The New Great Game – Russia and China Battle the U.S. for Influence and Resources in Latin America
ECONOMIC FOOTPRINT | BRICS+ | RIP VAN WINKLE AWAKENS
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“Barbershop Whispers….Russia (BWR)” begins with “My Takeaways” on the main topic, followed by a discussion on the main topic. The last two BWR sections are “Follow-ups” on previous publications and “Quick Bites” on emerging events.
SPECIAL MIAMI EVENT ANNOUNCEMENT:
On Monday, 27 January 2025, I will speak and moderate a discussion panel on the competition for Latin America. 360 One Firm, a global platform for family offices, is organizing this one-day event at the Miami office of Greenberg Traurig. If you would like to attend the event, 360 One is offering BWR subscribers a 50% discount. When you register, please use the PROMO code BWR36150.
I hope to see all of you there.
Adam A. Blanco
In last week’s BWR, I discussed the recently signed «Treaty On the Comprehensive Strategic Partnership Between the Russian Federation and the Islamic Republic of Iran». What is in it and what does it mean?
In this week’s BWR, I discuss Russian and Chinese influence in Latin America. The new great game.
Takeaways
ECONOMIC ADVANTAGE—The U.S. remains the largest and strongest economy in the world. Unlike Russia, the U.S. has the resources to buy friends and maintain client states globally, through trade and advantageous relationships.
COMPETITION—China is the US’s largest competitor in Latin America, as it is prepared to use state resources to invest significantly in infrastructure projects that may have uncertain financial benefits but offer considerable long-term political gains. Chinese government investments do not come with Western conditions such as human rights and democracy.
BRICS—The evolution of BRICS into a potentially formidable disruptor of the global order should not be underestimated. Russia leads this movement and has effectively integrated some allied “aggrieved" states, namely Cuba and Iran. Venezuela, Nicaragua, and North Korea are on the horizon. BRICS+ 2025 warrants its own dedicated discussion.
The New Great Game – Russia and China Battle the U.S. for Influence and Resources in Latin America
ECONOMIC FOOTPRINT | BRICS+ | RIP VAN WINKLE AWAKENS
Background
Like Rip van Winkle, Uncle Sam has awoken from his decades-long sleep to find a changed world in his backyard: Latin America and the Caribbean. During his sleep, Russia and China have been very active, reviving old relationships and establishing new ones on the political and economic fronts.
While the US has been preoccupied with ineffective illegal immigration and drug policies in Latin America, Russia has revived dormant Soviet-era relationships—Cuba and Nicaragua—and forged new ones with Venezuela, Bolivia, and Brazil. It has established a presence in the energy, agricultural, and media sectors, enabling it to influence local politics and public opinion. Additionally, Russia has reactivated and constructed new signal intelligence-gathering facilities in the region.
China, through its Belt and Road Initiative, has been funding significant dual-purpose infrastructure projects that allow it to influence Latin American commerce and mining policies. for example, the new state-of-the-art deep water port in Peru, financed by China, can accommodate naval ships.
For the first time in decades, the US is taking notice of Russia and China’s growing influence in LATAM and appears to take action. This is evidenced by the appointment of Russia and China hawks as well as Spanish-fluent LATAM experts to senior government positions.
The drivers of this change in US policy towards LATAM are rooted in rare earth minerals deposits in LATAM, the US need for reliable supply chains (nearshoring), and perceived security risks.
Russia and China’s Economic Footprint
Russia
Driven by Western sanctions, Russia has expanded its economic footprint into a broader range of Latin American countries. For example, Latin America’s biggest economy, Brazil, imported 6.1M metric tonnes of diesel fuel from Russia in 2023, a 6,000% increase from 101K metric tonnes in 2022. This represents a YOY dollar increase from $95M to $4.5B. According to the Financial Times, Brazil overtook Türkiye in October 2023 to become the largest buyer of Russian diesel fuel. Russia has also overtaken the US as Brazil’s largest supplier of diesel. The driving factor for this increase in trade is discount pricing for diesel fuel and other Russian imports, including fertilizers, as a result of Western sanctions. Russia now accounts for 85% of Brazil’s total diesel imports.
Roszarbezhneft, a Russian state-owned oil company, is a significant shareholder in the Venezuelan state-owned oil company Petróleos de Venezuela, S.A. (PDVSA). Its shares in PDVSA were acquired from Rosneft, a Russian quasi-state oil company. PDVSA owes the Russian company $4.6B, and Roszarubezhneft negotiated to take over the output sales in exchange for the debt owed. The change in ownership came at a time when an audit of PDVSA found $21B of unpaid invoices to intermediaries for past exports. This represented 84% of PDVSA’s exports since 2020.
Bolivia saw Russia’s state-owned nuclear power corporation, Rosatom, invest in several lithium extraction projects in June 2023. Then in September 2024, Bolivia’s state-owned Yacimientos de Litio Boliviano (YLB) and Rosatom subsidiary Uranium One Group reached a $976M agreement to build a direct lithium extraction (DLE) facility in the Salar de Uyuni.
