On his third trip to Latin America in less than 18 months since taking office, US Vice-President Mike Pence warned migrants against attempting irregular entry into the United States.
There are very few moments in today’s Russia-obsessed media landscape when US-Latin America relations garner much attention, but Pence’s remarks briefly refocused the news cycle on the topic of immigration and the preposterous plan to build a wall along the 3,200-kilometer southern border with Mexico.
Recently, the wall proposal has been criticized given the absence of clear budgets and expected overruns, though there is little doubt that President Donald Trump’s largest infrastructure project will run into the tens of billions of dollars.
The Trump administration has said border security and immigration are among its top priorities, and has trumpeted the wall as central to the country’s sovereignty and security.
To the south, however, there are larger and even more expensive infrastructure projects that US officials also see as a threat.
Plans have been approved for a 5,000km railway linking Brazil’s Atlantic coast with Peru’s Pacific shores. The US$60 billion project will also run through Paraguay and Bolivia.
In Nicaragua, some $50 billion has been earmarked to build an inter-ocean canal that will operate as direct competition to the Panama Canal, which was owned by the US until 1999 and still has special provisions for use exclusive to the US military.
These and other massive investments are coming from China, with the Chinese state itself responsible for much of it.
Since 2005, China Development Bank and Export-Import Bank of China have provided more than $150 billion in loan commitments to Latin America and the Caribbean, including some $27 billion for infrastructure projects.
Pence’s now-frequent trips to Latin America – as well as those by other high-ranking US officials – are more about these projects than about Trump’s wall.
The expanding presence of China in the region has been a growing concern to the US government, military and foreign-policy apparatus, which have been frantically maneuvering to regain dominance in “America’s back yard.” Part of these efforts have included an intensification of pressure and hostilities against governments seen as allies of China, especially those that have challenged US dominance in their countries.
How the vacuum developed
In 1823, US president James Monroe’s government issued a warning to European nations, saying intervention in the Western Hemisphere would be perceived “as dangerous to our peace and safety.”
While initially welcomed by anti-colonial leaders of the era, this policy served as the basis for US hegemony in the region.
The laundry list of US interventions in the affairs of Latin American and Caribbean nations have included military invasions, assassination attempts, assisting coups and regime changes, and even seizing direct control over territories. Even Panama’s secession from Colombia would not have happened without the intervention of the US Navy.
US business interests have always been central to these designs, obtaining considerable holdings across the continent while also ensuring access to cheap raw materials, agricultural exports and, of course, labor.
By the end of 1930, the US had more investments in Latin America than in all of Europe, mostly in property. At the same time, 98% of the Latin American bonds held by investors in the United States were government issued or backed.
The brutal US-backed military regimes of the 1970s and 1980s gave way to pliant civilian governments that obediently continued to implement policy prescriptions from Washington. The crescendo of this period in Latin America was the push for a continental free-trade zone, paving the way for unfettered US capital penetration across the Americas.
However, the spectacular failures of neoliberal policies in social as well as economic terms served to bolster social movements opposing the so-called Washington Consensus. Movements coalesced into electoral projects, and in country after country in the region, left-leaning governments came to power riding the wave of discontent. The Free Trade Area of the Americas proposal was finally buried at the 2005 Summit of the Americas by these very governments.
During this time also, the US government of George W Bush had become embroiled in two major occupations in Iraq and Afghanistan, and just a couple of years later, the US was hit with its biggest economic recession since the 1930s.
As the US weathered these major crises, the Monroe Doctrine went on the back burner and many governments of the region took the opportunity to pursue precisely the type of policies and partnerships that the US had historically worked against.
The first decade of the 21st century also saw the emergence of the BRICS (Brazil, Russia, India, China and South Africa) grouping, with China in particular emerging as a global economic powerhouse.
Averaging an annual GDP growth rate of 9.61% from 1989 through 2018, with historic 14.2% growth in 2007, the sustained growth of China’s economy meant it soon began to look for outlets for its capital.
Between 2009 and 2010, Chinese state banks signed loans of at least $110 billion to other developing countries, surpassing the World Bank’s loan commitments during this same period by some $10 billion.
