accused of protecting the drug trade, including figures tied to Morena’s political establishment. The dispute matters because it reveals the real ceiling of Trump’s pressure campaign: Mexico may accept joint operations against cartels, but not a U.S.-driven assault on the political networks that allegedly shield them.

That turns this into something larger than a bilateral legal fight. It is becoming a struggle over sovereignty, regime survival and the future of anti-narcotics cooperation itself. If Sheinbaum yields, she risks opening fractures inside her own coalition and exposing Morena’s old guard. If she refuses, she risks provoking a Trump administration that is far less willing than previous White Houses to prioritise stability over confrontation.

The real impasse, then, is not over extradition alone, but over whether the drug war can be separated from the political system that sustains it.

🇦🇷 More Than a Game

Tonight’s World Cup semifinal is not simply a football event in Argentine political culture. As El País notes, the fixture still carries the weight of the Malvinas sovereignty dispute, the 1982 war, and decades of national myth-making that turned games against England into symbolic contests over memory, humiliation and revenge. Lionel Scaloni may insist that it is “just a football match”, but in Argentina the rivalry has long exceeded sport, surfacing in chants, flags, commemorations and the enduring afterlife of Maradona’s 1986 victory.

That is what makes the game politically revealing. In a region where nationalism often appears fragmented or exhausted, Argentina’s clash with England shows how popular culture can keep historical grievances alive more effectively than diplomacy ever does.

Tonight’s semifinal matters not because it will settle anything, but because it reminds us that sovereignty disputes do not live only in foreign ministries; they also survive in stadiums, songs and collective memory.

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🇵🇪 Keiko Fujimori’s Five-Year Test

Keiko Fujimori is taking office in a country where the bar for success has collapsed to a single, brutal metric: can a president make it to the end of a five‑year term? In the past decade Peru has cycled through nine presidents; no one since Ollanta Humala, who left office in 2016, has managed to finish the job. Fujimori arrives with more institutional power than her predecessors, but also with weaker legitimacy, a harsher security crisis and deeper social mistrust.

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Welcome to your daily ☕️ Cafecito where we cut through the noise and identify what’s shaping the hemisphere. Today’s deep dive focuses on the rise of Latin America’s far-right, and explores why its hold on power remains deeply fragile.

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Latin America Today

🇸🇻 The Blueprint for Indefinite Power

The consolidation of Nayib Bukele’s political dominance reached a predictable milestone this week as he officially secured the ruling Nuevas Ideas party nomination for a third term. Running unopposed in the primary, Bukele’s path to the 2027 presidency is clear following a controversial July 2025 constitutional amendment by his congressional allies that effectively legalised indefinite reelection.

Backed by sky-high approval ratings stemming from his relentless 2022 security crackdown, Bukele has successfully dismantled the country’s institutional guardrails without facing significant electoral blowback. When voters head to the polls next February, he is expected to easily sweep aside the opposition candidate from his former party, the leftist FMLN.

Bukele’s political evolution offers a stark regional blueprint: trading democratic checks and balances for dramatic, heavy-handed security results to secure uninterrupted political control.

🇦🇷 Milei’s Search for a Third Way

Talk of the 2027 election is already sweeping Buenos Aires as President Javier Milei’s popularity hits a two-year low. Hamstrung by persistent 3% monthly inflation, climbing unemployment, and recent corruption scandals involving his inner circle, Milei’s aura of invincibility is fading. The political vacuum is triggering a fierce battle for the future of Peronism following Cristina Kirchner’s imprisonment last June.

Buenos Aires Governor Axel Kicillof is moving aggressively to claim the mantle, but his interventionist record terrifies markets, which still assign a high probability of default to a Kirchnerist resurgence. Consequently, nearly 30% of Argentines now say they would vote for neither Milei nor Kicillof.

This fragmentation is fuelling desperate backroom efforts by moderate Peronists and business leaders to forge a “third way”, one that preserves Milei’s fiscal orthodoxy while restoring state support for industry.

However, until a viable moderate candidate emerges, the binary threat of a Milei-Kicillof runoff keeps sovereign bond yields highly volatile.

🇧🇷 The Amazon as a Geopolitical Shield

Official government figures released this week shows Amazon deforestation falling to its lowest level since 2016. During the first half of 2026, forest clearing dropped 38% compared to last year, marking a significant victory for President Luiz Inácio Lula da Silva’s pledge to end illegal deforestation by 2030.

