Nicaragua Chooses China: Latin America’s Stroll Down the Silk Road

The most recent Nicaraguan election drew concerns from international observers due to a range of legitimacy concerns. Incumbent president Manuel Ortega and his wife, Vice President Rosario Murillo, jailed or exiled several opposition candidates, paving the way for reelection to a fourth term. Following the worrisome election, Nicaragua became the most recent state to pivot away from alignment with democratic Taiwan in favor of China. The Nicaraguan government seized the former embassy and diplomatic offices of Taiwan, claiming they now belong to China. This leaves Taiwan with only 14 global allies, 8 of which are in Latin America and the Caribbean.

Since the adoption of the Monroe Doctrine in 1823, the United States has served as Latin America’s primary trading and security partner. Recent years have shown the United States’ grip on hemispheric hegemony slipping, as foreign policy experts Douglas Farah and Caitlyn Yates explain in their 2020 article. A new framework of divergent powers, namely the U.S. and China, are actively pursuing their own divergent agendas in Latin America. New concerns surrounding natural disasters, infrastructure, and the pandemic are bubbling to the surface and democracies stand at risk of deteriorating for the sake of Chinese investments.

Latin America ranks as the second-most natural disaster-prone region of the world, and the pandemic has disproportionately impacted the region’s economic growth due to the dependence on tourism. The Chinese government swooped in with a comprehensive aid package following Hurricane Maria in 2017 as well as throughout the unrelenting hurricane season that devastated the region in 2020. Additionally, the last two years have exposed democratic multilateral institutions to be ill-equipped and inefficient at providing support throughout the COVID-19 pandemic, allowing China to step in where the U.S. and its allies failed.

Where aid isn’t enough, classic diplomacy suffices. China has hosted presidents from multiple countries throughout Latin America in the last few years, most notably including a joint meeting with the presidents of Panama, El Salvador, and the Dominican Republic. All three nations went on to end diplomatic ties with Taiwan and turn to China in November 2018.

Chinese infrastructure and development programs are currently the most quantifiable aspect of China’s influence in Latin America, especially those under the umbrella of the Belt and Road Initiative (BRI). Beginning under President Xi Jinping in 2013, BRI has become the largest infrastructure program in history. A total of nineteen Latin American and Caribbean countries receive investment from the BRI, with three new countries joining in 2019 alone.  Twenty-five of the region’s thirty-one countries are currently undergoing Chinese-funded infrastructure projects that are largely financed through China’s pledged $150 billion in loans. This new loan structure now makes Xi’s China the largest foreign investor and creditor in Latin America, surpassing the formerly dominant United States.

Chinese infrastructure projects in Latin America include bridges, railways, dams, and highways, with one especially concerning development: maritime ports. Chinese companies now own and control 55 ports in the region, including both ends of the Panama Canal and other key choke points. Western experts call port investment the most concerning area of Chinese influence, creating opportunities where the Chinese military could threaten sea lanes vital to global commerce and the movement of U.S. forces.

Since its launch, the BRI has been a source of heated debate. Supporters claim that it represents a new form of international cooperation intended to create a more inclusive type of globalization, as opposed to the divisive hegemony of the U.S. Chinese sources characterize the “Silk Road Spirit” as peaceful, cooperative, open, and inclusive, with a focus on mutual learning and benefit. Western critics sharply denounce the BRI as an attempt to export the aggressive Chinese model of development. There’s already been a slew of negative outcomes from Chinese economic intervention, including crippled local economies, untimely loan-payment demands, and a complete disregard for human rights.

Authoritarian-leaning leaders of Latin America can use a pivot towards China to legitimize themselves among other like-minded regimes on the world stage. For smaller states like Nicaragua, opportunities for regional and international legitimacy allow leaders to advocate for their nations’ needs on a much wider scale. China offers smaller powers a prosperous future, while the West’s critique of authoritarianism may be nudging Latin American states away rather than reining them in. The Ortega government was criticized for authoritarian tendencies while remaining an ally of the United States and Taiwan. Now that Ortega has switched sides, Nicaragua will be able to tap into Chinese development funds that are not contingent on governmental transparency.

Nicaragua’s turn towards China increases Taiwan’s already-isolated diplomatic position on the international stage. With Taiwan’s allies dwindling, all eyes are now on Honduras and its newly elected president, Xiomara Castro, as the next-most likely Latin American country to reexamine Taiwanese recognition. China’s wooing of Taiwan’s few-remaining diplomatic ties are yet another exercise of China’s soft power and a sign of the growth of Chinese influence and investment in America’s own backyard. Nicaragua is the latest domino to fall in a seemingly unstoppable cascade of shifting world power.