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Microsoft leads tech stocks lower as investors await fresh US economic data

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Microsoft leads tech stocks lower as investors await fresh US economic data

US shares dropped on Wednesday, with tech teams among the many worst performers, as traders assessed the most recent batch of company outcomes and regarded forward to an important set of US gross home product figures out later within the week.

Wall Road’s blue-chip S&P 500 fell 1.2 per cent and the tech-heavy Nasdaq Composite slipped 1.8 per cent shortly after the New York open, consuming into positive aspects registered earlier this week.

The strikes in fairness markets got here after Microsoft mentioned projected income would hit between $50.5bn and $51.5bn within the present quarter, under analysts’ expectations. Shares within the firm shed 4 per cent in early Wednesday buying and selling. Amazon dropped greater than 3.2 per cent and Alphabet slipped 1.8 per cent.

Tesla stories its fourth-quarter figures in a while Wednesday, with analysts polled by Refinitiv anticipating earnings of $1.01 a share on income of $24.03bn, up from earnings of 68 cents a share on income of $17.72bn throughout the identical interval in 2021. Tesla’s shares have jumped a 3rd to this point in 2023 however have greater than halved in worth over the previous 12 months.

Different firms have loved a January bounce. An easing of US inflation information, “along with indicators of cooling in labour and wages, is coming in forward of schedule”, boosting hopes that the Federal Reserve would pause its rate of interest rises sooner than beforehand anticipated, mentioned Charlie McElligott, analyst at Nomura.

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China’s reopening and Europe’s avoidance of a deep recession have pushed a “re-rating increased in world progress on the similar time”, he added. The Nasdaq Composite tumbled by a 3rd in 2022 however is up greater than 9 per cent this yr.

Some doubt how lengthy this yr’s rally has left to run. “Earnings season has been unremarkable to this point and the previous couple of classes of energy counsel that traders are both speculating that the season will turn into good in brief order or that when the Fed hikes [0.25 percentage points] subsequent Wednesday, earnings season gained’t matter as a result of there might be a wave of optimism and positivity because the climbing cycle concludes,” mentioned Mike Zigmont, head of buying and selling and analysis at Harvest Volatility Administration. “That’s quite a lot of gamesmanship if you happen to ask me.”

The tip of the European Central Financial institution’s rate-rising cycle is a extra distant prospect. “Markets now have the ECB priced as essentially the most lively G10 central financial institution this yr in tightening coverage, with [1.4 percentage points] of charge will increase priced into the curve,” mentioned Derek Halpenny, head of analysis at MUFG. “For the Fed, the remaining tightening quantities to about [0.6 percentage points].”

US GDP figures out on Thursday will shed additional mild on the well being of the world’s largest financial system, with analysts anticipating progress of two.6 per cent within the three months to December, down from progress of three.2 per cent within the earlier quarter.

US authorities bonds rallied as equities declined, with the yield on the benchmark 10-year bond down 0.03 share factors at 3.43 per cent, down from 3.88 per cent on the finish of final yr. The yield on the equal German Bund fell 0.04 share factors to 2.12 per cent. Bond yields transfer inversely to costs.

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A measure of the greenback’s energy in opposition to a basket of six friends was flat on Wednesday. Costs for Brent crude, the worldwide oil benchmark, rose 0.1 per cent to $86.18 per barrel.

The regional Stoxx Europe 600 fell 0.5 per cent and Germany’s Dax declined 0.3 per cent, as did London’s FTSE 100.

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Joe Biden cuts Donald Trump’s lead on handling of US economy

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Joe Biden cuts Donald Trump’s lead on handling of US economy

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Donald Trump has lost some of his edge over Joe Biden on the economy in a monthly poll of American voters, one of the first signs that months of strong economic data may finally be boosting the president’s re-election prospects.

Trump’s lead among registered voters who were asked which of the two candidates they trusted more to handle the economy was just four points in June, down from 11 in February, according to the latest survey conducted for the Financial Times and the University of Michigan’s Ross School of Business.