The data comes at a critical moment for Lula’s government, serving as a primary defence against the Trump administration. Last month, Washington proposed new tariffs on Brazil, citing illegal deforestation and unfair trade practices — a move widely viewed in Brasília as political retaliation for the imprisonment of Trump's ideological ally, Jair Bolsonaro.

By publicising the sharp decline in environmental destruction, Lula is most likely attempting to neutralise Washington's tariff justifications while bolstering his domestic standing ahead of October's presidential election, where the 80-year-old incumbent will likely face Senator Flávio Bolsonaro, the jailed former president's eldest son.

🌎 El Niño’s Asymmetric Economic Shock

The El Niño climate phenomenon has officially arrived, bringing severe and highly uneven macroeconomic disruptions across the hemisphere that will last into early 2027.

In Colombia, the crisis has materialised three months ahead of schedule, threatening 80% of the country’s major agricultural exports. Because three quarters of Colombian agriculture depends strictly on rainfall, impending droughts jeopardise vital export revenues from coffee, flowers, and bananas, while simultaneously threatening hydroelectric power grids and stoking domestic food inflation.

However, the regional impact is far from uniform. While Peru faces crippled fishing exports from warming coastal waters and severe infrastructure damage from torrential downpours, Argentina presents a different picture. In the Pampas, El Niño brings heavy rainfall that could actually salvage crucial soy and corn harvests, provided flooding does not destroy logistical routes.

Ultimately, this climate anomaly is not just a weather event; it will act as a primary driver of inflation, export revenues, and central bank decisions across the region for the next year.

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🔎 Latin American Far Right’s Hold on Power

The political pendulum in Latin America has swung with breathtaking speed, replacing the progressive "Pink Tide" with a conservative resurgence dubbed the "Orange Wave". Since 2023, 12 of the 15 presidents elected across the region belong to the political right, including recent victors like Peru’s Keiko Fujimori and Colombia’s Abelardo de la Espriella.

Political scientists view this shift not as a routine electoral cycle, but as a symptom of intense affective polarisation. The political centre has effectively collapsed, making way for radical postures and extreme rhetoric.

Voters are increasingly driven by deep-seated antipathy toward their opponents rather than shared policy goals, allowing a new generation of conservative leaders to capture the public imagination.

Recent academic research on the rise of the Latin American far right suggests this wave is not merely a rejection of left-wing economic policies, but a structural backlash against the region’s early 21st-century "inclusionary turn".

Paid readers have access to the full analysis, including a typology of the far right in the hemisphere and the structural vulnerabilities of these new governments. Subscribe to continue reading.

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The Price of Inclusion

During the 2000s, Latin American democracies implemented profound reforms that incorporated historically marginalised groups.

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Welcome to your daily ☕️ Cafecito where we cut through the noise and identify what’s shaping the hemisphere. Monday’s edition is free. Paid readers have access to every ☕️ Cafecito in full, including our deep dives on themes shaping Latin America and unrestricted access to our regional intelligence briefs. Subscribe here

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Latin America Today

🇭🇹 An Electoral Calendar Amid Anarchy

Haiti has taken its first concrete steps toward holding its first national elections in a decade, but the logistical hurdles remain staggering. On Friday, the Provisional Electoral Council announced a timetable for voter and political party registration, expecting a record 316 parties to compete. However, a date for the actual balloting has yet to be finalised. Prime Minister Alix Fils-Aimé and the electoral council recently ended a tense standoff over budget and electoral laws, finally agreeing on a drastically reduced US$120 million budget.

The most pressing question is whether an election is even physically possible. Armed gangs continue to control the capital and major highways, leaving 1.5 million Haitians internally displaced and more than half the country requiring immediate humanitarian aid.

While a UN-authorised security force recently received reinforcements from Sri Lanka, international aid organisations are warning that basic survival, not voting, is the priority for millions. The government’s determination to push forward underscores a desperate attempt to restore democratic legitimacy before the transitional council’s mandate expires in February 2027, even as the state lacks the capacity to secure its own territory.

🇨🇴 The Establishment Outsider

Colombian President-elect Abelardo de la Espriella won office promising a rupture with the political elite, yet his first cabinet appointments signal a return to the establishment he campaigned against.

