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.
