Regional Summary
When the State Is the Product Governments across the Americas are turning themselves into corporations. Mark Carney, Canada’s prime minister, wants to raise $6.6 billion for a Canadian defence bank. Pemex returned to local debt markets for the first time since 2019. Codelco signed a $900 million lithium deal with Rio Tinto. The state is borrowing the language of private enterprise — partners, credit ratings, oversubscribed offerings — while keeping political control. Early results look good. The real risk is that success will hide the governance problems that state capitalism always creates. Mr Carney’s defence plan shows how this works. It promises 125,000 jobs and less dependence on American equipment through private partners chosen by government and a new Defence, Security and Resilience Bank backed by all six big Canadian lenders. Three cities are bidding to host it. Mr Carney is also trying to link the Trans-Pacific Partnership to the European Union — a trading bloc of 1.5 billion people built not on economic logic but on shared fear of Donald Trump. The politics make sense. Whether the institutions can handle the load is unclear. A mass shooting in British Columbia united all parties, but the basics remain unchanged: Liberals lead in polls, Conservatives rally a populist base, and both cut quiet deals to keep a minority government alive. Canada’s new statism rests on an electoral truce, not agreement. Mexico’s state energy companies show what happens when the truce lasts. Pemex’s first local debt sale since 2019 was oversubscribed. International investors oversubscribed the Federal Electricity Commission’s bonds seven times over. Markets are pricing state enterprises as if they were private companies, even as the ruling Morena party fragments — a senator defying anti-nepotism rules, factional fights threatening Claudia Sheinbaum, the president. The government passed a constitutional cut in the working week from 48 to 40 hours while quietly sending its security secretary to Washington for talks. It performs sovereignty at home while cooperating behind the scenes. Brazil shows the contradictions. Petrobras posted record production of 3.08 million barrels a day, pre-salt fields humming, exports at an all-time high. But the Supreme Court — meant to referee the state’s expanding role — faces criminal evidence against Dias Toffoli, one of its justices, over links to banking fraud. The court’s credibility crumbles in an election year when Bolsonarismo, with Flávio Bolsonaro polling ahead of Luiz Inácio Lula da Silva, the president, proves it can outlive its founder’s imprisonment. A cyberattack compromising more than half a million Workers’ Party member records shows that digital governance is as vulnerable as everything else. Chile offers the sharpest warning. Codelco, the world’s largest copper producer and the crown jewel of Chilean state capitalism, fired three senior executives for hiding safety data from regulators — a cover-up that preceded an accident killing six miners. The scandal hits as José Antonio Kast, the president-elect, inherits a structural fiscal deficit of 3.6%, triple the target, and as Codelco secures its lithium deal with Rio Tinto and authorises $3.9 billion in new investment for 2026. The outgoing Boric administration’s lithium strategy will continue under a right-wing successor not because he likes it, but because the money is already committed. State capitalism creates facts that outlast the governments that create them, and it buries the risks in the same place. States across the hemisphere are not retreating from markets but dressing up as market players — issuing bonds, courting credit ratings, recruiting private partners — while keeping the political control that makes real accountability hard. The early returns look good: oversubscribed offerings, record production, new defence banks. But the week also produced a covered-up mine disaster, a compromised supreme court justice, a fiscal target missed for the third year running, and a defence plan built on a fragile minority government. States can sell themselves as products, but who audits the prospectus? Sovereign Inc.Country Summaries
Canada
Canada took a big step away from the United States this week, unveiling a $6.6 billion defence plan while its courts and politicians proved they can work when they have to.
Mark Carney, the prime minister, announced sweeping changes to Canada’s defence industry, including private-sector “partners” and promises of 125,000 new jobs. The plan, delayed by a mass shooting in British Columbia, aims to cut reliance on American military equipment by building more at home. The shift comes as Canadian intelligence officials told MPs that China worries them more than Russia in the Arctic, particularly its economic threats and attempts to influence Indigenous communities.
This matches Canada’s broader push to find new friends. All six big Canadian banks have endorsed the Defence, Security and Resilience Bank, with Vancouver, Toronto and Montreal competing to host it. The new institution would finance defence projects for NATO members and allies, creating 3,500 jobs for the winning city. Mr Carney is also trying to bridge the Trans-Pacific Partnership and European Union into a trading bloc of 1.5 billion people, positioning Canada among middle powers pushing back against Donald Trump’s trade policies.
