During the two day visit, students discussed key developments affecting the Americas today with experts from the School of Foreign Service, Department of Government, and the McCourt School of Public Policy at Georgetown University and from the Official Monetary and Financial Institutions Forum and Inter-American Development Bank.
Session 1: U.S. Foreign Policy on Latin America and the Caribbean
Michael Shifter, adjunct professor at the Center for Latin American Studies in Georgetown University’s School of Foreign Service, began by sharing the historical context for the political realities and foreign policy challenges in the region today. He identified the 1990s, notable for the push towards free trade and the consolidation of democracy, as the most productive moment of U.S. engagement with Latin America and the Caribbean (LAC).
Since then, the region has changed significantly due to the rise and fall of commodity booms and the lack of regional cooperation, as well as more recent and increasing engagement with China. Shifter also pointed out how changes in domestic U.S. politics have complicated the U.S.-LAC relationship, as the concept of “America First” has taken hold and both major U.S. political parties view Chinese influence in Latin America as a threat. On the economic front, increased polarization has made policy issues like migration too controversial for U.S. leaders to effectively address.
"Today there are two central issues for the United States in relation to Latin America: migration and the influence of China." - Michael Shifter
In addition, Shifter spoke on what to expect from LAC political leaders such as Brazil’s president Lula de Silva. He posited that Brazil’s foreign policy in the coming term will likely focus on bolstering Lula on the international stage, citing as an example Lula’s position in the push for a peace deal in the war in Ukraine. Similarly, Shifter noted that Lula has the ability to pressure the United States by using Brazil's relationship with China as a bargaining chip.
Shifter concluded by recommending that the United States engage with LAC in meaningful ways, taking advantage of its proximity and historic presence in the region instead of focusing on competing with Russian or Chinese influence. The United States should also strengthen its relationships with state- and regional-level actors in LAC—a strategy that China is already implementing.
Session 2: U.S. International Financial Policy
The group then heard from Mark Sobel, U.S. chairman at the Official Monetary and Financial Institutions Forum (OMFIF), on U.S. international financial policy. Sobel presented a brief overview of the origins of international finance institutions (IFIs) like the International Monetary Fund (IMF) and the World Bank, along with the rise of forums like the G20. He also discussed the role that IFIs play in responding to emerging crises around the world, using Argentina as an example to illustrate that IFI programs are not flawless.
“If Argentina decides to default on its IMF commitments it will leave a huge black mark in the country’s history. Argentina has always paid the IMF, even in its darkest moments. There is no need to default though, because of this never-ending restructuring.” - Mark Sobel
One issue with the current IMF program in Argentina is that refinancing does not take inflation into account. According to Sobel, Argentina—which suffers from low savings, low productivity, high deficits, a history of defaults, low competitiveness, high inflation, and a balance of payments crisis—will only achieve economic stabilization by adhering to a tight fiscal path.
Session III: U.S. Foreign Policy and the Geopolitics of the Twenty-First Century
In the third session Matthew Kroenig, professor in the Department of Government at Georgetown University’s College of Arts & Sciences, presented to CIAS students on geopolitical challenges facing the Western Hemisphere.
Kroenig first gave an overview of the current international liberal order that was set in place following World War II, led by the United States and its allies through NATO and other multilateral organizations. This order has created massive economic growth and globalization along with social and economic inequality.
Kroenig indicated there is broad consensus that the main threat for the United States is China. As geopolitical tensions rise, there is growing pressure to rethink sensitive areas of trade like computer chips; however, he predicts continued trade between the two powers in areas not critical to national security.
“In [the] context [of security] the main focus areas of the United States are Europe, Asia, and the Middle East, where the major concentration of people, power, and wealth are located. Latin America is thus relegated in terms of resources and attention.” - Matthew Kroenig
Kroenig sees Putin as a less serious threat because Russia is no longer an economic or environmental power. In Kroenig’s view, many policymakers view Russia as a near-term distraction from the more existential threat that is China.
Session IV: American Politics and Political Campaigns
Jonathan Ladd, associate professor in the McCourt School of Public Policy at Georgetown University, discussed the relationship between U.S. political parties and the media in the last 70 years.
Ladd explained that in the 1960s, there was broad support for the media in the United States across the political spectrum. Starting in the 1970s, key conservative leaders began to push a narrative that discredited the media during the Richard Nixon years, igniting a conservative distrust in the media, while people who leaned more liberal avoided outlets that were perceived to be conservative. Ladd noted that the combination of Donald Trump’s denigration of mainstream media and years of increasing polarization have pushed confidence in the media to an all-time low. When polled, conservatives recurrently show declining confidence in most media outlets, while liberals show more stable numbers.
Ladd also explored the concept of personal “media diets” and showed how politicians are influenced by their media preferences. Through historical examples that ranged from U.S. Supreme Court justices to recent presidents, he demonstrated how increasingly politicians are also polarized in the sources from which they gather information. This is a problem for democracy: without agreement on the sources and the facts, there can be little agreement about anything else. Ladd concluded by highlighting parallels in Argentina, showing the CIAS students how media polarization is a trend that affects all democracies.
