What does a Biden administration mean for Latin America?

May 6, 2021

Whenever there’s a change in leadership at the White House, inevitably there are questions about how the new administration will conduct itself with the rest of the Americas. This is not only because the U.S. is an important business partner for the Latin America, but also because of the political and cultural ties across the region, and due to the growing population of Latinos in the U.S.

Unlike the previous administration, President Biden has a significant history in Latin America. He traveled to the region 16 times as vice president under the Obama administration. As President Obama’s chief emissary to Latin America and the Caribbean, then Vice President Biden engaged with leaders of the Northern Triangle (Guatemala, Honduras, and El Salvador) to develop the “U.S. Strategy for Engagement in Central America” in response to a surge of migration in those countries. He traveled extensively throughout the rest of Latin America, but Biden’s work in Central America became arguably one of his biggest achievements in the region.

This experience will be crucial for President Biden as he faces one of the biggest ramifications of COVID on the region – migration to the border. Difficulties controlling the spread of the virus combined with deep economic impact has led to significantly increased migratory pressure. This comes at a time when migration had already intensified due to hurricanes and droughts caused by accelerated climate change. The effects could last for years to come, as several Latin American countries are faced with fragile public finances, a lack of job opportunities, and growing political uncertainty with several elections on the horizons over the next few years.

But the U.S.-Latin America relationship is not only defined by its areas of concern. A recent announcement by Biden about an infrastructure plan that focuses on “green reactivation” brings with it positive effects on important sectors such as copper and lithium mining (critical components of electromobility) and the development of sustainable energy sources, such as “green hydrogen.” The effects wouldn’t be limited to the U.S. but would benefit the broader global effort to reach the net zero carbon emissions goal within the coming decades.

Overall, the main challenge for Latin America will be to get the attention of the Biden administration, which has focused its first few months on ending the COVID crisis and restarting the economy. Externally, relations with China and Russia, as well as the resolution of the U.S. presence in the Middle East leave little space for the focus necessary for its neighbors to the south. That is where President Biden’s experience in the region will prove essential, along with an understanding that solving the migration challenge must begin with improving conditions in the countries of origin.

Axel Christensen
Axel Christensen
Chief Investment Strategist for Latin America for BlackRock