Elaine Dezenski
The Western hemisphere is home to some of the world’s largest economies—the United States, Canada, Brazil, Mexico—and boasts countries with long-standing democratic traditions. Yet a lack of U.S. leadership and vision has left the hemisphere vulnerable to authoritarian encroachment, weak economies, and populations at risk. A new regional economic security framework is badly needed.America’s backyard, instead of being filled with democratic friends and booming economies, is home to Russian bombers and mercenaries, twenty-nine Chinese-owned ports and port projects, a widespread Iran and Russia-fueled anti-U.S. propaganda machinery, Chinese-enabled fentanyl and money-laundering operations, wobbling and fallen democracies, and widespread economic and political instability. Soon, it may also be home to yet another Chinese surveillance outpost.
Over the last two decades, Latin America has seen wild swings from left-wing populists to right-wing populists and back, all of which have enabled corruption, disappointed their populations, and left the United States without stable partnerships across the region. In response, Washington has settled into a hands-off approach to the region—allowing Venezuela and Nicaragua to slide into dictatorships and largely ignoring chaos in Bolivia, Peru, Argentina, and El Salvador.
In addition to rising internal hardline forces within Latin America, external autocratic forces are imposing their will upon the region with little in the form of a coordinated American response. Russia and Iran are also increasingly active throughout the Americas, providing military assistance to Venezuela, evading sanctions in Cuba, or pushing misinformation and destabilizing democracy. The rising influence of authoritarianism throughout Latin America is pushing the region away from the stable and interdependent democracies that would benefit both local citizens and the hemisphere at large.
The true autocratic behemoth in the region, however, is China, which has ramped up its economic investment throughout the region, driving deep debt dependency while pushing an anti-democratic vision of surveillance states and crumbling, corruption-driven infrastructure. Ecuador has already discovered thousands of cracks in its brand new $3 billion Chinese-built and Chinese-financed hydroelectric dam.
With tacit state support, Chinese organized crime is infiltrating Central American drug trafficking and money laundering operations—supercharging both. China has become deeply interwoven in Latin America’s energy grids, ports, and other critical infrastructure, putting essential services and global commerce routes at risk to the whims of Beijing. And China is increasing its military engagement throughout the hemisphere, from booming weapons sales and anti-riot police gear to joint exercises and training.
The United States needs a concrete strategy to address Chinese encroachment throughout the region, whether through its illegal overfishing off of South America’s Pacific coast or its growing fentanyl operations throughout Latin America.
America’s cool relations with Central and South America have, meanwhile, failed to capitalize on the tremendous promise of the region and its critical role in American economic and national security. A prosperous Latin America lowers the pressure on immigration to the United States, offers critical supply chain advantages, and is rich with resources and human talent that should catalyze twenty-first-century technologies. Mexico has frequently benefitted from U.S. efforts to locate supply chains closer to home, but so much more could be done. A purposeful shift of critical supply chains of U.S. manufacturing from Asia to Latin America could promote regional prosperity, lower costs for American businesses, and reduce pressures contributing to political instability and mass migration.
A U.S.-led and unified Western hemisphere has the potential to control the future of energy and become a free and open answer to the Organization of the Petroleum Exporting Countries (OPEC) over the next century. The Americas possess some of the largest deposits of lithium and other critical minerals and the technological expertise to lead the world’s green future. Unfortunately, we are currently ceding much of the control of those resources and refining to China, which produces most of the world’s solar panels and electric vehicle batteries—often at factories utilizing forced labor. The United States cannot stand by passively as our energy security is threatened by reliance on a new generation of autocrats.
Washington must bring powerful answers to pressing issues in the region: populism, political unrest, and disinformation; water and food insecurity; extreme weather; mass migration; the evolving drug trade; money laundering and corruption; and weakened democratic institutions. These elements are interconnected, as violence in Guatemala and weak institutions in Nicaragua lead directly to immigration at the U.S. southern border. Political upheaval in Peru and Bolivia provides openings to Chinese state-sanctioned incursions.
For a rising Americas to succeed, there needs to be a focus on developing hemisphere-wide stability and keeping our physical, digital, and trade borders both secure and efficient. Reinforcing respect for democratic norms and increasing U.S.-led capital investment would help counter cheap Chinese cash and the petty dictators that thrive on corruption and misinformation.
The United States can take steps now to improve economic security and resilience throughout the Americas:
To begin with, the U.S. Development Finance Corporation and U.S. Export-Import Bank can help lead the way in Latin America, attracting more Western capital to the hemisphere, de-risking markets, increasing regional foreign direct investment, supporting manufacturing partnerships, and helping stabilize the tenuous economic conditions that fuel emigration and the drug trade.
U.S. law enforcement should coordinate with trusted allies throughout the hemisphere to develop a regional network of champions and tools to battle violence, corruption, money laundering, tax evasion, and drug trafficking.
Properly trained and resourced election monitors should ensure fair elections throughout the region, while non-partisan watchdogs should be empowered to monitor and act against misinformation from both foreign authoritarian regimes and domestic provocateurs.
Finally, unified and consistent policies throughout the Western Hemisphere on beneficial ownership registries, foreign agents, corporate taxation, and human rights protections should form the backbone of a more transparent framework for doing business.
China is already active throughout Latin America, destabilizing the region and putting our adversaries in our backyard. We don’t share a physical border with China, Russia, or Iran, but their trade, economic, and political influence throughout the Americas suggests the “border” isn’t so far away. It is time for Washington to reclaim leadership throughout the hemisphere. Offering improved economic security for countries and citizens is a critical first step.
Elaine Dezenski is Senior Director and Head of the Center on Economic and Financial Power at the Foundation for Defense of Democracies.
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