Announcing 12 of his 18 ministers, the self-styled outsider has filled his core security, finance, and interior posts with recognisable, traditional political figures whom critics have framed as “los de siempre”.

The emerging government reflects a delicate, potentially unstable balancing act. De la Espriella is attempting to reward the traditional clans that delivered his victory, most notably the Char family on the Caribbean coast, while appeasing his hard-right base with appointments like Omar Bula, a Trump-aligned, anti-globalist foreign minister.

The inclusion of hardline conservatives and religious figures, such as former prosecutor Viviane Morales at Education, points to an administration that will prioritise culture wars and domestic order over institutional reform. In claiming to dismantle the establishment, De la Espriella appears to be relying entirely upon it to govern — a point we made last week.

🇨🇺 A Revolutionary Rift

Raúl Guillermo Rodríguez Castro, the grandson of Raúl Castro, has emerged as Havana’s lead interlocutor in secret negotiations with the Trump administration. Yet his unprecedented confirmation of this role to US media, complete with details of his designer wardrobe, has sparked a rare and public backlash from core socialist loyalists.

For decades, the regime demanded unwavering unity and revolutionary austerity. Now, hardline defenders of the government, including retired diplomats and state-aligned musicians, are openly criticising Rodríguez Castro’s lack of credentials and his lavish lifestyle amidst a severe national economic crisis.

The unprecedented outcry forced the Communist Party and the prime minister to publicly intervene to defend his mandate.

This internal friction reveals a significant crack in the regime’s facade. It underscores a growing domestic realisation: the country’s formal institutional framework is largely a fiction, masking a family-run military conglomerate desperately scrambling for survival.

Meanwhile, the island witnessed another total blackout on Friday, the second in a week and the fourth one this year.

🇻🇪 The Crumbling Legacy of Chavismo

The collapse of “Hugo Chávez City” following June’s double earthquakes is more than a humanitarian emergency; it is the physical crumbling of Chavismo’s legacy.

Built during Venezuela’s oil-funded welfare boom, the seaside housing complex was intended as the crown jewel of the “Bolivarian Revolution.” Instead, its near-total destruction exposes the deep institutional rot beneath the socialist project.

Ignoring local engineering standards and seismic realities, the government relied on rapid, substandard construction methods, actively silencing domestic experts who warned of the structural risks.

Now, the crisis has laid bare the deadly, long-term costs of prioritising political optics over basic safety. The disaster has also triggered a real-time crisis of state capacity for interim president Delcy Rodríguez. With dust-coated civilians forced to dig for survivors by hand while security forces stand by with rifles, public fury over the lethargic response is surging, dealing a severe blow to a government already struggling to govern a hollowed-out state.

🇪🇨 Conservation at Gunpoint

The battle for Ecuador’s Amazon is no longer simply about environmental protection; it has mutated into a frontline security crisis. As criminal syndicates and guerrilla dissidents diversify their revenue streams beyond drug trafficking, illegal gold mining is rapidly metastasising across the country’s most vital national parks. For the outgunned rangers tasked with guarding these mega-diverse territories, conservation has become a deadly proposition.

Intercepted by heavily armed factions, state park rangers are being stripped of their equipment, threatened with death, and forced to abandon their patrol routes. While the government focuses its military apparatus on urban gang warfare, the state has effectively surrendered the jungle to illicit economies.

The result is a profound hollowing out of environmental authority: rangers are forced to look the other way just to survive, transforming pristine reserves like Yasuní and Podocarpus into lawless extractive hubs controlled by the hemisphere’s most violent actors.

Monday’s edition is free. Paid readers have access to every Cafecito in full, including our deep dives on themes shaping the hemisphere and unrestricted access to our regional intelligence briefs. Subscribe here

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We’re wrapping up the first week of our daily Cafecito. As part of our mission to cut through the noise, we’re refining the format: one deep-dive analysis of a key regional story, followed by concise intelligence briefs on the flashpoints shaping the hemisphere. As always, paid readers get the full edition, with a free preview for all.

Today’s edition is really about the limits of control: governments promising order, growth or stability, and discovering how quickly events narrow their room for manoeuvre. From Chile’s deteriorating economy to Venezuela’s earthquake recovery, Colombia’s hardline turn, Mexico’s sovereignty dispute, Argentina’s debt strategy and a striking story from Brazil on digital autonomy, the common thread is how power collides with reality.

