“Central America is the most important place in the world for the United States today.” You would never expect a White House official to say those words in 2023. But when Jeane Kirkpatrick, U.S. President Ronald Reagan’s ambassador to the United Nations, made that statement in 1981, it was not so controversial. Even the president agreed with her.
From the late 1950s, with the outbreak of the Cuban revolution, to the late 1980s, when civil wars raged in Central America, Latin America found itself in the cross hairs of great power competition. Geopolitics mattered to Latin America, and Latin America mattered to geopolitics.
Today, the region could hardly win less of the geopolitical spotlight. A new bipolar or multipolar world order is taking shape as conflict and instability grow from Ukraine to the Middle East to the South China Sea. But Latin America finds itself squarely on the sidelines. “In this world of four,” said the former Chilean President Ricardo Lagos, referring to China, Russia, the United States, and the European Union, “we don’t exist.”
Of course, being distant from today’s major geopolitical fault lines has its benefits. Since the end of the Cold War, Latin America has seen far fewer foreign interventions—once a mainstay of the region’s politics. That has afforded Latin American governments more room for self-determination. And it has coincided with the most resolutely democratic period in the region’s history, even accounting for recent cases of democratic breakdown, such as in El Salvador, Nicaragua, and Venezuela. Across most of the region, militaries returned to the barracks, independent electoral institutions developed staying power, and politicians of all stripes accepted democratic rules of the game. Given that Latin America remains the world’s most unequal and most violent region, the resilience of its democracies is striking.
But Latin America’s position on the margins also means that it misses out on the economic opportunities and support from abroad that it desperately needs. The region faces daunting cross-border challenges no one country can solve on its own, including the spread of transnational organized crime, surges in migration, and devastating natural disasters. Latin America also has a key role to play in solving global challenges. If it fails to preserve the Amazon rainforest, which spans eight Latin American countries, the world will have no chance to rein in global warming. The region’s harvests of soy and wheat are critical to global food security. But largely neglected by the outside world, its countries are fighting transnational challenges mostly in isolation.
As competition between China and the United States intensifies, however, Latin America could wind up closer to the geopolitical center stage, with all that position’s associated dangers and opportunities. In early October, U.S. officials raised concerns with their Peruvian counterparts about the growing Chinese control over key infrastructure in the country, such as a megaport on the Pacific coast and the electricity supply to the capital, Lima. Peru’s transport minister shrugged off the warning.
For now, analysts should not read too much into these frictions. Washington and Beijing have directed the bulk of their competitive energies to other regions. They have not attempted to exert great pressure on Latin American countries, but that restraint has also limited the ability of the region’s governments to fully exploit great-power competition and win benefits from either side. Latin America’s isolation—part blessing, part curse—will likely continue. Governments will have more leeway than ever to set their own course on key issues such as security and development but will have fewer of the international opportunities and linkages they need to deliver on their ambitious promises. Altogether, that amounts to a recipe for domestic instability.
In and Out of the Spotlight
From the era of European colonization to the end of the Cold War, external powers invaded and exerted great pressure on Latin America. But the current moment is unusual. For over three decades, the region has been left relatively alone, free to prosper, fend for itself, or simply muddle through without outside powers doing too much to tip the scales one way or another.
Over the course of the nineteenth and early twentieth centuries, Latin America went from an area colonized by European powers to an inward-looking region racked by post-independence civil wars. Parts of the Caribbean, Central America, and Mexico fell under the heavy hand of an increasingly imperialistic United States. The influence of foreign powers was often destabilizing: the Habsburgs arrived in Mexico as self-appointed rulers, the United Kingdom turned Argentina into a de facto economic colony, and U.S. gunboats pushed European forces out of the Caribbean. But the region’s links to the wider world were not just for ill. Booming exports of agricultural products and raw materials spurred rapid development and eventually set the stage for the emergence of the urban working and middle classes that often led the push to build modern mass democracies.