The tragedy that delayed the defence announcement — a mass shooting in Tumbler Ridge that killed eight people — brought rare political unity. Mr Carney cancelled international travel to join opposition leaders at a vigil, with party leaders attending memorial events together and the prime minister and Conservative leader Pierre Poilievre setting aside their usual feuding. The response showed the system can coordinate across party lines when it matters.
The system faced another test when the Supreme Court threw out a Liberal MP’s single-vote victory in Terrebonne after the Bloc Québécois challenged mail-in ballot errors, forcing a new by-election. The ruling showed the courts will override the government to protect elections. The decision came the same day it was issued, unusually swift.
The unity during the crisis did not last. Mr Poilievre won 87% approval at the Conservative party convention, but analysis suggests tensions between populist fervour and broader appeal. Polling shows the Liberals opening their largest lead since Mr Carney became leader, with public confidence hitting multi-year highs. Behind the scenes, both parties are reportedly cutting deals to keep the minority government running, with practical cooperation on bills despite public bickering.
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- Carney’s wealth and business ties raise ethics concerns — Analysis pieces examine Mr Carney’s extensive financial holdings from his Goldman Sachs and central bank career, with critics arguing Canada’s conflict-of-interest rules are insufficient for a leader with such complex business entanglements. (thewalrus.ca)
- Poilievre secures strong leadership endorsement but faces party unity challenges — Mr Poilievre achieved 87% approval at the party convention, but analysis suggests ongoing tensions between populist intensity and broader electoral appeal. Multiple pieces examine internal party dynamics and Poilievre’s challenges in expanding conservative support. (thewalrus.ca)
- Bloc demands public inquiry into Cúram software cost overruns — Bloc Québécois leader Yves-François Blanchet called for an independent public inquiry into the federal benefits modernization program using Cúram software, citing cost overruns of 277% and impacts on 85,000 seniors facing delays and other issues with the system. (lapresse.ca)
Notes
Notes
Poilievre secures strong leadership endorsement but faces party unity challenges
February 09-15, 2026
Other
Mexico
Pemex completed its first local debt placement since 2019 this week, issuing 31.5 billion pesos in certificates that attracted more demand than supply. The state oil company structured the bonds for five- to ten-year terms to refinance 2026 maturities without increasing total debt levels, earning top credit ratings from both S&P and Moody’s Mexico. The Federal Electricity Commission followed with an even stronger performance, issuing $1.5 billion in international bonds that drew $10.4 billion in demand—seven times oversubscribed. The utility secured investment-grade ratings from all three major agencies and priced the bonds at 6.045% for eight-year notes and 6.5% for 25-year paper. The successes reverse years of poor market access for Mexico’s state energy companies.
The ruling National Regeneration Movement (Morena) faces a succession fight ahead of 2027 elections. Saúl Monreal, a senator, has defied the party’s anti-nepotism rules by continuing his bid for governor of Zacatecas, where his brother, David Monreal, currently serves. The rebellion prompted a public warning from Ricardo Monreal, another party figure, who said scandals within Morena were damaging Claudia Sheinbaum, the president, and could provoke a “rupture” as the party heads toward crucial gubernatorial races. Ms Sheinbaum told Mr Saúl Monreal he should wait six years before seeking the governorship. The tensions reveal factional stress within the party that has dominated Mexican politics since 2018.
Elsewhere, Mexico maintained its approach to relations with Washington, combining operational cooperation with sovereignty rhetoric. Ms Sheinbaum demanded a formal explanation from the United States over the closure of El Paso’s airspace, saying Mexico had no information confirming alleged cartel drone use in border areas. Yet Omar García Harfuch, the security secretary, travelled to Washington for bilateral meetings with American officials, including Northern Command representatives, demonstrating the continued quiet cooperation that characterises the relationship. The Senate, meanwhile, approved a constitutional reform reducing the work week from 48 to 40 hours by 2030, showing the government retains its capacity to advance labour reforms despite internal political tensions.