Catch up on this week’s deep dives:

🇨🇴 A Return to the Iron Fist: Colombia’s Incoming Security Strategy | 🌎 Following the Money: Three Hard Truths About Latin America’s FDI | 🇨🇺 Blackouts, “Market Socialism” and a Shrinking Diplomatic Lifeline | 🇻🇪 A Government Reshuffle Amidst a Humanitarian Abyss | 🇨🇴 Where The Donroe Doctrine Meets ‘Total Peace’ | 🇻🇪 Disaster Theatre in a US‑Tutored Venezuela

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🇨🇱 Chile’s Growth Promise Meets Economic Reality

Four months into José Antonio Kast’s presidency, Chile’s economic debate is already colliding with an awkward fact: the government was elected on a promise of growth, but it has taken office just as the economy is losing altitude.

The latest figures have turned what could have been framed as inherited stagnation into something more politically dangerous: a test of whether the new right can do more than diagnose Chile’s malaise in pro-business terms. Unemployment reached 9.4% in the March-May quarter, its highest level in five years, while economic activity has now posted five consecutive monthly declines, raising the risk of a technical recession.

The numbers matter not just because they are weak, but because they cut directly against the spirit of Kast’s campaign. Chile’s Central Bank has slashed its 2026 growth forecast to 1%-1.75%, down from 1.5%-2.5%, while also nudging up its year-end inflation projection to 4.2%.

That leaves the government facing the classic bind of a low-growth economy with persistent price pressures: too weak to generate jobs comfortably, but not weak enough to justify a broad stimulus without reopening inflation and fiscal concerns.

The immediate drag is visible. May’s Imacec index fell 0.9% year-on-year, with mining (and especially copper) doing much of the damage.

But the broader story is more structural. Chile is not simply going through a bad patch; it is confronting a productivity problem that predates Kast by years, suggesting the country’s old growth model has been losing steam for a long time. The OECD made a similar argument, warning that Chile’s potential growth has weakened and that lifting it will require productivity gains, digitalisation, innovation and wider labour-force participation, especially among women.

A look across the region makes the contrast even starker.

While Chile enters the second half of 2026 with unemployment at 9.4% and five straight months of falling activity, Paraguay has spent the past three years growing at an average annual rate of 5.5%, buoyed by cheap renewable energy, low taxes, export diversification and rising foreign investment. The comparison is imperfect, as Paraguay still suffers from high informality and inequality, but it highlights Chile’s current predicament: stronger institutions no longer guarantee stronger momentum.

Kast did not create the stagnation, but he did campaign as if a firmer hand, better incentives and stronger investor confidence could unlock a relatively quick rebound.

Instead, he has inherited a country where confidence is not enough. Mining is weak, consumption is softening, and labour-market distress is deepening, especially for women, whose unemployment rate remains stuck in double digits at 10.5%. Informality has also climbed to 27%, a sign that even where work exists, it is becoming less secure.

That helps explain why the government is turning so quickly to labour-market flexibility. It is already considering changes to the 40-hour workweek so that hours can be averaged annually, and it wants to revive hourly contracts as a way to formalise precarious employment in seasonal sectors.

At the same time, it is betting heavily on a broader “mega-reform” package meant to reduce bottlenecks, improve investment conditions and revive hiring. The logic is that, if Chile cannot grow its way out immediately, it can at least try to make hiring cheaper, investment easier and expectations less bleak.

But this is also where the risk lies.

[Paid readers can read the full analysis, followed by our regional intelligence briefs. Subscribe here]

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Welcome to Cafecito. As part of our mission to cut through the noise, we are refining our daily intel format: delivering deep-dive analyses on the region’s most critical stories, followed by sharp, concise intelligence briefs on the flashpoints shaping the hemisphere. As always, paid readers get the full analysis, with a free preview for all.

In today’s edition, we look at the drastic pivot in Colombia’s security strategy as the incoming administration abandons “Total Peace” for a hardline drone eradication campaign. We also break down the hard truths hidden inside the UN’s latest Foreign Direct Investment report for Latin America. Finally, our intel briefs track the U.N.’s US$296 million appeal for earthquake-shattered Venezuela, the illusion of military pacification in Mexico’s Sinaloa state, and the controversial rise of facial recognition surveillance across Brazil.

