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Article • Rev. Bras. Polít. Int. 67 (2) • Oct 2024 • https://doi.org/10.1590/0034-7329202400221 linkcopy

Open-access Infrastructure as a Geopolitical Lever: Strategic Dynamics in Latin America’s Global Power Struggle

AuthorshipSCIMAGO INSTITUTIONS RANKINGS

    Abstract

    Infrastructure development is a strategic axis for Latin America, historically hindered by various challenges. In the 2000s, regional initiatives like IIRSA and COSIPLAN aimed to enhance infrastructure and competitiveness. However, political and economic instability disrupted these efforts, leading to the dismantling of regional efforts, as seen with the South American Nations Union (UNASUR). Despite this, infrastructure development continued, driven by various actors that used it to expand their influence. Between 2014-2015, China emerged as a key player in financing infrastructure, prompting the U.S. and the EU to launch initiatives to counterbalance China’s influence in the region from 2019-2021. This paper underscores the importance of infrastructure in Latin America as a geopolitical lever to analyze global power struggles in the region.

    Latin America; Infrastructure development; Geopolitics; BRI; Global Gateway; Growth in the Americas

    Introduction

    Although seen as a key feature for national development and economic growth, infrastructural development has always been an issue in Latin America, which faced asymmetries and inequalities. At the sub-regional level, the creation of the South American Regional Infrastructure Integration Initiative (IIRSA) in 2000 marked the multilateral effort to overcome this troublesome scenario, in the context of the failure of the neoliberal agenda in South American countries and the return of the “development agenda” in the political and economic programs.

    Throughout its existence, its main investment sources were the private sector, the National Treasure of its members (mainly Brazil), the Inter-American Development Bank (IADB), the Andean Development Corporation – currently named Latin American and Caribbean Development Bank (CAF), the European Union and the Financial Fund for the Development of La Plata River (FONPLATA). However, the growing national political and economic crisis in the region, deepened by the “commodity crisis” starting in 2014, led to stress in the South American regionalism and the dismantling and paralysis of existing regional institutions, such as the Union of the South American Nations (UNASUR). In this new critical scenario, public investments and efforts towards regional infrastructure development were gradually left behind.

    Conversely, and at the same pace, one other actor has been growing its presence and financial relevance towards the region: China. Already supporting infrastructural projects in IIRSA’s portfolio within the South American Council for Infrastructure and Planning of UNASUR (COSIPLAN), Chinese investments have been increasing in the continent since 2014. Besides the continuous projection of the Belt and Road Initiative (BRI), incorporating Latin America as a strategic route for its goals, and having signed some investment agreements with Venezuela and Argentina in 2014, China is already the main trade partner of most South American countries.

    China’s insertion in Latin America has, on the other hand, been seen as a threat to its former hegemonic regional player, the United States of America (USA). Trying to “catch up” with the preponderance that China now occupies in the national preferences of these countries, the USA launched in 2019 the Initiative “Growth in the Americas”, in opposition to the BRI’s presence in its regional area of influence. This dynamic is embedded within the global context of hegemonic competition between China and the United States, whose primary foundation lies in geoeconomic influence over territories. Latin America holds a significant position in this rivalry, and it is in this context that the infrastructure investment policies of both powers will be analyzed (Zelicovich and Yamin, 2024).

    As presented by the American government, the “Growth in the Americas” initiative aims “[...] on building an enabling environment for private sector investment in energy and infrastructure that is transparent, competitive, and in line with international best practices” (US Department of State 2019b). By supporting Latin American and Caribbean countries, the American government seeks to contribute to its infrastructure needs and limited-resource project financing. In 2021 the USA expanded its aims and launched a global initiative to support development throughout the world, the “Build Back Better World – B3W”, directing efforts towards low- and medium-income countries in Latin America and the Caribbean (LAC), Africa and South-East Asia, former regions of the BRI.

    As a latecomer joining the USA in its containment plan for China’s expansion, the European Union launched in 2021 its own financial initiative for boosting and supporting development in many different areas in the world, the Global Gateway. According to the European Union’s formal declaration during the launch, the initiative “[...] is about increasing investments promoting democratic values and high standards, good governance and transparency, equal partnerships, green and clean, secure infrastructures and that catalyse private sector investment” (European Commission 2021a). In addition, in the European Commission’s website they address the question of the Global Gateway being a response to the BRI by saying that “initiatives such as the Build Back Better World and Global Gateway will mutually reinforce each other” (European Commission 2021a).

    Considering the context of the China-West rivalry, where global infrastructure financing projects play an important role, this paper stems from the following research question: how do these global actors project themselves in Latin America and the Caribbean to secure their influence in the region? The main argument lies in the idea that the infrastructure initiatives undertaken by these powers serve as instruments to secure greater geoeconomic influence in the region within a context of competition, in which Latin American countries’ adherence is facilitated by the absence or instability of active regional institutions/actors on the matter.