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- Morena faces internal divisions over 2027 election nepotism rules — Internal conflicts within Morena over 2027 gubernatorial candidates intensify as Mr Saúl Monreal defies party nepotism rules to seek Zacatecas governorship, prompting criticism from his brother, Mr Ricardo Monreal, and calls from President Sheinbaum for him to wait six years. (elfinanciero.com.mx)
- Sheinbaum praises Bad Bunny’s Super Bowl performance message of unity — President Sheinbaum praised Bad Bunny’s halftime show at Super Bowl LX, highlighting his message of unity across the Americas and the use of Spanish. Her comments contrasted with criticism from President Donald Trump, who called the performance “one of the worst in history.” (jornada.com.mx)
- Sheinbaum responds to Spanish Madrid leader’s criticism of Mexico — President Sheinbaum responded to criticism from Isabel Díaz Ayuso, Madrid’s regional president, who called Mexico a dictatorship and narco-state. Ms Sheinbaum denied the allegations point by point, stating Mexico is not a dictatorship and there is no censorship. (ejecentral.com.mx)
- García Harfuch explains Sinaloa miners killed due to mistaken identity — Mr García Harfuch revealed that 10 miners kidnapped and killed in Sinaloa were victims of mistaken identity, confused by ‘Los Chapitos’ cartel members for rivals. He stated there was no prior extortion complaint from the Canadian mining company. (punto.mx)
- Banxico expected to maintain 7% interest rate throughout 2026 — Analysts project that Mexico’s central bank (Banxico) will keep the reference interest rate at 7% for the remainder of 2026, citing limited room for cuts given inflation outlook and neutral rate considerations. Government investment plans could delay rate reductions. (elfinanciero.com.mx)
- SEDENA announces various security and training activities — The Defence Ministry (Sedena) announced several initiatives including opening military training for women, security preparations for the 2026 World Cup in Nuevo León, and authorising US aircraft overflight for medical rescue operations. Officials also reported weapons seizure statistics. (voxpopulinoticias.com.mx)
Notes
Notes
Mexico responds to El Paso airspace closure with no information on cartel drones
February 11-13, 2026
Other
Brazil
Brazil’s Supreme Court faces its worst crisis in years as police deliver criminal evidence against Dias Toffoli, a justice, pushing the case well beyond ethics to potential criminal charges.
Police used Article 33 of the Magistrate Law to pursue Mr Toffoli over his links to the Banco Master fraud case. The evidence includes suspicious recordings, leaked internal court meetings, and financial ties through resort property sales to funds connected to the bank. Police found connections between the justice and the bank owner in messages from Daniel Vorcaro’s phone. The case poses an unprecedented threat to the court’s credibility during an election year when it already faces criticism for judicial overreach.
The 2026 presidential race has shifted into high gear. New polling shows Flávio Bolsonaro, a senator, leading Luiz Inácio Lula da Silva, the president, 48% to 42% in potential runoffs, confirming that Bolsonarismo remains a force beyond its imprisoned founder. The Electoral Court intervened in a Carnival parade controversy over a Lula tribute, requiring the government to issue precautionary guidelines. The Workers’ Party marked its 46th anniversary by approving resolutions attacking Central Bank policies and backing an end to the six-day work week. Arthur Lira, the former chamber president, announced his Senate candidacy, shaking up coalition politics, while several ministers including Fernando Haddad, the finance minister, prepare to leave for campaigns.
Petrobras reported record oil and gas production of 3.08m barrels a day in 2024, with 88.2% from pre-salt formations and exports hitting a record 765,000 barrels a day. The company announced new dividend payouts and international expansion including acquisitions in Namibia. The army adopted the Electronic Manoeuvre Air Defence System, an anti-aircraft system addressing air defence gaps. But a cyberattack on the Workers’ Party compromised up to 537,000 member records, highlighting security vulnerabilities in the digital age.