China
In November 2024, the Bolivian government signed a $1B agreement to construct two DLE plants with China's CBC, a subsidiary of Contemporary Amperex Technology Co., Limited (CATL), the largest lithium battery producer in the world.
In Brazil, China’s biggest EV manufacturer, Build Your Dreams (BYD), is completing an EV plant in the city of Camaçari. It’s worth noting that Ford had a major manufacturing plant there before leaving Brazil in 2021. The BYD plant should become operational in 2025 and is expected to produce up to 150,000 vehicles in 2026. Brazil is the poster child for BYD’s international expansion and its largest market outside China: one in every five BYD cars sold abroad is purchased in Brazil.
An essential component of China's footprint in LATAM involves financing, operating, and acquiring infrastructure. In November 2024, Chinese President Xi Jinping attended the Asia-Pacific Economic Cooperation Summit in Lima, Peru, where he inaugurated the Chancay deep-water port. The port received an initial $1.3B in funding from China’s Belt and Road Initiative, and Chinese banks provided an additional $2B. Beijing and Lima are collaborating to position it as a significant shipping hub between Asia and South America.
Chancay is the most modern port on the Pacific coast of the Americas. It will be linked by a new transcontinental railway line from Brazil to the port, efficiently transporting Brazilian soybeans and iron ore to the port. China sources 69% of its soybeans from Brazil, a Brazilian export value of $39B in 2023. The rail project has been discussed since the mid-’00s and is estimated to cost between $7B and $10B.
BRICS+
I have written extensively on the emerging “Alliance of the Aggrieved”, their enablers, and the evolving BRICS movement. BRICS is a critical vehicle of political and economic influence for China and Russia. China provides economic and political power by virtue of being the second largest economy in the world, while Russia tries to drive a BRICS mission.
BRICS has an annual rotating presidency, and the agenda is determined by the country that holds the presidency. Russia held the presidency last year and nominated Venezuela, Nicaragua, and Cuba as Partner Countries, but Brazilian President Luiz Inácio Lula da Silva blocked the membership of the first two. Lula da Silva has long been critical of Venezuelan President Nicolas Maduro and Nicaraguan President Daniel Ortega’s political repression and fraudulent elections.
Brazil took the presidency in January 2025 and has declared the theme as “Strengthening Global South Cooperation for More Inclusive and Sustainable Governance.” The two priorities are fostering Global South cooperation and pursuing reforms in global governance. The deliberate choice of language reflects Lula’s ambition to position BRICS as a legitimate representative of the Global South while advocating for the reform of world governance without discarding multilateral institutions. This latter conflicts with the desires of certain other members—Iran, Cuba and Russia—to replace the existing multi-lateral institutions with new ones. It should be noted, that the BRICS New Development Bank, which is largely funded by China, is currently led by former Brazilian President Dima Rousseff.
Information Warfare
Over two decades, the Kremlin has built a formidable cross-border media network in Latin America that spreads a repackaged Soviet narrative of Western exploitation of the region. This new narrative substitutes capitalists with colonists and the proletariat with the global south. The message claims, “Colonists are exploiting the Global South – or the majority of the world – through Western sanctions and control of the global economic system.” Latin America provides fertile ground for anti-Western tropes, given the region’s colonial history with Spain, Portugal, France, and the US. Western sanctions on Russia resonate and evoke sympathy from many Latin American countries – particularly Cuba, Venezuela, and Nicaragua – as well as Brazil and Mexico.
According to the United States Institute of Peace (USIP), Actualidad RT, is one of Latin America's largest Russian information platforms. Actualidad RT has 17M Facebook followers, triple the number of its English-language equivalent, and 3.4M X (formerly Twitter) followers. Actualidad RT and Sputnik Mundo, another heavy-weight Russian media platform, are the most significant Russian Latin American media platforms and have content-sharing agreements with regional media organizations such as TeleSur. TelSur, the creation of the later Venezuelan president Hugo Chávez in 2005, is owned by the Venezuelan, Cuban, and regional governments.
Actualidad RT has become embedded and accepted into the regional media landscape, as evidenced by numerous prestigious awards over the years presented to RT reporters by the Club de Periodistas de Mexico.
Security Risk
In addition to a standing presence of 300 Russian training soldiers in Nicaragua, the Kremlin also maintains a physical presence in Cuba. In addition to the small military presence, the Kremlin also maintains signal intelligence operations in the region. For example, Brazil and Nicaragua host several GLONASS (Russia’s alternative to GPS) ground stations.
New stations are being considered in Argentina, and Mexico allegedly signed a cooperation agreement with GLONASS last year. Similarly, Russia’s military runs six radar installations in Venezuela, which are meant to enhance the regime’s surveillance of the opposition and Colombia’s military movements.
