Latin America: Restive Trends and Great Power Encroachment - Developments that Matter for U.S. Policy

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Recent elections in Latin America have brought about abrupt shifts in government in Argentina, Brazil, Chile, Colombia, and Mexico, while unexpected upheavals in Bolivia and Ecuador have reversed their respective political status quo and challenged the rule of law.  Reaction everywhere is mixed; there has been violent social upheaval in Chile, muted protest amidst populist upheaval in Brazil, grave economic worry in Argentina, stymied reform in Colombia, government by prosecution and shutdown in Peru, creeping authoritarianism in Mexico, and increasing influence by militaries on regimes across the region.   These developments occur amidst increasing great power interest in the region.  China is using its “sharp power” to dominate foreign direct investment and infrastructure in order to supplant  U.S. influence in the region.  Russia, meanwhile, throws economic lifelines to Venezuela, securing its illicit revenue streams and gaining a disruptive military and economic presence in the Western Hemisphere. What is at the roots of these developments, and what do, or should, they mean for U.S. policy in the region?

Featuring: 

Ryan Berg, Ph.D., Research Fellow in Foreign & Defense Policy, The American Enterprise Institute; Adjunct Professor is International Relations, The Catholic University of America

Brian Winter, Editor In Chief, Americas Quarterly, and Vice-President for Policy, The Américas Society/Council of the Americas

Moderator: James Dunlop, Of Counsel, Jones Day

 

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Event Transcript

Operator:  Welcome to The Federalist Society's Practice Group Podcast. The following podcast, hosted by The Federalist Society's International & National Security Law Practice Group, was recorded on Thursday, March 5, 2020, during a live teleforum conference call held exclusively for Federalist Society members. 

 

Micah Wallen:   Welcome to The Federalist Society’s teleforum conference call. This afternoon’s topic is titled “Latin America: Restive Trends and Great Power Encroachments - Developments that Matter for U.S. Policy.” My name is Micah Wallen, and I’m the Assistant Director of Practice Groups at The Federalist Society.

 

As always, please note that all expressions of opinion are those of the experts on today’s call.

 

Today, we are fortunate to have with us our moderator, James Dunlop, who is Of Counsel at Jones Day. James will be introducing our panel today. After our speakers give their opening remarks, we will then move to an audience Q&A. Thank you all for sharing with us today. James, the floor is yours.

 

James Dunlop:  Thank you very much. I’m pleased to be with you here today. As was stated, any views I express on this call are my own, not that of my law firm. We’re here because recent elections in Latin America have brought about abrupt shifts in government in Argentina, Brazil, Chile, Colombia, and Mexico, while unexpected upheavals in Bolivia and Ecuador have reversed their respective political status quo and challenged the rule of law.

 

Reaction everywhere has been mixed. There’s been violent social upheaval in Chile, muted protests amidst populist upheaval in Brazil, grave economic worry in Argentina, stimmed reform in Colombia, government by prosecution and shutdown in Peru, creeping authoritarianism in Mexico, and increasing influence by military-style regimes across the region. These developments occur amidst increasing great power interest in the region.

 

We’re here to discuss today what’s at the roots of these developments and what do or should they mean for U.S. policy in the region. I’m very pleased to be joined by two experts on this topic. Dr. Ryan Berg is a research fellow in foreign and defense policy at The American Enterprise Institute and also a specialist in Latin American political analysis. He’s also adjunct professor in international relations at The Catholic University of America. And Brian Winter, who is Editor in Chief of Americas Quarterly and Vice-President for Policy at the Americas Society and the Council of the Americas.

 

So as I said, today we’ll be focusing on events and trends involving the regions continental powers. We’re going to focus on the continental powers because we’ve had, and we will have, other programming focused on the ongoing crisis and security challenge in Venezuela and on border and security issues emanating from Central America. So we won’t ignore those topics altogether. I’m sure they will surface as reference points as to what other powers may do or are doing in the region. But we’re going to try and keep our focus on some of the other powers and major economies in the region.

 

We have a lot to cover. Giving a Latin America update of this sort is akin to giving a wide Europe update. It’s an equally vibrant and complex region. But we will give it a try. So I’m going to turn to our experts, Ryan and Brian, and ask them, first, gentlemen, if you would give our listeners just a recap of the most significant developments, events, and/or trends on the continent in the last six months. I know that covers a lot of ground, but then we can discuss in more detail why these matter. Brian Winter, why don’t you start?

 

Brian Winter:  Well, thank you, Jim, for that introduction and thanks to all of you joining us on the call today. I’ve been following Latin America for 20 years as a journalist and analyst, half of that time spent living in the region. I have to say it’s mostly been a time of progress. This was an era where we saw strengthening democracies, fairly robust economic growth, a falling inequality and poverty and all kinds of improvements in social indicators as well.

 

But, Jim, that panorama that you just sketched out and some other things going on in the region right now -- look, there’s really no way to sugar coat this. Times are tough for Latin America right now. These images of unrest that swept the region in October, Jim, which you referenced, have some deep underlying causes. I thought that I’d just try to kick off the conversation by talking about three of these underlying trends that might help explain how we got here and why things are looking a little bit bleak right now.