    Based on this premise, the main goal of this study is to draw attention to the use of infrastructure as an instrument of power projection by these states in a context of power struggles, exploring the characteristics of the initiatives they lead in the region. To achieve this objective, an exploratory qualitative methodology and documental analysis was employed to outline the main characteristics of each initiative. It is important to note that the focus of the paper is not to compare the sums involved or the organization of the projects currently under development in each initiative, but rather to present them from the perspective of the geopolitical competition in the region. We highlight that some of these initiatives, such as the U.S.’s project, are still quite incipient, and there is insufficient data to enable such comparison.

    To reinforce the geopolitical importance of the Latin American region, the study refers to “Latin America” both in its title and throughout the text. However, in the following sections, the focus of the analysis becomes more sub-regionalized, with greater attention in the South American space. This is justified by the fact that South America is where the issue of infrastructure has gained prominence in regional governance through specific initiatives in recent decades, such as IIRSA and COSIPLAN. Therefore, for methodological purposes, it becomes highly relevant for observing the current dynamics of competition between the mentioned powers in the dimension of infrastructure in South America.

    Before delving into each initiative and the challenges and opportunities they might bring to Latin America, it is important to state that these actors are occupying a long-existing gap and insufficient investment in regional infrastructure. According to the Economic Commission for Latin America and the Caribbean (ECLAC), to overcome the gap between offer and demand for infrastructure in the region, each country should invest annually up to 6.2% of its Gross Domestic Product (GDP) (Comisión Económica para América Latina y el Caribe 2014). However, with the pandemic and the new challenges Latin America has been facing, the bottlenecks for better infrastructure provision in the region has increased, reflecting greater negative impacts on the well-being of Latin American society.

    In a recent study about the infrastructure gaps in LAC, the IADB pointed out that, contrary to recommendations, between 2008 and 2018, the public and private investments in infrastructure (water and sanitation, electricity, transport and telecommunications) were about 1.8% of the countries’ GDP. Hence, to overcome the already existing challenges and provide the demanded investments in the area, the IADB foresees that LAC should, until 2030, increase its investments by 70%, from 1.8% of its GDP to 3.12% annually (Brichetti et al. 2021).

    Since the year 2000, regionalism has been an important tool for diminishing such bottlenecks. In South America, for example, from the IIRSA Initiative to COSIPLAN, regional efforts and institutionalized practices helped sustain a continuous space for dialogue and cooperation in regional infrastructure development. Despite difficulties, regional initiatives were a fruitful instrument for defining a feasible portfolio of projects that would impact the region’s development and its physical integration. Besides, IIRSA and COSIPLAN were also seen as an instrument of national and regional commitment, also attracting more investments to the region, as we can see when comparing the values (% of GDP) invested in the last decades.

    During IIRSA’s activities (2000-2010), countries like Bolivia had no investments, with no infrastructure projects executed from the project’s portfolio. However, during COSIPLAN (2011-2017), Bolivia invested 3.1% of its GDP. Other countries had important growth of directed investments for infrastructure projects from IIRSA to COSIPLAN, such as Brazil (from 0.27% of its GDP to 1.30%); Chile (from 0.1% of its GDP to 0.83%; and Paraguay (from 0.42% of its GDP to 2.70%). Although we might see relevant growth in resources invested for developing regional infrastructure, it is important to reinforce that sums facilitated through initiatives like IIRSA and COSIPLAN were not even close to meeting the needs of the region, with much room for the contribution of other actors and sources of investments in order to reach the baseline indicated by ECLAC (Neves, 2019).

    Since its creation, IIRSA has sought to promote investments in integration infrastructure, where such projects were considered as a key element for deepening the interconnection between commercial and economic relations in the region. In such an understanding, regionalism and infrastructure development were seen as complementary to each national development and international insertion strategy, being interconnected and interdependent.

    Understanding economic integration and regionalism as a tool for autonomy in an asymmetrical and unequal International System (Quiliconi and Rhon 2021), allows us to comprehend the strategic position that infrastructure development occupies in the regional and international agenda. A better physical connection would allow these countries to better integrate their economies, productions and markets, not only within the region, but also globally. However, when designed only to integrate the national markets with the world, many losses and unforeseen challenges can be added to the many bottlenecks that Latin America faces.

    When integrating into the global economy, Latin and South American countries face not only the challenges of being underdeveloped economies, but also the structural and historical limitations imposed on the region as colonized territories. Up until now the region is considered one of the “world’s granaries.” Latin American countries are the main exporters of minerals, cereals and other commodities to the central economies. One of the current examples of the sustained unequal relationship between the center and the periphery can be seen when looking at the growing interest in extracting lithium from Argentina, Bolivia and Chile, as an important element of the central economies’ “green energy transition”.

