¡Buenos días from Greenway Parks! This is the Rorshok Argentina Update from the 8th of January twenty twenty-six. A quick summary of what's going down in Argentina.

We can’t start this week’s episode with any topic other than the capture of Venezuelan President Nicolás Maduro by United States forces. President Milei immediately celebrated the operation, aligning himself fully with the US. On social media, he posted, “Freedom moves forward. Long live freedom, damn it!” and later described the event as the fall of a dictator and a narco-terrorist.

On the diplomatic front, the region is divided. During an emergency meeting of the Community of Latin American and Caribbean States, or CELAC, Argentina led a group of nations that blocked a joint statement condemning the US intervention. While countries like Colombia and Venezuela’s allies pushed for a rebuke of Washington, Argentina, supported by Paraguay, Ecuador, among others, prevented a consensus, arguing that the operation removed a leadership flagged for human rights violations.

However, not everyone at home agrees with the President’s stance. Former President Cristina Fernández de Kirchner strongly condemned the US operation, calling it a literal kidnapping and an act of absolute illegality. She argued that it violates international law and sets a dangerous precedent for the region. Other opposition figures warned that celebrating foreign military interventions could backfire on Latin American sovereignty in the long run.

As a direct consequence of the events in Venezuela, the Ministry of Security announced the reinforcement of all border controls and airports. Additionally, Manuel Adorni, the Chief of Staff, confirmed a ban on entry for any Venezuelan officials, military personnel, or business owners linked to the Maduro administration. The Argentine government wants to ensure that no members of the ousted regime find refuge in Argentina.

Meanwhile, the judicial system is also making moves. Argentine prosecutors and NGOs representing Venezuelan victims have asked the federal courts to seek Maduro’s immediate extradition from the United States to Argentina. They want him to face trial in Argentina for crimes against humanity, based on the principle of universal jurisdiction. This follows an arrest warrant Argentina had already issued back in September twenty twenty-four.

Shifting to the economy, there is some positive data for the current administration. Argentina’s sovereign risk fell to its lowest level in seven years, dropping below 560 basis points. Investors are reacting optimistically to the government’s fiscal discipline and the recent legislative victories. This drop is crucial because it brings the country closer to being able to access international credit markets again, potentially by twenty twenty-six.

Also on the topic of financial markets, the Treasury has started selling dollars to keep the exchange rate stable. This week marked the start of a new foreign exchange regime where the peso’s devaluation is linked to inflation rather than a fixed crawl. On the first day of this new system, the Treasury sold an estimated 150 to 200 million dollars to keep the exchange rate from spiking.

The market is watching this closely because the government faces a major debt payment on the 9th of January. While bond prices suggest investors are confident Argentina will pay, the reserves are still thin. The Treasury needs to bridge a gap of about 2.4 billion dollars for the payment, and analysts warn that while the fiscal story is good, the accumulation of reserves remains the government’s Achilles’ heel.

Next up, we’ve got an update on a story from last week regarding tax reforms. President Milei has formally signed the Fiscal Innocence bill into law. As we reported on previous shows, this law raises the threshold for tax evasion prosecution significantly to about 70,000 dollars per year and reduces the statute of limitations for financial crimes. Luis Caputo, the Economy Minister, took to Twitter to urge people to deposit their dollars, promising they can spend them freely or earn interest.

The goal is simple: get those dollars into the banks to help the state meet its foreign debt payments, which total around nineteen billion dollars this year alone.

Speaking of state reforms, the administration has finalized the conversion of eleven state-owned companies into corporations, a necessary legal step before privatization. The list of companies includes the administration of the railways, the General Port Administration, the military manufacturer Fabricaciones Militares, and even the educational portal Edu.Ar. The government argues this will put these companies on equal footing with the private sector and make them competitive. For the opposition, however, it’s seen as a fire sale of national assets, with the railway system being a particularly sensitive point given its importance to national connectivity.

In a controversial move involving national security, President Milei has issued a decree to overhaul the SIDE, the state intelligence agency. The reform gives agents the power to detain individuals if they are caught in the act of a crime and redefines their activities as having a covert character.

The opposition has reacted with alarm. Lawmakers from various parties warned that this effectively creates a secret police with minimal civilian oversight. They argue that blurring the lines between intelligence gathering and police work is dangerous, especially with the ambiguous definition of national security threats. The government counters that the reform is necessary to professionalize the agency and protect the country against external interference and terrorism.

On an even more alarming note, the weather is posing a severe threat. Authorities have issued a red alert for wildfires in sixteen provinces, including parts of Patagonia (in the south), Córdoba (in the central region), and Buenos Aires (in the east). The combination of high temperatures, strong winds, and drought has created a potentially explosive situation, and officials are urging citizens to avoid starting fires in open spaces at all costs.

Moving to the energy sector, there is big news from Patagonia. Continental Resources, the company led by US shale pioneer Harold Hamm, has agreed to buy assets in the Vaca Muerta shale patch from Pan American Energy. Hamm is a major figure in the US energy industry, and this deal signals a growing interest from American capital in Argentina’s massive shale oil and gas reserves.

Further south, the Tierra del Fuego province is facing a tough start to the year. The local economy is struggling with layoffs in the industrial sector, and several key officials in the governor’s cabinet have resigned. To add to the tension, Gustavo Melella, the governor, publicly disagreed with President Milei, condemning the US intervention in Venezuela and calling for peace in the region.

Internationally, the President’s profile continues to rise. Three major British publications — The Telegraph, The Economist, and MoneyWeek — have ranked Milei among the top world leaders of twenty twenty-five. They highlighted his success in bringing down inflation and his commitment to free-market reforms, although some editors noted his intolerance of criticism.

The Economist also named Argentina its Country of the Year runner-up.

In a health update, the Ministry of Health has detected new cases of the H3N2 influenza virus in several provinces, including Buenos Aires in the east and Neuquén and Mendoza in the west. So far, eighteen cases have been confirmed. While there have been no deaths, half of the cases required hospitalization. Authorities are recommending that people, especially those in risk groups, keep their vaccination schedules up to date to prevent complications.

To wrap up, a recommended read: Juan Pablo Spinetto, an opinion columnist for Bloomberg, published an article in English titled Is Argentina Really Changing? Ask Its Salmon. The piece argues that Argentina is undergoing a profound shift toward economic realism, and uses the recent reversal of a salmon farming ban as a primary symbol of this change — moving away from ideological environmentalism toward pragmatic industrial development.

Check the full piece with the link in the show notes!

Aaand that’s it for this week! Thank you for joining us!

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¡Nos vemos la próxima semana!