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- Lula tours Carnival events in three capitals while managing political dynamics — The president visited Recife, Salvador, and Rio de Janeiro during Carnival, attending major events including the Galo da Madrugada. His appearances involved political figures competing for his support in upcoming elections, particularly in Pernambuco. (agenciabrasil.ebc.com.br)
- Workers’ Party celebrates 46th anniversary with strategic positioning for 2026 elections — The party held anniversary celebrations in Salvador with Lula, approving political resolutions criticising Central Bank policies, defending the end of the 6x1 work schedule, and outlining electoral strategies. The party also addressed internal challenges and alliance-building needs. (folha.uol.com.br)
- Cyberattack compromises Workers’ Party member database exposing sensitive data — The party confirmed a security incident in its affiliate system (Sisfil) that compromised personal data of members. The breach, revealed through unauthorised communications, potentially affected up to 537,000 records in São Paulo alone, including sensitive personal information. (esmaelmorais.com.br)
- Polling shows tight 2026 presidential race with Lula facing stronger opposition — New polls indicate Mr Bolsonaro leading Lula in potential 2026 matchups, with 48% versus 42% in one survey. The polling data has sparked discussions about Lula’s re-election prospects and the party’s need for broader electoral coalitions. (cnnbrasil.com.br)
- Arthur Lira announces Senate candidacy amid political positioning for 2026 — Mr Lira confirmed his pre-candidacy for the Senate, sparking reactions from rivals like Renan Calheiros who questioned his qualifications. Mr Lira’s move affects 2026 electoral dynamics in Alagoas and raises questions about his support for the federal government. (cnnbrasil.com.br)
- Haddad prepares exit from Finance Ministry while defending economic legacy — Mr Haddad participated in his likely final major public events as minister, defending his economic management record while proposing structural reforms to social programmes. He avoided specifying his departure date but indicated he would continue until completing key deliverables for Lula. (agenciabrasil.ebc.com.br)
- Intelligence agency agent faces disciplinary action over YouTube channel activities — Intelligence agent Glauber Mendonça, who operates a YouTube channel with over 3 million subscribers while presenting himself as a prison guard, faces disciplinary proceedings from the Brazilian Intelligence Agency (ABIN). The case raises questions about intelligence officers’ public activities and sparked legal attempts to notify him through social media. (cj.estrategia.com)
- Prosecutor General to decide on major investigations by mid-2026 — The Prosecutor General’s Office announced it will decide on several high-profile cases in the first half of 2026, including the ‘Parallel ABIN’ investigation, the Saudi jewellery case, and charges against former Human Rights Minister Silvio Almeida, seeking to avoid electoral interference accusations. (cnnbrasil.com.br)
Notes
Notes
Polling shows tight 2026 presidential race with Lula facing stronger opposition
February 09-14, 2026
Other
Chile
Chile’s state copper giant, the National Copper Corporation (Codelco), fired three senior executives this week for concealing safety information from regulators—a crisis that will test José Antonio Kast, the president-elect, before he even takes office.
The dismissed executives, including the vice-president of operations, had hidden technical details about a 2023 rock burst at the El Teniente mine from mining regulators. The cover-up preceded the July 2025 accident at the same site that killed six workers. An internal audit exposed the concealment, forcing Codelco to act. The scandal strikes at the heart of Chile’s credibility: Codelco is the country’s most important state enterprise and the world’s largest copper producer.
Mr Kast inherits a budget mess. Gabriel Boric’s outgoing administration posted a 3.6% structural fiscal deficit in 2025, far above the 2.2% projection and the 1.1% target. It marks the third straight year of missing fiscal targets, limiting what the new government can do from day one.
Codelco, meanwhile, obtained final approval for lithium development at the Maricunga salt flat with Rio Tinto, involving a $900m commitment, and authorized $3.9bn in investments for 2026. The moves extend Mr Boric’s state-led lithium plans, showing that business continues even as power changes hands. Chile confirmed that Marco Rubio, the US secretary of state, will attend Mr Kast’s March 11 inauguration—an upgrade in relations between the two countries. But the government also announced humanitarian aid to Cuba, following Mexico’s lead rather than Washington’s sanctions.
Military modernizing proceeded with a 75% pay increase for soldiers and expanded training programs, part of efforts to make voluntary service more attractive. The changes aim to build up the armed forces rather than signal any shift in Chile’s defense stance. Chile also reinforced sovereignty over Tierra del Fuego, updating boundary markers after Argentina installed solar panels on Chilean territory in 2024.
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- Codelco fires three executives for concealing information about 2023 El Teniente accident — State copper company Codelco dismissed three senior executives, including the vice-president of operations, after an internal audit revealed they concealed technical information from mining regulators about a 2023 rock burst incident at El Teniente mine. The cover-up preceded the deadly July 2025 accident that killed six workers. (reuters.com)
- Kast prepares for presidency with team appointments and pre-inaugural activities — President-elect José Antonio Kast announces subsecretaries, faces questions about funding for international trips, and confirms US Secretary of State Marco Rubio will attend his March 11 inauguration. Media coverage also examines his personal faith mission and right-wing international connections. (latercera.com)
- Codelco operational and business developments — Chilean state copper company reports production increases, authorises $3.9 billion in 2026 investments, and advances lithium projects including signing modified contract for Maricunga salt flat development and creating joint ventures. (reuters.com)
Notes
Notes
CODELCO fires three executives for concealing information about 2023 El Teniente accident
February 13-15, 2026
Kast prepares for presidency with team appointments and pre-inaugural activities
February 08-15, 2026
Boric government leaves higher than expected fiscal deficit for incoming administration
February 13, 2026
Other