    While regional efforts were undermined and multilateral spaces for cooperating shrank, Latin American needs and demands kept growing, especially in its key feature for development: infrastructure. However, although the dismantling of UNASUR paralyzed agendas and meetings taken within COSIPLAN and IIRSA, the efforts in financing and constructing infrastructure have not ceased, with many regional and extra-regional actors interested in propelling such agenda.

    In this sense, when looking to the growing dispute for influence in the region through infrastructure investment, we must also take into account the region’s economic dependence from “the center” as well as the opportunities and limitations regional institutions face when dealing with greater pressure and interest from actors such as the USA, China and the EU.

    Aiming to highlight the importance of paying attention to the implications of the expansion of extra-regional actors within the region through infrastructure investments amid a scenario marked by instability and fragmentation, this paper is divided in four sections besides this introduction and our conclusion. In the first section, while analyzing the role of regionalism for Latin America, we highlight and discuss the resilience of the infrastructure agenda in the region as a strategic element for the development of South American countries. Thus, in the second section we address the Chinese presence in Latin America and the potential implications of such rapprochement for regionalism in the continent. In the following section we analyze how the West have been responding to the Chinese offensive in the region, analyzing its projects for infrastructure investment. Finally, we discuss the contributions and challenges of extra-regional investments for regional infrastructure development, reflecting on the significance of infrastructure in Latin America as a geopolitical lever to analyze global power struggles in the region, the significance of infrastructure in Latin America and its impact on the region’s development amid global power struggles.

    The Resilience of Infrastructure Demands and Efforts

    Considering regionalism in Latin America as a non-linear process, marked by continuities and discontinuities, its resilience highlights “[...] the capacity of regional schemes to adapt and reformulate themselves as response to shifting internal (local) and external conditions” (Briceño Ruiz and Rivarola Puntigliano 2021, 16). In this sense, regional institutions’ and initiatives’ ability to adapt when facing new expectations and demands in a changing world highlight the role such efforts and initiatives occupy in Latin American foreign and economic policies, as a strategic tool towards economic growth and attraction of investments. As a central element for development, regional infrastructure initiatives have been one of the few resilient spaces while regionalism was discredited in the subcontinent.

    Although facing growing instability and political changes, UNASUR’s South American Council for Infrastructure and Planning (COSIPLAN) kept presenting continuous results, concluding projects and attracting growing investments to the countries. Between 2000 and 2010, under IIRSA, there were 33 finished projects with an approximate investment of US$7 billion. However, between 2011 and 2018, under the scope of COSIPLAN, there were 127 concluded infrastructure projects, with a total investment of approximately US$ 58 billion (Neves, 2019).

    It is important to highlight that IIRSA was incorporated into COSIPLAN as a Technical Forum in 2011. Still, the increase of finished projects and rise of investments represented the importance of infrastructure to South American countries, as well as the regional (IADB, CAF) and extra-regional (EU, Chinese Government) actors involved.

    In addition, even after the paralysis of UNASUR and COSIPLAN, the regional infrastructure portfolio has continued to advance. Through an empirical survey (carried out between February 2020 and January 2023) in newspapers, ministerial websites and websites of institutions financing such agenda, we concluded that many of the projects in the IIRSA/COSIPLAN portfolio continued not only because of the demands and actions of national actors, but also because of external investments coming from extra-regional actors (China, European Union and others) and through the continuation of the institutionality formed by regional financial institutions (IADB, CAF and Fonplata).

    When UNASUR was paralyzed in 2018, there were 165 infrastructure projects running. From these 165, until January 2023, 50 were concluded, 82 were still running, 20 were interrupted, and 13 had no information on their status (Neves, 2023).

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    Table 1
    Running Projects from the IIRSA/COSIPLAN Portfolio between 2018-2020, per country.

    It is also interesting to look at the main financial sources that have been pulling forward such regional infrastructure projects. It should be emphasized that these investment sources are registered at the IIRSA/COSIPLAN Portfolio as the financial supporters of each project selected in this analysis. However, many also count on other sources, which are difficult to track due to the lack of transparency in such data.

    Considering the IIRSA/COSIPLAN Portfolio, the main actors responsible for supporting the continuity of regional infrastructure building are the National Treasures, which continued to invest in 47 projects in the region. For the ongoing constructions, besides the National Treasures, we can highlight the relevance of the private sector (8 projects), the CAF (6 projects), Public-Private Partnerships (4 projects), and China (2 projects).

    Even though certain projects have the National Treasure as their financial source, many count on investments from external sources redirected by the state. As an example, one of the continued projects is the construction of a bypass road in the city of Formosa, Argentina. In the IIRSA Portfolio the project has the National Treasure as its financial source, however, part of the investments came from China. Another example is the project for the refurbishment of the railroad between Montevideo and Rivera in Uruguay. In its file, the National Treasure and the Structural Convergence Fund of the Southern Common Market – MERCOSUR (Focem) are stated as its financial supporters, but since 2018 the project also counts on investments from the CAF (Neves, 2023). In sum, the projects seen as strategic to the countries, national actors and their financial sources continued. Those actors and sources contribute to such efforts, where there are advances and continuity despite the critical juncture.