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🇨🇴 A Return to the Iron Fist: Colombia’s Incoming Security Strategy

President-elect Abelardo de la Espriella is mounting a sweeping return to a hardline, militarised security posture that promises to reshape Colombia’s immediate future when he takes office on August 7.

As Gustavo Petro prepares to leave the Casa de Nariño, his ambitious and controversial “Total Peace” agenda — a framework built on negotiating with all rebel groups and dismantling drug syndicates from the top down — is officially dead.

The magnitude of the challenge waiting for De la Espriella is daunting. Over the last four years, the number of illegal armed actors has swelled to more than 27,000 combatants across 14 active dispute zones. Cocaine production is at a historic peak, with 2024 cultivation reaching 261,000 hectares. But more concerning than the acreage is the yield: new agricultural techniques mean a single hectare can now produce up to six harvests a year.

Faced with this entrenched crisis, the incoming administration is making an ideological pivot. De la Espriella’s team has made it unequivocally clear that the state will no longer seek “connivance” with criminal groups. Instead, the new buzzword is sometimiento, or subjugation.

This shift was vividly illustrated during the president-elect’s recent “territorial transition” visit to Cúcuta, the capital of Norte de Santander. The border department is home to the Catatumbo region, currently the densest global enclave of coca cultivation and a fierce battleground between the National Liberation Army (ELN) and FARC dissidents.

Bypassing Bogotá’s traditional channels, De la Espriella addressed local mayors and governors directly, promising them unfettered access to the presidency. He then delivered a blunt one-month ultimatum to alias “Alfred” of the ELN and alias “Andrey” of the FARC: surrender, or face the “full weight” of the state.

To enforce this threat, the new government is restructuring its tactical approach.

[Paid readers have access to our full analysis below, a second deep dive into the real numbers behind Latin America’s FDI boom, plus intel briefs on Venezuela’s earthquake recovery, Mexico’s cartel crackdown, and Brazil’s surveillance state.]

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Welcome to Cafecito. As part of our mission to cut through the noise, we are refining our daily intel format: delivering deep-dive analyses on the region's most critical stories, followed by sharp, concise intelligence briefs on the flashpoints shaping the hemisphere. As always, paid readers get the full analysis, with a free preview for all.

In today’s issue, we look at Cuba’s gamble on “market socialism” under blackout conditions and eroding diplomatic support; Venezuela’s attempt to relaunch its interim government in the middle of a post‑earthquake humanitarian abyss; and three flashpoints where institutions are under acute stress, from Colombia’s contested transition and Haiti’s rural massacres to Argentina’s experiment with an imported U.S.‑style shutdown.

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🇨🇺 Blackouts, “Market Socialism” and a Shrinking Diplomatic Lifeline

Cuba has quite literally been plunged into darkness. Yet again. For the third time this year, the island suffered a total collapse of its national electric grid. With parts of Havana hitting 35 consecutive hours without power, and other provinces enduring up to three days of pitch-black heat, daily life has ground to a halt. The grid’s failure reflects a crumbling infrastructure starved of investment and exacerbated by a biting U.S. energy blockade.

But it’s against this backdrop of darkness and escalating street protests that the Cuban government is attempting its most radical ideological pivot since the 1959 revolution.

In mid‑June, the Communist Party and National Assembly approved 176 economic measures that amount to the most sweeping market‑oriented reforms since the revolution. The package expands space for private business, authorises free hiring, opens foreign trade and investment to non‑state actors, and clears the way for private banking and capital from the diaspora, chipping away at pillars like the state monopoly on foreign trade. President Miguel Díaz‑Canel sells this as a “very Cuban” adaptation of Vietnamese and Chinese market socialism, a route out of crisis without surrendering sovereignty.

But the structural mismatch is stark. Vietnam and China liberalised with young workforces, rural surplus labour and rising integration into global capital; Cuba is urbanised, ageing fast, and haemorrhaging skilled professionals, with more than a quarter of the remaining population already over sixty.

Unlike Hanoi or Beijing, Havana faces a hostile financial siege: Trump’s campaign of secondary sanctions and energy restrictions has scared off hotel chains and investors just as reforms seek to attract them. These measures will remain “stopgaps” unless they are embedded in a broader strategy of state reform that tackles bureaucratic resistance and opens real space for civic and political participation.

