Central America Bows Down to Trump

Dear all,

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

Security has become the main driver of our zeitgeist. Many of those reading us today grew up under the illusion of liberal democracy’s promise and the hope of coming of age in a free world. That message no longer inspires the generations that follow, and for many who once believed in it, it no longer does either. What we see in El Salvador has ceased to be an exception and has become a model of competitive authoritarianism spreading across the region—one that the United States finds acceptable.

What this will mean in the long term is a question we still cannot answer. What is clear is that popular demands for stability have crystallized into what can be described as security populism, which has become a stabilizing model across much of the continent. In doing so, it has delivered tangible gains in hemispheric security—precisely the kind Donald Trump seeks to promote. And it is not only appealing to Washington; it resonates with voters as well. That is the landscape likely to carry the governing party to victory in Costa Rica, probably this Sunday, or, failing that, almost certainly in a second round.

Realpolitik is back to stay. The question is whether, fifty years from now, we will look back on this trough in the democratic cycle as a period that reshaped the rules to balance order and liberty, or as an episode in which freedoms were traded away for quick but ultimately fragile results. That is the central geopolitical question of our time.

In this issue, you will find:

• Costa Rica Elections: The Dilemma Between Enduring Institutions and Quick Results

• Is the U.S. Doing Enough for Hemispheric Security?

• Quid Pro Quo: Expectations on Asfura’s Government

• What We’re Watching

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Costa Rica will elect its next president tomorrow in a national mood far removed from the one that shaped its political life for decades.

In perspective. What used to be described as a “civic celebration” now feels marked by fatigue, distrust, and low emotional engagement, even as the outcome appears increasingly predictable. The latest polls place Laura Fernández, the ruling party’s candidate and a figure closely aligned with President Rodrigo Chaves, near or even above the 40% threshold needed to secure a first-round victory.

• The opposition, unsettled by a political project buoyed by Chaves’s nearly 60% approval rating, is hoping for a late upset that could force a runoff. Few expect that hope to materialize.

• Despite the stakes, there is little visible enthusiasm on the streets. The opposition remains fragmented, and much of the electorate seems to be following the process with concern rather than anticipation.

• That gap between an almost predetermined result and a disengaged public mood is the first clear sign of a deeper transformation underway.

Between the lines. As in much of Latin America, insecurity has been the driving force behind this shift. In a short span of time, Costa Rica moved from being a regional outlier to facing the most severe wave of violence in its recent history, tied to organized crime and drug trafficking. Against that backdrop, Rodrigo Chaves built his presidency on the promise of breaking with what he portrayed as an institutional order incapable of responding effectively to the crisis.

• His confrontational style, open clashes with traditional checks and balances, and hard-line security discourse resonated with a population increasingly frustrated by perceived inertia.

• Ending his term with close to 60% approval in such a context is notable. It reflects a broader global trend in which voters increasingly prioritize security and decisiveness over procedural rigor.

• For many Costa Ricans, Chaves did more than talk about security. He projected action, even when that meant straining long-established political norms and institutional conventions.

Why it matters. That support is driven by a perception of leadership and resolve. In a climate shaped by fear, a president willing to challenge structures considered ineffective is interpreted as a figure of control. The risk is that legitimacy becomes tied more to short-term outcomes than to enduring rules. Security populism, even when it emerges as a pragmatic response to real threats, often weakens the safeguards that make democratic systems sustainable over time.

• This is where trust gradually moves away from institutions and toward a single leader.

• While this does not amount to an authoritarian break, it does signal a drift toward a more personalist system, a dynamic that has historically made democracies more vulnerable in the long run.

• Costa Rica now faces the difficult choice to either preserve an institutional tradition built on restraint and balance, or adapt to a regional environment where personal leadership is increasingly seen as the most effective path to restoring order.

Hemispheric echoes. From Washington’s perspective, Costa Rica serves as a transit corridor for drug trafficking toward the United States, a node in migration flows, and a key partner in police and judicial cooperation. In this context, the Trump Administration has shown growing tolerance, and at times quiet preference, for governments that promise quick results on security, even when that comes at the expense of traditional institutional forms.

• In this pragmatic logic, a state capable of imposing order is viewed as a predictable and manageable partner.

• Rodrigo Chaves’ sustained popularity fits within a broader regional pattern in which security effectiveness increasingly outweighs institutional elegance in how allies are assessed in Central America.

• No wonder that not only Laura Fernández, but most of the candidates in this race, seek alignment with Washington. It all comes down to the logic captured in the phrase often attributed to Henry Kissinger: “I prefer to negotiate with one man rather than with a parliament.”

