Ecuador: Is Coca Codo Sinclair a Bellwether for China in Latin America?

by Julie Radomski*

Mega project Coca Codo Sinclair inaugurates its new tunnel / Carlos Rodriguez / Agenda de Noticias ANDES / Wikimedia Commons / Creative Commons license

Ecuador’s Coca Codo Sinclair hydroelectric project – celebrated as a triumph of then-President Rafael Correa’s Revolución Ciudadana and a harbinger of the promise of South-South Cooperation when inaugurated in November 2016 – today appears to be a lightning rod for debate around China’s preferred form of international cooperation. The project was emblematic of the new relationship between Latin American countries and development finance’s new regional leaders, Chinese policy banks. Five years into its operations, Coca Codo is riddled with uncertainties and dramas at local, national, and global scales. 

  • The 1500 Mw project consists of a diversion dam; 24.8 km of tunnel to channel water under the Andean foothills; a compensation reservoir; pipes dropping the water 620 meters; and an eight-turbine powerhouse. It supplies Ecuadorians with 30 percent of their electricity, helping to edge out expensive and fossil fuel-driven thermoelectricity.

The project was a crowning jewel of efforts since the mid-2000s by Chinese policy banks – the China Development Bank and China Export-Import Bank – to provide Latin American countries with billions of dollars in loans, the majority for large infrastructure projects of the variety once financed by multilateral development lenders like the World Bank. Indeed, between 2005 and 2018, the total lending to the region by these two Chinese banks was greater than that of the World Bank and Inter-American Development Bank combined. Coca Codo was financed by a 2010 loan from the China Export-Import Bank and constructed by Chinese state company Sinohydro.

  • However, since 2015 lending has trended steeply downwards, and since 2019 Chinese policy banks have provided no new loans to Latin American countries or state-owned enterprises. While this by no means indicates a downgrading of China-Latin America relations, the nature of this political and economic relationship is no longer oriented around multibillion-dollar state-to-state infrastructure lending like that which made Coca Codo Sinclair possible. This is likely due, at least in part, to the increased hesitancy on the part of Chinese lenders following political controversies surrounding such projects.

The impacts of the projects of this period are still very much an ongoing and controversial issue for countries like Ecuador.

  • Although vital in providing Ecuadorians inexpensive and emissions-friendly electricity, to this day the project has not been fully turned over to the Ecuadorian government, primarily because its distributors (snail-shaped pipes that channel water to each of the powerhouse’s eight turbines) exhibit thousands of fissures that Sinohydro has been unable to repair despite years and millions spent trying. New fissures continue to emerge that experts say indicate “imminent danger” of equipment failure, or even collapse.
  • The diversion dam is also in danger of collapse due to a rare and catastrophic process of “headward” erosion (erosión regresiva o remontante) along the Coca River. The erosion, resulting from the collapse of the famed 150-meter San Rafael waterfall in February 2020, has so far caused two major oil spills, the loss of houses and land, and the repeated destruction of a major roadway connecting the Amazonian region to Ecuador’s capital. The Ecuadorian state power company, CELEC-EP, is investing millions in new infrastructure to attempt to contain the erosion before it reaches the dam. They are also studying the possibility of building an entirely new dam that could be reconnected to the existing powerplant.

The scientific community is debating the extent to which the dam itself may have contributed to the disastrous erosion. Lack of rigorous environmental assessments and monitoring mean that there may never be definitive evidence either exonerating the dam or proving its guilt in the current social, economic, and environmental crisis. There is, however, broad agreement that, given the instability of the Coca River basin, the dam should not have been constructed at the current location and scale due to environmental risks.

Critics of Chinese global economic expansion have seized on Coca Codo Sinclair as a symbol of the danger of China’s influence in Latin America. Other observers argue that the project’s downsides are a result of national institutional failures, irrespective of the “Chineseness” of its finance, engineering, and construction. Either way, recent patterns in Chinese lending indicate that the country’s decisionmakers no longer see this type of project as the basis of win-win development or mutual cooperation. It appears that environmentally sensitive, politically polarizing mega-infrastructure will not be the face of China-Latin America cooperation going forward. Regardless, Ecuadorians are faced with the return of expensive and unreliable electricity, an irrevocably altered Amazonian River basin, and about $3 billion at risk of being carried away by the river.

May 6, 2022

*Julie Radomski is a PhD Candidate and Fulbright-Hays Fellow at American University specializing in development studies.

North America: More Support Than Meets the Eye

By Malcolm Fairbrother, Tom Long, and Clarisa Pérez-Armendáriz*

Mexican President Andrés Manuel López Obrador (L) and Canadian Prime Minister Justin Trudeau (R) join President Joe Biden for the North American Leaders Summit (NALS) at The White House/ The White House/ Flickr/ United States government work

U.S., Canadian, and Mexican leaders’ support for North American integration has ebbed and flowed in the years since the North American Free Trade Agreement (NAFTA) was signed in 1994. But our analysis of some previously little-known polls taken a few years ago shows that, even when support for trade integration and other big-picture institutional initiatives has been weak, interest in some forms of cooperation has been relatively strong in all three countries.

  • Discussions of North American integration have been fraught from the beginning. Fiery debates over NAFTA in the early 1990s meant politicians had to work hard to sell regional cooperation. Canadian politicians’ approach to North America has been pragmatic, low-key, and mostly bilateral with the United States. U.S. politicians gave North American cooperation a tepid embrace at best, until Donald Trump turned to repeatedly badmouthing NAFTA and both neighbors. Although Mexican political and business leaders’ enthusiasm for NAFTA has cooled in recent years, and President Andrés Manuel López Obrador is a longtime NAFTA critic, they have made a reluctant peace with its regional economic structures.