During the Cold War, Latin America hurtled toward the geopolitical center stage. The consequences were overwhelmingly negative. The revolution in Cuba that brought Fidel Castro to power in 1959 precipitated the 1962 Cuban missile crisis. The Cuban revolution inspired dozens of attempted follow-up insurrections often supported by the Castro regime, including one that succeeded in 1979 in Nicaragua, where Soviet military advisers set up shop. U.S.-backed military juntas unseated democratic leaders and worked to track down and execute dissidents.
The end of the Cold War did not do away with Latin America’s importance to geopolitics—at least not right away. Even as the Berlin Wall crumbled, a Maoist sect terrorized Peru. During the 1990s, the United States invaded Panama, supported Colombia’s counternarcotics efforts, promoted the so-called Washington consensus on free-market economic policies, and cut trade deals with a number of Latin American countries.
Drifting Away
But then everything started to change. Historically, the United States tethered the region to broader geopolitical dynamics. Washington began to disengage from Latin America in the twenty-first century. To be sure, it was not always the United States’ plan to step back from the region. U.S. President George W. Bush came to office promising to make the region a focal point of his foreign policy, promote the expansion of free trade agreements, and advance domestic immigration reform. After the 9/11 attacks, however, Bush shifted focus almost entirely to the Middle East as he launched invasions of Afghanistan and Iraq and declared a global war on terror.
His successor, President Barack Obama, also entered office planning to devote more attention to Latin America. But events elsewhere soon took over: the Arab Spring, conflicts in Syria and Libya, and Russia’s invasion of Crimea all left little room for the Western Hemisphere. Obama ended up delegating Latin American policy entirely to then Vice President Joe Biden, and Obama’s biggest policy initiative in the region—a diplomatic thaw and opening with Cuba—was quickly reversed by his successor.
President Donald Trump dialed up the focus on Latin America, leaning heavily on unilateral pressure to achieve objectives, but few of his initiatives lasted. In the end, his Latin America policies—including compelling small Central American countries to detain northward-bound migrants and what his Secretary of State Mike Pompeo and National Security Adviser John Bolton called a “maximum pressure” campaign to oust Venezuelan dictator Nicolás Maduro—made relationships with the region’s capitals more transactional. Trump’s foreign policy always focused primarily on shifting the United States to a posture of competition with China. Although the Biden administration has engaged with Latin America to an extent, assisting efforts to thwart election deniers in Guatemala and Brazil and brokering multilateral accords on migration, other areas—notably Asia and Europe—have consumed most of Biden’s attention.
But even as U.S. foreign policymakers spend less time thinking about Latin America, the region has become more intertwined with U.S. domestic politics. Immigration from the region has become a political issue that fuels polarization at home. Synthetic opioids, such as fentanyl, that come into the United States primarily from Mexico have generated a drug-fueled public health crisis more severe than any in the past. And in a bid to “de-risk” supply chains, U.S. officials have increasingly talked up the possible benefits of keeping supply chains closer to home, spurring the beginning of a “near shoring” trend in Mexico. Nevertheless, most of Washington still sees the United States’ greatest threats and opportunities elsewhere.
THINGS FALL APART
Early in the twenty-first century, many Latin American leaders, remembering the destruction wrought by the Cold War, welcomed the fading of U.S. interest and the receding of American influence. They took advantage of Washington’s lapse in attention to stake out divergent positions on key issues and form their own multilateral bodies, such as the Union of South American Nations (UNASUR). They could have carved out space for the region to assert itself in geopolitics with a unique voice, if not for one problem. Instead of integrating further, the region fragmented into competing multilateral blocs defined and divided by ideology—none powerful enough, on its own, to hold the floor internationally.
Venezuelan President Hugo Chávez started the break-up. Chávez and several other aligned Latin American presidents aimed to push back against U.S. influence in the region and sought to distance themselves from the Organization of American States, the region’s oldest multilateral body and the only organization that includes all 35 countries in the Western Hemisphere. In its place, they hatched the Bolivarian Alliance for the Peoples of Our America, which they intended as a counterweight to the U.S.-proposed Free Trade Area of the Americas. But as Chávez led Venezuela into authoritarianism, the project lost its luster, and other governments joined contending groups, such as the Pacific Alliance, a trade bloc composed of Chile, Colombia, Mexico, and Peru. UNASUR, one of Chavez’s preferred vehicles for regional influence, disbanded rapidly when governments decided that the reputational costs of membership in a Venezuelan-led project clearly outweighed its benefits.
