From BRICS to BIC

Welcome back to Foreign Policy’s Latin America Brief.

The highlights this week: Lula outlines the green tenets of Brazil’s new foreign policy, Mexico’s opposition hits the streets, and the crypto crash takes a toll on El Salvador.

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After meeting with envoys from both the United States and China on Tuesday, Brazilian President-elect Luiz Inácio Lula da Silva gave a speech on Wednesday at the United Nations climate change conference, known as COP27, in Sharm el-Sheikh, Egypt. As expected, he laid out ambitious goals for restoring Brazil’s record of rainforest stewardship that was greatly diminished under incumbent President Jair Bolsonaro. But Lula also went further, reflecting on the current international order and Brazil’s role in it.

“We spend trillions of dollars on wars that just bring destruction and death while 900 million people across the world don’t have food to eat,” Lula said, pledging “to help construct a global order that is peaceful and based in dialogue, multilateralism, and multipolarity.”

Some elements of Lula’s speech were familiar refrains from his 2003 to 2010 presidential tenure: He advocated for Latin American regionalism, cooperation among countries in the global south, and an expanded U.N. Security Council. But this time, Lula linked these goals to addressing climate change. “There will be no future as long as we keep digging a bottomless pit of inequalities between the rich and the poor,” he said. Climate change “will have the highest profile in the structure of my government.”

During Lula’s last presidency, he co-founded the BRICS grouping of Brazil, Russia, India, China, and South Africa, which focuses on economic cooperation. At COP27, Lula heralded a new partnership among Brazil, Indonesia, and the Democratic Republic of the Congo to coordinate policies on rainforest preservation. Together, these three countries are home to 52 percent of the world’s tropical forests that have not been significantly disturbed by human activity.

The long-marinating deal was first discussed during the 2011 to 2016 presidency of Lula’s hand-picked successor, Dilma Rousseff. Its text suggests the countries will work at least partly within the framework of a preexisting U.N. program of payment for conservation known by its acronym, REDD. Although the countries did not announce any new financing, they said they would work together to establish a “funding mechanism” for conservation.

The themes in Lula’s speech were consistent with those of a 68-page policy paper titled “Climate and International Strategy: New Directions for Brazil” that was formally presented to Lula at COP27. His advisors had gotten their hands on the paper before the conference, co-author Adriana Abdenur tweeted, and they used it as input for Lula’s remarks.

A partnership between a think tank affiliated with Lula’s Workers’ Party and the Brazilian environmental policy organization Plataforma CIPÓ, the paper’s co-authors include two members of Lula’s presidential transition team. A third author was reportedly in talks to join the transition team on Thursday. Lula’s foreign affairs advisor, Celso Amorim, wrote its preface, in which he argued that “the fight against the climate crisis will occupy a central space in [Brazil’s] international activity.”

Other organizations have also submitted policy proposals to Lula since his election. But the fact that the aforementioned paper was written by members of his own party and transition team—and featured so prominently in his speech—suggests it may be key to informing his policy as president.

If the plans outlined in the paper come to pass, Brazil’s climate policies under Lula would go beyond simply reducing deforestation and pressuring rich countries to provide more climate financing to poorer ones. The paper’s authors wrote, for example, that the Brazil-Indonesia-Congo rainforest alliance could work together to promote deforestation-free products for sale. In his speech, Lula similarly said medicines and cosmetics could be responsibly sourced from the rainforest.

The paper also proposed that Brazil gradually transform state oil company Petrobras into an energy company with a greater focus on renewables. They suggested that lithium-rich Bolivia be incorporated into South American customs union Mercosur, and that together with Chile—which is not part of the bloc—Mercosur could create a regional governance framework for lithium. Bolivia, Chile, and Argentina together hold more than half of the world’s known lithium reserves, while Brazil holds under 1 percent.

Another recommendation is that Brazil seek Chinese investments for green infrastructure and examine whether the U.S. Inflation Reduction Act (IRA)—a landmark climate bill—could lead to new international cooperation or funding. Though the IRA’s money is overwhelmingly targeted at U.S. businesses, European Commission Vice President Frans Timmermans urged Washington in September to spread some of the money overseas. The BRICS alliance, the authors suggested, could also be mobilized to invest more in green energy projects through its development bank.

Together, the policies pitched in the document would contribute to green industrialization in Brazil. But passing and implementing the proposals is far easier said than done. The United States—which does not face the same fiscal constraints as South American countries—tussled for months over the details of the IRA. In Colombia, new President Gustavo Petro’s pledges to carry out an ambitious transition away from new oil exploration are stoking economic concerns and dividing policymakers, the New York Times reported this week.

It’s precisely because Latin American countries don’t have hundreds of billions of dollars in green stimulus money that it makes sense for them to work together on policies for their green transitions, analysts have argued. The authors of the Brazilian strategy document made the same case. They warned that in another recent global scramble for new technologies—the COVID-19 pandemic and the race for vaccines—the global south got left behind.

Friday, Nov. 18, to Saturday, Nov. 19: Chile, Mexico, and Peru attend a meeting of Asia-Pacific Economic Cooperation nations in Thailand.