From Washington’s vantage point, the bet is harsher. The Trump administration has doubled down on maximum pressure, war‑gaming scenarios for regime fracture, tightening sanctions that worsen blackouts and shortages, and signalling that serious economic relief is off the table without changes Havana reads as existential threats. In practice, the U.S. seems to be playing for time, hoping that energy strangulation, fiscal isolation and mounting humanitarian strain will splinter Cuba’s ruling coalition from within, particularly around the military‑economic conglomerate GAESA.

A UN “Win” that Exposes Cuba’s Isolation

This week, Havana scored what looks like a diplomatic victory: Cuba secured a special debate at the UN General Assembly on Trump’s energy embargo, with 136 states voting to hold the session versus nine against and 30 abstentions.

Yet, the numbers mask a fraying diplomatic cushion. The near‑automatic solidarity Cuba once enjoyed is eroding as key nations rethink their unconditional support.

[Paid readers have access to our full analysis, including a second deep dive into Venezuela’s post-quake political reshuffle and flashpoint briefs on Colombia, Haiti, and Argentina]

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With Abelardo de la Espriella’s razor‑thin victory, Colombia has become the first full‑scale laboratory for Donald Trump’s revived “Donroe Doctrine” in Latin America. A country that spent a decade trying to build “Total Peace” is now preparing to join the US‑led Shield of the Americas, resurrect aerial fumigation and extradition, and experiment with urban “security blocs” that echo the darkest chapters of its paramilitary past.

Today’s Cafecito looks at what this pivot really means: how De la Espriella plans to fuse Trump’s counter‑cartel agenda with Colombia’s fractured institutions, what a Plan Colombia 2.0 would require in a far harsher fiscal environment, and why unravelling Petro’s peace framework could push forced displacement and rural violence to levels no government has ever managed to bring under control.

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When Abelardo de la Espriella takes office as Colombia’s president on August 7th, he will not only be steering a new domestic course but also serving as the vanguard of a broader regional shift.

His victory, propelled by a direct endorsement from Donald Trump, marks the arrival of the so-called “Donroe Doctrine” in Colombia — a strategy that prioritises aggressive anti-narcotics operations, hardline security, and a staunch alignment with US interests over negotiated peace.

This “Trumpification”, mirrored in Argentina, El Salvador, Ecuador, Costa Rica and even these days in Venezuela promises to reshape Colombia’s foreign and security policies.

The new administration is moving quickly to enact this vision. De la Espriella has already promised to join the “Shield of the Americas”, a US‑led security pact aimed at joint operations and intelligence‑sharing.

Domestically, the rhetoric is equally uncompromising. The designated Minister of Defence, retired General Jorge Eduardo Mora, alongside a transition team stacked with former military personnel, signals a return to a militarised approach.

One of De la Espriella’s first concrete measures will be to decree the creation of urban “Bloques de Seguridad”, framed as citizen‑defence units for cities battered by extortion, homicides and robberies, and marketed as the “largest urban security operation in Colombia”.

But the symbolism is explosive. As El País notes, the proposal immediately collides with the ghosts of the 1990s Convivir cooperatives — state‑authorised “self‑defence” groups that morphed into paramilitary structures and helped give birth to the AUC.

Petro has already branded the plan “puro fascismo criollo ignorante”, while figures from the left warn of “paramilitarismo 2.0”, underscoring how any attempt to blur the line between civilian defence, retired soldiers and formal security forces risks reopening one of Colombia’s darkest chapters.

A central question surrounding this alignment is the depth and funding of anti‑drug cooperation with Washington. De la Espriella’s agenda proposes reactivating controversial measures such as aerial fumigation and extradition, tools that once turned Colombia into the primary theatre for US anti‑narcotics policy under Plan Colombia. Back then, Bogotá could count on roughly US$1.3 billion in emergency US support on top of its own multi‑billion‑dollar contribution, in an era of lower debt and a more benign global interest‑rate environment.

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Venezuela’s earthquakes have exposed not only the fragility of a failed state, but also the limits and contradictions of Washington’s self‑proclaimed guardianship under the Donroe Doctrine. The numbers speak for themselves: billions in Venezuelan oil revenue under US control, against a few hundred million dollars of aid, in a country where thousands are dead and tens of thousands remain missing.