 

The first one is that Latin America’s economies are just not growing. And lest you think that’s an overstatement, Latin America’s regional GDP grew just 0.1 percent in 2019. That’s an estimate that came from the IMF in January. And even if you take Venezuela, which we all know is a disaster for several years now -- even if you take out Venezuela, that growth figure for the region was just 0.8 percent.

 

And if you look at the IMF projects from late January for what might happen in 2020, they’re predicting, or they were predicting, 1.6 percent growth for Latin America in 2020. But now, even those numbers are starting to look optimistic based on some data that we’ve had from the big countries, Brazil, Argentina, and Mexico. And then god knows what coronavirus is going to do to economic growth not only in that part of the world but elsewhere as well.

 

I’m happy to go into further detail about what’s happening in these places, the reasons for this slow growth. But just a quick sort of tour around the big countries, in Brazil, you have a fairly good pro-market policy framework that’s been put in place by Jair Bolsonaro’s economic team but a government that really can’t quite seem to keep its eye on the ball in terms of executing that agenda, lots of distractions, lots of kind of sideshows. And that’s had the net effect of scaring off investment in some quarters, which has kept the economy there from really taking off.

 

In Mexico, you have a very popular leftist government, in Andres Manuel Lopez Obrador. But that popularity is now starting to sag. He’s still high by global standards, in the low to mid-60s in terms of his approval rating. But the results have just not been there, and we found out recently that the economy there did not grow at all in 2019.

 

And then in Argentina, as you mentioned Jim, that government that’s trying to sort of claw it’s way out of an economic mess, a new administration. Everything’s kind of on hold right now while they try to work out a deal with creditors. There’s more to it than that. But just for the sake of brevity, I want to move on to the second thing that’s kind of happening right now, creating unease.

 

And that’s the migration from Venezuela creating strains in much of the region right now. Leaving the Venezuela story itself aside, let’s just talk briefly about the effect it’s having on the rest of the region. You’ve got more than 5 million people who have left Venezuela since 2015. That’s a pace that may actually surpass refugees from the Syrian crisis this year in terms of raw numbers, according to Brookings.

 

And I was actually just in Peru this week to kind of look into this story and the effect that it’s having there. Why Peru? There’s been so much focus in the international press on Colombia, which has taken the most Venezuelans, around probably 1.5 to 1.7 million people I believe. But the number’s actually 900,000 in Peru since 2015.

 

And when we think about that, we think about the effect that that has on politics and the economies, recall that it was 1 million Syrians that came into Germany in the wake of their crisis there and kind of turned politics upside down. And while I was on the ground in Peru, I saw all kinds of signs of strain that’s not only been put on the economy but on politics as well. I’m happy to go into that in a little more detail.

 

The third thing that’s happening right now is I think we’re seeing signs of weakening democracies. All kinds of polling over the last couple years has told us that Latin Americas, as a whole, are dissatisfied with the quality of their democracy. That’s partly because of the economic story, partly because of these big corruption scandals like La Legato, the Odebrecht scandal that has swept the region in recent years has fueled the perception that corruption is getting worse, which is questionable, by the way.

 

But in that vacuum, a lot of people are turning to either strong leaders, people like Jair Bolsonaro or Nayib Bukele in El Salvador and/or looking to the military as a possible substitute. And we don’t have any military dictatorships per se in the region right now, with the exception of Cuba. But authoritarianism is definitely on the rise. And those of us who believe in old-fashioned things like democracy and independent institutions, it’s a tough moment right now because you see all over the region how they’re under duress. So having painted that happy picture, Jim, I’ll cede the microphone back to you.

 

James Dunlop:  Thank you very much, Brian. That’s a very deep and interesting picture. Ryan Berg, what are your thoughts about what the most significant recent trends have been in Latin America and developments?

 

Ryan Berg:  Well, thanks, Jim, and thanks to all of our listeners for tuning in. Brian’s done a pretty good job of giving a summary of what ails the region. I’ll try to fill in some of the details or some of the gaps that I think might have been missing from the summary.

 

On the democratic back sliding front, this is a huge issue, a huge trend that I think we should unpack and talk about in this conversation. One area that didn’t get discussed but deserves discussing is Nicaragua, an area that I’ve been focusing on of late pretty intensely. You can see there that the opposition is very much under the same kind of duress that the opposition is under in Venezuela.

 

Also experiencing its own issues with fragmentation, difficulties preparing for national elections in November of 2021, but in many was is operating without the same kind of pressure under which U.S. foreign policy has placed Venezuela, for example. So in many cases, Daniel Ortega in Nicaragua has been able to engage in backsliding without the same level of oversight as had Maduro, for example, in Venezuela. I won’t go into anything on the lack of economic growth, which Brian covered pretty thoroughly.

 

One thing that I’m going to emphasis is the explosion in transnational organized crime activity in Latin America over the last few years. It’s something that we’ve been paying attention to here at AEI. We’ve been pretty focused on it, particularly countries like Brazil, which have become hotbeds or hubs for TOC activity, particularly as countries of transshipment. So there are a number of very important ports, for example, in Brazil, out of which groups like the PCC or the CV are running drugs, weapons, cooperating with a whole bunch of unsavory groups such as Hezbollah, the Italian Mafia and deepening those ties. The explosion in transnational organized crime and illicit economies is something that I think we should pay attention to.

