Elections & Energy Policy Brief

ELECTIONS & ENERGY | La Jolla Conference 30 th Anniversary Policy Brief What is evident is post-pandemic Latin America has limited policy options. Countries will have to walk a tightrope of stimulating the economy and managing the massive social difficulties caused, or at least exacerbated by the pandemic, such as high levels of poverty, unemployment, and youth discontent while at the same time trying to balance large fiscal deficits. Policy makers will have to choose between quick fix approaches to increase revenue such as boosting production and exports from extractive sectors or betting on transforming their economies by reducing dependency on fossil fuel consumption and exports while developing the industries, workforce, and supply chains of the future. A NEW THUCYDIDES TRAP AND HOW IT WOULD AFFECT LATIN AMERICA?

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Latin America’s recovery will depend on access to significant international financial support from foreign powers. China has certainly been active in the region: Mexico excluded, since 2018 China has been Latin America’s main trading partner. Additionally, China has been using its pharmaceutical capabilities to engage in vaccine diplomacy by offering up to US $1bn on medical equipment and Covid vaccines, reaching out to many Latin American countries desperate to access these (Ellis 2021). The rise of China has profound implications for the region’s political and energy future. In fact, China’s efforts to secure access to strategic minerals for a post-oil economy is putting Latin America at a considerable disadvantage in terms of economic diversification and industrialization. China is securing access to essential commodities by financing, building, and operating the infrastructure required to

ANNIVERSARY POLICY BRIEF | INSITUTE OF THE AMERICAS