Rip van Winkle Awakens
Newly elected President Trump appointed Marco Rubio, a native Spanish-speaking Florida senator of Cuban descent with extensive knowledge of Latin America, as secretary of state. Rubio is also a Russia and China hawk, expressing support for Ukraine and the need to exorcise the invasive powers—Russia and China—from Latin America. In addition to Rubio, Trump has nominated Christopher Landau, a Spanish-fluent diplomat with LATAM experience. Other Russia and China hawks have been nominated to other senior positions in defense and intelligence.
Russia’s dwindling resources strain its ability to maintain a global presence, as demonstrated by the toppling of Syrian President Assad and the battlefield stalemate in Ukraine. How can the Trump administration exploit this vulnerability to counter Russian influence in Latin America? For instance, one of Trump’s key domestic campaign promises was to address the long-standing issue of illegal immigration. Venezuelans now rank second in illegal immigration to the U.S. The political and economic turmoil in Venezuela, driven by the illegitimate presidency of Nicolás Maduro, has triggered the largest refugee crisis in the history of the Americas. Cuba is also facing an economic and energy crisis not witnessed since the fall of the Soviet Union, leading to an increase in Cuban refugees.
As the Trump administration starts rounding up undocumented migrants for deportation to their home countries, an agreement to repatriate them will need to be established with their respective nations. How will the Trump administration negotiate the repatriation agreements with Venezuela, Cuba, and Nicaragua? Could the US role in the ongoing Ukraine war be leveraged to extract Kremlin pressure on its LATAM client states?
Conclusion:
Despite China and Russia’s “first mover” advantage in Latin America, the US still has a significant economic and political advantage. It has deep roots and history with the region and remains the strongest and biggest economy in the world. Its economic power and position in the mainstream global economy provide leverage over Russia and China. This is particularly true as Russia struggles with resources and China grapples with a sluggish economy.
Despite its sluggish economy, China can project global power because it has the resources of the second-largest economy in the world. Because of its economic power and willingness to spend significant money on infrastructure, China represents a greater threat to US interests in Latin America than Russia.
Nevertheless, the US is in a good position to reassert its dominance in Latin America, a region of great opportunity that the US has long neglected.
Additional Reading(s)
Russia’s Footprint in Latin America (Barbershop Whispers…Russia, 3 Mar 2024)
Brazil Vetoes Venezuela and Nicaragua’s Bid to Join BRICS (ColombiaOne, 27 October 2024)
Alliance of the Aggrieved – Russia and Venezuela (Barbershop Whispers…Russia, 20 October 2024)
Venezuelans Now Rank Second in Illegal Immigration to the U.S. (Federation for American Immigration Reform, 22 February 2024)
Chancay Megaport Magnifies China’s Presence in South America (Asia Times, 27 Nov 2024)
Putin's BRICS Block Party in Tatarstan (Russia) (Barbershop Whispers…Russia, 27 October 2024)
BYD in Brazil: From the company’s triumphant arrival to a scandal involving ‘slavery-like’ working conditions (El Pais, 10 Jan 2025)
Follow-ups & Quick Bites
Follow-ups
No Follow-ups this week
Quick Bites
Cubans Learn Ukraine is No Angola
Hundreds of Cubans desperate to escape island poverty have accepted the Faustian trade of a tour on the Ukrainian front for a Russian passport. As reported by Politico, hundreds of Cubans have accepted Russian citizenship and now find themselves unable to leave the war because the Ministry of Defense has sized their passports or other tactics to keep them on the Front lines.
Some have escaped the frontlines and now live in hiding as they look for a way out of the country.
This situation has been reported by other nationalities that have joined the Russian armed forces in exchange for citizenship.
Additional Reading(s)
Putin’s Passport Trap: The Cubans Caught in Moscow’s Endless War (Politico, 13 Jan 2025)
Foreign Troops Help Putin Avoid the Pitfalls of Another Mobilization (Atlantic Council, 12 Dec 2024)
Putin Speeds up Citizenship for Foreigners Who Enlist in the Russian Military (AP, 4 Jan 2024)
Belarus Cosplays Presidential Elections
The illegitimate Belarus president Alexander Lukashenko will re-elect himself this weekend and extend his 30-year presidency till the end of time. The entire process reminds me of the track & field scene from Sacha Baron Cohen’s movie, the Dictator. If it were not so tragic and sad, it would be funny.
Learning from his 2020 fraudulent presidential election, when hundreds of thousands of citizens took to the streets in support of Belarusian opposition activist Svetlana Tikhanovskaya who did win the election, he is running unopposed with the exception of a few highly vetted and handpicked opponents.
Additional Reading(s)
Belarus: Lukashenka Having Himself Re-Elected (The Kyiv Post, 24 Jan 2025)
Belarus Protests show no sign of Fading (The Guardian, August 2020)
Vol 3, No 04 - BWR 26.01.2025
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