 

And lastly, I will just mention something that Brian briefly touched on, which was the debt and financial precariousness that some of the countries find themselves in. Brazil is still working on getting its finances in order. Obviously, the pension reform that had passed recently is a move in the right direction on some levels. Then there’s also countries like Argentina trying to renegotiate 100 billion in new IMF debt and stave off what would be, I believe, the ninth sovereign debt default it the country’s history. So some new trends and some recurring trends that are once again rearing their heads in Latin America.

 

James Dunlop:  Thanks, Ryan. Those are both interesting and I hesitate to say divergent views. But I think they are two sides of the same coin, at least when we come to this question of authoritarianism and democratic backsliding, which you both raised. And I think I want to go a little deeper there and ask you, Brian, to talk a little more about that, both in terms of developments that have taken place in countries like Brazil and some of the things you covered in your recent issue, excellent issue of AQ, Americas Quarterly, on the role of the military and the resurgent role of the military in Latin America. And then I’m going to go to you, Ryan.

 

And one of the things I see in this is -- I’ll just set my view forward -- is a little bit of a mixed picture. If you’re looking at the overall issue of democratic backsliding, you have the issues that Ryan mentioned. You have things like change that occurred in Bolivia where Evo Morales, an authoritarian, was out after trying to steal an election. You’ve got Lenin Moreno changing his views a little bit in Ecuador in ways that maybe aren’t such a backslide.

 

And then you’ve got an awful lot of hyperventilating about Jair Bolsonaro in Brazil, but a man who has a lot of popular support, including around some of the issues like organized crime that Ryan points to. So Brian, how important is this development and trend that you see, and how does it really weigh on the region?

 

Brian Winter:  Yeah. Thanks, Jim. Look, for readers who may not be familiar, and this is one of those moments where a telephone call is not the best platform -- I wish I could show you some images. But we saw these images when unrest broke out last October of presidents all over the region going usually on television and surrounding themselves with stern-faced men in camouflage to reinforce that they were in charge and that they also had the armed forces on their side.

 

And these were images that were striking. We saw them in Peru. We saw them in Ecuador. We saw them in Chile, as well. And it was the kinds of images that we really had not seen in Latin America in this way since kind of the bad old days of the 1970s and ‘80s when the region was still mostly undemocratic.

 

So the question becomes what does it mean? How is what we’re seeing now different from 30 or 40 years ago? And I think, for now, it’s very, very different. These are still democracies. You can overstate the risks posed by some of these things. And in the case of Brazil where I spent -- continues to be kind of my specialty country amongst all of them and where I spent a week last November doing research into this phenomenon of the resurgent military, if you talk to generals and kind of active duty and retired, they will say to you that they absolutely understand the need for civilians to be in charge and that democracy is sacrosanct.

 

And in the case of Brazil, they still feel like -- one general used the phrase “We still feel like a scalded cat from our experience actually running government in the ‘60s, ‘70s, and ‘80s, all the blame, all the tarnish that was put on our institution as a result. And so we have no interest in actually being in charge.” But then you look at things in a different way and you see popularity of Bolsonaro. He’s around 48 percent, which doesn’t sound that high but actually, by global standards, that’s a reasonably good popularity level in the year 2020.

 

You see that congresses all over the region have approval ratings of 3, 4 or 5 percent. That’s true in the United States as well, by the way. And old habits die hard. And you see a lot of push from people in government, as well as people in society. You see it on social media -- to sort of push aside these inconvenient countervailing institutions and to do what the president wants.

 

And to wit, there is a large demonstration planned for March 15 in Brazil where it is ostensibly supporting Bolsonaro in his confrontation with Congress. And there are lots of voices that are supporting that march that will be out at that march, calling directly for Congress to be closed and for a purge of the Supreme Court. And when you then consider that Jair Bolsonaro, the one thing, the consistent thing that he advocated during his 30 years that he was in Congress was nostalgia for military dictatorship, I think that it’s sufficient cause to be worried.

 

Jim, you used the phrase or the word hyperventilating. I don’t think it’s hyperventilating. I think these are legitimate things to be concerned about, even as the president has said, “No, of course we stand by democracy. We respect independent institutions and so on.” So it’s going to be really interesting to watch what happens not only in Brazil on this front but in other countries over the next few weeks and months.

 

James Dunlop:  Brian, before I bounce it to Ryan, I want to ask this question. Is this then -- in the way that you describe it, particularly in Brazil, it sounds like you see it as a problem of creeping authoritarianism by Bolsonaro, rather than militarism, or am I wrong? I think one thing that’s important to discuss is where the military sees itself in all of this in Brazil and maybe throughout the region. Is the military aligned with Bolsonaro on these things? Is it an institution that is likely to support him in this?

 

Brian Winter:  Yeah. That’s a great question. It’s an important question. And my short answer to that is that, right now, the military is kind of trying to have it both ways. On the one hand, they say in both private and public conversations that they have no real interest in power. On the other hand, active duty or retired military currently account for about a third of Bolsonaro’s cabinet. He has recently made moves to increase their representation in his inner circle. He recently bragged that he now has the entire fourth floor of the presidential palace is militarized, to use his term.

