As the transatlantic community races to put in place a global sanctions regime to punish a vengeful Russia and limit the spread of war in Ukraine, there is little bandwidth left to advance US national interests elsewhere. Latin America, however, should not be taken for granted. It is increasingly clear that there are serious problems for the United States much closer to home.
In June, the United States will host the Summit of the Americas, a triennial gathering of heads of state and government first held in 1994. This year’s theme will be “Building a Sustainable, Resilient and fair “. Few might object to it as a hemispheric goal, but it is ambitious, non-ideological and vague.
Notably, it doesn’t even hint at a series of issues in the Western Hemisphere that should concern the United States. These include, among others: a rise in Russian and Chinese influence; an eroded regional consensus that support for democracy is a prerequisite for full participation in the inter-American system; growing frustration with the failure of the market economy to reduce poverty and income inequality; divergent views on the centrality of oil and gas dependence; the persistence of drug trafficking and criminal violence; and, finally, a much larger and more complex refugee crisis than the focus on the US southern border suggests.
Not so long ago, leaders in North and South America trumpeted the triumph of democracy and human rights, insisting that all countries in Latin America, exception of Cuba, had rejected the authoritarianism of the past and the human rights violations that so often characterized the dictatorships in Argentina, Bolivia, Brazil, Chile, Uruguay, the Dominican Republic, Nicaragua and the northern triangle of Central America.
Today, Venezuela and Nicaragua are unquestionably dictatorships. Nicaragua’s longtime strongman, President Daniel Ortega, has expressed his unconditional support for the Russian invasion of Ukraine. Venezuelan President Nicolas Maduro criticized Western sanctions against Russia and abstained in the United Nations vote to condemn the invasion. The recent visit of a high-level delegation to Caracas likely validated the Maduro regime’s longstanding defiance of the United States, European Union and other critics.
In El Salvador, the Bukele administration seems to be sliding inexorably towards authoritarianism. The problems of the northern triangle of Central America are dizzyingly complex; ineffective democratic governance, criminal violence and corruption are endemic. None of the three – not Guatemala, Honduras or El Salvador – were invited to President Joe Biden‘s democracy summit held last December. In Haiti, which suffered a presidential assassination, an earthquake and a hurricane in the space of a year, more than 50% of the country is now believed to be controlled by armed gangs. Cuba remains a resolutely communist dictatorship.
In Brazil, former president Luiz Inacio “Lula” da Silva, the Workers’ Party icon, has been exonerated and will likely run for president again. Current President Jair Bolsonaro, fearing the defeat of Lula or another candidate in this year’s presidential contest, has begun to question the electoral system he led to the presidency. Worse still, practically on the eve of Russia’s invasion of Ukraine, Bolsonaro traveled to Moscow to meet Russian President Vladimir Putin and express his solidarity with the Russian strongman. Bolsonaro has since refused to condemn the invasion.
Argentine President Alberto Fernandez has also recently visited Moscow as well as Beijing and made clear his interest in deepening Buenos Aires’ cooperation with Moscow, in part to ease the move away from the United States. He then traveled to China, apparently looking for a way around his government’s dissatisfaction with the International Monetary Fund (IMF), despite a recently negotiated refinancing deal with the IMF.
Somewhat conflicting views on the development of the region’s oil and gas reserves will likely figure prominently in discussions at the Summit of the Americas. On the one hand, the Biden administration has embraced the idea of a green energy future highlighted by the cancellation of the Keystone XL pipeline and a ban on new exploration, development, and tight oil extraction on federal lands. On the other hand, the United States and Europe are actively, if not always explicitly, looking for ways to replace Russian oil exports in the short term. Other countries in the hemisphere are sympathetic to the global environmental agenda, but are unlikely to forgo further development of the region’s vast energy reserves. Indeed, most will be interested in the windfall hydrocarbon profits likely to be generated by the price spike that closely followed Russia’s invasion of Ukraine.