Session V: Regional Integration and Trade Policy
On the second day of their visit, Antoni Estevadeordal, formerly of the Inter-American Development Bank (IDB), spoke with students on the role technology, policy, and politics play in globalization and trade.
Hyperglobalization took place from 1974 to 2008 accompanied by an information and communications revolution, as well as geopolitical changes like the fall of the communist bloc and the rise of China. There were major policy shifts in the Western Hemisphere towards open trade, regional trade agreements, and multilateral liberalization. A result of these shifts was highly fragmented global production in high-, medium-, and low-complexity goods.
“Since 2008, [growth] has stabilized, however some people say that it is going to start to go down.” - Antoni Estevadeordal
Those same three drivers are now reshaping global value chains. New technologies like automation and 3D printing are changing how products are manufactured, while the politicization of globalization and U.S. commercial policies in the wake of the COVID-19 pandemic create vacuums in spaces the United States once occupied. For example, Trump’s decision to abandon the Trans-Pacific Partnership (TPP) gave Japan and China opportunities to play a leading role in the Pacific with trade agreements like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP).
Latin America and the Caribbean will need to explore strategies to engage with competing global powers, which could involve taking on a North American Free Trade Agreement (NAFTA) model, continuing with traditional trade agreements, or reorganizing relations at a regional level. Estevadeordal warned against pursuing bilateral approaches to trade as fragmentation will be increasingly dysfunctional in a world of large economic blocs. Although there has been much talk of regional economic integration in recent years, there have not been many concrete examples of success.
“China and Latin America is not a new relationship, there has been trade since the 1700s.” - Margaret Myers
The Going Out Strategy (1990-2013) was a period characterized by the internationalization of Chinese state-owned enterprises (SOEs). The country’s priority was finding new markets for China’s exports, and Chinese industries made their way into natural resources, concentrated in the energy sector. This period was followed by the era of the Plenum Reform (2013-2018). Myers noted a crucial moment for the country was the election of Xi Jinping, under whom the Belt and Road Initiative (BRI, 2018-present) was created to enhance connectivity with the rest of the world. At the same time, China experienced a period of expansive domestic reform, with a key result being a new focus on transport infrastructure development in Latin America.
The latest era of Sino-LAC relations is dominated by the BRI, a context in which China and Latin America find themselves increasingly bound, both economically and beyond. Trade is driven by the mineral and energy sectors, as well as an added focus on technology and innovation investments in the region. This era is also characterized by localization, with commercial deals being made at provincial, state, and municipal levels. During this time, the Chinese government began to publicly classify their relationships with Latin American countries; however the official meanings behind these rankings remains unclear. Myers also noted that joining the BRI at this point is more of a political than economic move, as non-member countries still receive investment from China. The inclusion of LAC countries in the BRI is politically meaningful for both LAC and China because it makes the initiative a global phenomenon.
Looking into the next era of China-LAC relations, Myers said key factors to monitor will be the nature of China’s stimulus measures and related reforms, LAC’s investment in the environmental sector, and China’s appetite for strategic investment in the region. Today, there is less focus on BRI as new initiatives at the local level develop. Investment in technology and infrastructure innovation will continue to drive the economy, while on the political side issues like Taiwan and competition with the United States will continue to be significant factors.
Session VII: Latin America and the Caribbean Economic Outlook
In the final session, Alejandro Werner, founding director of the Georgetown Americas Institute, first discussed the economic outlook for the region as a whole before focusing on the current economic situation in Argentina. Werner noted that LAC’s focus should be to achieve more equitable and sustainable growth in the coming years.
Rejection of established political forces and an affinity towards populist or anti-establishment leaders is trending in the region. Countries like Mexico, Colombia, and Brazil are seeing more state intervention in the economy, with leaders moving away from using private middlemen and increasingly using public institutions as public policy tools. In Chile, although the 2022 referendum on the new constitution failed, there has been progress to create a framework that balances the priorities of different social and economic groups and provides social coverage and the financial structure to support it through legislative changes.
Werner addressed the economic situation in Argentina and examined the country’s relationship with the IMF, which has shifted significantly under different administrations. Argentina’s current leadership disagrees with the IMF on basic economic principles, like the cause of inflation. The most 2018 IMF program would have benefited from more fiscal direction, a clearer direction of exchange rates, and a simplification for the capital control frameworks.
There were many mistakes in the design and implementation of the 2018 IMF program in Argentina, leaving three options: intensive therapy, debt restructuring, or an intermediate loan program. Werner noted that the IMF cannot move at the speed that financial crises require, and the organization needs a faster process for redesigning policies. Overall Werner warned that economic recovery in Argentina is going to be difficult.
Throughout the two-day exchange, experts and students shared insightful conversations on the economic, political, and social issues facing Latin America and the Caribbean today. GAI looks forward to continued collaboration with the CIAS program in the coming years.