 

These situations are always tricky. You never know exactly where it’s headed because, in theory, there’s nothing wrong with a civilian president leaning on former and even current military to fill key positions. We had a president of the United States who did that at the beginning of his government as well, referring to President Trump of course with I think it was the four generals that he had in key positions at the beginning of his administration.

 

But if you believe that the Bolsonaros have this plan to continue to consolidate power, and you don’t have to be paranoid to believe that—you have to listen to things that his sons are saying and hints that he has dropped along the way—then, yeah. When you see this increasing -- and if you’ve read Brazilian history as well, you see this increasing representation of the armed forces in government, and you wonder where it’s headed.

 

James Dunlop:  Ryan, is there a threat from authoritarianism to democracy in Latin America? If not, why not? And is there a threat generally, beyond the obvious current state of Venezuela and the Nicaragua example that you mentioned?

 

Ryan Berg:  Well, of course, I think it’s difficult to make any sort of generalizations. But if we’re sticking with the Brazil example, which we’ve been on for the last several minutes, as Brian mentioned, one-third of the cabinet, approximately, is military. Look, you know, many people have said that these are some of the best adults in the room for many of the conversations that are taking place. We’re talking about people like Augusto Heleno, essentially usually translated as the national security advisor, or even the vice president himself, Hamilton Mourao. Both military guys, both what many people I think would consider some of the more serious minds in the Brazilian government.

 

So I think it’s difficult to make sweeping statements about the danger. I certainly read the AQ issue that you referenced and share Brian’s belief that there is a trend when presidents are on the ropes, when there is unrest and mayhem, discord in countries that there has been a lot of images, at least, of presidents giving speeches and taking pictures with the military chiefs of staff behind them, men in camouflage he said, to reinforce the idea of being in charge. But I think it’s difficult to make sweeping statements.

 

And the other thing I would bring in is Mexico here. In Mexico, you have sort of different situation where you have almost completely the opposite, a very difficult relationship between President Lopez Obrador and many of the generals in the military, particularly after the botched raid last year, attempting to capture Ovidio Guzman, the son of the drug lord El Chapo. There were some murmurs, which then grew into open conversations about the displeasure that many generals had with the botched raid and the general level of morale within the armed forces, some of the things that they were being asked to do on the security front and also on the immigration front and so forth. So you have another situation in Mexico which is very difficult and yet completely the opposite when it comes to relationship between head of state and the military.

 

James Dunlop:  That’s very insightful. And let’s stick with the topic a little bit as we turn attention to Chile because Chile is a country that, if you’re not thinking about Latin America too much, you might think, oh, that’s a place where everything seems to go well in Latin America. It’s the one place where things have seemed to go well, with transition to democracy successfully after Pinochet in the 1990s. It wrote a new constitution. It’s operated successfully under it. It’s had competitive government.

 

It’s had relatively low levels of corruption. It’s increased somewhat in recent years. And of course, from the days of the influential Chicago school of Ford, it’s had a relatively open economy that has produced higher levels of economic wellbeing than really anywhere else in continental Latin America. And yet it erupted into dissension and protest late last year. A million people in the streets of Santiago, which I think nobody would have predicted, and a resort by Sebastian Pinera first of all to send military imagery, as you talked about, Brian, and then an acquiescence by him in a movement that seems to have a sort of a leftist student cast toward constitutional reform. There, it seems to me, are a lot of trends emerging from Chile that might pertain to the wider continent. And I wonder if each of you could discuss that a little bit. Brian, why don’t we start with you?

 

Brian Winter:  It’s been four months, and I’m still kind of shocked by what happened in Chile, I’ll confess, for all the reasons that you cited, Jim. It was a country that not only grew it’s GDP but also reduced poverty. There’s been so much focus on inequality in Chile as a driver of what’s happening, but it’s also true that Chile actually has less inequality or inequality is less pronounced there than the Latin American average. And the trend lines have been heading in the right direction on that front for a couple years now.

 

So there’s lots of reasons. We could spend the entire call kind of analyzing why things happen in Chile when they did. But here we are, and a lot of the story has to do with access to services. One person wrote recently that Chile was a middle class country when it came to income but not when it came to access to services. I get that.

 

As far as where it’s all headed, they seem likely to approve this referendum in late April on a new constitution. We’re actually publishing in Americas Quarterly a piece later today by a Chilean analyst who’s very worried about this whole process and who’s sympathetic to the underlying demands of the protestors and society at large but thinks that this constitutional process will take two years and kind of put the country on hold while it does that, which will actually make the underlying problem worse because the economy won’t grow. And you won’t see much in the way of investment until this thing is over.

 

One other comment I would add to this, Jim, is, in my travels recently throughout the region I’ve been astounded by the degree to which Chile is the subject of conversation elsewhere around the region, as well. I was at a lunch with members of the business world in Colombia a couple weeks ago, and it was practically all anyone wanted to talk about. And they were actually all furious at the Chilean president, Sebastian Pinera, who they saw as kind of having lost his nerve and given in to the demands of these protestors.

