The Balkanized States of (Hispanic) America

Dear all,

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

Today’s edition contains one of the most important explanations of why this newsletter exists. While our continent has almost 500 million native Spanish speakers, compared with roughly 300 million native English speakers, this newsletter is written in English—and there is a reason for it: the United States is the axis around which geopolitics oscillates. But 200 years ago, when the U.S. was barely 50 years old and struggling for survival against the European powers, that was not the case.

History unfolded against the logic of geopolitics. The vast expanse of the former Spanish colonies—which shared a common culture, religion, language, political institutions and traditions—lost the race to a more effectively integrated federation of just 13 colonies. Today, rather than constituting a competing power, Hispanic America has, in many respects, become the strategic backyard over which the United States exercises predominance—and rightly so, for such is the logic of international politics. The story of how that happened, however, is far more complicated and tragic.

It is a story of colonial rivalries, elite competition and Balkanization. Both regions began from remarkably similar starting points, united by a profound commitment to liberty and republican government. The difference lay in the sense of political unity that the former Spanish colonies lacked, but which the Thirteen Colonies embraced from the very beginning, 250 years ago. That is why the 250-year American experience is so significant: it is the story of a nation that overcame extraordinary odds to become the greatest superpower in history. It is also the reason why GCaM is written in English, even though all of its authors are native Spanish speakers.

The story behind America 250 is remarkable. The story behind Panama 200 is tragic.

In this issue, you will find:

• America 250 and Panama 200: From Sister Republics to Backyard

• High Margins: Chevron’s Upstream Reconfiguration in South America

As always, please feel free to share GCaM with your friends and colleagues. We all, at the GCaM team, wish you a good weekend.

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After 250 years of American independence and 200 years since the Congress of Panama tell the story of two Americas that followed radically different paths; but the United States didn’t become a superpower because it won a race. Latin America lost it by failing to become a region.

In perspective. July 2026 presents one of the most remarkable historical coincidences in the Western Hemisphere. While the United States celebrates the 250th anniversary of the Declaration of Independence, Latin America quietly marks 200 years since Simón Bolívar convened the Congress of Panama—the first serious attempt to unite the newly independent Spanish American republics into a common political and strategic bloc. Both commemorations trace their origins to republican revolutions that rejected European colonial rule and sought to establish a new political order in the Americas. Yet, two centuries later, they tell fundamentally different stories. One republic evolved into the world’s foremost military, economic and technological power. The other half of the hemisphere became a fragmented region whose strategic importance has often been defined less by its own collective ambitions than by its relationship with Washington.

• The United States consolidated while Spanish America fragmented. The thirteen colonies became a single federal republic with common institutions, an integrated market and a unified foreign policy. In contrast, Bolívar’s Gran Colombia dissolved, Central America fractured into separate republics and the broader region pursued competing national projects that often overshadowed regional cooperation.

• The Congress of Panama represented Latin America’s first integration project. Bolívar envisioned a permanent confederation capable of coordinating defense, diplomacy and commerce among the new republics. The initiative ultimately failed to overcome political rivalries, leaving the region without the institutional architecture that could have used geographic proximity as a geopolitical leverage.

• The divergence accelerated with industrialization. Political unity allowed the United States to develop continental infrastructure, deep financial markets and a large internal economy. Much of Latin America instead remained dependent on commodity exports, foreign capital and fragmented domestic markets, reinforcing structural asymmetries that persist today.

Between the lines. The contrasting trajectories of North and South America were not simply the result of geography or natural resource endowments. Instead, they reflected fundamentally different models of state-building, institutional development and regional integration. While Washington steadily expanded its economic reach and strategic influence across the hemisphere, Latin America spent much of the nineteenth and twentieth centuries managing issues like domestic instability, territorial disputes and competing national interests. Rather than producing two comparable poles of power in the Americas, these dynamics gradually created a hemisphere organized around a single dominant actor.

• The Monroe Doctrine ultimately eclipsed Bolívar’s vision. What began in 1823 as a warning against European intervention gradually evolved into the foundation of U.S. hemispheric primacy. By the twentieth century, Washington had become the region’s superpower, replacing Bolívar’s aspiration for cooperation among equals with an increasingly asymmetrical regional order.

• From the Congress of Panama to ALALC, the Andean Pact, Mercosur, UNASUR and CELAC, Latin America has repeatedly sought greater political and economic coordination. Yet ideological divisions, shifting governments and competing national priorities have prevented those institutions from developing into a cohesive geopolitical bloc comparable to the European Union or even the United States’ own federal system.

• The hemisphere became increasingly connected through trade, investment and migration, but largely around the gravitational pull of the United States. Today, Washington remains the principal export destination for much of the region, the dominant source of FDI across key industries and the primary destination for Latin American migrants.

Why it matters. The coincidence between America’s 250th anniversary and the bicentenary of the Congress of Panama arrives as the hemisphere enters another period of geopolitical transformation. Competition between the United States and China, the reconfiguration of global supply chains, energy security, migration and organized crime have once again placed the Americas at the center of global strategy. Yet, despite all its comparative advantages, Latin America continues to approach its challenges largely as a collection of individual states rather than as a coordinated regional actor.

• The region continues to negotiate from a position of fragmentation. Whether on trade, migration, security or investment, Latin American governments rarely present unified positions, allowing larger powers to negotiate bilaterally rather than with the region as a whole.

• As companies seek to relocate production closer to North America, Latin America possesses a historic opportunity to integrate into regional manufacturing chains. However, fragmented regulations, uneven infrastructure and political uncertainty continue to prevent the region from capitalizing fully on that moment.