Perceptions of NAFTA as a political loser paint too dark a scenario for North American cooperation. Though U.S. views briefly soured and polarized in 2016-17, strong public support for the agreement’s successor – the U.S.-Mexico-Canada Agreement (USMCA) – suggest those negative views were short-lived. North American cooperation beyond trade enjoys robust support. Our analysis of surveys conducted before the “Trump shock” shows that respondents in Canada, Mexico, and the United States have long favored more cooperation in a variety of areas, albeit with a few important qualifications. In our recently published study, Areas, Sovereignty Costs, and North Americans’ Attitudes Toward Regional Cooperation, we show: 

  • The three countries share strikingly similar aggregate levels of support for free trade. But levels of support for regional coordination in six different issue areas – currency, energy, defense, economic affairs, environment, and border security – vary by issue and country, and are often higher. For respondents, it matters “on what” North America cooperates in ways that questions about trade and NAFTA do not capture. For example, there was significant support in all three countries for regional policy coordination with respect to environmental protection and border security.
  • Mexicans show the highest level of aggregate support for regional cooperation, but also the greatest variation by issue area, suggesting that they are attuned to the potential costs and benefits of cooperating in an asymmetrical region. Only Mexicans express much support for North American currency coordination, but they showed comparatively little desire for cooperation in energy. They are strong backers of border and environmental cooperation.
  • Although Canadians are skeptical of the benefits of some aspects of the relationship, they also identify cooperation on the border and environment as worth pursuing. Canadians expressed the lowest average support for policy coordination. In contrast to their government’s approach, Canadians slightly prefer trilateralism to bilateralism. Indeed, Canadians, Mexicans, and Americans don’t always want to cooperate trilaterally. Americans report stronger support for regionalism with Canada alone, rather than trilateral cooperation with both Canada and Mexico. 

North America is a highly asymmetric, U.S.-centric region. That shapes patterns of public attitudes as Canadians and Mexicans are concerned about national vulnerabilities vis-a-vis the United States. Mexican citizens’ support appears to be shaped by perceptions that Mexico stands to gain from regional cooperation on many shared problems that Mexico struggles to address alone, such as the environment and border security. Still, support for coordination in the United States also was comparatively high for border security, perhaps a result of politicians’ dramatizing a supposed U.S. inability to “control” the border. 

  • Paying attention to the issues where public support exists and overlaps may allow supporters of regional projects to build on firmer – albeit narrow – ground.

March 22, 2022

Malcolm Fairbrother is Professor in the Department of Sociology, Umeå University and the Institute for Futures Studies, Sweden, and the Department of Sociology, University of Graz, in Austria. Tom Long is Associate Professor in the Department of Politics and International Studies, University of Warwick, UK and Affiliated Professor in the División de Estudios Internacionales, Centro de Investigación y Docencia Económicas, Mexico. Clarisa Pérez-Armendáriz is Associate Professor the Politics Department and Program in Latin American and Latinx Studies at Bates College, USA. This article, part of the Robert A. Pastor North American Research Initiative, draws on “Issue-Areas, Sovereignty Costs, and North Americans’ Attitudes Toward Regional Cooperation,” published recently in Global Studies Quarterly. The underlying surveysRethinking North America, were conducted in 2013 by Miguel Basáñez, Frank Graves, and Robert Pastor. 

How Is the Crisis in Ukraine Like the Cuban Missile Crisis?

By William M. LeoGrande*

President John F. Kennedy and Soviet General Secretary Nikita Khrushchev/ U.S. Department of State & Kennedy Presidential Library/ Flickr/ Creative Commons License

When Russian Deputy Foreign Minister Sergei Ryabkov warned that the standoff between Moscow and Washington over Ukraine could trigger a crisis akin to the Cuban Missile Crisis, he wasn’t just referring to the danger of nuclear war, narrowly averted. He was also reminding Washington that Russia is not the only great power jealous of its sphere of influence. Russia has its “near abroad,” and the United States has its “own backyard” as defined in the 1823 Monroe Doctrine warning European powers to stay on their own side of the Atlantic. 

Sixty years ago this October, the Soviet Union projected its military power into the Western Hemisphere by placing missiles with nuclear warheads in Cuba. Soviet Premier Nikita Khrushchev’s principal purpose, we know now, was to protect Cuba from another U.S. invasion. (The Bay of Pigs invasion had failed the year before, and Washington had plans for an encore using U.S. troops.) 

To President John F. Kennedy, this intrusion into the U.S. sphere of influence was intolerable, not just because it posed a military threat, but because a U.S. failure to defend its own neighborhood would throw Washington’s credibility into doubt. To Kennedy, it was worth risking thermonuclear war to repel the Soviet incursion. Had Khrushchev not backed down, agreeing to withdraw the missiles, the United States was ready to launch a full-scale invasion of Cuba.

To this day, the United States has not accepted the idea that a hostile government allied with a rival superpower should be allowed to exist just 90 miles off the coast of Florida. This year marks not only the 60th anniversary of the Missile Crisis, but also the 60th anniversary of the U.S. economic embargo against Cuba designed to overthrow the Cuban government and replace it with one more to Washington’s liking. As Donald Trump’s national security adviser, John Bolton, candidly proclaimed, “The Monroe Doctrine is alive and well.” 