    This section aims to call attention to the statement that infrastructural development occupies a strategic role in national and regional policies in the region. However, in view of the stress and discontinuity of regional institutionality, the strategic role of infrastructure may respond to a market and geopolitical logic, in a space where there is no longer a regional leadership that directs efforts towards integration. Hence, it is important to monitor and analyze the rapprochement of extra-regional actors towards the region, as well as its role for their national preferences and interests when trying to understand what the stress of regionalism and joint efforts will entail for South American countries and the development they seek.

    Chinese Investments in Latin America

    China’s presence in Latin America and the Caribbean became economically relevant in the middle of the 2000s. It is not by chance that most regional analysts use the expression “The China factor” to explain the economic boom specially performed by the South American countries due to the commodities price appreciation, mainly caused by the rise of Chinese demand in that period. From 2005 onwards the Asian country became the first or second trade partner of almost all countries in the subcontinent, even surpassing the United States in cases like Brazil, Chile and Argentina. Another demonstration of its economic power in the region concerns the financial area, as China became a creditor of many Latin American countries, buying parcels of their external debt (Slipak 2014).

    Not only did China turn into a giant trade partner for the Latin American and Caribbean region in the beginning of the 21st century, but it also became geopolitically important. In 2008 China’s government published “The White Book of Politics for Latin America”, where it established cooperation and equality as main principles of their mutual relations. This can be observed by the rise and diversification of interactions between China and the region.

    China’s geopolitical importance was built based on a multifaceted political strategy, for example: 1) building and consolidating cooperation under the “South-South” label, such as the BRICs initiative; 2) strengthening bilateral diplomacy, linked with a considerable amount of Foreign Direct Investment (FDI) in countries like Bolivia, Nicaragua and Venezuela. Since 2000 Brazil, Peru, Chile, Mexico and Argentina are the main destinations of China’s investments, receiving together 81% of the total amount invested in the region (Garcia and Curty 2022). In 2004 President Hu Jintao visited a long list of South American countries and signed Memorandums of Understanding (MoUs) that opened a large range of agreements of cooperation and Chinese investments; and 3) forging multilaterally cooperation through Latin American and Caribbean regional integration mechanisms such as the China-Community of Latin American and Caribbean States (CELAC) forum, established in 2013 (Slipak 2014).

    In this context of Chinese multilevel and multidimensional presence in the region, another theme, in addition to those regarding the economy, gained prominence during the 2000s: the share of China and Chinese enterprises financing infrastructure projects in Latin America. As explained above, the disarticulation of regional processes opened a window of opportunities for extra-regional actors like China. One such example was the replacement of Brazilian National Bank for Economic and Social Development (BNDES) by the China Exim Bank as the financier institution in many infrastructure projects in Bolivia, such as the Rurrenabaque-Riberalta road in 2015 (Honório, 2021).

    It is important to highlight that since 2009 China has appeared as an important infrastructure investor in Latin America, contributing through multilateral finance institutions such as the CAF and the IADB, or acting bilaterally. Examples of infrastructure initiatives financed by Chinese enterprises or Chinese banks are: the modernization of the Buenaventura Harbor in Colombia, Quito’s subway in Ecuador, improvements in navigation on the Meta River in Venezuela, the expansion of the San Antonio Oeste Harbor in Argentina and a 600-kilometer road that connects Colombia to Venezuela (Jaeger 2017).

    China’s share in the architecture of Latin American and Caribbean financial infrastructure reached another strategic level with the launch of the Belt and Road Initiative (BRI) by China’s government in 2013. Announced by President Xi Jinping during a visit to Kazakhstan, the Silk Road Economic Belt and the 21st-Century Maritime Silk Road, summarized in the BRI proposal, is also known as “One Belt One Road” (OBOR) or “New Silk Road”. It concerns the Chinese project to integrate development strategies, in the first place, of Central Asia and Southeast Asia countries. It mainly involves the development of international transport corridors on land and sea that will be able to connect these countries’ industrial parks and economic flows in an integrated perspective.

    The BRI’s geographical scope was enlarged to Europe, Africa and most recently to Latin American and the Caribbean. After ten years of its launch, it has become increasingly clear to analysts that the BRI should be understood not as a simple physical integration project, but as China’s main global strategy. In financial terms, the BRI counts on US$40 billion from the Silk Road Infrastructure Fund, the Asian Infrastructure Investment Bank (AIIB), with registered capital of US$100 billion, and the BRICS New Development Bank, with potential capital of US$100 billion (Yang et al. 2018).

    The initiative’s principles encompass the main strategy of China’s Peaceful Coexistence Foreign Policy: 1) mutual respect for each other’s sovereignty and territorial integration, 2) mutual non-aggression, 3) mutual non-interference of each other’s internal affairs, 4) equality and mutual benefit and 5) peaceful coexistence (Office of the Leading Group for Promoting the Belt and Road Initiative 2019).

