


Welcome back to Foreign Policy’s Latin America Brief.
The highlights this week: The White House unveils details of a new U.S. economic strategy toward the region, Brazilian authorities probe possible plans for a Hezbollah attack, and Chileans weigh yet another draft constitution.
Getting Down to Business
Last Friday, U.S. President Joe Biden hosted leaders from Latin America and the Caribbean at the White House for a follow-up event to the June 2022 Summit of the Americas. The atmosphere at the two events was markedly different, reflecting how U.S. economic statecraft toward the region has evolved over the past year.
As the host of the rotating summit, the Biden administration used the 2022 meeting—held in Los Angeles—as a big moment to showcase its Latin America policy. But it was overshadowed by boycotts. The presidents of Mexico, Bolivia, and Honduras stayed home to protest the fact that Venezuela, Cuba, and Nicaragua had not been invited—an omission that Washington claimed adhered to the pro-democracy theme of the event. Little progress was made on the key regional issue of economic development; migration policy fared slightly better, yielding a declaration on joint principles.
The elephant in the room was China: Beijing has drawn closer to Latin American countries over the past two decades, thanks to bilateral trade and loans for infrastructure projects. The United States has pressured countries in the region not to make deals with Chinese firms but has been slow to offer alternatives.
At last year’s summit, U.S. officials said they planned for stepped-up economic engagement in Latin America without providing many details. But this time around, at the White House, officials from the U.S. government and Inter-American Development Bank (IDB) touted a recently launched program to pair U.S. companies with projects in Latin America seeking investment.
The IDB will organize “roadshows” of events across the United States to inform U.S. firms about investment-ready projects in Latin America. U.S. government agencies, such as the International Development Finance Corporation and the Department of Commerce, will work to facilitate some of those deals. Furthermore, U.S. Treasury Secretary Janet Yellen reiterated that she was seeking approval from the U.S. Congress to increase the amount of money that the IDB has available to lend. (The United States is the bank’s largest shareholder.)
The event also touched on the economics of migration policy. The United States and Canada, along with extra-regional partner countries South Korea and Spain, pledged to jointly provide $89 million in grants for migrant-hosting communities in the Americas. Washington separately earmarked further funds for communities hosting Venezuelan migrants, who are mostly concentrated in Colombia, Peru, Brazil, Ecuador, and Chile.
The White House said that last week’s events were open to all Western hemisphere countries that shared the United States’ “values and vision.” Unsurprisingly, Venezuela, Nicaragua, and Cuba did not participate. Two democratic and generally more closed economies—Brazil and Argentina—stayed home, too. In all, eight Latin American and Caribbean heads of state traveled to Washington.
The White House’s choice to work with the IDB to accomplish its economic goals reflects how the protectionist mood in Washington has effectively ruled out a more traditional tool of economic statecraft: the free trade agreement. During both the Trump and Biden administrations, Ecuador sought a free trade deal with the United States but was unsuccessful due to opposition on Capitol Hill; Quito subsequently signed a free trade deal with China in May. Working through the IDB to get more private sector money flowing to Latin America is less straightforward than signing a trade deal, but it doesn’t require congressional approval.
“I’ve regained optimism about our relationship with the United States,” Uruguayan President Luis Lacalle Pou said at an IDB-hosted event on Nov. 2. Mexican Foreign Minister Alícia Barcena also struck a positive tone at the same forum, saying she hoped to step forward on a path of “economic partnership.”
While the White House-led summit was designed with an eye to competing with China, IDB President Ilan Goldfajn suggested in an interview with Bloomberg earlier this year that he wanted to steer the bank’s work away from U.S.-China polarization and focus on goals related to economic growth. Next year, the IDB will take the rotating leadership position of a new group of global and regional development banks. The group is coordinated by the World Bank and has pledged to cooperate more closely to lend more quickly and at greater scale. Members include the New Development Bank, known colloquially as the BRICS bank, of which China is a founding member.
China is cooperating more with Western lenders in other ways, too. A report on overseas Chinese lending released Monday by researchers at the College of William and Mary found that China is increasingly working with Western commercial banks and groups such as the World Bank, where there are stronger due diligence standards for making loans. China’s overseas lending is generally opaque, and critics say Beijing has a track record of providing loans to countries that are unlikely to be able to repay them.
Taken together, U.S. efforts to increase its economic footprint in Latin America coupled with China’s moves to increase the quality of its lending are good news for the region.
Upcoming Events
Sunday, Nov. 19: Argentina holds a presidential runoff election.
Friday, Dec. 1: Brazil assumes the presidency of the G-20.
What We’re Following
Brazil’s anti-terror operation. On Wednesday, Brazilian police carried out searches in three regions as part of a probe into suspected plans for a terror attack, arresting two people. The office of Israeli Prime Minister Benjamin Netanyahu said Israeli intelligence had worked with Brazilian security services to foil an attack planned by Lebanese militant group Hezbollah against Israeli and Jewish targets inside Brazil.
Hezbollah is backed by Iran and, along with Hamas and other groups, is part of its so-called axis of resistance against Israel. Since the onset of the Israel-Hamas war, Hezbollah and Iranian-backed proxy groups in Iraq and Syria have targeted Israel as well as U.S. troops in the Middle East. The United States has responded by striking weapons depots and other sites used by Iran and its proxies in Syria.