The Biden administration, however, appears not to recognize its own great power conceits. “We can’t go back to a world of spheres of influence,” Secretary of State Antony Blinken told CNN, chastising Russia for its attempts to exert influence over former Soviet states. “We’re not going back to that.” He apparently had not read the U.S. Southern Command’s annual Posture Statements for the past decade, each of which defines the growing influence of Russia, China, and Iran as one of the principal threats the United States faces in the Western Hemisphere. The 2021 version elevates these interlopers to a collective proper noun: External State Actors (ESAs) – external to the U.S. sphere of influence.

When Russian diplomat Sergei Ryabkov suggested that Russia might enhance its military posture in Cuba and Venezuela in response to the U.S. build-up in Eastern Europe, the U.S. warning was unequivocal. Any Russian attempt to deploy missiles in Latin America would be an “aggressive action,” declared United Nations Ambassador Linda Thomas-Greenfield, and would be met with a “strong response.”  “If Russia were to move in that direction,” said National Security Adviser Jake Sullivan, “we would deal with it decisively.” 

Biden’s officials seem not to grasp the irony of defending a U.S. sphere of influence while condemning Russia’s claims to its own. Not much has changed in the 60 years since the Missile Crisis, when Soviet missiles in Cuba were, by definition, “offensive” weapons, whereas U.S. missiles in Turkey were merely “defensive.”

If President Joe Biden is serious about replacing spheres of influence with what Secretary Blinken called a “rules based international order” in which small states can decide their own future free of great power coercion, Biden can start in his own backyard. Washington’s policy of regime change toward Cuba, based on economic coercion and subversion – a policy Biden inherited from Donald Trump and continues unchanged – has not worked for more than 60 years. Replacing it with a policy of engagement and coexistence would set a good example for President Putin in his near abroad.

February 1, 2022

* William M. LeoGrande is Professor of Government at American University and co-author with Peter Kornbluh of Back Channel to Cuba: The Hidden History of Negotiations between Washington and Havana (University of North Carolina Press, 2015).

China-Latin America: Literature Shows Varying Perspectives on Beijing’s Intentions

By Andrés Serbin*

Communicating Influence: China’s Messaging in Latin America and the Caribbean project page logo

By frequently casting China-Latin America relations as a “triangular relationship” between China, the United States, and Latin America, much of the academic literature generates a series of misunderstandings. Studies in both the English-speaking community and in China generally portray Latin America and the Caribbean (LAC) as a relatively homogeneous and unified area – ignoring regional fragmentation and diversity – in a triangular relationship with the two superpowers. But Latin American analysts are increasingly focused on the widely varying nature of countries’ bilateral and subregional ties with each.

  • Latin American analysts generally produce theoretically more complex, politically diverse, and ultimately contradictory approaches to the relationships. Whereas the theoretical disciplines of international relations (IR) and international political economy (IPE) are ubiquitous in the English-speaking community, recent debates and critiques in Latin America reveal accelerated development of their own theoretical and conceptual approaches.

The two sets of analyses overlap in several important areas, such as China’s primary interest in securing resources and in investing its booming wealth in the region, but they yield different interpretations of its strategic objectives. Most views center around China promoting a version of globalization based on its geostrategic objectives, generating an increasingly tense dispute between the United States, as the traditional hegemonic power, and the rising PRC. This competition occurs mainly in the commercial and technological arenas, but it has military and cultural elements as well.

  • The Western epistemic community, to some extent reflecting the demands and expectations of the political milieu in which they work, frequently regards the Chinese presence in Latin America as a threat to U.S. interests and the autonomy of LAC countries. In this dynamic, China’s objectives go beyond economics and into spaces from which the United States has withdrawn. Latin America, despite its peripheral situation, is immersed in and eventually subordinated to a broader and more global geostrategic dispute, even if (as most analysts believe) China is not trying to impose its political system and development model on the region. 
  • Others tend to view China’s modernization and transformation, its remarkable need for commodities, and its ability to finance large acquisitions and projects as having important bilateral effects for the region. China has incorporated countries into its “Belt and Road Initiative” (BRI) infrastructure megaproject. Recently, it has undertaken an aggressive “health diplomacy” project during the COVID‑19 pandemic. 

The Latin American perspective is independent of efforts by LAC-based and Chinese analysts to foster joint research and interaction in the past 25 years; Chinese input into LAC analysis is growing but still limited. 

  • The most prolific LAC authors maintain fluid links with U.S. and European academic counterparts, but their work draws on theoretical frameworks that are rooted in approaches developed in the region. This includes a wealth of economic analysis and statistical data developed by individual scholars, research centers, and networks (such as Red‑ALC China), and institutions such as the UN-sponsored Economic Commission for Latin America and the Caribbean (ECLAC). Many aspects of China’s policies, such as their impact on labor, environment, regional industrialization, and increasing LAC indebtedness to China (the “debt trap”) have been criticized, but its “soft power” has expanded significantly and benefited many in LAC.

This significant body of research and publications about China’s activities in LAC reflects three predominant disciplinary and theoretical approaches in addition to analysts’ own perceptions of their national interests.

  • The focus of international relations neorealism on China’s potentially destabilizing effects in the region and its relations with the United States gives short shrift to other important actors in the region and world. It also stimulates an inaccurate vision of Latin America as a monolithic, unitary actor and deep down expresses a subtle neocolonialism and “neocolonialist paradigm.” 
  • The emphasis of the international political economy approach is on China’s intentions as predominantly linked to its development – and not as a threat to the United States. Most argue that Latin America must develop its relationship with China and maintain its links with the United States simultaneously, without getting involved in a confrontation between them. 
  • But LAC is showing a third, hybrid approach mixing IPE and geopolitical analysis to contextualize China’s influence. It has shown that some “benign” impacts have also generated new dependency and center-periphery relations that can be characterized as a “dependency with Chinese characteristics.”

