A little more than two years ago, there was cautious optimism that Washington’s relationship with Latin America could be transformed with the inauguration of the Biden administration. In much of the region, there was the hope that an emerging “pink tide” of left-wing governments could respond to the challenges of recovering from the social, political, and economic impact of the Covid-19 pandemic. The juncture seemed all the more defining in the context of the radically changing dynamics of global geopolitics and the world economy.
The moment never quite arrived. Developments globally, inside Latin America, and in the United States have blown past the promise of early 2021.
The current political reality in Latin America is more fluid, complex, and challenging than ever—and it remains unclear if the region will fully embrace the significant potential that exists for economic transformation and deeper integration into world markets. The relationship between the United States and many countries appears to be growing more distant as Washington deals with pressing national and other global priorities and Latin American governments are consumed by domestic challenges and actively pursue multi-alignment.
These trend lines can be examined under three broad headings: developments inside the region, Latin America’s evolving relationship with the global economy, and the state of U.S. ties in the region. In doing so, the political and economic crossroads facing the region become more evident—as do the challenges to deepening hemispheric ties in the near term.
The outgoing Trump administration’s nationalistic focus had deepened long-standing questions about whether Latin America would ever be more than an afterthought to other policy priorities for the United States. In the region itself, years of slow growth, rising corruption, the emergence of illiberal democracies, growing inequalities, and the ravages of the Covid-19 pandemic raised questions about the ability of democracy to deliver. Predictions of a coming lost decade of growth in Latin America were widespread.
There were, however, significant changes underway in 2021 that offered new opportunities to the region and the United States. The deficiencies of global supply chains lent greater urgency to the debate over nearshoring production in Latin America. The region’s rainforests, renewable and hydrocarbon energy resources, and its supplies of critical minerals were taking on greater significance, with climate change back on the agenda for Washington and major investments in energy transition underway across the world. An accelerating technological revolution was taking off in Latin America, and there was talk of revitalizing international financial institutions to include the Inter-American Development Bank (IDB).
With the growing trend of regionalization, prospects for greater integration in the hemisphere also appeared to be improving. Countries were recovering more rapidly from the ravages of the pandemic than predicted, and new governments were focused on internal transformations to promote social justice and the modernization of their economies.
Additionally, the inauguration of President Biden in January 2021 promised a U.S. administration with a stated intent to deal with the region as a partner, and a willingness to engage with the new leaders of Latin America. The shift recognized reality: left-wing governments elected across 2020 and 2021 in Peru, Chile, Bolivia, and Honduras consolidated the pronounced political shift that began with the victories of Andrés Manuel López Obrador in Mexico and Alberto Fernández in Argentina in 2018 and 2019. They would be joined in 2022 by Gustavo Petro in Colombia and Luiz Inácio Lula da Silva in Brazil.
The stage seemed set for the region, and for its relations with the United States, to undergo renewal—notwithstanding the quiet anxiety many longtime Latin Americanists had about failed such efforts in the past.
Things did not develop quite as anticipated. The election of left-of-center governments did not lead to the transformations that many Latin American voters expected. Regional politics resisted easy generalizations, with implications for reforms, economies, and governance.
In the United States, the conflict in Ukraine, concerns about China, and major domestic initiatives like the Inflation Reduction Act consumed policy time and resources. As CIA director William Burns recently noted, “priorities aren’t real unless budgets follow them.” The FY 2023 request for the region was $2.4 billion, compared to $75 billion for Ukraine in a little over a year—a stark contrast even considering the demands of the conflict in Europe. The partial relegation of other foreign policy priorities was inevitable, but in the case of Latin America, it was compounded by a largely skeptical Washington view of the region’s new governments, and domestic concerns about the surge of irregular migrants distracted from advancing a more innovative hemispheric agenda.
A May 2008 Council of Foreign Relations report stated that “the era of the United States as the dominant influence in Latin America is over.” Countries “have expanded relations with others, including China” and “US attention has also focused elsewhere.” The corollary: “a region shaping its future far more than it shaped its past.”
These conclusions would not be out of place today; the context, however, is profoundly different.
In understanding how Latin America and the United States arrived at this point, it is important to avoid succumbing to the tendency of looking at the “pink tide” in Latin American politics as a challenge to democracy and U.S. goals in the region.
The pendulum swing leftward is part of the natural order of democracies, rather than an anomaly or threat. Just four years ago, Mexico, Brazil, Argentina, Peru, Chile, and Colombia were led by right-of-center governments. They in turn were the product of a voter backlash that led to the ouster of the largely left-of-center governments that prevailed in the 2000s but had lost their luster and direction in the 2010s.
It is not surprising, therefore, that leftist governments won power across much of Latin America after a decade of economic decline and the impact of the Covid-19 pandemic. In 2020, former IDB president Luis Alberto Moreno wrote that the region was shrinking economically more than any other part of the world, with tens of millions of people returning to poverty-level existences. It was thought that it would take a decade to return to pre-pandemic levels of GDP. With 8 percent of the world’s population, Latin America suffered more than 30 percent of global deaths from Covid-19.