    Based on these principles and linked with China’s broader strategy, the initiative seeks to stimulate financial integration, people-to-people bonds, policy coordination, facilities connectivity and free trade. Yang et al. (2018) argue that there is no consensus among specialists and politicians about what the BRI really is or how the initiative may affect actual world order. However, they claim that it should be understood as a new era of globalization.

    In fact, besides the increase of the numerical scope of participant countries and international organizations (IOs) in the BRI – 146 countries, according to China’s government information, and 32 IOs – one also may observe a qualitative expansion of the themes and areas that involve the cooperation in this project. Another four branches of the BRI emerged during these years and reflected the incorporation of areas traditionally dealt with by China’s Foreign Policy in the initiative, as well as the adequacy of the BRI’s original objectives to the most current global needs. They are : 1) Green Silk Road, adhesion to the “green agenda” and the sustainable development in the initiative; 2) Health Silk Road, cooperation in medical assistance and health, prevention and control of diseases; 3) Intelligent Silk Road, human resources cooperation to train and produce professionals in many fields; and 4) Peaceful Silk and Road, security cooperation (Office of the Leading Group for Promoting the Belt and Road Initiative 2019).

    For the purposes of this paper, the infrastructure dimension is key to the BRI’s process in Latin America and Caribbean, although it is essential to highlight the region’s role in China’s geopolitical and geoeconomic strategy with the BRI. Especially, the fact that with the BRI the interaction between China and Latin America reveals a multidimensional agenda that forges a challenging scenario for the traditional role of the United States in the region.

    According to official data, China had signed MoUs with 20 Latin American and Caribbean countries1 until March 2022. China’s investments in LAC, from 2013 onwards, are focused on securing its companies access to mineral and energy resource markets (Garcia and Curty 2022; Menezes and Bragatti 2020). According to Garcia and Curty (2022), more than half of China’s lending to the region was destined to infrastructure, and one third was directed to the extraction of hydrocarbons and the distribution of power generation. The BRI’s investment in the LAC countries corresponds to the expanded investment logic present in China’s global investments strategy, where mining and construction are the core areas of investments (Nedopil 2022).

    The fact that China is currently one of the most relevant financiers of infrastructure in LAC responds to the structural needs of Latin American and Caribbean countries’ development agenda. More specifically in this issue, infrastructure, the Chinese share/financing evolves the internationalization of Chinese companies. Slipak (2014) states that the contracting obligation of all the work to be executed by companies from China contributes to this process of globalization of its national enterprises. One of the axes of the BRI’s operation lies in the role of Chinese companies as tools for BRI goals of implementation.

    The consequences of this dynamic in LAC infrastructure was the increase of the social and environmental conflicts related to the activities of Chinese companies in such countries. After the creation of the BRI, China’s investments in the sector in South America increased about 643 per cent (Nedopil 2022).

    China’s unprecedented and multidimensional growth in the region in the two first decades of the 21st century, especially after the BRI, challenges the United States’ hegemony in the continent. In the 1990s the Washington Consensus set the tone for the economic and political agenda in LAC, and since 2014 one could argue that it was substituted by the “Beijing Consensus”, the idea that China is the inevitable path for the development of the region and is, therefore, necessary to deepening ties with the Asian giant (Slipak 2014). The infrastructure dimension is one way to see clearly how this process with China is being built and what it shows us about the directions LAC countries are taking in this new context.

    The “Rise” of the West?

    The West has historically been a very important actor in Latin America and the Caribbean. Not only by colonization, and, later, under the influence of the Monroe Doctrine, European countries and the United States of America had always held a close relationship with LAC. However, since the beginning of the 21st century, with the USA’s War on Terror and the various institutional crises faced by the European Union, this relationship was gradually left behind. However, both actors remain important players to LAC and have seen the growth of the Chinese presence in the continent as a potential threat to their interests and long-built market access (Gratius 2020).

    US Initiatives for the Americas

    In 2019 the US government launched the Growth in the Americas (GA), or América Crece in Spanish. The aim of the initiative is to boost US private investments in infrastructure in LAC countries through bilateral relations and US diplomatic support to American investors and governments (US Department of State 2019b).

    The GA’s bureaucratic agencies include the Department of State, Treasury, Commerce, Energy, the United States Agency for International Development (USAID), the United States Agency for Trade and Development (USTDA), and the Corporation for Private Investment Abroad (OPIC). It is important to contextualize that the proposal emerged as a US reaction to the Chinese presence in LAC not only in the field of financing investments, but also in the geopolitical arena.