The debate between these differing interpretations –viewing dynamics as either bilateral or triangular – will continue to mold U.S., Chinese, and LAC countries’ policies as China pursues its global projection strategy.

January 21, 2022

* Andrés Serbin is an international analyst and president of the Regional Coordinator of Economic and Social Research (CRIES), a network of more than 70 research centers, think tanks, NGOs, and other organizations focused on Latin America and the Caribbean. This article is adapted from his recent CLALS Working Paper, Latin America-China Relations: A Review of Recent Literature (2010-2020)

The Interamerican Democratic Charter Turns 20: Is it Becoming Irrelevant?

By Stefano Palestini Céspedes*

Commemoration of the 10th Anniversary of the Inter-American Democratic Charter, September 2011./ OEA – OAS/ Flickr/ Creative Commons License

Despite the clear merits of its text, the Interamerican Democratic Charter (IADC) has been enforced inconsistently over the 20 years since its singing; its effectiveness in curbing democratic backsliding remains unclear; and, with little chance of being reformed, it risks becoming increasingly irrelevant.

  • The Charter was speedily adopted in Lima on September 11, 2001, while the world was reacting to the terrorist attacks in New York and Washington. It emerged from a proposal by the government of Peru after the resignation of authoritarian President Alberto Fujimori to reinforce existing multilateral instruments for democracy. It became the main multilateral framework to deal with breakdowns of democracy and backsliding in the hemisphere.
  • The IADC developed a shared and precise definition of representative democracy; expanded the scope of action of the OAS to address coups and violations perpetrated by the elected governments; and defined procedures for various enforcement actions ranging from the dispatch of missions to the imposition of sanctions and the suspension states from the OAS.

Limits on the IADC mandate have compromised its enforcement and effectiveness, however. The enforcement of measures is under the control of governments, which take decisions through consensus or qualified majority-voting (in the case of suspensions from the OAS). Even though the IADC is grounded on the principle that democracy is a “right of the people” (Art.1), non-state actors and state institutions other than the executive branches have limited capacity to activate the IADC, and the Inter-American Commission of Human Rights does not play any role in its enforcement.

  • The IADC has not been invoked in cases in which member states have conflicting interests. For instance, it was not applied against Haiti in the wake of the forced removal of President Jean Bertrand Aristide in 2004 or against Honduras after the electoral fraud of President Juan Orlando Hernández in 2017. In both cases, Washington obstructed enforcement of the Charter for reasons other than “the defense of the right to democracy” of Haitians and Hondurans. More recently, Mexico has obstructed enforcement against Nicaragua despite the serious violations of the opposition’s political rights by President Daniel Ortega. Similarly, the IADC has been altogether ignored when the attacks against democracy have taken place in powerful states, such as after the assault against the U.S. Capitol in January.
  • Against this backdrop, the activism of current Secretary General Luis Almagro – who has pressured member states to take a stance through social networks and moral shaming on various occasions – has sought to work around governments’ monopoly of enforcement and break gridlocks. But his actions often compromised the impartiality of his post as he has been perceived as taking sides in the conflicts at hand and overreaching his powers under the IADC.
  • Disappointment with the IADC and Almagro’s performance has led Mexico and other governments to advocate for reinforcing alternative regional forums such as the Community of Latin American and Caribbean States (CELAC). However, these announcements have little credibility if they are not accompanied with sustained political leadership – in the face of certain U.S. opposition – and commitment of resources to build strong regional institutions.

Ironically, the IADC came into existence precisely when the conditions that made it possible – a liberal consensus and an international agenda on democracy promotion – were fading away. These two decades have demonstrated that the democracies of the hemisphere, including Washington, are not always willing to put the defense of democracy in the neighborhood before other foreign-policy interests. Governments are also prone to bypass the OAS and the IADC and go unilateral if they feel that a crisis affects their interests, as the Lima Group and the U.S. unilateral sanctions against Venezuela have recently shown.

  • These two decades have also demonstrated that member states are not up to even discuss reforming the IADC. They are reluctant, for example, to create an enforcement authority, which would render the application of the Charter more impartial and possibly more effective. This is certainly disappointing news for those who believe in Inter-American relations based not only on Realpolitik but also on principles and norms. The IADC will continue being a roadmap for the states in the region and a reminder of the commitment to democracy, but it will be – paraphrasing the first OAS Secretary General Alberto Lleras Camargo – what the states want to make of it.

September 28, 2021

* Stefano Palestini Céspedes is Assistant Professor of International Relations at the Pontificia Universidad Católica de Chile.

China in Latin America: Influential But Not Liked

By Andrei Serbin and Luiza Duarte*

President Michelle Bachelet participates in a document-signing ceremony with the President of the People’s Republic of China, Xi Jinping./ Government of Chile/ FlickrCreative Commons License

An on-line survey of Latin American international relations experts reveals that China is viewed as having great influence in regional commerce, surpassing the United States and Europe, but that its engagement with the region is perceived as relatively negative. Although Chinese media have been increasing efforts to enter the information landscape in Latin America, they are not perceived to be a significant source of news for Latin American opinion leaders and do not appear to have significant influence on public opinion.

The questionnaire was administered by CLALS and CRIES last May and June as part of a broader project to assess the role of China and its communication strategies in Latin America and the Caribbean. It targeted academics and other thought leaders throughout Latin America. Some 379 experts responded.

