Javier Milei’s top midterm candidate quits amid drug scandal. And Guatemala turns to South Korea to fix its long-standing road traffic problems.
ARGENTINE MIDTERMS
Javier Milei’s top midterm candidate quits after narco scandal
Corruption accusations continue to beleaguer Javier Milei’s government in Argentina. After leaked audio suggested his sister and closest adviser, Karina, had solicited bribes from Argentina’s disability agency, Milei’s top candidate for this month’s midterm elections has now been forced to withdraw over ties to an alleged drug trafficker.
José Luis Espert, a libertarian economist, had been leading the ruling coalition’s slate of lawmakers in Buenos Aires Province for the October 26 midterms. He resigned this weekend after revelations that he accepted at least USD 200,000 from Fred Machado, who is under investigation for cocaine trafficking in the United States and has been in custody in Argentina since 2021.
The money was wired to Espert in January 2020 through a Bank of America account. After dodging the issue in multiple interviews, Milei’s former candidate acknowledged the transfer but said it was a down payment for consulting work at Machado’s Guatemalan mining venture, Minas del Pueblo. But that firm is also under investigation for money laundering, and while Espert claims that the mining project was abandoned during the pandemic, the money was never returned.
“Time will show that all this was a great lie to dirty this electoral process and dodge the real debates about what Argentina needs to do to change its course,” Espert said in his resignation letter, claiming he was stepping down from the ticket in order to safeguard Milei’s coalition.
The president resisted counsel from his inner circle to demand Espert’s resignation, but caved at the last minute. He reportedly changed his mind when he saw polls indicating that Espert was losing by 15 to 20 points in Buenos Aires Province, Argentina’s largest electoral district, home to more than one-third of the country’s population.
Milei’s steadfast loyalty to Espert has puzzled even some of his closest allies, fueling speculation that the president himself could be entangled in shady dealings. Opposition leaders have pointed to links between all figures involved: Fred Machado is represented by Milei’s lawyer, Francisco Oneto, whose business associate, Diego Spagnuolo, is Espert’s closest confidant and has already been implicated in corruption cases involving Milei’s family.
👉 Why it matters. The scandal has thrown the Milei camp into turmoil just three weeks before the midterm vote, undermining the coalition on matters of crime and corruption, an area in which it has long claimed an advantage over the Peronist opposition. Allegations of ties to drug traffickers are particularly damaging in a country still reeling from the brutal killing of three young girls last month, who were tortured and dismembered by a drug gang in Buenos Aires Province — a level of violence more often associated with Mexico or Colombia than Argentina.
The ruling coalition now faces a legal and logistical scramble to reprint ballots in Buenos Aires Province, where Espert’s name and photo still appear under Milei’s banner. If courts refuse to authorize new ballots, the president may be forced to urge voters to select a box bearing the image of a candidate who withdrew due to criminal allegations.
As the bad news mounts, the government is also grappling with an economic crisis. On Monday, Economy Minister Luis Caputo traveled to Washington to negotiate the terms of a potential aid package with Treasury Secretary Scott Bessent, as the administration seeks support to halt a selloff in bonds and the Argentine peso.
URBANISM
A South Korean solution to Guatemala’s car traffic problem
Vehicular traffic is the bane of many major cities worldwide, particularly densely populated capitals with limited public transportation options. In Latin America, Mexico City and Lima are notorious for their gridlocks, but other capitals face even more severe congestion.
Guatemala City is home to the worst traffic jams in Latin America, according to some user surveys, and officials have been struggling to address what many consider to be the capital’s most urgent problem.
Last month, a Mobility Plan commissioned in 2019 and developed in partnership with the South Korean International Cooperation Agency was unveiled after years in the making. The draft, which cost USD 9 million to produce, lays out a 20-year roadmap to overhaul the city’s urban transit system.
South Korean experts proposed sweeping infrastructure investments, including three beltways totaling more than 120 kilometers to redirect traffic away from the congested city center. Other projects include five new inter-municipal highways, numerous bridges and overpasses, and a four-kilometer tunnel near La Aurora International Airport, one of the city’s worst choke points.
The plan also calls for reinforcing public transportation. Proposals include expanding the Transmetro bus system, introducing a unified fare structure and creating a metropolitan transport authority. To enhance monitoring and safety, the program envisions a citywide CCTV network comprising 350 cameras.
👉 Why it matters. Guatemala City’s metropolitan area endures some of the heaviest traffic in Latin America. During peak hours, as much as 95% of the road network is oversaturated, and average speeds slow to between 4 and 7 km/h. Commuters often spend up to four hours a day in transit, straining mental health and fueling violent episodes of road rage. Delivering on such an ambitious plan will pose daunting budgetary and logistical challenges, particularly in a country as poor as Guatemala. Elsewhere in Latin America, there are numerous examples of large-scale transit projects that have been announced with fanfare, only to stall indefinitely.
President Bernardo Arévalo has vowed to make urban mobility a priority, citing the wide-ranging toll of congestion. He argued that traffic erodes family life, reduces productivity and stifles business opportunities.
“It is not normal for us to always be tired because an eight-hour workday is followed by three to four hours returning home,” the president said. “We are convinced that joint efforts between the central government, municipalities and international cooperation will be key to improving the quality of life of the Guatemalan people.”
QUESTION OF THE WEEK
Last week’s quiz asked which statement about Peru’s indigenous peoples was false. The incorrect statement was that “most of Peru’s indigenous people live in the Andes, not the Amazon,” whereas the opposite is true! Here is how you guessed:
🟩🟩🟩🟩⬜️⬜️ Peru recognizes 55 indigenous groups that speak 47 different languages. (40%)
🟨🟨⬜️⬜️⬜️⬜️ Most of Peru’s indigenous people live in the Andes, not the Amazon. (20%) ✅
🟩🟩🟩🟩⬜️⬜️ After Spanish, Quechua is the most widely spoken language, with about 3.8 million speakers (40%)
⬜️⬜️⬜️⬜️⬜️⬜️ Much of modern-day Peru once made up the heart of the Inca Empire.
QUICK CATCH-UP
🚬 The US Office of Foreign Assets Control removed former Paraguayan President Horacio Cartes and his tobacco company, Tabesa, from its sanctions list. The move reverses penalties imposed by the Joe Biden administration, which blocked US citizens and companies from doing business with Cartes, who is seen as the man behind the throne in President Santiago Peña’s government.
🚔 Mexican officials announced the capture of Nelson Arturo “N,” considered one of the most notorious leaders of the Venezuelan-born Tren de Aragua cartel, listed by the US as a foreign terrorist organization with ties to the Venezuelan regime. The suspect was wanted for human trafficking, drug dealing, murder, extortion and kidnapping.
📣 As indigenous protests escalate, Ecuadorian President Daniel Noboa declared a new state of exception in 10 of the country’s 24 provinces, saying that “violent rallies” are threatening citizens and security agents. The announcement came after top courts declared some emergency decrees unconstitutional, deepening the clash between the government and the judiciary. One protester has died so far, while nearly 100 injuries have been reported from both sides.
⛏️ The Andean Community has declared that Peru is failing to meet its obligations to combat illegal mining. The trade bloc — made up of Bolivia, Colombia, Ecuador and Peru — was responding to a complaint filed by indigenous groups in the Loreto region, who say they face growing threats from expanding economic activity.
đź“Š According to the latest Global Trade Outlook and Statistics report, the WTO estimates that South American exports will decline by 1.9% next year, while imports are expected to shrink by 0.6%. WTO economists say the numbers indicate no more than a return to normal, after years of massive growth in trade.