China found in Latin America many governments willing to accept loans without the conditions and structural reforms placed by such lenders as the World Bank and Inter-American Development Bank, where the US exerts considerable influence over decisions. Left-leaning governments in the region saw China as a geopolitical ally that could reduce their dependence on the US for trade and loans.
The biggest benefactors of the $150 billion in state-to-state financing doled out to governments in this region by China since 2005 were those on the left, including Venezuela, Ecuador and Bolivia, which received $62.2 billion, $17.4 billion and $3.5 billion in loans respectively. The more moderate nationalist governments in Brazil and Argentina took loans of $42.1 billion and $18.2 billion respectively.
In 2015, Chinese President Xi Jinping set the goals of $500 billion in trade and $250 billion in direct investment for Latin America in the period between 2015 and 2019, signaling the importance of Latin America and the Caribbean for China.
More recently, China approved a Special Declaration on its $1 trillion Belt and Road Initiative, inviting Latin American and Caribbean countries to join through bilateral agreements.
As of June this year, four countries in the region had signed such agreements.
During his presidency, Barack Obama pushed the Trans-Pacific Partnership as a means of curbing China’s growing role in Asia as well as in Latin America. His successor Donald Trump abandoned this method, choosing to withdraw from the agreement negotiations, but ramped up the aim of reasserting the United States’ position in the hemisphere by taking aim at China and the left-wing governments that emerged at the turn of the century.
Trump’s National Security Strategy, which references China more than any other country, sees Beijing as seeking “to pull [Latin America] into its orbit through state-led investments and loans,” while also supporting “the dictatorship in Venezuela.”
Former secretary of state Rex Tillerson began his only tour through the region with praise for the Monroe Doctrine as a “success” and added the extraordinary denunciation of China as a “new imperial power” in Latin America.
But it hasn’t just been Trump officials pushing in this direction.
The National Endowment for Democracy published a paper titled “China in Latin America,” similarly arguing the case for China’s growing influence on nations through “soft power” mechanisms, including its capacity for investments as well as diplomacy. The NED, itself a mechanism of US “soft power” in the world, distributes millions of dollars that it receives from the State Department to support groups aligned with US foreign-policy objectives.
Among the 2017 disbursements, the NED specifically funded projects for “Oversight of Chinese Investments in Latin America” and “Raising Awareness on China’s Human Rights Record.”
In his annual address to the US Congress, Admiral Kurt Tidd, commander of the United States Southern Command (SOUTHCOM), warned that China was “courting some of our most strategically important Latin American and Caribbean partners and supporting authoritarian, anti-American regimes.”
Importantly, the head of US forces for the region pressed for a coordinated effort among different branches of the US state to “compete effectively against China’s coordinated efforts in the Americas.”
“Some of the most critical elements needed in this effort are not ones that US SOUTHCOM can bring to bear,” Tidd told lawmakers this year. “In addition to the crucial role of whole-of-government efforts, I am referring to the strength and vibrancy of the US private sector, our multinational corporations, and NGOs.”
This is precisely what has taken place, with the US government, military, diplomatic corps and aligned “civil society” apparatus working in tandem toward their goals for the region.
Despite very public infighting within the US state concerning other global matters, Congress and the White House have been able to pass measures against Venezuela and Nicaragua.
US diplomats have also been working simultaneously to isolate and pressure governments and actors seen as allies of China, while warning other nations against drifting into Beijing’s orbit. Millions of dollars are dedicated to groups that work along these lines also.
For its part, the US military has been moving to bolster its presence in the region.
Just weeks after Pence’s visit, Ecuadoran President Lenin Moreno hinted that a return of US troops to the country under a “cooperation” agreement was imminent. The potentially unconstitutional move also comes at a time when Argentina is reportedly looking to install a US base and as Colombia moves forward with full membership in the North Atlantic Treaty Organization.
But Trump administration’s efforts to resuscitate the Monroe Doctrine, with China as the new power to keep at bay, may be in vain.
The rebuff that US officials received at the Summit of the Americas in April when it came to China relations shows that many see the offers from China as too good to pass up.
Appeals on geopolitical and even ideological grounds have brought their friends onside against Washington’s left-wing adversaries in the region. But the US is failing to dissuade its allies from accepting the considerable funds that China is offering.