Key findings:

  • China was perceived by 80 percent of the experts to have a “high” level of influence in Latin America, and only 5 percent said it was low. According to respondents, China’s influence was surpassed only by that of the United States. Madrid and Moscow scored slightly lower than Beijing.
  • The specific areas of Chinese influence were not homogeneous across the region. Asked about Beijing’s role in culture, the economy, health care, and technology, about 90 percent of respondents cited the economy as top area, followed by technology and medicine. (In each of these three categories, it was surpassed only by the United States.) Fewer than 5 percent named culture – higher than Russia and India but lower than six other countries on the list.
  • On the positive or negative impact of that influence, fewer than 10 percent said they had a “very good” opinion of the Asian power, while a little more than a quarter said they had a “good” opinion. About one-third said they had an “intermediate” opinion of Beijing, and the final third had a “bad” or “very bad” estimation. When asked to compare China with other world or regional powers, respondents ranked it among the lowest. A little more than one third view it negatively, 32 percent as neutral, and a little more than 25 percent positively. Germany, Japan, and Spain scored highest as “very good” and “good,” even if they’re ranked as having a lower level of influence. The United States scored somewhat lower, but China and Russia had stronger negatives and weaker positives. Only Russia’s influence is perceived more negatively than China’s.
  • Most of the experts felt the principal priority for having relations with China should be commercial, followed by foreign direct investment and other financial ties. International security ranked as their lowest priority – even lower than multilateral cooperation and human rights. Importantly, this order of priorities is the same as with U.S. relations – with the only statistically significant difference being a preference for cooperation on international security with Washington.

Important among the findings of the survey is that China is failing in its efforts to use media tools to create a positive image for the country and its government. Beijing has made significant investments in establishing a media presence, principally through its China Global Television Network (CGTN).

China’s state broadcaster launched CGTN Español in 2007, and it has significatively expanded operations worldwide in the past decade, multiplying platforms, newsrooms and crew. CGTN doesn’t have a Portuguese-language TV channel, but content in that language is produced by other Chinese media outlets, such as Xinhua, Radio China International, and People’s Daily.

  • Despite these efforts, fewer than 4 percent of those interviewed say Beijing’s influence was “high” or “very high,” while 38.8 percent say it was “low,” and 30 percent say it was “very low.” U.S. media influence, on the other hand, is high. More than 70 percent of the experts said CNN, for example, has “high” or “very high” impact. China’s CGTN international television network also ranked lower than the United Kingdom’s BBC, Venezuela’s Telesur, Russia’s RT, and France24.
  • According to most of the experts consulted, CGTN’s influence is principally “neutral,” but 33 percent of them said they didn’t know how to characterize it. That said, a greater percentage of them say its effect on China’s image is “positive” (about 20 percent) than “negative” (about 12 percent). In this regard, CGTN’s impact is similar to that of CNN (which is not a government entity tasked with burnishing the United States’ image) and RT, and much better than Telesur. But BBC and France24 reflect more positively on the British and French governments.
  • Even if findings indicate that Chinese media have “low” influence among Latin American leaders, a growing number of media-sharing agreements are facilitating the distribution of Chinese content through local media in Latin America. The influence of this indirect consumption has yet to be measured.

September 17, 2021

Luiza Duarte is a journalist, has a PhD in Political Science, and is a Research Fellow at CLALS, the Brazil Institute, and the Wilson Center. Andrei Serbin Pont is the Director of CRIES and an International Relations PhD candidate at the Universidad Complutense de Madrid. The survey is part of a CLALS project on China’s Messaging in Latin America and the Caribbean, supported by the Institute for War & Peace Reporting with funding from the U.S. Department of State

Caribbean: Need for Overhauling Regional Maritime Transport

By Ryan Sullivan*

Container ship in freeport, Bahamas/ Corey Seeman/ Flickr/ Creative Commons License

A lack of coordinated policy and overreliance on a one-size-fits-all trade structure have long hindered the development of the maritime transport infrastructure that the Small Island Developing States (SIDS) of the Caribbean need to build a stable system for moving goods to and from the islands. The region’s current infrastructure, which carries more than 90 percent of its goods, is vulnerable to disruptions and inefficiencies.

  • Data published by the United Nations Conference on Trade and Development (UNCTAD) show the SIDS of most of the Caribbean have the lowest Liner Shipping Connectivity Index (LSCI) in the world (The Bahamas, Jamaica, and Trinidad and Tobago are the exceptions). LSCI was established to measure a country’s port connection to global markets by applying factors such as the number of regularly scheduled shipping services, the reach of these services, and vessel capacity. Connectivity in the Caribbean has been an issue for decades because global shipping companies believe the economies of scale and distance to major shipping routes make carrying goods in the region an unprofitable endeavor.
  • The growth in global container shipping has amplified connectivity issues. The shipping companies have steadily increased container capacity and employed advanced technology on vessels to the point that the port infrastructure in the region – the age of most port infrastructures in the Caribbean averages 50 years – is inadequate. Mega container ships call on only large transshipment hubs from which smaller, feeder ships pick up containers for delivery to islands – creating an indirect path to and from global markets that has been estimated to increase the costs of goods by 7 percent compared to the world average. In addition, shipping cartels have consolidated the power of these multinational shipping companies to the detriment of local companies dependent on their services.
  • The COVID-19 pandemic has created shockwaves across supply chains, affecting both developed and developing economies. UNCTAD reports note that SIDS were among the most affected by supply chain shocks, highlighting their trade dependency for critical foodstuffs and medical supplies.