The arrests in Brazil set off alarms in the country, which is home to Latin America’s second-largest Jewish population. Brazilian and U.S. authorities have issued alerts over the years about suspected Hezbollah activity in the border region between Brazil, Argentina, and Paraguay, but the group has never carried out an attack in Brazil.
Argentina designated Hezbollah as a terrorist organization in 2019, but most other Latin American countries, including Brazil, have not done so. Hezbollah is widely understood to have bombed a Jewish community center in Buenos Aires in 1994. Douglas Farah, a national security expert at IBI Consultants who studies Hezbollah in Latin America, said that the group has been able to maintain a presence in Brazil because the country is so large and has bigger security priorities than Iranian proxies.
As for why Hezbollah or its patron Iran might want to carry out an attack in faraway Brazil, rather than closer to home and the Israel-Hamas war zone, Farah said, “What they look for is targets of opportunity. I would imagine that there are plans or thoughts that are underway in multiple countries,” rather than a sole plan to attack Brazil. Targeting Latin America also demonstrates to the United States that if “you’re screwing with us close to us, and bombing our depots in Syria,” then “we can get to you near your homeland as well.”
Peruvian Foreign Minister Ana Cecilia Gervasi arrives to attend the Amazon Summit at the Hangar Convention Centre in Belem, Brazil, on Aug. 9.Evaristo Sa/AFP via Getty Images)
Top diplomats step down. The foreign ministers of Uruguay and Peru resigned over the past two weeks. Though the scandals that ended their careers are unrelated, they shed light on political dynamics in both countries.
In Uruguay, Foreign Minister Francisco Bustillo resigned on Nov. 1 after news site Busqueda published leaked audio messages from 2022 in which Bustillo appeared to obstruct a probe into the issuance of a passport to a known drug trafficker. The scandal originally came to light last year, but at the time, no evidence surfaced implicating Bustillo; instead, a deputy foreign minister stepped down.
The new audio suggests Bustillo told colleagues to hide their correspondence with the drug trafficker. The passport obstruction scandal was major news both last year and this one in a country that usually gets good marks in anti-corruption rankings. Uruguay’s former deputy foreign minister is cooperating with an ongoing government investigation into the case.
In Peru, Foreign Minister Ana Cecilia Gervasi stepped down on Monday after facing outrage over her failure to schedule a bilateral meeting between President Dina Boluarte and Biden at the Washington summit last week. Under other circumstances, this could be written off as a simple error, but the appearance of international legitimacy is important for Boluarte, who has little domestic public support due to her security forces’ heavy-handed crackdowns on opposition protesters.
The making of Milei. A new podcast titled Without Control, from El País and Argentina’s Anfibia online magazine, explores the unusual personal story and eccentricities of far-right Argentine presidential candidate Javier Milei. In one episode, the show unpacks Milei’s successful mission to clone his beloved English Mastiff, Conan, into five copies. Conan was an important source of emotional support for Milei after he suffered a childhood of domestic abuse, the podcast explains. If Milei is elected, the dogs would make up Argentina’s first family, as Milei is unmarried.
The podcast also considers how the gig economy has fueled Milei’s rise. Argentina’s ruling left-wing Peronist movement touts its legacy of guaranteeing labor rights such as sick leave and vacations to workers, but an increasing number of working-class Argentines don’t have formal labor contracts and work in more precarious app-based jobs, such as via Uber and Rappi, a food delivery service. While the Peronists say they are against the privileges of big money, today “an employed worker with labor rights is in a position of privilege,” sociologist Melina Vazquez told the podcast. For workers without those rights, Peronist rhetoric can appear hollow.
Question of the Week
What is Milei’s party called?
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In Focus: Chile’s Second Constitutional Vote
Chilean President Gabriel Boric receives the text of Chile’s proposed new constitution from the president of the Constitutional Council, Beatriz Hevia, during the closing ceremony of the Constitutional Process at the Hall of Honor of the National Congress in Santiago on Nov. 7.Pablo Vera/AFP via Getty Images
For the second time in two years, Chileans are sizing up the draft of a new constitution ahead of a nationwide vote about whether to adopt it.
On Tuesday, President Gabriel Boric officially received the latest draft constitution from its writing committee, which is dominated by the far-right Republican Party. Last year, Chilean voters rejected a previous draft constitution, written by a mostly left-leaning and independent drafting committee, because many saw the document as too progressive. That prompted Boric to endorse a do-over of the entire process. The initial rewrite was greenlit by politicians as a way to channel the discontent of mass anti-government protests in 2019.
The language in the new draft, however, has alarmed left-wing parties so much that many—including the parties in Boric’s governing coalition—have publicly come out against it.
The new document says that Chile’s “law protects the life of the unborn,” a line that some warn could lead to the full criminalization of abortion. Currently, the procedure is only legal in cases of rape, fetal inviability, and risk to a pregnant person’s life. The draft also includes phrasing that pro-democracy activists worry could place people convicted of crimes during Chile’s dictatorship under house arrest as opposed to remaining in prison.
Polls suggest that the draft will be rejected, though the poll gap has narrowed in recent weeks. Boric says that if the document is voted down, there will be no third attempt to write a new constitution. Chile will instead stick with its current one, drafted during the dictatorship of Augusto Pinochet.