Beyond Opportunities Today, many countries look to oil and gas revenues to fund both government programs and new developments. For example, Brazil’s offshore oil deposits are immense, and those of Guyana are sufficient to underwrite a transformation of its economy. Argentina has significant shale reserves, as does Mexico. Colombia and Ecuador are also major exporters. Moreover, both depend on oil exports for a significant portion of government revenue. Venezuela has the largest reserves in the world, but an otherwise moribund economy. Canada is now the largest foreign supplier of gas and oil to the United States. With the Russian invasion pushing world oil prices over $100 a barrel, it is unrealistic to expect these countries with still developing economies to abandon or even reduce their dependence on hydrocarbons. Moreover, the Caribbean is particularly concerned with avoiding future energy shocks that result from crises in other parts of the world.
Another particularly sensitive issue for the United States will be immigration. Not surprisingly, North Americans think of the immigration and refugee problem in the region largely in the context of their southern border. However, the problem is much larger and more complex than that. While poverty and criminal violence propelled a flood of refugees from Central America and Mexico to the United States, the most acute refugee crisis was that which resulted from the chaos in Venezuela. Nearly six million Venezuelans have fled their homeland in recent years as Maduro’s corrupt and incompetent regime presided over the gutting of what was, at one time, the region’s most vibrant economy. Despite initial and generous efforts to welcome the tens of thousands of destitute newcomers, the governments of Colombia, Chile and Ecuador have recently signaled that they have reached their absolute limits in absorbing more migrants. Costa Rica is also struggling to cope with the thousands of Nicaraguans who fled Ortega’s crackdown in Nicaragua. More recently, a wave of displaced Haitians ended up last year in Mexico and some of the neighboring Caribbean islands, as well as on the US border. Forcing some back into Haiti has deepened the crisis there, and leaving some in Mexico or admitting others to the United States has exacerbated political problems in both destination countries.
The United States must present to its Latin American neighbors a new and compelling case for the values it has long championed in the region and for greater cooperation with its neighbors to the north. Making this point will mean, at the very least, engaging in regular dialogue with regional leaders, sustained support for international financial institutions, particularly the Inter-American Development Bank, solid funding for the United States Agency for international development as well as for smaller US agencies such as the Export-Import Bank, US Trade and Development Agency, US International Development Finance Corporation and others. These smaller agencies facilitate U.S. private sector economic activity abroad and respond to the region’s need for fresh capital to escape its vulnerability to fluctuations in the global commodity trade on which so many still depend. The Caribbean’s need for new job-creating investment is particularly acute as tourism, on which so many island economies depend, has been hammered by the pandemic.
Clearly, immigration and law enforcement will continue to be a heavy burden, but it would be helpful to recognize the complexity of the issues for host countries like Chile, Colombia and Mexico and to s tackling the causes of undocumented migration from places like the Northern Triangle and Haiti. Truly meeting these needs will require a sustained and non-episodic commitment of resources.
The United States must understand that some critically important things have changed in Latin America. China, not the United States, is the biggest trading partner of Brazil, Chile, Peru and others. It also presents an alternative model of economic development for some in the region as well as a vast market. Moreover, recently elected left-wing presidents like Gabriel Boric in Chile and Pedro Castillo in Peru are seriously questioning the effectiveness of the economic formulas that the United States has long advocated. Although both have impeccable democratic credentials and are critical of the dictatorship in Venezuela, their rejection of what they term neoliberalism may portend serious difficulties for their private sectors and domestic and international investors in the future.
Most South American countries are on the whole critical of the Russian invasion of Ukraine, but few feel immediately threatened by it. Most would vigorously oppose the installation of Russian military assets in Cuba and Venezuela, as Putin has threatened to do. That said, they also understand that US enthusiasm for partnering with the region is likely to wane if a new Cold War follows a resolution to the conflict in Ukraine. In the meantime, they are unlikely to wait for the United States to prepare to take their concerns seriously. They will look for new partners, new markets and new ideas elsewhere.