Right-wing politicians from throughout Latin America attend the CPAC Mexico conference in Mexico City. A spinoff of the conservative U.S. conference, a sister event was held this year in Brazil.

Wednesday, Nov. 23, to Friday, Nov. 25: Mexican President Andrés Manuel López Obrador hosts a meeting of Latin American leaders.

Friday, Nov. 25: Mexico hosts the Pacific Alliance summit with the leaders of Peru, Colombia, and Chile.

Crypto shock. The nosedive in cryptocurrency value in the wake of a bankruptcy announcement at crypto exchange FTX last Friday has taken a toll on El Salvador’s public finances. Salvadoran President Nayib Bukele made bitcoin legal tender last year and transferred some of the country’s financial holdings into the digital asset. Bukele has not published a full breakdown of the purchases, but based on his social media posts, economists calculate that the Salvadoran government’s assets have declined around $70 million in value since their original purchase.

After refraining from commenting publicly about the crypto shock for several days, Bukele tweeted Wednesday that El Salvador would continue to buy one bitcoin per day, which as of Thursday is equivalent to around $16,500. As FTX neared its insolvency announcement last week, Bukele also announced El Salvador would sign a free trade deal with China.

New ruling on Title 42. On Tuesday, a U.S. federal judge ruled that the immigration rule known as Title 42 was “arbitrary and capricious.” Title 42 was introduced in March 2020 and allowed for immediate expulsions of migrants at the U.S.-Mexico border to prevent the spread of COVID-19. The Biden administration tried to end the Trump-era measure this year, but it soon became entangled in the courts. The U.S. Department of Homeland Security has since expanded its use, effectively denying many migrants the right to seek asylum at the southern U.S. border.

In response to the latest ruling, the White House asked for a five-week stay to adjust migration policies. District Judge Emmet Sullivan said he granted the stay with “great reluctance.”

Frida, a Mexican rescue dog, performs at an exhibition at the headquarters of the Mexican Navy in Mexico City on Oct. 14, 2017.PEDRO PARDO/AFP via Getty Images

The other Frida. On Tuesday, the Mexican Navy announced the death of its search-and-rescue yellow Labrador, Frida. Frida, who died of natural causes, had become a national icon after sniffing for survivors following Mexico City’s catastrophic 2017 earthquake. Images of her in protective goggles and booties can be seen in murals across the country and on a Mexican postage stamp. She was 13 years old.

While Frida did not find any survivors in Mexico’s 2017 quake, which killed more than 300 people, the navy credits her with locating a dozen earthquake survivors in Haiti as well as finding deceased victims in other disasters elsewhere. One of Frida’s last public appearances was at the Mexico City unveiling of a statue in her honor last month.

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Thousands of people join a march to protest election reform in Mexico City on Nov. 13.Marco Rodriguez / Eyepix Group/Future Publishing via Getty Images

On Sunday, Mexicans marched in some of the largest anti-government protests of López Obrador’s presidency. Thousands of demonstrators voiced opposition to his plan to overhaul the country’s electoral authority in a manner they argue imperils its independence.

Under the proposed reform, which López Obrador said would help cut costs, state-level election offices would be eliminated and only government officials would be allowed to nominate members of the federal electoral authority’s regulatory board. (Currently, anyone can run for the position without needing a nomination.) Public campaign financing for political parties would also decrease.

Many critics of the plan view it as just one in a series of attacks López Obrador has waged on Mexico’s democratic institutions. During his term, the president slashed funding for the country’s National Institute for Transparency, which processes freedom of information requests, and National Human Rights Commission, a government body that investigates human rights abuses, such as police violence.

“By flooding these institutions with partisan loyalists and delegitimizing their work by calling them instruments of ‘the conservative, hypocritical elite,’ López Obrador is harming their ability to carry out their roles as checks and balances on the government,” Denise Dresser, a political scientist at the Autonomous Technological Institute of Mexico, wrote in Foreign Affairs this month.

Sunday’s demonstrations were noteworthy not only because of their size but also because prominent figures from Mexico’s oft-disorganized opposition participated. In response to the protests, López Obrador said on Tuesday that he would consider revising the reform and sending a new version to Congress.

The scale of the demonstrations doesn’t automatically mean López Obrador is weaker than their organizers ahead of Mexico’s next presidential elections in 2024, Mexican journalist Federico Arreola wrote in SDP Noticias. For an opposition movement to be successful, it should have “leadership that is strong, absolutely committed to the struggle, and possessing the charisma needed to bring millions of people together. No one has those characteristics in the Mexican opposition.”

However, that doesn’t mean López Obrador is as politically strong as when he was elected in a landslide in 2018. In El País, political analyst Viri Ríos wrote this week that the president has more recently taken to harshly and publicly criticizing the Mexican middle class, which could cost him their support. In one memorable press conference, he called parts of the middle class “indiviudualistic” and “morally inscrupulous.”

Although López Obrador’s rhetoric is overwhelmingly pro-poor, many in Mexico’s middle class also voted for him in 2018, surveys show. He apparently “thinks [his party] can govern and win in 2024 without them,” she wrote. But reality “is much more complicated and less favorable than he assumes,” she wrote, adding “they influence other groups.”