    The initiative can be understood as part of the resumption of the US hemispheric strategy at the end of the Trump administration, marked in general by a policy of disinterest in Latin America and the Caribbean that made possible the increase of Chinese presence and the strengthening of the economic and political ties of LAC countries with the Asian giant. This US recovery strategy in LAC included the election of an American citizen, Mauricio Claver-Carone, as director of the IADB in October 2020. Since its creation the IADB has never been presided over by a non-Latin American citizen. Before the IADB, Claver-Carone had a long trajectory in US politics and especially in the Western Hemisphere Bureau. He served as Assistant to the President of the United States and Senior Director for Western Hemisphere Affairs at the National Security Council. In that capacity, he was the chief adviser to the US President on issues related to Canada, Latin America and the Caribbean (Inter-American Development Bank 2022).

    Claver-Carone was responsible for the conceptualization and launch of the GA while he was in the government, later occupying the IADB’s presidency. The IADB is the most important source of development financing in LAC, and this reveals the connection between the exercise of US hegemony and its interests through inter-American multilateral institutions, reinforcing the thesis of the US’s concern with China’s advance in the region.

    There is not much official information about the development of the GA’s implementation, partly because the initiative is recent. One can find sparse information of MoUs and bilateral working groups. In this sense Brazil and the USA officially launched, in September 2020, a working group under the GA to promote private investments in the infrastructure sector (US Embassy & Consulates in Brazil 2019).

    Despite the little information found of formal actions and partnerships achieved under the GA currently in progress in LAC countries, the importance of the initiative lies precisely in the fact that it represents the US’s effort to gain space and recover influence in LAC in a scenario marked by the dispute with China, and the infrastructure dimension is where this can be observed.

    The EU’s Global Gateway Strategy

    As briefly mentioned, the European Union has been a very important actor to LAC. As pointed out by Giordano (2003, 1), “ever since the 1960’s, the EU has established and built up an increasing series of political and trade relations as well as cooperation agreements with Latin America”. Cooperation between the two regions kept evolving through the decades. It overcame some difficult times during the 1970s and 80s, with the discredit of integration in Europe and the so-called “lost decade” caused by the economic crisis in LAC. However, with the redemocratization of LAC and the strengthening of the EU in the 1990s, the relationship between both regions got back on track, resulting, in 1999, in the establishment of a strategic partnership during the Rio de Janeiro Summit, marking the First EU-LAC Summit (Inter-American Development Bank 2004).

    The EU has always been seen by LAC countries as a model of successful integration and one of the main actors supporting the strengthening of integration in the region, especially in MERCOSUR. In the Declaration of Rio de Janeiro, the regions stated its commitment to “promote further development and diversification of trade, taking into account ongoing and future multilateral and bilateral negotiations for the liberalization of trade, such as in the case of the European Union with Mexico, MERCOSUR and Chile, as well as future developments in our regions” (EU-LAC Foundation 1999, 6).

    In 2004, the IADB published a special report about the III EU-LAC Summit and its achievements. According to this study the EU has always preferred to negotiate and cooperate with blocs, not unilaterally with each country, which reflects its actions favoring approximation with MERCOSUR, or the Andean Community, for example, instead of Brazil, or Colombia on their own. By seeking to strengthen the interregional institutional bonds, during the years 1990 there was an increase of the trade and FDI between the regions, which resulted in the EU becoming the main investor in the LAC and its second main trade partner, behind the USA (Inter-American Development Bank 2004).

    However, the rapid growth of investments and trade between the EU and LAC was reduced during the EU’s expansion and its tightening relations with Central and Eastern European countries. According to the IADB (2004), European investments in its neighborhood, especially Hungary, Poland and Czech Republic, increased in the late 90’s. Although there was no direct effect in that moment, there was a gradual change in the positioning of LAC in EU priorities, since the geographical proximity of its new members was seen as more attractive and secure for investments, mainly while seeking a better regional market interconnectivity.

    Furthermore, constant political instability in LAC, and the economic crisis that affected the main countries (Mexico, Brazil and Argentina) in the turn of the 21st century, negatively affected the EU’s perceptions of risk and its expectations towards a profitable relationship between both regions. Additionally, in the mid-2000s and, mainly, after the international economic crisis of 2008, such risks grew while the EU faced internal and institutional crises of its own.

    In this sense, these elements resulted in the gradual decline of EU-LAC relations, with China eventually surpassing the EU and the USA to become LAC’s main trade partner. Furthermore, as stated by Josep Borrell – High Representative of the European Union for Foreign Affairs and Security Policy, and Vice-President of the European Commission (AR/VP) –, since 2015 the EU-LAC Summit has not taken place, reflecting a perception of neglected relations between both regions, in which, “[...] other actors have been occupying such space. The US has maintained its constant commitment, and the Chinese investment has multiplied by 10 between 2008 and 2018” (Borrell 2020, 3).

    Within the current scenario, there are many discussions about the perceived threat of China, which is seen as a competitor to the European Union’s presence in Latin America. However, many European countries have always been, and continue to be, important players in the region, for example, by supporting regional institutions such as the IADB and the CAF, or by their commitment in maintaining their position as the most important donor in development cooperation in Latin America (Nolte 2021).

