With the crisis in Syria keeping the President in Washington, Vice President Mike Pence will represent the United States at the Eighth Summit of the Americas in Peru this weekend. His trip comes amidst a new era for the Western Hemisphere – for the first time in 60 years there are no major wars being fought in the region, and robust economic growth has yielded new trading partners for the U.S. Yet the trip also takes place against the backdrop of a host of policy challenges in the region – from a lack of economic cooperation and trade, to concerns about violence and illicit drug flows, and a humanitarian crisis in Venezuela that has provoked massive refugee flows in the region. Here are some key opportunities and challenges that should be top of mind for the Vice President as he touches down in Lima:
Peru has seen dramatic economic growth and poverty reduction in recent decades, thanks in large part to U.S. foreign assistance. Programs led by the U.S. Agency for International Development (USAID) have helped Peru cut the number of people living in poverty in half since 2005, and have helped to significantly improve the health and economic security of the Peruvian people. Today, Peru is a major trading partner with the U.S. – our countries exchanged more than $14.3 billion of goods in 2016, with the U.S. maintaining a $5 billion trade surplus. Since the signing of the U.S.-Peru Trade Promotion Agreement in 2006, American exports to Peru have gone up by nearly 200%. U.S. aid has also helped move Peruvian farmers away from coca drug production and towards new high-value crops such as cacao, coffee, and oil palm trees. USAID Administrator Mark Green will join Vice President Pence in Lima, where he is expected to see firsthand how USAID is supporting former coca farmers as they learn to grow alternative crops.
Remaining Challenges: Reducing Corruption. However, in light of Peru’s President stepping down last month amid corruption charges, it’s clear that Peru continues to face challenges regarding governance. USAID is currently working on exactly these issues: in recent years, USAID has provided anti-corruption training to more than 900 government officials, while another 800 Peruvian judges and prosecutors have been taught how to identify and prosecute corruption cases.
Though the Vice President will not visit Venezuela, this South American nation—just a few hours from Peru – is currently in the throes of a devastating economic and political crisis. As recently as 2001, Venezuela was the wealthiest nation in all of Latin America – though today it is among the poorest, with more than 90% of its population unable to afford food. As many as four million people have already fled Venezuela, making it Latin America’s worst refugee crisis ever. Since 2014, the number of Venezuelans seeking asylum abroad has increased by 2000%, threatening to destabilize neighboring states like Colombia and Brazil. And with inflation expected to reach 13,000% this year, this mass exodus of Venezuelans shows no signs of slowing down.
Over the past two decades, China has dramatically expanded its presence in Latin America, threatening U.S. influence in our own hemisphere. Once a marginal trading partner in the region, China’s trade with Latin America has grown from $10 billion in 2000 to more than $270 billion in 2012. And today, China is the top trading partner for the region’s largest economy, Brazil, as well as the host of this year’s Summit of the Americas: Peru. China is also courting Latin America to join its ambitious Belt and Road Initiative, helping to build new markets for Chinese goods and services while economically linking the region to China. Moreover, the Chinese government recently committed to reach $500 billion in trade with Latin America over the next 10 years, while also sending $250 billion in direct investment to the region
While China is ramping up its engagement and spending in Latin America, the Administration has proposed deep budget cuts that would significantly impact the region. The President’s recent FY19 budget proposal seeks a severe 35% cut in aid to Western hemisphere nations. Colombia and Mexico would see a 31% and 43% cut in assistance respectively, while the U.S. Strategy for Central America – which aims to reduce violence, promote the rule of law, and foster economic growth in the region – would be slashed by nearly 40%. Given the scope of challenges facing Latin America today, and the demonstrated success of investments in development and diplomacy, it’s clear that the U.S. needs more – not less – engagement with the region. Such investments play a critical role in alleviating the root causes of the challenges outlined above.
Year of the Americas? As the Administration gears up for the Summit of the Americas, the White House should translate its stated support for our key partners in the region into long-term investments in our shared economic and security interests. During Vice President Pence’s trip last summer to Latin America, he said that “The President sent me here to build on what we believe is an unprecedented and growing alliance among Latin American nations with the United States of America.” As we’ve seen in Peru, America’s investments in development and diplomacy can make a tremendous difference in lifting societies out of poverty and promoting America’s national and economic security interests. Sustained, robust investment will allow the U.S. to continue to thrive, and make 2018 the Year of the Americas.