Regional echoes. The influence of Nayib Bukele has been central to this process. Chaves quickly recognized that El Salvador’s president had become the regional reference point for a new political formula: order first, legitimacy later. Bukele’s experience has shown how a security-first agenda can generate overwhelming public support, even beyond national borders. For Chaves, echoing that narrative has reinforced his project and offered voters a promise of effectiveness in a region increasingly shaped by criminal violence.

• Similar dynamics are unfolding elsewhere, from Ecuador and Peru to Panama and Honduras. What makes Costa Rica’s case distinctive is the symbolic weight of a country long regarded as an institutional stronghold now adopting the language and tools of security populism.

• A recent example was Bukele’s visit to Costa Rica to mark the start of construction on a new megaprison modeled after El Salvador’s CECOT, widely read as a political endorsement of the ruling party’s approach.

• The embrace of megacarceration and zero-tolerance rhetoric signals the direction in which Costa Rica’s version of “chavismo” is heading.

In conclusion. Costa Rica is choosing between two competing visions of democracy itself. One is rooted in strong institutions that many now view as slow and unresponsive. The other centers on leadership capable of imposing direction during moments of crisis. While the latter is not authoritarian by itself, it more often than not leads to democratic backlash. Costa Rica faces this dilemma precisely because of its democratic legacy in Central America, but it is also a reflection of a broader regional shift that extends well beyond its borders.

• A Laura Fernández presidency will test whether the country can strike a balance between these two models, or whether, like much of Latin America, it will move toward a system in which efficiency reshapes the boundaries of democratic practice.

Hemispheric security has become one of the central organizing principles of U.S. foreign policy under the 2025 National Security Strategy. From Venezuela to Mexico, from organized crime to migration, Washington has made clear that instability in Latin America will be treated as a direct national security concern.

• Yet when one looks at how the United States allocates its foreign assistance across the region, a clear contradiction emerges.

• The rhetoric of security has not yet been matched by the structure of spending.

Between the lines. The first graph illustrates this imbalance clearly. Across Latin America, U.S. assistance remains overwhelmingly economic rather than military or security-focused. Even in countries where narcotrafficking, transnational gangs, and territorial criminal control are systemic threats, security assistance represents only a small fraction of total aid. Costa Rica, Guatemala, Honduras, and Mexico receive between 80% and 99% of their assistance in economic form, with military and security aid reduced to symbolic levels.

• This structure is not new. Although 2025 data is not yet fully available, the trend has remained largely unchanged.

• Total assistance has contracted, particularly following the effective dismantling of USAID, but the internal composition of aid has not meaningfully shifted.

• The long-standing assumption that economic development creates opportunity, opportunity reduces crime, and crime reduction stabilizes migration and security outcomes continues to dominate U.S. policy.

Why it matters. The problem is that this logic no longer holds in large parts of Latin America. Organized crime today exploits poverty, but it feeds on weak state capacity. Criminal organizations tend to fill power vacuums in countries where police forces are underpaid, judicial systems are overwhelmed, and infrastructure is insufficient to project territorial control. They provide order, employment, enforcement, and revenue where the state cannot.

• Economic assistance alone does not dislodge these structures; instead, often, it coexists with them.

• Low state capacity has become the single most important enabler of hemispheric insecurity. This is why migration flows continued throughout this century despite economic aid, why drug routes remain resilient, and why criminal organizations adapt faster than governments can respond.

• While the absence of opportunities is a good trigger, the main reason why organized crime blossoms is the absence of credible authority.

Winds of change. The Trump administration has implicitly acknowledged this shift. Its foreign policy posture is isolationist by default, but explicitly interventionist when a hemispheric security threat is identified. The 2025 National Security Strategy leaves the door open for direct action against transnational terrorist and criminal organizations, even beyond U.S. borders. That doctrine fundamentally changes the logic of foreign assistance.

• If security is the trigger for engagement, then assistance cannot remain development-heavy and enforcement-light.

• This does not mean that foreign assistance should stop. On the contrary, it means it must be restructured. Strengthening security forces, improving intelligence capabilities, reducing incentives for corruption within security forces, and investing in infrastructure that enables states to control territory are prerequisites for stability.

• Without law and order, economic development does not trickle down.

Yes, but. The second graph reinforces this argument. When total U.S. foreign assistance is viewed in aggregate, the countries receiving the largest absolute sums are not those with the highest military-to-economic assistance ratios. In fact, the inverse is often true. Countries that receive relatively higher security-focused aid tend to receive far less assistance overall. Meanwhile, Central America, the region closest to the United States geographically and most exposed to spillover risks, remains underfunded in precisely the areas where capacity matters most.

• This creates a paradox, where the countries most critical to U.S. hemispheric security receive aid structured around long-term development models, while facing short-term threats that overwhelm their institutions.

• The result is persistent instability that eventually forces Washington to escalate, whether through pressure, coercion, or intervention.