The poll was conducted from May 30 to June 3 — immediately after Trump’s criminal conviction in New York over “hush money” payments made to porn actor Stormy Daniels — and found 41 per cent of registered voters nationwide said they trusted Trump, compared with 37 per cent who put their trust in Biden. Seventeen per cent said they trusted neither.

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Despite Biden’s seven-point improvement since February, the survey still showed some grim sentiment for the Democratic party candidate, who has battled persistently low approval ratings on his management of the economy — which voters say is their top issue heading into November.

The survey results come despite the continuing strength of the US economy, with robust consumer spending and low employment helping to propel gross domestic product and push stock markets to record highs.

But the FT-Michigan Ross poll continued to reveal anxieties about costs for housing and food, among other goods, with about 80 per cent of respondents citing inflation as among their top three sources of financial stress. The Federal Reserve is expected to keep high US borrowing costs unchanged at its meeting on Wednesday in its ongoing effort to tame prices.

The improving numbers for Biden come with five months left before election day, with the president sharpening his attacks on his predecessor. On Friday, the president used a D-Day commemoration speech in France to call on American voters to stand up for democratic rights that he has said are under threat from Trump.

The two men are set to face off in a live televised debate later this month in Atlanta, Georgia.

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“The Trump campaign should be worried about his shrinking lead on who voters trust with the economy because the economy is voters’ biggest issue,” said Erik Gordon of the Ross School of Business.

“Voters are more concerned with the economy than with other campaign issues like immigration and foreign policy,” Gordon added. “To win the election, you have to convince voters that you will do the best job with the economy.”

The latest survey showed that Biden enjoys a particular advantage with older voters, while younger adults favour Trump on economic stewardship. Among voters between the ages of 18 and 54, Trump enjoys a 10-point advantage on his handling of the economy. Biden leads Trump by one point among voters over the age of 55.

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Biden’s advantage with older voters was also laid bare by a new question in the poll, asking which candidate people trusted more to lower healthcare costs, including drug prices and insurance premiums. Biden had an edge over Trump, with 41 per cent of voters saying they trusted him versus 39 per cent picking his Republican rival. Among Americans older than 55, Biden had a seven-point advantage.

The president’s re-election campaign has often cited his administration’s efforts to cap the price of insulin at $35 a month for seniors who get their health insurance through Medicare, the federal provision for Americans over 65.

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Still, the FT-Michigan Ross poll continued to show vulnerabilities for the president, whose economic approval ratings have remained depressed amid continued public frustration with high prices and inflation.

Just one in five American voters said this month that they were financially better off since Biden became president, while just over half said they were worse off.

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Creating a throw-away culture: How companies ingrained plastics in modern life

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Creating a throw-away culture: How companies ingrained plastics in modern life

A trash can overflows as people sit outside of the Martin Luther King Jr. Memorial in Washington, D.C.

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Just for a minute, think about how much of the plastic you use today will end up as trash. Drink bottles? Grocery bags? Food wrappers? If you live in the United States, it’ll probably add up to about a pound of stuff — just today.

Most plastic is dumped in landfills or becomes pollution in places like rivers and oceans, according to the Organisation for Economic Co-operation and Development. Along the way, it sheds microplastics that can make their way into animals and people. Just 4% of plastic in the U.S. is recycled.

It wasn’t always this way. But over the past 70 years, plastic has become embedded in nearly every aspect of human life. The world produces around 230 times more plastic now than it did in 1950, according to Our World in Data.

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As production soared, so did pollution. Many scientists and activists say chemical and fossil fuel companies make too much plastic now for society to manage sustainably. The United Nations says the problem is also being fueled by a “worrying shift” toward single-use products and packaging, which are designed to be used once and thrown away.

Plastic became ingrained in modern life in large part because the plastics industry started working in the 1950s to convince people to embrace the material as cheap, abundant and disposable.