 

I don’t think it’s that simple. You look at polls, and the vast majority -- really the overwhelming majority of Chilean society seems to be on their side, wanting change as well. You mentioned that there were 1 million people in the streets, Jim. That would be a lot anywhere. But the number was actually -- I think it was 1.6 million, keeping in mind that Chile is just a country of 18 million. The equivalent of that, just back of the envelope, would be 30 million people in the streets in the United States in one day. Yeah. That would provoke change on this kind of scale. So that is a box that has been opened, and it’s still very uncertain where it’s going to lead us.

James Dunlop:  Ryan, I want to let you react to that and ask you why the dissonance? Because it seems dissonant to me in an economy that has produced a relatively high level of well-being, to see this much dissatisfaction with that economy and maybe among youth with some lingering vestiges of Pinochet in the constitution, although it’s not an authoritarian vestige anymore. Why this movement? Why this dissonance? Why now?

 

Ryan Berg:  Well, it’s important to reiterate what Brian said about the lack of that pronounced inequality vis-à-vis some other countries in Latin America and some of the progress that Chile has made recently. There was an OACD report about social mobility, particularly pointing to children who are born, I believe, in the bottom quartile of Chilean society having, I think, the highest level of social mobility in the OACD. And social mobility, I think, in that study was defined by the number of children born in that lower quartile who end up moving up to the upper quartile by the time that they are middle-aged professionals. Reasonable amounts of social mobility, and yet, as you mentioned Jim, all of this social upheaval.

 

Well, there’s a lot of stuff that kind of floated, I think, below the radar. Brian made sort of passing mention of some of the lack of access. I think a lot of the grievances had to do with education, the cost and the quality of it, the fact that healthcare was run by a state bureaucracy that, to the best of my knowledge, hasn’t been changed or significantly reformed since the Pinochet era, the fact that this bureaucracy is very sporadic doesn’t exactly work for many people. It’s a huge issue.

 

People were complaining about the fact that they don’t get enough money in their pensions to make ends meet. So I think the average pension payment was somewhere around $250 U.S. dollars. Brian, you can correct me if I’m wrong on that. And I think the last thing that I’ve heard a lot about are young people making complaints about the inflexibility of a lot of employment law, particularly surrounding issues like contracts.

 

A lot of them have to find a way to subsist on short-term and medium-term contracts because Chilean law makes it quite onerous to hire someone on a more permanent basis. So I think many young people were looking at this thinking that there is sort of a cabal of elite folks who have access to permanent, stable, well-paying jobs while many of them sort of flounder in these short- and medium-term contracts, which of course gives rise to this position of instability.

 

Brian Winter:  Yeah.  Just following on what Ryan said, I do, for somewhat eccentric reasons have some of those Chilean numbers on hand. The private pension system in Chile was sold on the claim that Chileans would be able to retire on about 70 percent of their salaries. And in most cases, they’ve been receiving just 20 to 30 percent. The payout for women was actually even lower. And partly as a result, the suicide rate among people in their 70s and 80s in Chile was the highest in any age group.

 

You can focus too much on that. There’s more to it. As Ryan said, it has to do with student debt and other things as well. There’s another part of this, which is sometimes tough to talk about, which is expectations. And sometimes society’s expectations can get ahead of reality.

 

When I was just quickly -- just a very short story here -- the last time I was there was at the end of 2017. And of course, if you’ve lived in places like Brazil and Argentina and Mexico as I have, you arrive in Chile, and you’re like wow. This works so well. It seems like every -- why would people be protesting here? Even then, you could detect a degree of unrest, though. And I remember making that comparison to a Chilean political analyst who said, “Oh, well. You know, Chileans stopped comparing ourselves with Latin America a long time ago. What the younger generation is looking at now is Europe. And by Europe, I don’t even mean Spain or Portugal. I mean Denmark and Sweden.”

 

There’s some polling that backs that up and suggests it’s true and raises sort of deeper questions about whether Chile’s really in a position at this stage in its development to unroll a system of social services and benefits that match Scandinavian countries. But there you are.

 

James Dunlop:  Well, I think you both have provided a great rundown of the issues and shown that they are real issues and real Chilean issues. Because there’s the question of why we don’t see more of this unrest in Brazil or in the streets in Argentina where economies have been similarly bad in recent years, and expectations have been similarly raised. So I suppose it’s fair to say every country’s situation is unique, even as the economic numbers are equally dismal at various points.

 

But I do want to turn to the question of whether these are issue -- where there are issues that maybe are ripe for exploitation in a larger way. And I think what you’ve sort of done is align the Chilean issues so that they’re not part of some large leftward trend or something like that. What I’m getting at is something that, again, AQ raised several months ago when it published an entire issue devoted to China’s growing influence or desire to grow its influence on the continent and in which it quoted my friend Eric Farnsworth, also at the Americas Society/Council of the Americas, in reference to China’s use of sharp power to present itself as an alternative to U.S. power around the globe and lately, in particularly, in Latin America. I wonder if we have our eye on this enough.