The heterogeneity of Latin America stymied successful regional integration. It was no easy task bringing together nearly three dozen countries separated by vast distances, language barriers, insufficient cross-border infrastructure, and often, ideology. For reasons of proximity and market access, Mexico and the countries of Central America and the Caribbean have largely tied their fates to that of the United States, while South America in the last 20 years has increasingly deepened commercial ties with China. The proliferation of Latin American regional organizations saw countries lower their democratic standards, rendering these organizations unable to enforce collective norms or pursue shared goals. The result was a set of organizations long on ambition and short on tangible results, heavy on presidential summitry and light on permanent staff.
As the prospect of a more unified or integrated Latin America faded, individual governments set their sights on striking a balance between alignment with Washington and alignment with Beijing. China’s demand for commodities, which surged 20 years ago, made it the first or second biggest trading partner of almost all countries in the region.
Although each Latin American country differs in the exact balance it strikes between Washington and Beijing, all seek some degree of distance from both. On its own merits, this endeavor has largely succeeded. Under President Luiz Inácio “Lula” da Silva, Brazil has maintained deep ties to Washington in matters of security and defense cooperation while exporting vast quantities of agricultural commodities and minerals to China. Likewise, Chile has relied on U.S. capabilities to track and deter illegal, unreported, and unregulated fishing off its long coastline, while Chinese companies are heavily involved in the mining of Chile’s lithium for batteries. Rather than side with the United States or China, many of Latin America’s leaders feel the answer to their most important challenges will not be found through taking sides in a new cold war.
The Upsides of Indifference
Latin America’s “new solitude,” as the politicians and writers Jorge Castañeda, Hector Aguilar Camín, and Ricardo Lagos have called it, has been a mixed bag. Among the positives, Latin America’s drift away from the international spotlight has left the region freer than ever from foreign intervention, with positive downstream consequences for democracy. Since U.S. marines landed in Haiti in 1994, there has been no foreign military intervention in the region.
By almost any measure, most of Latin America is freer today from external pressure than perhaps at any time since before European colonization. It helps that as the United States has curtailed its old habit of political intervention, China has not intervened much in the region’s domestic politics, either. To be sure, the region’s turn to Beijing for some of its development needs has permitted China to deepen its influence across Latin America. But Chinese foreign policy is regime agnostic; Beijing is more than happy to cut trade deals with any willing partners, be they democrats or despots.
Achieving sovereignty and democracy in a region often in short supply of both is no small accomplishment. Democracy has given the region’s political systems a degree of stability, predictability, and legitimacy they have long lacked. Destructive protests occasionally flare, leading some analysts to observe that Latin American politics remains a tinderbox. Many, perhaps even most, Latin Americans note that democracies do not always deliver security, quality public services, or corruption-free government. Still, democratic institutions, however imperfect, have held almost everywhere in the region.
The Burdens of Isolation
If Latin America’s isolation shields the region against dangers, it also walls it off from opportunities. On the economic front, that has been the story of the last three decades. Rather than developing new and diverse linkages to the global economy, spurred by inflows of investment, most Latin American countries moved backward, doubling down on commodity exports as the main drivers of growth. This has produced an odd pairing: more political sovereignty than ever but also increased economic dependence on markets abroad.
Latin America is studded with obstacles to intraregional trade: crumbling cross-border infrastructure, costly logistics and long flight times, high tariff and nontariff barriers, a subpar patchwork of trade deals, and a lack of economic complementarity in goods and services. No wonder the countries of the region trade less among themselves than those in any other part of the world—with the exception of African countries.
That leaves Latin America dependent on external markets. But on trade, the region lags behind others. Only Mexico’s economy underwent a major opening through integration with North American markets and supply chains after the North American Free Trade Agreement deal came into force in 1994. The situation is different elsewhere. Brazil and Argentina maintain two of the most closed economies in the world. There is no Central or South American equivalent of Malaysia or Poland, countries that rapidly grew richer by becoming integral parts of global manufacturing hubs in their immediate neighborhood.
