In an Insecure World, Americans Should Look South
In an Insecure World, Americans Should Look South
From semiconductors to critical minerals, Latin America can bolster U.S. economic security, writes AS/COA's Eric Farnsworth in Barron's.
Americans don’t normally think of artificial intelligence and other sophisticated technologies when they think of Latin America, but, increasingly, they should. Today, Costa Rica’s top export is not banana chips but computer chips. The Dominican Republic, famous for its white sand beaches, is becoming a hub for biotechnology manufacturing. Brazil, the land of samba and soccer, is a world leader in fintech, with a web-based start-up having become its largest bank. Stable, middle-class Uruguay is breaking technology investment records.
So much for stereotypes. Together, these countries and others are re-imagining in real time what Latin America is, what it could be, and why it matters to us.
No doubt it’s a region plagued by slow economic growth and underinvestment, corruption, and crime. But Latin America also enjoys one of the world’s greatest endowments of natural resources critical to combating climate change, strengthening global development, and feeding the world. There is no hint of a threat to global supply chains from armed conflict or invasion. And it doesn’t hurt that, from Mexico to Argentina and with just a few exceptions in between, voters regularly go to the polls to select their leaders and democracy prevails.
The hemisphere is ripe for reassessment. For too long observers have focused on the challenges and asked “why?” Now it’s time to see obvious potential and ask, “why not?”
As an innovative initiative of President Rodrigo Chaves and Trade Minister Manuel Tovar, with the active support of U.S. Commerce Secretary Gina Raimondo and Ambassador Cynthia Telles, Costa Rica has developed a semiconductor investment and manufacturing roadmap to position itself as a leader in memory chip manufacturing and distribution. It’s a strategy that takes advantage of political and economic partnership with Washington, building on existing commitments and expanding opportunities via the CHIPS Act.
An overwhelming number of microchips are currently manufactured in Asia, particularly Taiwan. As tensions with China continue to build and the future is uncertain, the dramatic geographic concentration of global chip production has become an acute national security risk for the U.S., within both military and consumer supply chains. Regional diversification is essential. If we need any proof, the recent pandemic was instructive...
