Spring Fades, Red Sun Rises

Dear all,

We welcome you to the Greater Caribbean Monitor (GCaM).

In this issue, you will find:

• The Withering of Arévalo’s Spring

• China’s Steady Rise South of the U.S. Border

As always, please feel free to share GCaM with your friends and colleagues.

If you’ve been forwarded this newsletter, you may click here to subscribe.

Best,

The GCaM Team

Almost two years have passed since Bernardo Arévalo and his Semilla Party shook Guatemala’s political landscape with their unexpected surge as front-runners—eventually winning the 2023 general elections—and securing a strong showing in congressional seats.

• Arévalo and his party’s status as underdog opposition, coupled with a tumultuous transition period marked by intense political persecution from Guatemala’s Public Prosecutor's Office, managed to generate a vast wave of support for the Semilla movement and renewed hope among the population.

• However, more than a year into Arévalo’s presidency, the glow of that initial hope has faded rapidly, and the prospect of his promised primavera democrática (democratic spring) for Guatemala now seems increasingly unlikely.

Panorama. While to this day Arévalo is still seen as a decent man with good intentions by most business leaders, academia, and opinion-makers—with many top government positions filled by technocratic profiles, a stark contrast to previous administrations—the government’s inability to enact concrete change and deliver tangible results is becoming increasingly frustrating for both them and the broader Guatemalan population.

• There is a clear shift in public sentiment, with growing resentment toward Arévalo for some broken promises and “lukewarm” leadership.

• “Honestly, the new spring doesn’t exist,” said Juan Pablo Ajpacajá, leader of the 48 Cantones de Totonicapán, an Indigenous organization that backed Arévalo and led the protests defending his ascension in 2023.

• Another proof of his declining support is that Arévalo’s approval rating has dropped by nearly half since he took office.

Between the Lines. Guatemala’s problems are well-known, and most—or at least the most urgent—stem from decades of neglect by authorities widely regarded by the population as corrupt and incompetent.

• In general, the most evident source of the country’s problems is poverty. Guatemala’s poverty rate (54.8%) is more than double the regional average for Latin America and the Caribbean (24.7%).

• This contrasts sharply with Guatemala—Central America’s largest economy—whose economic data over the years has shown slow but steady growth and sound fiscal policy, standing out within the region. Just recently, the IMF’s revised projections for 2025 economic growth, which lowered the average rate for the entire Western Hemisphere, highlighted Guatemala as having one of the most positive outlooks, with an expected growth rate of 4.1% for this year.

• This shows that while Guatemala has—and partly seizes—enormous potential, it still faces significant gaps in creating widespread wealth. For example, strong state investment in renovating and building infrastructure such as ports and roads remains essential—an area where Arévalo’s government has been notoriously ineffective.

The Bottom Line. Even his most honest and harsh critics acknowledge that Arévalo cannot simply wave a wand to fix all of Guatemala’s problems, but he needs to show greater resolve and authority in securing at least a few specific wins and reforms that could have a real positive impact on the country.

• His administration’s ongoing feud with the Public Prosecutor’s Office has been very damaging. Not only has it failed to deliver significant wins, but the population is also growing increasingly frustrated that what now appears to be a petty political battle continues to consume so much attention from the authorities, while the country’s many problems keep piling up.

• With the shadow of Guatemala’s 2027 general elections already looming, Arévalo’s persistent failures risk paving the way for a cut-rate Bukele imitation—an out-of-depth opportunist capitalizing on public disillusionment, the kind Guatemala has seen many times before.

• Arévalo’s case proves a hard truth: In politics, being a “nice guy” means nothing without decisive action. Good intentions alone cannot rule.

Want to cut through the noise and understand the forces reshaping the Western Hemisphere?

Don’t miss Líderes, the new podcast from República, hosted by its publisher Rodrigo Arenas. In bold, straight-talking conversations, Arenas engages top business and political leaders across the Americas—breaking down the region’s most critical debates:

• The clash of ideological agendas

• Trade and economic

• Geopolitical shifts redefining power

Expect unfiltered insights, hard-hitting analysis, and the stories behind the headlines.

🎧 Listen to the first episode now:

• Youtube

• Spotify

Brazilian President Lula da Silva will travel to China in May for another meeting with Xi Jinping.