• From organized crime and migration to energy interconnection, critical minerals and digital infrastructure, many of Latin America’s most pressing issues transcend national borders. Yet organizations such as CELAC, Mercosur and the Pacific Alliance have struggled to evolve into effective mechanisms for regional action.

In conclusion. The anniversaries of 1776 and 1826 remind us that history is not predetermined. Two centuries ago, both North and South America emerged from colonial rule convinced that republican government represented the future. One project ultimately produced a continental federation capable of becoming a global superpower; the other produced a constellation of sovereign republics that shared language, history and geography but rarely acted in concert. The difference was not simply one of wealth or resources, but of institutions, political cohesion and the ability to transform common interests into collective power. The Balkanization of the Americas is the reason for such a big difference between the north and the south side of the U.S. border.

• The Congress of Panama ultimately failed, but its diagnosis remains remarkably current. Bolívar recognized that fragmented republics would struggle to preserve strategic autonomy in a world dominated by great powers—a dilemma that continues to shape Latin America’s foreign policy today.

• The United States did not simply become stronger; Latin America became comparatively weaker. Today’s hemisphere still reflects decisions made two centuries ago. The United States continues to define much of the region’s strategic environment, while Latin America continues searching for formulas of cooperation capable of geopolitical relevance.

• Ultimately, the simultaneous celebration of America’s 250th anniversary and the Congress of Panama’s bicentenary is more than a historical coincidence. It is a reminder that the Western Hemisphere was built upon two competing visions of republican order. One produced a nation capable of shaping the international system. The other left behind a region that, despite its immense potential, still struggles to become more than the strategic backyard of the world’s most powerful republic.

The volatile landscape surrounding the Strait of Hormuz is being actively capitalized on by Chevron, as highlighted by its strategic move to revive a massive Iraqi oil field formerly operated by Russia’s Lukoil.

• However, the supermajor’s long-term geographic reconfiguration is increasingly anchored in Latin America, particularly in Guyana and Argentina.

• Driven by favorable domestic political shifts and explicit U.S. diplomatic backing, Chevron is recalibrating its upstream profile to mitigate structural exposure.

In perspective. The structural pivot away from mature, low-margin jurisdictions represents a deliberate capital migration designed to maximize cash-flow efficiency and optimize upstream value. By liquidating its interests in the Canadian Athabasca oil sands and Duvernay shale for USD 6.5B, Chevron is systematically offloading capital-intensive, high-emission operations. These divested funds are being actively redeployed into high-margin frontiers across Latin America, where the combination of lower break-even costs and favorable regulatory realignments offers superior long-term returns.

• The exit from Alberta’s oil sands successfully unloads carbon-heavy, asset-heavy liabilities, reducing long-term exposure to capital-intensive mining processes and strict domestic environmental regulations.

• Capital is diverted directly to Guyana’s offshore Stabroek Block, securing premium, low-breakeven crude assets that promise substantial, high-margin future cash flows.

• Expansion within Argentina’s Vaca Muerta formation acts as a strategic geopolitical risk adjustment, positioning Chevron to exploit premier shale reserves under a market-friendly political landscape.

Guyana. The case of Venezuela’s neighboring country represents a textbook example of structural asset de-risking through rapid institutional adaptation and state-led resource management. To prevent the onset of Dutch disease—the systemic decay of non-oil sectors often triggered by massive capital inflows during, in this case, an oil boom—the government has implemented a framework that pairs regulatory speed with macroeconomic insulation. For Chevron’s long-term value capture, this combination of bureaucratic agility and institutional hedging creates an exceptionally predictable environment for high-margin, low-breakeven operations.

• Broad-based institutional modernization and targeted bureaucratic overhauls have significantly streamlined the administrative framework, accelerating project approvals and minimizing friction for upstream operators.

• The strategic integration of the Gas-to-Energy initiative works alongside a robust Natural Resource Fund—whose capital balance crossed the USD 4B mark at the end of April 2026—safeguarding non-oil industries against structural volatility while guaranteeing long-term fiscal stability.

Argentina. The country’s aggressive regulatory pivot has successfully unlocked massive capital positioning from Chevron, transforming the Vaca Muerta formation into a primary theater for unconventional asset growth. By leveraging newly implemented large-scale investment incentives, the supermajor is replicating its domestic Permian Basin playbook to maximize liquidity extraction while insulating its global portfolio from long-cycle capital lockups. This structural transformation has simultaneously revolutionized subnational fiscal dynamics, altering regional risk profiles and giving local provinces direct paths to international debt optimization.

• Chevron’s USD 13.8B investment plan under Argentina’s special tax regime is designed to mirror the agile, short-cycle production models of U.S. shale. By executing short, low-capital investments in shale oil production, Chevron creates a dynamic operational hedge capable of absorbing rapid shifts in global demand elasticity.

• This localized upstream boom has structurally upgraded subnational credit-risk profiles, enabling Neuquén—a province that contains a major portion of Vaca Muerta—to pursue up to USD 500M in U.S. bonds in the coming days of July, backed by the robust future liquidity and hard-currency inflows generated by the shale oil and gas export surge.

In conclusion. By anchoring massive corporate capital injections within cooperative regional corridors, the United States is effectively underwriting the fiscal and investment architecture of its strategic energy partners in Latin America. This systematic execution of friendshoring allows Washington to capture a dominant share of global upstream CAPEX and secure future supply lines, structurally insulating the Western Hemisphere from the volatility of traditional Eurasian maritime choke points.

• For host nations like Guyana and Argentina, this alignment guarantees a transformative influx of hard currency and critical infrastructure, permanently strengthening regional energy security against global macroeconomic shocks.

• However, the ultimate stability of this axis will depend on whether these developing institutional frameworks can successfully absorb such massive liquidity without generating severe localized distortions, provoking regulatory pushback, or undermining fiscal stability.