In February 1915, John Casper Branner, the second president of Stanford University, published an article in Science titled “Patronizing the South American Republics.” In his article, Branner tells of Mr. John Doe, a “distinguished North American” who, after announcing that “South America is waking up” to a group of fellow North Americans, was told by the men, “It is Mr. John Doe who is waking up.”
One hundred years later the United States and its Messers Doe are still waking up.
While the United States has been asleep, South America has been diversifying its political and economic connections and portfolio. Intent on being more than a verdant necklace of “banana republics,” South America spent the 1990s implementing the “first stage policy reforms” mandated by the “Washington Consensus.” Exports soared and South America’s appetite for a new era of globalization was piqued.
South American exports to China grew an average annual rate of 23 percent between 2006 and 2011. Similarly, the region’s exports to the European Union doubled between 2003 and 2012. As a result, by 2012, South American and Caribbean’s gross domestic product had tripled to $5.3 trillion from the last decade. Meanwhile the United States was still seeking solid ground following the economic crisis of 2008.
To be clear, the United States remains an influential economic actor in South America. The U.S. is a significant trading partner for virtually every major country in the hemisphere, and total U.S. trade with Latin America is still three times that of China’s. Additionally, the U.S. is the largest source of foreign direct investment for South America, accounting for nearly a quarter of the total $175 billion in 2012, according to the UN Economic Commission for Latin America and the Caribbean. By comparison, Chinese foreign direct investment in the region is approximately $10 billion per year.
Despite these economic figures, the U.S.’s role as a political ally seems to be diminishing, while its rivals are gaining ground. More important, South America seems to be looking eastward for new political friends.
For instance, several indicators of increased Iranian activity in the region exist. Countries that belong to the regional bloc created by former President of Venezuela Hugo Chávez, the Bolivarian Alternative of the Americas (ALBA), have signed a number of cooperation agreements with Iran to manufacture agricultural machinery and establish cement plants, hydroelectric developments and mining projects. And there is limited information about the Iranian-controlled factories already operating in remote areas in Venezuela and Bolivia, raising allegations that they could be manufacturing weapons. Finally, there is suspected cooperation between Iranian extremists and narco-terrorist organizations in the region.
South America has rightly set its sights beyond El Norte, but the United States should be asking itself how does it remain relevant and safe in the region? Of course, the U.S. could revert to its paternalistic past and attempt to treat South America as if it is merely “America’s backyard” subject to Washington D.C.’s control. But such behavior would likely fail and only widen the gap between the North and the South. The result would be increased anti-American sentiment and closer relations with nefarious anti-American nations.
The U.S. should wake up and acknowledge South America’s independence and growing power. This requires approaching the region as a neighbor and partner with whom prosperity and regional peace can be pursued — in much the way the administration of President Barack Obama has started. A few agenda items that would be worth exploring are listed below:
- Partner with South America, especially Brazil, to develop Cuba. A vibrant, independent Cuba would benefit everyone in the region.
- Develop a coherent trade strategy. The U.S. can improve intra-regional trade and help develop a regional strategy for Chinese investment and trade —something that is sorely lacking today. Part of this should involve investing in intra-regional infrastructure, long lacking and long a hindrance on commerce among the countries in the hemisphere.
- Tackle corruption. The implementation of evidence-based programs to counter corruption and promote civil society involvement in monitoring and preventing corruption would improve the lives of millions, increase GDP growth and indirectly address other issues that strain the U.S.’s relationship with South America, such as immigration.
- Partner with countries and regional associations to develop critical areas such as infrastructure, security, renewable and green energy, health and education.
- Finally, improve U.S. immigration policy toward Latin American immigrants who arrive as minors. Specifically, childhood arrivals should have the opportunity to obtain permanent residency or citizenship status by graduating from an accredited college or enlisting in military service. Such a policy acknowledges the unique circumstances of minor immigrants and would liberate both the immigrants and their birth nations from the extraordinary burdens and risks associated with the deportation of minors.
In short, we must build a relationship with Latin America as we have done with other allies. To start, the U.S. needs to consult with Latin America to develop solutions to societal problems and a vision of our shared destiny.
Jo Christine Miles is pursuing a Masters in International Affairs with a concentration in economic and political development at the School of International and Public Affairs at Columbia University. Jo Christine practiced law focusing on cross-border corporate restructuring for over ten years before matriculating to SIPA.