The marketing campaign worked so well that litter soon became a problem across the U.S., and there was a public backlash. The industry responded by pitching recycling. But almost from the outset, corporations knew that recycling probably wouldn’t work to rein in waste, multiple investigations have shown.

Now, faced with spiraling plastic pollution, the U.N has set out to write a legally-binding agreement to deal with the problem. But the negotiations are fraught.

And even if nations can broker a deal, it’ll be a daunting task to actually reduce the world’s consumption of plastic, which is in almost everything, from clothing and diapers to medical devices.

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“We’ll continue to need plastic for specific uses,” Inger Andersen, executive director of the United Nations Environment Programme, said at the latest round of U.N. negotiations in Canada in April. “But there’s a growing agreement,” she said, that a lot of single-use plastic “can probably go.”

Vintage Bakelite and other plastic objects at a museum in England.

Vintage Bakelite and other plastic objects at a museum in England.

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The plastics industry pitched disposability to make more money

As part of the treaty talks, some countries want to cap production of new plastic, which is made from oil and gas. However, those efforts are opposed by big fossil fuel producers that are determined to keep plastic demand growing. State and local governments in the U.S. have tried to limit pollution by passing laws that ban plastic shopping bags or single-use plastic bottles.

The industry has responded by fighting regulations that could hurt demand for its products. It says the solution to environmental problems is better recycling, not using less plastic.

Matt Seaholm, chief executive of the Plastics Industry Association, says his group is advocating on behalf of plastic producers and consumers alike, since “it is an essential part of society at this point.”

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Synthetic plastic was patented in the early 1900s. It was known as Bakelite, and it sparked a boom in durable and affordable consumer goods. Soon, companies started selling different kinds of plastic. At first, most of it was marketed as sturdy and reusable. One television ad from 1955 — about a made-up homemaker named Jane in a made-up place called Plasticstown, USA — touts how plastic containers are ideal for families because they won’t break if kids accidentally drop them.

But soon, the messaging started to change. In 1956, the industry learned about a new way to boost sales — and profits. At the plastics industry’s annual conference in New York, Lloyd Stouffer, the editor of an influential trade magazine, urged executives to stop emphasizing plastics’ durability. Stouffer told the companies to focus instead on making a lot of inexpensive, expendable material. Their future, he said, was in the trash can.

Companies got the message. They realized they could sell more plastic if people threw more of it away. “Those corporations were doing what they’re supposed to do, which is make a lot of money,” says Heather Davis, an assistant professor at The New School in New York who’s written about the plastics industry.

Garbage is dumped at the Fresh Kills Landfill in Staten Island, New York, in 1989.

Garbage is dumped at the Fresh Kills Landfill in Staten Island, New York, in 1989.

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Throw-away living was a foreign concept in 1950s America

But getting people to throw away items after a single use took a lot of work.

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Adults in the 1950s had lived through The Great Depression and World War II, and they were trained to save as much as possible, Davis says.

“It was a really difficult sell to the American public in the post-war period, to inculcate people into a throwaway living,” she says. “That is not what people were used to.”

A solution companies came up with was emphasizing that plastic was a low-cost, abundant material.

A 1960 marketing study for Scott Cup said the containers were “almost indestructible,” but that the manufacturer could still convince people to discard them after a few uses. To counter any “pangs of conscience” consumers might feel about throwing them away, the researchers suggested a “direct attack”: Tell people the cups are cheap, they said, and that “there are more where these came from.”

A few years later, Scott ran an advertisement saying its plastic cups were available at “‘toss-away prices.”

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In a 1963 report for another plastics conference in Chicago, Stouffer congratulated the industry for filling dumps and garbage cans with plastic bottles and bags.

“The happy day has arrived,” Stouffer wrote, “when nobody any longer considers the [plastic] package too good to throw away.”

Workers remove garbage floating on the Negro River in Manaus, Brazil.