 

I’m wondering if this is a real threat to the United States and whether there’s sort of a growing great power confrontation that needs more attention in Latin America. That’s a big question and gets back to the economic situation in many of these countries that either are in need of financing or refinancing, like Argentina, or in need of infrastructure investment, like Brazil, and also to the internal politics of the country where countries, especially in Brazil where there may be disagreement about alignment with the U.S. or China as those countries look at both great powers, not least because China’s a major trading partner -- the largest trading partner, for example, of Brazil. So having introduced a giant topic toward the end of the call, I just want to get each of your thoughts on the contours of a great power confrontation in Latin America, if there is one, what the United States ought to be thinking about.

 

Ryan Berg:  To make matters more complicated, I’m also going to bring in what we see as a sort of nascent or the beginning stages of Russian influence in Latin America, as well. So if China weren’t enough, I’m also going to add another wrinkle to this big issue at the end of the call before we open to questions. Look, the question of great power competition in Latin America is one that we’ve been talking about actually for a while now, even if the administration or the U.S. government is just now sort of getting around to it.

 

I would say, yes, quite plainly, yes, there is the makings of great power competition in Latin America, particularly with an issue like Huawei. Look at the battle for 5G networks so the ability to build 5G networks. The Secretary of State has been to Latin America something like five or six times in the last year and a half. And every time Secretary Pompeo goes, he’s brining up the issue of Huawei, every single time and at every single stop.

 

By and large, he has not managed to get much traction on this issue, mostly because the U.S. is going on about the risk of espionage. And countries like Brazil will very quickly point out the hypocrisy in that, given the revelations in the Edward Snowden case of the NSA spying on Dilma Rousseff’s phone. So the Huawei campaign is a very easy, tangible thing to point to to say, look, there’s this growing presence of countries like China in the region, which the U.S. is now finally starting to wake up and notice and is trying to push back on.

 

The issue of Russia is a little bit less so. It’s more so in Venezuela, which we’ve sort of walled off for purposes of this call. But it’s also in countries like Nicaragua and in Bolivia, particularly with the government to government and some of the military machinery and weapons donations or weapons trades that’s gone back and forth between those two countries. So we see Russia’s also staring to sort of make a splash in the region.

 

And I would say, on the whole, look, the United States hasn’t taken as much advantage as it could have when it comes to the existence of some of these center-right governments who want to stake out better position with the United States. I’m think about countries like Ecuador, which took a surprising turn under a president like Lenin Moreno, even countries like Brazil where the two presidents, Presidents Trump and Bolsonaro, have a very good personal relationship, personal rapport. I had breakfast with some folks at the Brazilian embassy recently, and they were complaining to me about the fact that there wasn’t a deepening of the relationship at this point in time, given the personal rapport between the two presidents. I think you can see the effects of that lack of deepening when it comes to great power competition.

 

For example, when Bolsonaro came into office, he was campaigning on ideas of China not wanting to buy in Brazil but to buy Brazil. Remember, there was that famous quote on the campaign trail. And now, Bolsonaro is going to China. Hamilton Mourao has been to China. Bolsonaro said, I think, at the last brick summit -- Brian, you can correct me if I get this quote wrong. But he said something about Brazil and China having a shared destiny to walk together. This is a substantial about-face on the China issue that perhaps a deeper, faster move to shore up bilateral relations with Brazil could have staved off.

 

James Dunlop:  Brian, your thoughts?

 

Brian Winter:  Yeah.  Money talks, man. You know, when you’ve got an economy that only grew 1 percent last year and you’re in your first year of government, are you really going to do things to alienate your biggest trading partner if you’re Brazil? And by the way, I don’t have these figures in front of me, but I think this is right. China’s not only the biggest trading partner for Brazil but I believe the total amount of commerce is three times what it has with the United States. You know, that government and others have had kind of internal conflict, right?

 

I mean, on the one hand, especially in the Brazilian case -- but I don’t want to get too hung up on Brazil because it’s true elsewhere in the region as well. They feel a deep pull towards Washington that is based in decades of history and shared values. And for all -- some of the awful things that Washington’s done in Latin America over the years, I think, overall, if you talk to most leaders around the region, except for some people on the hard left and kind of elsewhere, they believe that, given a choice between Washington and Beijing as a partner, they would -- most of them would prefer that it be Washington.

 

But, you know, then again you look at the way that trade with China has taken off over the last ten, 15 years. They realized that, at some level, they would be deeply sabotaging their own economies in these trade links if they moved too hard against China. I’ll tell you, I mean, I had a conversation recently with a well-known Brazilian politician who said something that kind of shocked me just with the sort of directness with which he said it. He said, “I really hope that we don’t have to choose between Beijing and Washington. I hope that we don’t go to kind of a bipolar world like we had in the second half of the 20th century where you have to be either on team red or team blue.”

 

And he even compared it to what happened in Brazil in the 1940s where he said, “You know, because of its distance and the fact that’s in not center to geopolitics, Brazil was able to stay out of World War II until really the very end. And I hope that we’re able to do that again.” And that kind of left my mouth agape a bit. That tells you what some people are thinking. And if you look at what the Duque government has done in Colombia or what the Vizcarra government has done in Peru or the Pinera government in Chile, you’re kind of seeing -- they’re not quite saying it as directly as that unnamed Brazilian politician, but they have good relationships with the Trump administration.