In Context. The upcoming meeting will take place less than a year after Chinese President Xi Jinping’s most recent visit to Brazil in November 2024.

• The visit underscores growing ties between China and Latin America’s biggest geopolitical players.

• Lula will be accompanied by Colombian President Gustavo Petro, who recently assumed the pro tempore presidency of the Community of Latin American and Caribbean States (CELAC) for the 2025–2026 term.

• Earlier this April, CELAC formalized a regional alliance widely perceived as countering U.S. influence—despite opposition from Argentina and Paraguay.

Why It Matters. In the 21st century, CELAC’s most influential member states have increasingly distanced themselves from U.S. trade dominance in favor of closer strategic alignment with China. Bilateral trade between Latin America and China has grown from under 2% of the region’s total trade in 2000 to nearly 20% today.

• Brazil now counts China as its top export destination—particularly for soy and iron—surpassing the United States. Meanwhile, Mexico has expanded trade with China in sectors such as electronics. Both dynamics are expected to deepen further in the wake of the ongoing tariff war between Washington and Beijing.

• China has deepened regional engagement by projecting a less interventionist posture than the U.S.

• Its South American partners have tapped into Chinese financing through the Belt and Road Initiative and Xi’s aggressive investment drive in infrastructure and natural resources.

Between the Lines. Since its inception, CELAC has been viewed by some—predominantly leftist—Latin American leaders as a key mechanism to assert regional autonomy and distance the region from historic U.S. influence.

• Governments in Nicaragua, Venezuela, Bolivia, and Cuba have championed the bloc as an alternative to the Organization of American States (OAS), which they consider a tool of U.S. foreign policy.

• This strategy dates back to the 1960s, when figures like Fidel Castro sought alliances beyond the Monroe Doctrine.

• Despite its limited institutional weight, CELAC has served as a platform for anti-imperialist rhetoric and closer ties with powers like China and Russia.

The Bottom Line. Lula maintains that Brazil need not choose between China and the United States and intends to maintain strong trade ties with both. While Beijing has raised no objections, Donald Trump has framed such outreach as an affront to American interests. Still, Lula appears willing to risk potential backlash from Washington to strengthen Brazil’s relationship with Xi.

• Although Argentine President Javier Milei—a staunch ally of the Trump administration—poses a challenge to CELAC unity, most governments in the region are beginning to question the benefits of continued U.S. influence and view China as a viable—if not preferable—alternative

• The United States remains the world’s largest economic power, and Trump is betting on tariffs to force global alignment: comply with U.S. terms or face economic isolation.

• Still, Latin America seems determined to send a clear message—if the U.S. falters, China will increasingly find the door open.

What We’re Watching 🔎 . . .

IMF cuts Latam, Caribbean 2025 GDP growth estimate [link]

Rodrigo Campos, Reuters

The International Monetary Fund (IMF) has revised its economic growth projection for Latin America and the Caribbean in 2025, lowering it by half a percentage point compared to its January estimate.

The adjustment follows broader concerns over global economic uncertainty, driven in part by the recent wave of U.S. tariff measures. As a result, the IMF has downgraded its worldwide growth forecast from 3.3% (reported in January) to 2.8%.

In Latin America and the Caribbean, the downward revision is primarily attributed to weaker prospects in Mexico, the region’s second-largest economy, now expected to contract by 0.3%. However, some countries, such as Argentina, present a more optimistic outlook, with growth projections revised upward by 0.5% since the beginning of the year.

Shipping Tycoons Discuss Separating Panama Ports From Hutchison Deal [link]

Costas Paris and Jack Pitcher, The Wall street Journal

A USD 22.8 billion agreement, under which a consortium of MSC and BlackRock was set to acquire multiple ports from Hong Kong-based CK Hutchison, now faces uncertainty after Beijing suspended the process due to national security concerns. The move stems from fears over potential US influence in the Panama Canal, a critical global trade artery.

Sources indicate that the parties are considering splitting the deal into two segments: Panama-based ports and those in other regions. While the revised negotiations for dozens of ports worldwide are expected to proceed smoothly, significant doubts remain over control of operations in the Panama Canal. The impasse underscores escalating commercial and geopolitical tensions between China and the US, with Panama’s strategic waterway at the center of the dispute.