Proposed solutions have mostly looked at encouraging free trade agreements to reduce costs of trade and at encouraging foreign investment to increase capital flows and drive demand for cargo capacity. But none addresses the inherent lack of connectivity and high costs involved in this critical mode of transportation. U.S. President Biden recently issued an executive order that has empowered the Federal Maritime Commission to actively investigate unfair competition and enforce antitrust laws in the maritime sector. This signals a failure in the current trade structure since companies are being bullied as they attempt to bring their goods to the global market.

  • These challenges have raised questions about the wisdom of continuing to rely solely on private shipping companies to provide logistics, fueling policy reviews aimed at increasing coordination among the governments of the Caribbean, with assistance from international development banks, to promote a network of interisland transport services and increase investment in infrastructure upgrades. Governments are seeking unprecedented cooperation in digitalizing customs document processes and streamlining delivery of vital goods to their destinations.
  • Some SIDS experts point to the European experience in subsidizing short sea transport services. Greece created a network of ferries with a hub-and-spoke model of logistics centered at the Port of Piraeus to transport passengers and cargo to and from islands in the Aegean Sea. However, the service has seen no profits and is only viable under a single trade regime without the headache of various customs laws. Other proposals have not led to action due to resistance from maritime nations to easing cabotage measures meant to protect their maritime industries. Using Europe as an example for coordinating a secure interisland transport system would provide a unified policy approach that the Caribbean governments have so far been unable to reach.

While technology has advanced operational processes, the major impediment for Caribbean SIDS is the lack of willingness, at least so far, to coordinate policy in establishing a resilient and sustainable maritime transportation network of their own. The Caribbean Community (CARICOM), whose 15 member states and five associate members bill themselves as the oldest surviving integration movement in the developing world, would be the best platform to promote comprehensive, strategic solutions, but there’s little sign of progress ahead.

  • One solution would be to encourage a multinational public-private partnership to create capacity for businesses to ship less-than-container-loads (LCL). The smallest container size available on the market currently is a 20-foot container. Most businesses are unable to fill one but are still obligated to pay tariffs of a full-container-load (FCL). The old one-size-fits-all approach is unrealistic for island logistics, and it imposes extra cost per good for the shipper and capacity issues for feeder ships. Additionally, efforts to streamline customs processes through digitalization should continue to be a priority beyond the pandemic, and concrete customs policies for seamless interisland trade would promote an environment for secure supply lines. Once the friction in interisland trade is reduced and capital and goods flow, the conversation can move toward developing a permanent maritime infrastructure – such as a regularly scheduled transport service with the sole purpose of serving the needs of the small islands of the Caribbean.

August 18, 2021

* Ryan Sullivan is a master’s candidate in the School of International Service, specializing in International Trade Relations.

U.S.-Southern Cone: Looking at Relations Through a Different Optic

By Noah Rosen*

Top: Display of bottles of Chilean wine/ David Almeida/ Flickr/ Creative Commons License
Bottom: Notebooks from the Plan Ceibal/ Jorge Gobbi/ Flickr/ Creative Commons License

While headlines track the highs and the lows in the United States’ relations with Latin America, a closer look at the broad range of interaction shows that, at least in some sectors in some countries, long-term economic relationships and knowledge exchanges have encouraged mutual benefits that rarely get mentioned in public discourse.

Chile’s wine industry, for example, is a powerhouse that has benefited from U.S. investment, open markets, and research and development work. Chilean wine underwent a sea change beginning in the late 1980s and early 1990s, as liberalization and democratization in the country opened opportunities for massive upgrades in quality and opportunities for export to new markets. Global recognition of the quality of Chilean wine grew throughout the 2000s and 2010s, and today bottled wine is Chile’s third most valuable export after copper and salmon. Exports to the United States in 2019 totaled $238 million, reflecting the vital importance of wine to Chile’s economy.

  • Though Chilean exporters were eventually able to diversify their export markets to include Europe and Asia, the exploding U.S. market in the 1990s and 2000s was key to the industry’s upgrading and expansion. Wines of Chile, a public-private partnership that markets Chilean wines, maintains a permanent U.S. office, runs events throughout the country, and organizes visits by U.S. sommeliers to provide feedback to Chilean producers. Knowledge exchange and technology transfer between experts in California, including the University of California at Davis, and Chilean counterparts has helped Chile’s wine industry stay on the cutting edge of production technologies, spurring advances in genetic identification and sequencing of key Chilean varietals.
  • U.S. foreign direct investment and joint ventures have also promoted innovation, technological advances, and access to international markets. For example, an early partnership allowed Concha y Toro to gain a foothold in the U.S. market and opened the door for other Chilean exporters. California winemakers Robert Mondavi, Kendall Jackson, and Canandaigua have established operations in Chile, bringing with them advanced trellis systems, drip irrigation, and other technology that have led to a marked increase in quality across the sector.

The remarkable success of Uruguay’s technology sector has also been aided by U.S. markets and tech exchanges. Visionary domestic programs such as “Plan Ceibal” in 2007, which promoted nationwide digital literacy and provided a laptop to every public-school student in the country, and investments in some of the fastest internet in the Americas, have helped Uruguay become the largest software exporter per capita in the region and third largest per-capita exporter in the world. However, the importance of the U.S. model and the depth of relationships between the U.S. and Uruguayan sectors have earned it the nickname “Silicon Valley of South America.”