    However, “[...] one has to acknowledge that for European foreign policy, Latin America has not been a priority. Therefore, the growing presence of China in Latin America is also not of major concern for European politicians” (Nolte 2021, 89). Besides, Chinese loans have not been competing with the loans from the West, because former have been focusing on specific sectors such as infrastructure, mining, energy and agriculture, and the latter in loans directed to social stability, industry and energy (Gallagher 2016; Myers 2018; Peters 2020).

    Still, although not competing directly in investments, China has occupied an important space in the LAC market, which directly competes with the EU’s access to such market, especially when considering Chinese investments and presence in the LAC energy sector – which has become a more complex and urgent matter in the face of the Russia-Ukraine conflict.

    While understanding that “[...] Europe’s withdrawal might open up new opportunities for China to increase its engagement in this area” (Nolte 2021, 87), the European Union took its chance and launched, on December 1st, 2021, the Global Gateway Strategy. The Press Release of the European Commission stated that the launch of the Global Gateway reflects:

    [...] the new European Strategy to boost smart, clean and secure links in digital, energy and transport and strengthen health, education and research systems across the world. It stands for sustainable and trusted connections that work for people and the planet, to tackle the most pressing global challenges, from climate change and protecting the environment, to improving health security and boosting competitiveness and global supply chains. (European Commission 2021b).

    Aiming to mobilize up to €300 billion in investments between 2021 and 2027, the initiative will take into account its partners’ needs and EU’s own interests while investing in infrastructure, the digital sector, climate, energy, transport, health, education and research. So far – while this paper is being written – the Gateway Initiative has been integrated to different bilateral relationships of the EU, with the Gulf, within the discussions of the new Joint Communication on a “Strategic Partnership with the Gulf” in May 2022, and with Asia, being mentioned in the Press statement by President von der Leyen following the EU-Japan Summit, also in May 2022.

    During the launch of the Gateway Initiative, Josep Borrell discussed the importance of connections across key sectors for the resilience of our supply chains, stating that “a stronger Europe in the world means a resolute engagement with our partners[...]. With the Global Gateway Strategy we are reaffirming our vision of boosting a network of connections [...]” (Borrell 2020). However, and so far, Latin America has not been further involved in the spread of the European Initiative across the globe.

    On December 2nd, 2021, the EU-LAC Summit was held, after a 6-year gap. During the meeting, the European Commission focused on the impacts of the pandemic on Latin American and Caribbean countries, directing financial support to the production and purchase of vaccines for the region, sustainable long-term recovery, halt of deforestation in the Amazon, and other topics such as social cohesion and fighting inequalities. Regarding the Global Gateway, launched one day before the EU-LAC Summit, the European Commission pointed out that the initiative will seek to engage the EU with LAC countries “[...] to jointly identify other viable projects, such as developing the potential of green hydrogen and creating sustainable raw materials value chains with the LAC region” (European Commission 2021b).

    What can be observed when analyzing the presence of the EU in LAC and the launch of the Gateway Initiative is that, although perceived as an important region for Europe, LAC is not a priority. Besides, China also has interests in Asia and its Belt and Road Initiative, mainly directed to its own neighbors. In this sense, and in contribution to the discussion led by Nolte (2021), the Global Gateway Initiative is presented not as a mere response to the Chinese presence and the expansion of the BRI in LAC, but as an instrument to secure European interests in the region, seeking to maintain the role and position they already have on financing and investments. In this sense, it seems more viable that Europe and China seek “[...] to defend their interests and to find a middle ground in Latin America” (Nolte 2021, 89).

    A question, however, appears. Amid the regional crisis in LAC, the dismantling of UNASUR, and an even more fragmented space, how does the quest to secure Chinese, American and European interests in LAC comply with Latin American needs for development?

    A disputed territory

    The conceptualization of regional infrastructure in South America was initially driven by regional institutional arrangements aimed at fostering deeper integration among South American countries. The goal was to create a cohesive network that would enhance intra-regional connectivity, economic collaboration, and political solidarity. However, in the current fragmented scenario, the landscape has shifted significantly. External finance sources have become main drivers of infrastructure projects, redefining priorities and redirecting focus. Thus, this paper argues that, instead of prioritizing integration within the South American region, these projects are now geared towards facilitating access to international markets in a non-autonomous pattern, oriented by extra-regional actors. This shift reflects a broader trend where South America is increasingly being integrated into the global economy in a manner that often perpetuates existing inequalities. Consequently, the original vision of regional integration has been overshadowed by an unequal system of global integration, where the benefits are unevenly distributed, and the region’s infrastructure development serves external economic interests more than regional cohesion.

