For Latin America, being ‘pro-American’ means disaster

In their recent Foreign Policy piece, Carsten-Andreas Schulz (assistant professor in international relations at Cambridge University) and  Tom Long, (affiliated professor at the Center for Research and Teaching in Economics in Mexico City) argue that the Monroe Doctrine is making a come back in Washington, including talks about military intervention in neighboring Mexico. According to the two experts, the White House’s “warnings about China’s growing footprint in the Western Hemisphere carry a distinctively Monroeist undertone.” Latin America has, after all, been the stage of great power competition between the US and China, and also between the former and Russia.

In order to understand how a supposed, outdate conception such as the Monroe Doctrine could possibly reemerge, implicitly and explicitly, in American discourses one has to keep the following points in mind:

1. In the de-industrialized world, geoeconomics meets geopolitics: insulating industries from geopolitical disputes is now increasingly hard.
2. In this context, we live in an age of economic warfareand the superpower who weaponizes the economy and its currencythe most is the United States of America with the dollar leverage.
3. As part of that, the US-led West has been mostly pushing a New Cold War paradigm of “alignmentism”, wishing for nations to “pick up a side.”
4. At the same time, most of the Global South now, to a greater or lesser extent, pursues, non-alignmentand multi-alignment, as shown by Saudi Arabia, Brazil, India, Indonesia, and Egypt – with echos even in Europe, as seen in the (thus far timid) German and French attempts at “strategic autonomy”.
5. Thus, American attempts to pressure partners and allies into some kind of unconditional alignment have the potential to backfire, as seen in Asia, and the Middle East.
6. To make matters worse, more often than not, Washington economic war-gaming hurts its partners and allies, as exemplified by US President Joe Biden’s subsidy war against Europe, with Taiwanbeing yet another instance, in the context of the chip war. Albeit often counterproductive, such an approach is still employed by the Atlantic hegemon, for reasons that might have to do with the inertial resilience of paradigms, embedded as they are in several institutions and policies, not to mention the hubris that often accompanies superpowers.

The above context provides a framework that enables one to grasp part of the logic behind American campaign pressures in Latin America. With regards to that part of the world, Washington is mostly interested in exploiting its resources, as exemplified by hydropolitics of pressuring Brazil over the Amazon issue, while keeping China, and also Russia, “away” – albeit without necessarily offering Latin American nations anything more attractive. In fact, in Latin America particularly it is arguably becoming increasingly clear that being “pro-American” simply does not pay off.

One has merely to consider initiatives of former Brazilian president Jair Bolsonaro, defeated in October 2022 elections. After being consistently “snubbed” by Washington, Bolsonaro ended up seeking cooperation with Moscow for its nuclear submarine project at the end of his term. Or consider the newly elected “pro-American” leaders in the continent (and they are many), ranging from center-left to the far-right, be it Javier Miley of Argentina, Luis Lacalle Pou of Uruguay, Mohamed Irfaan Ali of Guyana, or Daniel Noboa of Ecuador, among others. In each and every one of these cases, these leaders have brought huge economic, political, military or social problems upon their nations, due the complexities of their domestic realities, but always made worse by American pressures.

Argentina’s Milei is of course an extreme case. On November 29, he met with top US officials in Washington and took his economic team to a meeting with IMF officers. The IMF did not seem to be so happy about the meeting, though. Milei’s economic measures are controversial, to say the least – and could mean a “nightmare” to Argentines, according to Michael Stott, the Financial Times’ Latin America editor. They involve devaluing the Argentinian currency, the peso, by over 50% as part of “emergency” measures”.

During his campaign, Milei promised to “get rid” of the peso by replacing it with the dollar. Such a dollarization move, for all practical purposes, would take away the Argentinean Central Bank’s role in the country’s economy, while handing it to the US Federal Reserve – this amounts to fully giving up any autonomous monetary policy. This plan has not been abandoned. According to a statement signed by several leading economists (including the likes of Jayati Ghosh and Thomas Piketty), the poor exchange rate in this case would place the “burden of adjustment” on “working people”, bringing about a real wages decline and more inflation. “Geopolitically-wise”, he has pledged not to join the BRICS trade group.

The Argentinian president has employed vicious rhetoric against Brazil and China, which are among Argentina’s main trading partners. In response to such signaling, Beijing has reportedly suspended US$6.5 billion in credit swaps to the South American country.

While Washington demands its Latin American partners decouple from China, the truth is that the US itself cannot safely “decouple” from China or, to use the trendy term now, “de-risk”. In addition, Latin American countries such as Brazil need the nitrogen, potassium and phosphates (the three main fertilizers) supplied mostly by Russia and Belarus,  and not all countries in the region are willing to sacrifice their own economies as Europe has shown itself to be – for the sake of cold war “alignmentism”. Moreover, in terms of intergovernmental organization and multilateral forums, all the US-led West has to offer to Latin Americans are the likes of the Organization of American States (OAS) and the Lima Group. It is no wonder that BRICS has been gaining traction, as states seek alternatives and parallel mechanisms.

As mentioned, even Bolsonaro saw the light, albeit too late, and even a traditional American ally such as Colombia is currently negotiating with Beijing to build “an alternative to the Panama Channel” – not to mention, moving from the Americas to West Asia, Saudi Arabia’s recent pivoting to Asia in the context of the emerging de-dollarized world. Eventually, although it seems very unlikely now, even Milei might see it too. As is the case with so many other American approaches, today’s neo-Monroeism is bound to backfire.