In theory, Marco Rubio’s three-stage roadmap for the country — stabilisation, recovery, and eventually, political transition — makes logical sense. But in practice, its focus has been entirely misplaced. Under the Donroe Doctrine, 'stabilisation' has meant securing oil flows for American markets, while 'recovery' prioritises foreign interests over the survival and freedom of ordinary Venezuelans.

In these circumstances, what could a credible roadmap back to democracy actually look like?

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Note to my readers: Significant changes to my job (which I’ve sadly lost following mass redundancies) mean I have been unable to produce the regular posts you’ve been accustomed to. I hope to resume a normal service in the coming weeks.

A state that cannot save its own people

More than two weeks after the twin quakes of 7.2 and 7.5 struck the north‑central region, Venezuela remains in acute emergency. OCHA’s latest situation report puts the official toll at 3,342 dead and 16,740 injured, with 17,345 people losing their homes and at least 856 buildings affected, 190 of them collapsed.

Satellite analysis suggests the real scale is far greater: NASA‑linked researchers estimate roughly 58,870 buildings damaged or destroyed, while a report by the UN Office for Disaster Risk Reduction (UNDRR) estimated the direct physical damage from the twin earthquake at at least US$37 billion, about a third of Venezuela’s annual GDP. This latest estimate, released on July 2, far exceeds the US$6.7 billion (about 6% of GDP) that the UNDP had calculated days earlier.

On paper, the interim government led by Delcy Rodríguez has declared mourning, set up a presidential commission and opened 79 transitional camps around Caracas and La Guaira.

In practice, survivors describe a state absent in the most basic tasks of rescue and dignified burial. Reporting from La Guaira and Caraballeda finds families digging by hand through “tonnes and tonnes of rubble”, pleading for heavy machinery that never arrives, and struggling to identify decomposing bodies in improvised morgues, while forensic technicians speak openly of impending mass graves. The World Health Organisation has sounded the alarm over potential disease outbreaks as the country’s stressed and damaged health facilities struggle to cope with the aftermath of the quakes.

The vacuum is being filled by foreign rescuers and a patchwork of UN agencies and NGOs. More than 2,000 international search‑and‑rescue specialists from 27 countries have been deployed, and multiple UN field hospitals now support shattered local health services. This dependence on external actors is not just a state overwhelmed by a one‑off shock; it is the symptom of institutions hollowed out over decades, now collapsing in the face of a disaster they cannot manage.

If you followed TeleSUR throughout the weekend — the multi‑state funded, Caracas‑based network backed primarily by the Venezuelan state — you will have seen a different Venezuela.

Cameras followed Rodríguez in endless walkabouts through the rubble, surrounded by officials and soldiers, berating “propaganda laboratories” and foreign journalists who, she claimed, are politicising a tragedy the government has handled impeccably.

The gap between TeleSUR’s disaster theatre and lived reality is itself political. It is how the government masks its reliance on foreign rescuers and donors, and how Donroe‑style guardianship is sold domestically as sovereign strength rather than what it is in practice: a protectorate that cannot save its people without outside help.

The Donroe Doctrine as oil pillage

Since US forces captured Nicolás Maduro in January, Venezuela has effectively become a US‑tutelaged petro‑protectorate. Washington markets Venezuelan crude, holds the proceeds in US‑controlled accounts and has declared a national emergency to “safeguard” that revenue, firewalling it in Treasury‑linked structures shaped by the Donroe reinterpretation of the Monroe Doctrine.

Shipping and price data suggest that in the first four months after the raid, roughly US$8 billion worth of Venezuelan oil was exported under US oversight, with production and exports climbing as sanctions morphed into control mechanisms rather than bans.

By contrast, the US earthquake response, though rapid and significant in humanitarian terms, is modest against this backdrop. OCHA records US$100 million committed to the Venezuela Humanitarian Fund and another US$100 million in bilateral funding to major agencies, for a US$200‑million package at the time of writing; subsequent briefings raise this to “over US$300 million” in total assistance.

That is roughly one dollar in aid for every 25–30 dollars in Venezuelan oil revenue currently flowing through US‑managed accounts — a ratio that encapsulates the priorities of the Donroe Doctrine: stabilise the oil architecture first, worry about the people second.

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Rubio’s three‑stage plan and the frozen transition

This hierarchy is codified in Marco Rubio’s three‑stage roadmap for Venezuela: stabilisation, recovery and only then political transition.

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