Six stories - 23 January 2025

Comments on conflict on the Colombia-Venezuela border, poll numbers in Ecuador... and cattle gallstone smuggling in Brazil? Sure, why not?

Happy Thursday. The first two comments about Colombia-Venezuela issues are available to everyone. The other four comments - Ecuador’s debate and poll numbers, Mexico’s water issues, Milei hype, and brief thoughts on that wild WSJ article about Brazil’s cattle industry - are for paying subscribers. If you want access to that analysis, yesterday’s newsletter about President Mulino’s approval ratings in Panama, and additional content every week, please consider becoming a paid subscriber.

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Colombia’s border with Venezuela is in crisis. The government’s negotiations with the ELN have broken down. Conflicts among various criminal and terrorist groups including the ELN have left dozens dead and hundreds if not thousands of people displaced. Elizabeth Dickinson at ICG has been providing great updates on Twitter if you want to follow this conflict more closely.

Venezuela is running military drills immediately across the border. This has led to some unfounded speculation about a potential military incursion. However, there are legitimate questions about whether Maduro is escalating the border tensions in response to Petro not showing up to his inauguration. He is likely using his connections to the ELN in that process. Colombian military intelligence leaked a memo showing the ELN moved its forces through Venezuela during the recent offensive. The Maduro regime has kept border crossings blocked in some spots, but they are also preparing for a wave of refugees from the recent violence on the Colombia side and will use that to some propaganda advantage.

Earlier this week, Gustavo Petro announced that he is declaring a state of emergency. He then posted some memes about Argentine President Milei and took off for a planned trip to Haiti. It’s hard to take Petro seriously on social media. The official language of the decree and the specific steps he would take to counter the growing crisis would have to wait.

While I’m sympathetic to the idea that the Haiti trip should not be canceled because of this crisis - Haiti is worth focusing on, and I hate when big strategic issues lose out to the crisis du jour - Petro also appears disorganized and caught totally off guard by the events along the border. A weak and lame duck president could use this moment for a political boost, and instead, Petro’s administration appears on track for another reputation blow.

Speaking of Colombia-Venezuela issues, my friends at Colombia Risk Analysis have a new report out about the Monomeros refinery. It’s timely in that it directly relates to the question of how the Maduro regime manages its foreign assets and plans for sanctions evasion, two issues that are occupying a lot of my time right now as many clients have questions (feel free to reach out if you also want to discuss or get updates).

It’s also timely because it addresses broader strategic questions of how countries in Latin America deal with foreign investment - CIPE calls the potential risks of bad foreign investments “corrosive capital.” That issue goes well beyond Venezuela, touching on investments and issues involving China, the Middle East, Europe, and the US. Some of the details in the Monomeros report are quite specific to Venezuela and the Maduro regime, but step back, and there are parallels to the debates over the Panama Canal question, the Mexican auto industry, El Salvador’s Bitcoin, Argentina’s lithium mines, and Peruvian copper.