In a major blow to U.S. interests in Latin America, Colombia last month elected a former Marxist guerrilla as its next president. Voters in Mexico, Chile, Bolivia, Argentina, Chile, Peru and Honduras are turning to left-wing populists to solve their economic woes. This has strengthened the Marxist troika of Cuba, Venezuela and Nicaragua.
The administration has relied heavily on foreign aid—lots of it—to alleviate the region’s poverty and advance U.S. interests. Clearly, this strategy has failed.
Last March, President Biden called Colombia “the linchpin, in my view, to the whole hemisphere, north and south.” U.S. aid reflects Colombia’s importance to American security. In 2020 alone, Bogota received $813 million in aid to combat drug trafficking, feed 2 million Venezuelan refugees and improve the country’s agriculture and health sectors, environment and governance, plus demining. Over the last five years, Colombia has received $3 billion in aid from Washington and over $4 billion from the World Bank and Inter-American Development Bank.
This aid cycle is repeated in country after country. Consider El Salvador, Honduras and Guatemala. The three small Northern Triangle states boast a combined population of only 33 million, yet since 2015 they have received $3 billion in U.S. foreign aid and billions more from multilateral banks. These figures exclude resources from Europe, faith-based donors, foundations and corporate philanthropies. Nor do they include the $22 billion in remittances (mostly from the U.S.) received in 2020.
Then there are the Andean states of Peru, Bolivia and Ecuador. Since 2015, they have received almost $16 billion in foreign aid and soft loans.
Why have these massive aid flows failed to stem the poverty driving this leftwing surge? Because of Mr. Biden’s disastrous climate policies. Those policies have sent the price of fertilizer, power and transport soaring, sparking a raging inflation that has left Latin Americans careening into poverty and hunger.
As oil prices rise, resource-rich Latin America should be earning substantial revenues. Instead, their export revenues are shrinking as global investors and multilateral banks cave to political pressure from the White House and close their fossil fuel portfolios. This, combined with the region’s socialist policies that encourage capital outflows and discourage foreign investment, has created a perfect poverty storm.
Mexico now earns from oil exports only half of what it spends to subsidize domestic fuel prices. Colombia, South America’s top oil and second-largest coal producer, sees its new green president promising to phase out oil and mining altogether—an approach that his predecessor accurately labeled: “absolute suicide.” Banks have cut off oil export financing to Ecuador, Latin America’s fifth-largest oil producer, amid violent protests by environmental extremists demanding fuel subsidies.
The upshot is billions in lost export revenues and billions more in costs to import fuel, food and everything else because of the climate agenda. Hemispheric poverty is increasing, leading to more political turmoil. Nevertheless, last month, the tin-eared Group of Seven industrialized countries, including the United States, vowed to end public financing of fossil fuel projects abroad, a veritable death sentence for resource-rich poor countries.
Mr. Biden’s climate delusion extends to foreign aid. The U.S. Agency for International Development announced it will “mobilize $150 billion in public and private climate finance by 2030” from some magic money pot. USAID “is now a climate agency.” America’s principal foreign aid agency is colluding with green energy activists to destroy the region’s development prospects, strand trillions of dollars of productive industrial assets in developing countries, and exacerbate food insecurity. All this is being done to meet the West’s net-zero carbon emission diktat to the developing world.
The climate agenda’s financial wallop on poor nations is well known. At last year’s Glasgow, Scotland, climate summit, it was estimated that “more than $750 billion annually” would be needed to cover the costs of developing countries transitioning away from fossil fuels. Renewable energies, meanwhile, will not power developing countries into prosperity. The solution? More aid!
Congress should not reward failed policies with more aid. It should end the climate crusade that threatens America’s hemispheric security. Yet the House Appropriations Committee recently allocated $64.6 billion in global foreign aid spending, a 15% increase over last year. Worse, the spending doubles down on aid strategies that harm economic growth, earmarking $3.6 billion “to address the climate crisis.”
Colombia is set to get another $487.4 million in economic and development assistance. Congress should reconsider the wisdom of sending more aid to a country that plans to cut its primary source of foreign income. Indeed, all aid to the region should be conditioned on country commitments to pro-growth strategies, otherwise our aid will make no impact on relieving hemispheric poverty.
In the end, everyone is losing from Mr. Biden’s climate dogmatism. Latin Americans are forced to bear the financial brunt of clean energy transition, while American taxpayers shell out billions in aid that cannot remotely compensate for the economic losses caused by the climate agenda.
This piece originally appeared in The Washington Times