In conclusion. A rebalanced approach would align security assistance with economic opportunity instead of substituting one for the other. Capable security forces and functional infrastructure create the conditions for investment, local business growth, and employment. Those outcomes reduce migration pressures and the security threat of narcotics. Altogether, higher state capacity through effective security forces and strategic infrastructure allows for local businesses to grow, while it opens new consumer markets for U.S. firms. Stability, not aid dependency, is the real multiplier.

• If hemispheric security is truly the priority Washington claims it to be, then the way it funds Latin America must change accordingly.

• Otherwise, the United States will continue to treat symptoms while ignoring the structural weaknesses that turn economic aid into a temporary patch rather than a lasting solution.

Honduras is entering a new geopolitical phase as Nasry Asfura consolidates his path to power.

Geopolitical realignment. Beyond domestic politics, the transition signals a recalibration of foreign alignments and security priorities. Early moves point to a return to traditional partnerships and a sharper focus on regional security. For Washington, Tegucigalpa is once again emerging as a predictable node in Central America’s strategic map. The first signal of Asfura’s rise is a reversal of the diplomatic posture adopted under Xiomara Castro.

• Asfura has pledged to terminate the treaty with China as a priority of his foreign policy agenda. This marks a clear break from Beijing-oriented diplomacy and restores Honduras to Washington’s preferred orbit, reducing exposure to geoeconomic pressure.

• Recognition of Taiwan is central to U.S. narrative support and deterrence against China’s strategy to seize the island, control semiconductor flows, and project power toward Japan. It also reopens political and commercial channels that historically underpinned bilateral cooperation.

• The reestablishment of Taiwanese trade ties is expected to revive Honduras’ stagnant shrimp industry, a strategic export sector hit hard by the pivot toward China and subsequent market disruptions.

Narcotrafficking policy. The second pillar of the shift lies in security cooperation and counter-narcotics alignment with the United States. Military presence across the hemisphere is a core component of the new U.S. geopolitical strategy. Washington, therefore, seeks to expand and consolidate its footprint after Castro weakened the legitimacy of the Palmerola Air Base, generating friction in bilateral defense relations.

• Honduras’ geography makes it a critical platform for power projection, logistics expansion, and intelligence collection across Central America and the Caribbean, particularly in relation to Nicaragua.

• For Asfura, reducing drug trafficking is not only a governance imperative but a strategic necessity. Inclusion on the U.S. “Majors List” would severely constrain financial flows and undermine international credibility.

Between the lines. The emerging Trump–Asfura arrangement is transactional. Security cooperation is likely to be negotiated in exchange for economic and political concessions. Asfura is expected to seek tariff reductions and preferential trade terms from Washington, mirroring the leverage strategy employed by Guatemala, which linked migration and security cooperation to improved market access.

• To attract capital aligned with U.S. interests, Asfura will need to consolidate the legal status and long-term stability of the Special Employment and Economic Zones (ZEDE), offering regulatory certainty to tech-oriented investors drawn to their highly flexible legal frameworks.

• On the social front, Donald Trump could negotiate limited relief on remittances, partially offsetting the political cost of the new 1% tax, in exchange for tighter border controls and deeper counter-narcotics alignment.

In conclusion. Asfura’s rise signals a pragmatic return to transactional geopolitics, where alignment with Washington is leveraged to stabilize the economy and restore international credibility under the National Party of Honduras. By trading security cooperation and counter-narcotics enforcement for tariff relief, investment certainty, and limited concessions, Nasry Asfura is positioning Honduras as a functional partner rather than an ideological outlier.

• The strategy’s success will depend on delivering measurable results without triggering domestic resistance to sovereignty trade-offs.

What We’re Watching 🔎 . . .

US signs agreement with Guatemala on reciprocal trade [link]

Reuters

Guatemala has signed a new trade agreement with the United States that eliminates tariffs on a broad set of national exports, reinforcing Washington’s economic footprint in Central America at a moment of wider regional realignment. The deal expands preferential access for Guatemalan products to the U.S. market and is framed by the government as a step toward boosting competitiveness, exports, and job creation. It also comes as the U.S. sharpens its focus on hemispheric security and nearshoring, using trade policy as a tool to anchor partners more tightly to its economic orbit.

Beyond the commercial upside, the agreement has clear geopolitical implications. By deepening trade integration with Guatemala, Washington strengthens a cooperative partner in a region increasingly shaped by migration pressures, organized crime, and competition with China for influence. For Guatemala, the deal signals alignment with U.S. priorities at a time when access to the American market remains critical for economic stability. What matters now is whether tariff relief translates into sustained investment and productivity gains, or whether structural constraints at home limit the agreement’s long-term impact.