Latin lessons: the Donroe-doctrine boost
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What is the Donroe dividend and why is Latin America thriving despite US‑Trump chaos?
The Economist. Hello and welcome to the Intelligence from The Economist. I'm Jason Palmer.
And I'm Rosie Blore.
Today on the show, the rocketing cost of a staple dish in Nigeria and the BBC waves goodbye to Longwave Radio.
But first
For America's neighbors, Trump's second term has been unsettling.
Kerrian Richmond Jones is our international economics correspondent.
As well as disrupting trade and sending energy prices soaring, Trump has seemed determined to impose his will on the Western Hemisphere. For example, by kidnapping the leader of Venezuela,
US President Donald Trump says the American military has captured President
Nicolas Maduro and his wife, sending gunboats to the Caribbean.
The USS Gerald R. Ford aircraft carrier has reached Caribbean waters off South America's northern coast
and threatening to invade Cuba. Trump
has said that the US Navy will take over Cuba almost immediately on the way back from Iran.
But Latin America, strangely, is also benefiting from Trumpian chaos. No other regional economy in the developing world has done so well in the past year.
So you say Latin America is benefiting from Trumpian chaos, Karrion. Just how well is it actually doing?
It's doing remarkably well. In 2025, foreign direct investment to the developing world at large shrank, so that means that the developing world got less foreign cash in 2025 than it did in 2024. But in Latin America, the amount of foreign investment actually rose to $205 billion. That was a sizable increase on the previous year.
So how much of that was actually down to
Trump?
How much foreign direct investment is flowing into Latin America and which sectors are benefitting?
Quite a lot. At least half of that increase came from America. It helps that Latin America is no longer this place of endless economic crises that it was thirty years ago. More or less, all thirty-three countries south of the Rio Grande, apart from Argentina and Bolivia, now have floating currencies or peg them to the dollar. That means that investors know that they're not going to lose large amounts of cash when the central banks starts printing lots of it. There's also more inflation targeting going on. So basically it's a much more stable region politically and crucially financially than it was thirty years ago. And that's helped lure investors back gradually. But the fact is is that we've seen a huge increase in twenty twenty five.
And why is it exactly that Trump has decided Latin America is where he's going to invest?
It's kind of counterintuitive, really, because on the one hand, Trump is not very nice about Latin America on a regular basis. He gathers leaders together to berate them for failing to get hard on drugs, hard on gangs. But the flip side of that is that he's also really interested in the place. And as part of his belief that America should have more power over its southern neighbors, that in theory should create these investment opportunities. So in October, Trump extended $20 billion in swap lines. To Argentina to help Javier Malay, the president, and a Trump ally. In twenty twenty four, the Development Finance Corporation, which is the foreign lending agency of Trump's government, set up its first office in the continent.
It was in Sao Paulo. And a bit more generally, actually, if you go to Sao Paulo at the moment, in these swanky hotels, I was there a few weeks ago, there are just lots and lots of American investors looking for opportunities.
So where exactly is the money going to in terms of countries or even industries?
By far the single biggest beneficiary has been the mining industry. We've seen several deals from Trump himself with different Latin American governments, ranging from Chile, which has got almost half the world's copper that you'd maybe expect, but also down to places that even I didn't know had that many minerals like Paraguay, to try and develop more of these deposits.
Why is mining the biggest winner of the Trump‑driven investment surge in Latin America?
As well as that, you've seen the American government quite literally just stump up half a billion dollars in one case for a rare. Earth mine in Brazil. And then on the heels of the government, there's this separate wave of private investors.
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Chapters
8 chapters
1
What is the Donroe dividend and why is Latin America thriving despite US‑Trump chaos?
0:03–2:10
2
How much foreign direct investment is flowing into Latin America and which sectors are benefitting?
2:10–4:24
3
Why is mining the biggest winner of the Trump‑driven investment surge in Latin America?
4:24–6:25
4
How are China’s reduced presence and the new US‑Latin America trade deal reshaping the region’s geopolitics?
6:25–8:46
5
Will the mining boom be sustainable after Trump leaves office?
8:46–10:11
6
Why has the cost of Nigeria’s staple dish jollof rice exploded and what does it reveal about the local economy?
10:11–12:12
7
How are diesel prices, war in Iran and poor infrastructure driving food inflation in West Africa?
12:12–14:16
8
Why is the BBC shutting down its long‑wave radio service and what does it mean for listeners?
14:16–16:43