Workers remove garbage floating on the Negro River in Manaus, Brazil.

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A booming market hit a consumer backlash

By the early 1970s, plastics were booming. The market was expanding faster than the “rosiest of predictions,” and its growth prospects were “out of sight,” an executive at the chemical company DuPont told the Chamber of Commerce in Parkersburg, West Virginia, in 1973. Soon, big soft drink companies introduced plastic soda bottles.

But the industry faced a growing public-relations problem that was especially threatening to beverage companies, whose names were stamped on the packaging: Plastic litter was becoming an eyesore across the country.

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“Even if you’ve convinced people that maybe the disposability of plastics isn’t such a bad thing, people are still seeing this waste out in public,” says Bart Elmore, a professor of environmental history at Ohio State University.

So drink makers went on offense. Elmore says they fought bans on throw-away bottles and joined the plastics industry in pushing recycling as an environmental solution.

However, multiple investigations, including by NPR, have shown that plastics industry representatives long knew that recycling would probably never be effective on a large scale. Officials have said they encouraged recycling to avoid regulations and ensure that demand for plastic kept growing.

Trade groups for plastic companies say those investigations don’t accurately reflect today’s industry.

There isn’t evidence that drink makers were part of those internal discussions about recycling’s viability. But Elmore says they should have had enough information at the time to know recycling was a risky bet.

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In 1976 — two years before big soft-drink makers introduced plastic soda bottles — a study by the U.S. Food and Drug Administration concluded that “substantial recycling of plastics is unlikely in the near future.” That echoes the agency’s 1975 draft report that found “recycling of plastic bottles is unlikely to be commercially feasible.”

“To make a gamble like that, where public agencies and public documents are saying this at the time, I think raises real questions about culpability, accountability in an era when I think a lot of people are asking for that,” Elmore says.

Less than 10% of plastic waste is recycled globally. As countries try to negotiate a global waste agreement, activists and scientists are focusing a lot of their attention on chemical and fossil fuel companies that make plastic. But Elmore says consumer goods companies like beverage makers also deserve scrutiny, because they use a ton of plastic packaging and rank as some of the biggest plastic polluters globally.

“If they take a stand, one way or the other, it has a huge global impact,” Elmore says.

A business group called the American Beverage Association said in a statement to NPR that one of its highest priorities is creating a so-called circular economy where plastic is recycled and reused to prevent waste.

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An aerial view of Buffalo, New York, facing Lake Erie.

An aerial view of Buffalo, New York, facing Lake Erie.

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A lawsuit aims to hold a major plastic polluter accountable

The disposable culture that was fostered by the plastics industry is playing out in places like the Buffalo River, which empties into Lake Erie in western New York. Plastic debris litters the banks of the river, and it breaks down into fragments called microplastics that accumulate in the lake, contaminating drinking water for about 11 million people.

One morning this spring, volunteers met at the river to clean up some of the pollution. “We see plastic tops, bottles, we have single-use plastics from takeout food,” says Jill Jedlicka, who leads Buffalo Niagara Waterkeeper, a nonprofit that organized the event.

It’s constant work. The debris that volunteers collected will be replaced in weeks by more plastic trash. “It’s an onslaught,” Jedlicka says.

A lot of the plastic waste around the Buffalo River is packaging sold by the food and beverage giant PepsiCo, according to a lawsuit that New York State Attorney General Letitia James filed last year against the company. New York prosecutors say plastic pollution around the Buffalo River is a public nuisance, and that Pepsi contributes to the problem by selling tons of single-use packaging.

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Activists say lawsuits like the one New York filed against Pepsi are a way to try to hold corporations accountable.

In a court filing, Pepsi said it isn’t responsible for the Buffalo River pollution, and that it shouldn’t have to warn people that plastic waste poses environmental and health risks.

“Consumers are more than capable of purchasing a beverage or snack product, consuming it, and placing the packaging in a recycling or waste bin,” the company said.