  • The United States accounts for 65 percent of Uruguay’s tech revenue (as of 2019) – the result in part of the marketing and relationship-building by Uruguay XXI, the country’s investment, export, and country brand promotion agency. The agency annually sets up a country pavilion at TechCrunch Disrupt, one of Silicon Valley’s most important tech conferences. U.S. ventures in Uruguay have also played an important role in building the local tech market and providing capital and opportunities for local software developers. Major U.S. software and IT companies, including IBM, Microsoft, Cognizant, New Context, NetSuite, and VeriFone, have established bases in Uruguay and hire Uruguayan developers. In 2017, the Agencia Nacional de Innovación e Investigación (ANII) arranged for the highly recognized U.S. tech incubator 500 Startups to run a six-week accelerator program to build skills for 20 Uruguayan startups focusing on growth, product design, fundraising, and building connections.
  • The opening in 2019 of a Uruguayan Consulate in San Francisco reflects the importance of the relationship with Silicon Valley. The incoming Consul emphasized his mission as “opening doors for Uruguayan businesspeople” and pledged to facilitate connections and provide “softlanding support.” The office will also facilitate two-way knowledge and skills exchanges between Californian and Uruguayan universities and institutions. Last month, Amazon announced that Uruguayan vendors would be eligible to sell products on their platform, thanks to the efforts of the Uruguayan Embassy in the U.S.

These positive relationships — facilitated by governments but driven by private-sector partners — don’t erase all adverse twists and turns in U.S. relations with the region. But relatively quiet successes like U.S. cooperation with Chile’s wine industry and Uruguay’s technology sector provide important ballast. They are lucrative for both sides and provide valued jobs: wine in Chile employs over 100,000 people in direct work and represents 0.5 percent of GDP; the tech sector in Uruguay employs 17,000 people, representing 2 percent of the country’s GDP.

June 25, 2021

* Noah Rosen is a PhD candidate in the School of International Service, specializing in grassroots peace movements in Colombia. This article is adapted from CLALS research on the impacts of U.S. engagement in Chile and Uruguay, supported by the Institute for War & Peace Reporting with funding from the U.S. Department of State

Will U.S. Aid Address the “Root Causes” of the Crisis in the Northern Triangle?

By Fulton Armstrong*

Women carry home their monthly food aid rations through a USAID-funded program in Guatemala/ USAID/ Flickr/ Creative Commons License

U.S. Vice President Kamala Harris’s statements this month on the need to address the “root causes” – including government corruption – of the ongoing surge of migrants fleeing the Northern Triangle of Central America reflects the strong agreement among analysts that lasting solutions will require deep reform within the region, but the Administration’s kid-gloves treatment of those governments risks repeating the errors of the past. Harris and Ricardo Zúñiga, the U.S. envoy coordinating policy toward the area, have emphasized the difficult task of real reform while also addressing the immediate challenge of the humanitarian crises contributing to migrants’ desperation.

  • While recommitting to a campaign promise to spend $4 billion in the Northern Triangle, the Administration last week announced an additional $310 million in emergency assistance to mitigate suffering from recurrent droughts, food shortages, COVID‑19, and back-to-back hurricanes last November. Even before those calamities, 60 percent of Hondurans lived in extreme poverty, and malnourishment stunted the growth of 23 percent of children nationwide. The World Food Program in June 2020 reported that 2.3 million Guatemalans (14 percent) were suffering from food insecurity, and another 800,000 would soon follow. Malnutrition among Guatemalan children under five has skyrocketed.

Addressing “root causes” will be much tougher than sending aid. Zúñiga argues that success will depend on drastically reducing the corruption that robs citizens of state resources and fuels other crime and violence, particularly senior political and military officials’ cooperation with narcotraffickers. Harris has supposedly mentioned this in several virtual meetings with Guatemalan President Alejandro Giammattei and will stress it during a visit to the region in June. The Administration is also creating an “anti-corruption task force” to enforce the policy, and Zúñiga offered $2 million to El Salvador if it pursues a hybrid anti-corruption effort called CICIES. Corruption is an endemic problem in all three countries, but the Harris initiative seems most sorely tested in Honduras, where President Juan Orlando Hernández has emerged as the poster child of what a U.S. District Judge last month called “state-sponsored” trafficking.

  • The U.S. drug convictions of Hernández’s brother, Tony, in 2019 and of trafficker Geovanny Fuentes Ramírez last month both featured apparently credible testimony about the President’s personal role in protecting the flow of narcotics through Honduras to the United States. These allegations come on the heels of waves of evidence of other corruption, human rights violations, and electoral fraud he has engaged in.
  • Nonetheless, the White House has publicly stated that “we are going to work with [Hernández’s] government and … seek areas of common interest.” While U.S. officials have severely criticized Salvadoran President Nayib Bukele – whose migrant flow is a fraction of Honduras’s – for anti-democratic digressions, they have been relatively silent on Hernández. His efforts to portray himself as an indispensable ally appear to have earned him that latitude. Last year, after U.S. concern about trafficking rose, he won brownie points for supporting legislation deterring private jets from entering the country. Recently, he has mobilized the military several times to stop migrant caravans from leaving the country.

This is not the first U.S. Administration to try to cajole corrupt Central American incumbents to become allies in eliminating their own corruption. The humanitarian crisis requires the Harris team to send aid quickly and to collaborate with the same governments that have aggravated, and sometimes caused, people’s suffering. But the Biden Administration hasn’t given an indication yet that it can avoid being taken to the cleaners as previous administrations have, including President Obama and Vice President Biden when they teamed up with the Inter-American Development Bank for the Alianza para la Prosperidad. That initiative cost hundreds of millions but, as the current migration surge indicates, the “push” factors behind it continue to grow. Obama/Biden also made significant efforts – for example, helping CICIG in Guatemala and MACCIH in Honduras begin important processes – but local officials and their elite allies managed to get out from under both.