 

But at the same time, they are traveling frequently to Beijing to try to cultivate not only trade but things like direct flights. President Duque was very keen trying to get a direct flight between Beijing and Bogota. So for now, I think they’re trying to kind of have it both ways.

 

James Dunlop:  Well, thank you. Some of us would say, at least in the minds of the Brazilian establishment, it’s their nature not to want to choose or to make a choice and has been in their foreign policy at least since the dictatorship. With that, I want to open the floor to questions. I hope there are some lined up.

 

Micah Wallen:  I’m not seeing any question come through right away. James, I’ll toss it back over to you until we have a question come through for anything else you’d like to discuss.

 

James Dunlop:  Thanks. Well, I hope not proving my fear that Latin America still becomes the backwater foreign policy when everybody’s lining up to look at what they’re going to pay attention to. And in fact, I’ll use that as a starting point because, with that, I want to go back to the topic of what the U.S. might do in the face of the great power competition shaping up in the region. We’ve talked about some of the views of governments as to the relationship with the United States vis-à-vis a relationship with China.

 

What can the United States do to improve its position in that? Should it be looking at coming up with major infrastructure packages? Is it incumbent upon it to look at some of the rule of law things going on in Bolivia and trying to interest U.S. companies in Bolivia’s lithium, for example? Should we be trying to exercise greater influence in Brazil and promote the Bolsonaro side of the divide within its own cabinet over whether to align more with the west and the United States or whether to stay in this sort of middle position that leaves them completely open to trade investment and political relationship in China? Ryan, why don’t you take that?

 

Ryan Berg:  Great. Thanks, Jim. One thing that I was going to point out is the -- you know, when I was complaining in my last response about -- to the fact that the United States hasn’t, in my opinion, taken advantage of many of the center-right governments currently in Latin America to deepen their relationship and deepen the level of engagement, I was also thinking about America First and a number of pretty prominent cases in which the America First foreign policy sort of struck Latin American leaders. And then very quickly thereafter, there was some sort of Chinese influence.

 

So look at Brazil, for example, where there was a sort of opening on the side of Bolsonaro and then it was reciprocated with some America First steel and aluminum tariffs. Those were, of course, eventually not imposed. But there was about a two week period where there was a bit of a freak out and markets were a little bit jittery. And then of course, the Chinese were able then to come in and take advantage.

 

Look again at El Salvador. Trump, the America First foreign policy, decides to pull USAID’s role in helping the country to grow, pulls assistance. And in a short period of time -- on the migration issue of course. And in a short period of time, China announces, to quite a bit of fanfare, a lot of infrastructure investment in Central America. The same could be said of Colombia. Trump says that Duque isn’t doing anything for us. And a number of hectares under cultivation in coca is exploding. And then the big contract for the big Bogotan metro, which is something they’d been discussion for years, is awarded to a Chinese company after, by the way, some fiddling in the bidding process to sort of, from what I’ve seen, really tilt it in the favor of the Chinese.

 

So you have a number of prominent incidents like that where sort of the America First American foreign policy has struck, and then the Chinese, in my estimation, have taken advantage of that. And now, we’re in many ways trying to play catch-up. And an easy example I’ll point to is something like the America Crece program, which Jared Kushner’s trying to get off the ground from the White House, which is sort of an alternative vision kind of project, which in my opinion the United States should have been working on years ago. What would a U.S. lead neighborhood look like, and how, quite prominently, would it be opposed or would it look different, let’s say, than sort of the Chinese influence that you’re starting to see in the hemisphere? So I’m happy that we’re getting around to this. I think it’s unfortunately a bit too late.

 

James Dunlop:  With regard to Brazil, the other misstep, I think, which was a year ago at the summit between President Trump and President Bolsonaro, President Trump pledge to support Brazil’s bid to join the OACD and then not long afterward sort of didn’t reverse it but favored Argentina’s admission ahead of Brazil’s. And I think that, in my sense of talking to people there was that that really felt like a setback and a little bit of a retrenchment on the promise. Of course, we’re without an ambassador for a long time to Brazil in the first couple of years of the Trump administration.

 

That post has now been filled by a career State Department official, Todd Chapman. So perhaps, for want of diplomatic representation, we’ve missed some of these things. I don’t know. Brian, I wonder if you’d just react just a little bit to what Ryan said. And then also, tell us whether some of this might not be Latin America’s own fault in terms of it’s ability to exercise larger influence in the world with its major great power partners.

 

For example, I notice at the recently concluded Munich Security Conference, there was virtually no Latin American representation at that conference. Latin America’s regional ability to get together on foreign policy issues seems a little bit broken. So in terms of what the United States ought to be doing, let’s talk a little bit about that. But also, what could Latin America be doing to improve its place in the world?

 

Brian Winter:  It’s hard for me to improve on the U.S. side of things on what Ryan has already pointed out. I would just echo that many countries look at the United States, look at Washington right now, and they see a somewhat erratic, self-interested partner. And even when there’s tremendous good will, as there is not just with the Bolsonaro government but with the previous Macri administration in Argentina and other governments around the region, they will all tell you kind of in hushed tones and behind closed doors that they don’t see a big ability to execute right now. And I’m tripping over words a little bit because I’m being diplomatic.