Researchers say companies often blame consumers when plastic waste gets into the environment.

Pepsi said in statements to NPR that “no single group or entity bears responsibility for plastic pollution,” and that it is trying to improve recycling and reduce how much new plastic it uses.

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However, in its latest sustainability report, Pepsi said its use of new plastic increased slightly in 2022, partly because recycled material was expensive and hard to find. Pepsi isn’t alone: Despite growing public pressure, companies increased their use of new plastic by 11% between 2018 and 2022, according to data compiled by the Ellen MacArthur Foundation.

“There is so much that the plastics industry needs to do to improve the sustainability of plastics,” says Shelie Miller, a professor at the School for Environmental Sustainability at the University of Michigan. But she says consumer culture is also part of the problem.

“If our stance is, consumers should be able to consume whatever they want in whatever quantity they want and it’s someone else’s job to deal with it,” Miller says, “that’s not a path toward sustainability.”

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Venezuelan gang’s arrival shakes Latin America’s safest nation

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Venezuelan gang’s arrival shakes Latin America’s safest nation

The grand Beaux-Arts Portal Fernández Concha building was once a fashionable hotel in downtown Santiago. Now, the 19th-century property in Chile’s capital has become the face of the country’s gang-driven crime wave.

As Venezuela’s Tren de Aragua gang made its first push into Chile — one of Latin America’s safest and most developed economies — over the past five years, men alleged to be members of the gang turned rented rooms in the downtown building into the base for a sex trafficking ring.

Police said they dismantled the operation in 2023, but on a recent afternoon, young women still hovered in the square outside, approaching passing men.

“At the peak, we had 1,500 people entering every day,” said a security guard at the building. “I was seeing knife fights outside most weeks. I had never seen anything like it.”

The historic Portal Fernández Concha building has become a hub for the sex trade © Vanessa Volk/Alamy

Experts say Chile has fallen victim to a regional trend, in which organised crime groups have embraced business models less tied to their home territories in the wake of the pandemic. Cells in different countries exercise autonomy while communicating with their home base and taking on contract-based work, enabling the gangs to expand into new regions.

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The Tren de Aragua, which was formed in a Venezuelan prison in 2014, has been one of the most successful. It has taken advantage of an exodus of some 7.7mn refugees from its home country’s economic collapse, which expanded the pool of poor, jobless and marginalised people vulnerable to exploitation across the region.

While Peru, Ecuador and Colombia have all reported its presence, Chile’s lack of criminal competition and relative wealth have made it an especially desirable target.

“The Tren de Aragua and other foreign groups saw a big business opportunity in the flow of vulnerable people towards the country,” Ignacio Castillo, director of organised crime at Chile’s public prosecutor’s office, told the Financial Times.

“They have fundamentally changed the nature of crime in Chile.”

Chile’s murder rate has nearly doubled since 2019 to 4.5 per 100,000 people in 2023, very slightly down from 2022. Last year it lost its spot as the country with the region’s lowest murder rate to El Salvador, where a crackdown on homegrown gangs dramatically cut violence, according to a ranking by watchdog group Insight Crime.

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Chilean Investigative Police officers take part in an operation against Los Trinitarios criminal gang in an area known as Nuevo Amanecer or New Dawn, in the Cerrillos commune of Santiago
The police launch a raid against an international criminal gang in the capital Santiago © Esteban Felix/AP
Members of the Chilean police work at the site where three policemen were murdered, in a Mapuche area in Cañete, Biobio region
Chilean society was stunned when three policemen were killed in April © Guillermo Salgado/AFP/Getty Images

Kidnappings, extortion and sex trafficking have also increased in Chile, Castillo said.

Fears over the gangs have transformed the country’s politics. Seven in 10 Chileans rank crime as their top concern, according to a March Ipsos poll. That has pulled attention away from economic inequalities that sparked mass protests in 2019, and helped to sap the popularity of leftist president Gabriel Boric even as his government works to beef up security policy.