Most Latin American countries export food and raw materials and import goods manufactured almost entirely abroad. “Premature deindustrialization,” in which countries exhaust opportunities for industrialization more quickly than other countries have and at lower levels of income, is making the problem worse. Major economies, such as Brazil, are seeing drops in manufacturing jobs and are becoming dependent on commodities for export revenue.
The lack of effective regional integration no doubt erects major hurdles to improving Latin America’s position in the global economy. For instance, Argentina, Bolivia, and Chile—which hold most of the world’s lithium, a key input for electric vehicle batteries—have an interest in jointly setting terms for foreign investors so that they can make the most of their resource wealth. But without a functioning forum to coordinate policy, they are more likely to compete with each other than to collaborate.
Solitude: The Next 100 Years?
Many of the threats Latin America faces are transnational in nature. Organized crime groups, such as Mexico’s Sinaloa and Jalisco New Generation cartels and Venezuela’s Tren de Aragua, have forged ahead with their own bloody spin on regional integration, extending their reach or recruiting criminal proxies as far away as Chile and Ecuador. Climate change threatens Latin America’s ability to feed itself and the world and is expected to drive millions of climate refugees from the region by 2050. But the region’s leaders are only now collectively starting to draft response plans—ones that may not survive upcoming electoral cycles. Latin American leaders have implored wealthy countries to engage in debt-for-nature swaps, in which creditors forgive some of a country’s external debts in exchange for that country making financial commitments to conservation. Some are listening: in May, Ecuador and the U.S. Development Finance Corporation and the Inter-American Development Bank together struck the biggest such deal in history, financing the protection of the Galapagos for years to come. But perhaps more governments would take an interest in these arrangements if the region did not dwell so far from the center of geopolitical action.
If Latin America remains on the sidelines, the consequences of the region’s drift to the margins—greater political sovereignty but continued economic dependence—make for a potentially explosive combination. Governments are freer than ever to promise their citizens more dynamic and just economies, but they are more constrained than ever when it comes to delivering on these ambitious goals. The result has been increased instability. In 2019, in the context of economic slowdowns, mass protests against inequality tore through half a dozen Latin American capitals. In some places, the protests turned violent. Nearly all states met them with a disproportionately violent response. In 2020 and 2021, additional mass mobilizations followed. Since 2018, opposition candidates and parties have won virtually all free elections in Latin America, giving voters an outlet to express their grievances but also guaranteeing policy instability. If foreign interventions once destabilized Latin America, the forces of instability now primarily come from within. Latin America may dodge geopolitical conflict in an age of rising tensions between great powers. But isolation is the region’s own burden to bear and its own source of turmoil.
Latin America’s distance from the rest of the world, however, is not guaranteed to last forever. The distance could close in two ways: one malign and one beneficial for the world and the region. The first possibility is that China, the United States, or both pull the region into a new cold war. During the first Cold War, Latin America initially appeared to be safe from the fray—it took a decade and a half for the region to be drawn into the conflict by the United States, Cuba, and other players. If policymakers in Beijing and Washington insist on seeing Latin America as the staging ground of a new cold war, history could repeat. Latin American leaders will also play key roles, either in actively keeping a distance from competing poles in the emerging multipolar order, as they are now, or by drawing close to one and not the others. But hemmed in by the interests of the superpowers, Latin American countries will have only so much room to maneuver.
The second, and more promising, alternative is that Latin America and other world regions find common ground on solving shared cross-border challenges, such as climate change, the search for a viable green transition, and shoring up brittle, overextended supply chains. The region and partners abroad should seize these opportunities. The U.S. search for havens for near-shoring opportunities is already boosting Mexican exports and could do the same for parts of Central and South America. The global economy’s green transition means that the next decade should be Latin America’s moment to shine: the region is rich in sources of green energy and critical minerals, has a relatively young population, and benefits from proximity to the United States. Additional debt-for-nature swaps could solve two problems at once: easing Latin American countries’ debt burdens and preserving its forests and biodiversity, of great value both to the region’s inhabitants and to the rest of the world. External actors may continue to show only limited interest in such opportunities, but for the sake of both Latin America and the world, they should not let the region further drift away.