 

One other thing that you also hear frequently lamented, especially from those of us who’ve made our careers in the bigger countries of Latin America, there’s so much focus coming out of Washington on Venezuela, Cuba, and, to a somewhat lesser extent, Nicaragua and Central America. Those are all countries that account for significantly less than 10 percent of Latin America’s GDP and population. And yet, they command nearly all of the bandwidth that Washington has for Latin America for reasons of kind of domestic politics being driven out of south Florida and elsewhere.

 

I’ve always just personally, as somebody who has really focused on Brazil and Argentina, you’ve seen again now in this last cycle of these last couple years how that has really practical effects in terms of our decisionmakers in some cases really just not knowing those countries that well. I think they tend to know Cuba left and right. They know everything, but they don’t know as much about Brazil and Argentina. And in practice, it becomes a problem.

 

You know, your question about Latin America in global forums -- and this is a different version of the same question that you raised implicitly earlier, Jim, which is why don’t people care more about the region? I think there’s a good answer to that and a bad one, from the Latin American perspective. The good answer is that, you know, Latin America is rarely the biggest headline. It’s rarely the biggest disaster happening on the global stage. Venezuela’s a clear exception to that, by the way.

 

But elsewhere in the region, there’s almost always a bigger crisis or war happening somewhere else in the world. And that’s a good thing for Latin America, especially when you consider that, yes, these last two years have been very stagnant and noisier. But overall, it’s been a pretty good two decades, really even three decades for Latin America.

 

But you know, the bad answer is that, you know, you look at the fact that the economies in Latin America grew less on average than any other region in the world during the 2010s, according to IMF data. That was over the course of the decade. You look at kind of the internal troubles that Brazil and Mexico are having right now and Argentina, too. There’s a big risk now, as we go into the ‘20s, of Latin America becoming irrelevant. And you see it reflected in these global forum. The amount of attention being paid not just by media but by investors as well is slipping. It is kind of returning, in some ways, to the reputation it had in the 1980s as being a place that was kind of too tumultuous and too stagnant to merit attention when there are other more interesting things happening elsewhere.

 

I don’t think that’s the fate that the leaders and the people of the region have to accept. I think there are good stories to be told, and some countries are certainly doing better than others. Colombia and Peru and the pacific coast in general tend to be a cut above what’s happening on the Atlantic coast. But it’s a real danger right now, and it’s kind of the product of all these things we’ve been talking about on this call.

 

James Dunlop:  Yeah. And who would have thought that ten years ago that we’d be saying that about Latin America and analogizing it to its position in the ‘80s. So Ryan, my guess is you take a little bit of an issue with the statement that it’s been a good couple of decades in Latin America, probably over the biggest topic we left out, which is Venezuela. But rather than focus on that country specifically and on this question of should it matter to the United States at least, should Latin America matter? Does it matter? On the security front, does it matter, and is it something that we should be more concerned about then we maybe have been?

 

Ryan Berg:  Well, thanks for the last word, Jim. I think the answer is absolutely. It’s something that we’ve been focused on pretty heavily here at AEI. It’s something that we’ve been pretty consistent in advocating that, as the United States turns its attention to other regions, particularly in places where it’s trying to project power abroad, it can’t do so with quite the same efficiency and effectiveness if it doesn’t have a secure, prosperous, largely democratic hemisphere at home. So Latin Americanists have been banging on for a while more or less. Sometimes we’re successful.

 

Sometimes we’re not so successful in convincing U.S. officials that this is sort of the shared neighborhood which we inhabit, which if free, if prosperous, if secure, lends us a lot more strength abroad than a hemisphere or a neighborhood that is completely in disarray. So yes, absolutely I think it matters. A lot of the -- we haven’t discussed security in too detail, but a lot of the issues that the United States has with opioid addiction, for example, methamphetamines, fentanyl, all these types of things have their origins in dynamics that take place in Latin America with cartels and the desire for those types of products here in the United States.

 

So of course security in our hemisphere matters. And in my opinion, a free, secure, and prosperous hemisphere should still be one of the top goals of U.S. foreign policy and if for nothing else than at least for the purpose of being able to be more effective and efficient in projection of our influence places further abroad.

 

James Dunlop:  Thank you, Ryan. And I’m sure that Brian shares those goals. I want to say that, Brian, you, very kindly -- when you characterized the region in the last two decades, I know you were purposefully leaving out Venezuela because I’d asked you to. So I don’t mean to mischaracterize your view or suggest that you don’t see that as a crisis area that poses a lot of issues for itself, for the region, and for us. I want to thank both my guests, Ryan Berg at AEI and Brian Winter at Americas Quarterly. And that concludes this teleforum.

 

Micah Wallen:  And on behalf of The Federalist Society, I’d like to thank all of our experts and James for his moderating duties and for the benefit of their valuable time and expertise today. We welcome listener feedback by email at info@fedsoc.org. Thank you all for joining us. We are adjourned.

 

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