“Crime and organised crime are the greatest threats we face today,” Boric said in his State of the Union address in June. “Without security, there is no freedom, and without freedom there is no democracy.”

On a recent afternoon in Maipú, a suburb of Santiago, salsa music played loudly from one of hundreds of homes improvised from MDF and corrugated iron beneath an underpass, which house mainly Haitian and Venezuelan migrants.

In March, a body was found here, stuffed in a suitcase and buried under cement: the corpse of Ronald Ojeda, a former Venezuelan soldier and critic of Venezuelan president Nicolás Maduro’s authoritarian regime.

Chile’s public prosecutor said the Tren de Aragua had carried out Ojeda’s high-profile assassination. He later added that the killing had been “organised” from Venezuela and was probably politically motivated.

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Maduro’s foreign minister responded by claiming the gang “does not exist”, triggering a diplomatic dispute.

Similar migrant settlements to the one in Maipú have sprung up across Chile as the state failed to absorb millions of new arrivals: the country’s foreign-born population grew from just 1.8 per cent in 2013 to 13 per cent in 2023.

“The state loses control in these areas, and there is a generation of young people who aren’t getting access to education, healthcare and employment,” said Claudio González, director of the University of Chile’s Citizen Security Studies Centre. “It’s a perfect hunting ground for crime groups.”

Fears over organised crime have fomented anti-migrant sentiment among Chileans, polls show, but González said the gangs’ victims themselves were mostly migrants. Cases of violent gang crime targeting Chileans were “very exceptional”, he said.

Relatives and friends of Mayra Castillo, a 13-year-old victim of violence, hug during a protest against criminal violence outside La Moneda government palace in Santiago
Relatives and friends of 13-year-old Mayra Castillo who was killed in gun violence hold a protest outside the president’s office © Esteban Felix/AP

A volunteer working with children on a community art project in the settlement, who declined to give his name because he also works for the government, said authorities had only carried out “isolated interventions” such as pop-up health clinics, and failed to reach undocumented migrants.

“Mostly they treat these communities as a security problem — they don’t prioritise their quality of life, so they won’t solve the problem,” the volunteer said.

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The Tren de Aragua differs sharply from more famous groups like Mexico’s cartels, said Ronna Rísquez, a Venezuelan journalist who published a book on the gang last year.

“Those groups are militarised, and [tend to stay in] fixed territories, while the Tren de Aragua is more fluid, with loosely connected cells,” she said, adding that the group numbered 3,000 people at most.

The gang picks up contract jobs, such as assassinations or transporting drugs for other gangs, González said.

“These are basically predators who look for niches to exploit — they do a lot of harm, but they’re not very sophisticated,” he added.

The arrival of organised crime in Chile, combined with a conflict with separatist indigenous groups in the south, has pushed security to the top of the political agenda ahead of elections next year.

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Chile’s rightwing has seized on Boric’s history as a critic of the country’s police. Its approval ratings have surged to an all-time high of 84 per cent amid the crime wave, according to pollster Cadem.

The situation has become a major headache for Boric, who had hoped to expand Chile’s social safety net and human rights protections, but has instead been forced to focus on security.

Since 2022, the government has created organised crime units within the public prosecutor’s office and police, launched the first national organised crime policy, and passed dozens of crime-related reforms.

Having imprisoned some 100 members of Tren de Aragua, according to authorities, Chile is preparing to launch the region’s first mass trial of the group, with 38 people — 34 Venezuelans and four Chileans — facing charges including murder, kidnapping, and human and drug trafficking.

However, the country is not immune from the institutional corruption that enables organised crime to expand. In April, Chilean media reported two members of Chile’s investigative police had shared information with the Tren de Aragua.

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“Our institutions have reacted very efficiently in an exemplary way,” Castillo said. “But when it comes to this type of crime, you have to be permanently vigilant.”

Additional reporting by Martín Neut and Benjamín Martínez in Santiago

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