    In this regard, it is important to point out that the Brazilian government, under the new presidency of Luiz Inácio Lula da Silva, has committed to reviving South American regionalism on the topic through the relaunch of infrastructure projects forged within the framework of IIRSA/COSIPLAN, under the banner of the “Five Routes of South American Integration and Development Project”2. This effort arises in the broader context of Brazil’s renewed push for integration in South America, politically symbolized by the Meeting of South American Presidents in May 2024. As the proposer of IIRSA and one of the major political actors and financiers of infrastructure in South America during the 2000s, via BNDES, Brazil’s pursuit to reactivate its leadership in this area highlights that regional infrastructure explicitly positions the region as a disputed territory. The regional coordination that Brazil seeks to re-establish could recalibrate the terms of competition between extra-regional powers in the continent and bring back proposals guided by the interests of South American countries in a more self-coordinated pattern.

    The main argument of this paper lies in the fact that infrastructure is a central theme for the development goals of LAC countries, their international insertion and projection. It is also key to understanding the geopolitical role of the region in a China-West dispute. The dismantling of regional institutions such as UNASUR, or even the withdrawal of subcontinental financing players like BNDES, created an opportunity window for extra-regional actors like China, the US and the EU. A question that should be addressed in future research is: how do extra-regional performances in LAC comply with the economic and geopolitical needs of Latin American and the Caribbean in their own development process?

    Conclusion

    As pointed out in the first section, there was a multilateral effort to regionally govern the issue of infrastructure through the creation of IIRSA/COSIPLAN. Despite criticism regarding the potential for implementing its portfolio of works, these institutions provided countries with space for autonomy in relation to the projects that would be included or prioritized. The main argument is that regional initiatives ensured that the works conducted responded to the interests and development model of the countries, which was compromised by the dismantling of regional institutions and the entrance of extra-regional actors into the financing of the works.

    China’s insertion in the region is part of its global strategy summarized in the BRI. It became one of the most important infrastructure finance investors in LAC. If, on the one hand, this represented the possibility of enabling the countries’ infrastructure projects to continue in a scenario of failure of the regional financing architecture, on the other, it became increasingly clear that such investments respond to the interests of China’s priority sectors and its national development strategy.

    The rapprochement with China and the complexification of the economic relations with the country beyond trade in recent years led to some economic growth in LAC countries and granted investment in infrastructure. However, it did not change the region’s position in the global value chains, nor did it enable possibilities of transformation on the development models dependent on the export of commodities. Also, the environmental and social consequences of this dynamic are worrying for LAC countries.

    The renewed attention from the West towards Latin America and the Caribbean is also a movement to be further accompanied and understood. Although historically investments from the EU and the USA are directed to sectors that have more value added to them, the same logic of containing the possibilities to transform the development models of the region can be applied to the US and EU initiatives in the region. Thus, despite caring more about the environment, they also bring more conditionalities that reduce the autonomy to define the economic policies in these countries, limiting their already complex and insufficient governmental institutions and, hence, their efforts within regional mechanisms.

    LAC’s dependence on investments in the infrastructure sector and the deactivation of regionally oriented institutions put the region in a subordinated position, especially in a global context of dispute on the subject. In other words, regional vulnerability in its institutional insufficiency ensures that new actors take over a previously cohesive space, with relative continuity of ongoing projects, such as COSIPLAN/IIRSA. It also guarantees a fragmented environment for an action that no longer responds to the objectives of regional integration initially proposed.

    The analysis of the dimension of infrastructure governance in Latin America is inserted in the context of the current dispute between China and the United States at the global level. In this sense, the article seeks to contribute to this debate from the Latin American perspective. It should be noted that infrastructure has gained relevance in International Politics with the emergence of the initiatives by China, the US and the EU. Therefore, more than occasional financial investments in infrastructure works and projects, the analysis of the political movement that involves such dynamics may indicate the geopolitical design that China and the United States, mainly, build in the dispute for hegemony in the international order.

    Considering the importance of investments for regional infrastructure development in Latin America, as well as the current scenario, we also argue that the inherent need for better and equal infrastructure within the region is used as a platform to expand the influence and presence of extra-regional actors and their own goals amid the crisis and dismantling of regional institutions such as UNASUR and other spaces of autonomous regional governance. However, when trying to understand these scenarios, it is also important to pay attention to the implications of the expansion of such actors within the region, especially if we look at the perks of such disputes, Latin American (under)development.

    Acknowledgements

    This article was produced with funding from a scholarship from the Coordination for the Improvement of Higher Education Personnel - Brazil (CAPES), within the framework of the Capes-PrInt Program, process nº 88887.310463 / 2018-00, mobility nº {88887.569777/2020-00} and the financial support from the São Paulo State Research Support Foundation (FAPESP) - process nº. 20/04348-5. The opinions expressed in this article do not necessarily reflect the thoughts of CAPES and FAPESP.

    References

    Publication Dates

    • Publication in this collection
      29 Nov 2024
    • Date of issue
      Oct 2024

    History

    • Received
      19 July 2024
    • Accepted
      30 Sept 2024
    Creative Common - by 4.0
    This is an Open Access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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