Another border dispute between Gustavo Petro and Daniel Noboa. And the threats to Javier Milei’s disinflationary hopes in Argentina.
FOREIGN AFFAIRS
Unexploded bomb escalates Colombia-Ecuador conflict
The shock was palpable on Monday night as Colombian President Gustavo Petro accused Ecuador of bombing his country. Although the incident has been played down since, the situation is worth monitoring given the rise in border tensions in recent months.
“Bombs have appeared. One bomb, thrown from a plane. It happened on the Ecuador border. This is confirming my suspicions — though we have to investigate this well — that we are being bombed from Ecuador and not by irregular armed groups,” Petro said, during a televised meeting.
Adding weight to his words, Petro said he had asked for help from Donald Trump, whom he recently visited in Washington. “I asked [Trump] to call Ecuador’s president [Daniel Noboa] because we don’t want to have a war,” Petro stated.
Noboa quickly denied the allegations and fired back with his own complaints about the Colombian leader. “We are acting on our own territory, not on yours. With international help, we are bombing the hiding places of groups that are largely Colombian, which have infiltrated our country thanks to your government’s neglect of the border,” Noboa replied.
The Ecuadorian president went further, claiming that Colombia is currently harboring the family of “Fito,” the leader of Ecuador’s Los Choneros cartel, who was recently extradited to the US.
According to a New York Times investigation, this week’s contention originates from an unexploded device found on a farm in the Putumayo region of southern Colombia, near coca crops and a banana plantation. Experts identified the device as an “American-designed Mark-82, a 500-pound bomb widely used in modern aerial warfare,” and said that a “specialized team” from the Colombian army was required to dispose of it.
Petro’s ambiguous statement on Monday suggested that more bombs may have been dropped on his country, while his other claim about finding “27 charred bodies” near the border heightened tensions further, although the latter was played down by Colombian medical officials.
👉 Why it matters. The incident comes less than two months after Noboa slapped a 30% tariff on Colombian imports, calling it a “security fee” for not cooperating in the fight against drug trafficking, which is rampant in both nations. The decision sparked a trade war, with both nations now charging 50% levies on most of their neighbors’ products.
Drug trafficking and cartel violence have long been at the heart of Colombian politics, given the country’s central role in global cocaine production, but the issue is taking over Ecuador as well, with the port city of Guayaquil becoming a key trafficking hub in the region, wracked by murderous gang disputes.
As a result, Ecuador went from being one of the most peaceful countries in Latin America to among the world’s most violent. Homicides, which stood at 6 per 100,000 people in 2018, skyrocketed to 46 per 100,000 by 2023. Noboa has struggled to bring down the numbers, despite declaring a “war on gangs” in 2024.
Petro’s instincts are just the opposite, going as far as suggesting legalizing cocaine in a meeting with a Trump envoy last year, and describing the drug as “no worse than whiskey” in a televised cabinet meeting.
Still, the Colombian leader has tried to appease Trump in recent months, putting his “total peace” strategy aside to bomb armed groups in conflictive regions, with support from US intelligence.
After a difficult few days, Colombia-Ecuador tensions dialed down slightly yesterday, as Petro and Noboa scheduled a bilateral meeting in Lima next week to settle their differences.
ECONOMY
Inflation tops Milei’s worries, but Argentines have other concerns
Argentina’s libertarian President Javier Milei reached office by promising to “burn down the Central Bank” after a string of politicians from different political stripes had failed to control inflation. Compared with his predecessor, Alberto Fernández, Milei’s results on this front have been tangible: from a yearly inflation rate of 211% in 2023 to 31.5% in 2025.
Despite these improved figures, recent months have been troublesome, with progress seemingly halted since May 2025, when monthly inflation stood at 1.5%. From then on, monthly price hikes were at least as large as the previous month, reaching 2.9% in February and potentially higher in March following oil price spikes due to the war in the Middle East.
Milei has blamed the spike on financial uncertainty caused by last year’s midterms, which his coalition ultimately won after US Treasury Secretary Scott Bessent bailed out the Argentine peso. He has also promised that monthly inflation figures will fall to “zero point something” later this year, bringing them closer to the average of most Western countries.
👉 Why it matters. The government has made inflation its top priority, slashing the deficit and seeking to borrow money to tame consumer prices. But Milei’s economic program has brought other problems, with Argentines now saying that poverty and unemployment worry them more than price hikes.
More than 200,000 private-sector jobs have been shed since Milei took office, along with 70,000 public posts. These losses have only been partially offset by a rise in the number of self-employed workers. According to the latest job figures, unemployment rose from 5.7% in Q4 2023 to 7.5% in Q4 2025, while the share of unregistered jobs also increased from 41.4% to 43%.
Despite financial optimism, the country has seen little investment in the real economy beyond specific energy and mining projects, for which tailor-made legislation was passed to ensure profitability. The manufacturing and construction sectors, meanwhile, are laying off workers to stay afloat.
As for poverty concerns, public-sector workers have seen the biggest salary cuts, down by 17% in inflation-adjusted terms since the start of the administration. Despite these efforts, critics say that the country’s much-vaunted fiscal surplus has only been achieved with some help from accounting tricks, so new runs against the peso remain a possibility.
While lower inflation has been enough to convince voters so far, any sustained resurgence could prove fatal for an electorate already worried about other emerging problems.
QUESTION OF THE WEEK
Colombia and Ecuador had another famous border conflict this century. What happened between them?
- Colombia bombed Ecuador to kill a FARC leader.
- Then-Colombian Pres. Álvaro Uribe said his Ecuadorian counterpart Rafael Correa allowed cocaine labs in the region.
- Ecuador claimed part of the Tumbes National Reserve.
- An international arbitration court settled a conflict over oil deposits.
QUICK CATCH-UP
😲 President Gustavo Petro of Colombia is under criminal investigation by at least two US federal prosecutors’ offices — in Manhattan and Brooklyn — the New York Times reported. The inquiries have involved prosecutors who focus on international narcotics trafficking, as well as agents from the Drug Enforcement Administration and Homeland Security Investigations.
🎙️ Cuba’s Foreign Trade Minister Óscar Pérez-Oliva Fraga, the grandnephew of Fidel and Raúl Castro, announced economic reforms, including authorizing Cubans who live abroad to own property and invest in the island — a first since the large-scale expropriations of the 1960s. US Secretary of State Marco Rubio, who is in talks with Cuban authorities about a potential transition, said the reforms do not go far enough.
⚡ Defying a US embargo, two shipments of Russian oil are making their way to Havana, with one of them expected to arrive as soon as next Monday. A pro-Cuban organization in Brazil has also signalled willingness to help, vowing to send 1,000 solar panels to the island as it faces one of its worst energy crises in history.
🪖 In a cabinet shakeup that also included the Labor, Transport, Public Works, Housing, Culture, University and Electricity ministers, Venezuela’s Interim President Delcy Rodríguez fired Defense Minister Vladimir Padrino, who controlled the country’s military and was seen as being only below Nicolás Maduro and Interior Minister Diosdado Cabello in the previous regime’s power scheme. His replacement, Gustavo González López, is believed to have Washington’s approval.
⚾ Venezuela became baseball world champions for the first time after beating the United States in the World Baseball Classic final by 3-2, the second Latin American team to do so after the Dominican Republic in 2013. The championship game was held in Miami, home to a large Venezuelan crowd and set against the backdrop of bilateral political intrigue, amid the US-managed transition in Caracas.