  • It’s a long shot that, without threats of sanctions similar to those levied against leaders who are not U.S. “allies,” Washington can get these governments to undertake major reforms that would threaten leaders’ wealth and power. But if the United States and others can break the vicious cycle of corruption, bad governance, poverty, and flight in the Northern Triangle, they will be laying the groundwork for breakthroughs far beyond the migration crisis on the U.S. border.

April 30, 2021

Latin America: Impact of the January 6 Insurrection at the U.S. Capitol

By Ilka Treminio Sánchez, Fábio Kerche, and Esteban De Gori*

Tear gas outside the U.S. Capitol on January 6, 2021/ Tyler Merbler/ Wikimedia Commons/ Creative Commons License

AULABLOG invited three Latin American experts to comment on the impact of the events in Washington, DC, last month on U.S. relations with the region.

Ilka Treminio Sánchez*

During the Trump Administration, the United States revealed regrettable signs of institutional erosion and democratic backsliding. The political engine that allowed and promoted these actions was based on polarizing political discourse that shaped a hostile atmosphere toward Trump’s and his supporters’ opponents. This behavior escalated to the point of attacks on the electoral results and the violent assault on the Capitol by Trump’s followers on January 6, the day Joe Biden’s victory was certified. The insurrection failed as institutions upheld the legitimacy of the electoral process and the popular will of the citizens.

For Latin America, and for Central America specifically, this episode signifies the rupture of the myth of democratic exceptionalism in the United States. It reveals U.S. fissures and defects that are characteristic of the hemisphere’s weakest democracies. Central America has many times experienced authoritarianism, populism, violence against the adversary, social violence against ethnic groups, attacks on Congress, and attempts to alter electoral results. The Trump Administration’s actions have seriously damaged the United States’ image as a country that guarantees democracy – and its future governments could lose moral authority in the region on this matter.

  • The January 6 assault could give new life to undemocratic “zombie ideas” in Central America, undermining progress in political and civil rights made in the last decades. It could further embolden efforts to weaken election processes and increase presidential authoritarianism already present in the region.

Fábio Kerche*

The insurrection at the U.S. Capitol and President Trump’s campaign to overturn the electoral results were a sad scene for more than just the United States. Democracy is the regime in which a government can be defeated in an election and then leaves office peacefully. The events in Washington revealed that, even in a country in which democracy was a consolidated regime, it is vulnerable – with profound implications for younger and more fragile democracies worldwide. This includes Latin America and particularly Brazil.

  • It is important to remember that the Brazilian political crisis started when the runner-up in the 2014 presidential elections challenged the results. Fortunately, the U.S. political institutions were still strong enough to overcome the impasse in Washington. The United States’ most recent crisis gives Latin Americans cause to consider what should and should not be done to protect and consolidate democracy across our continent. In Brazil, where President Jair Bolsonaro is trying to reproduce Trump’s style, the failure of the U.S. Capitol insurrection – and the triumph of the country’s Constitutional order – should discourage any imagining that there is a way out of democracy.

Esteban De Gori*

The insurrection was undoubtedly shocking for South America. No government and no citizenry had imagined that a group of persons could occupy the U.S. Capitol as they did, nor that challenges to U.S. electoral processes could be so intense. Among the most powerful events: persons supported by the President overrunning the building and deepening the runaway polarization; the struggle of the democratic system to overcome the challenges to the electoral competition; and, perhaps most profoundly, the erosion of popular faith in the system. Leaders in most of Latin America, with the exception of Venezuela and perhaps others, showed concern and surprise. A crisis afflicting a great geo-economic player in the context of a pandemic and trade war with China could bring greater uncertainties and risks and, especially now, few opportunities.

  • The insurrection and the singularly belligerent government of Donald Trump are not the only things driving reassessment of the United States as a promoter of democracy and the rule of law. Since 2008, to take the financial crisis as a point of reference, doubts about the effectiveness of the country’s political system have deepened. That discomfort helped bring Trump to power as it eroded faith in the political system and its ability to balance desires and demands. The early statements and actions of the Biden Administration suggest awareness of this discomfort and willingness to begin addressing it.
  • The events (and Biden’s efforts to overcome them) do not appear likely to significantly change the U.S. relationship with Latin America. The pandemic and other challenges to democracy have placed extraordinary pressure on the region’s leaders, for whom the images of U.S. insurrection may have engendered even a certain empathy. They now know that parliaments and democratic institutions can be illegally occupied; that debate can go horribly awry; that polarization can seriously deepen in any country of the hemisphere.
  • More than the turmoil in Washington, the pandemic and its economic consequences appear likely to influence U.S.-Latin America relations. Joe Biden will probably remain focused on the country’s customary interests in the region – no great changes – although with less belligerence than Donald Trump. China, the other great regional power, will continue to promote its position without big conflicts or stridency. Even if the United States retains its economic edge in Latin America, its problems – and China’s gradual expansion in the region – put Washington on the downward path typical of a great power in decline.

February 11, 2021

* Ilka Treminio Sánchez is the director of La Facultad Latinoamericana de Ciencias Sociales (FLACSO) in Costa Rica, and a lecturer and researcher at the University of Costa Rica, specializing in electoral processes, political behavior, presidential reelection, and Latin American comparative politics.
* Fábio Kerche is a professor at UNIRIO and IESP-UERJ in Rio de Janeiro. He was a CLALS Research Fellow in 2016-2017.
* Esteban De Gori teaches sociology at La Universidad de Buenos Aires and is a researcher at Argentina’s Consejo Nacional de Investigaciones Científicas y Técnicas (CONICET).