By James Bosworth* – World Politics Review
In Latin American elections, big debates about the left-right ideological divide and the geopolitics of U.S. and Chinese influence often take a back seat to simple concerns about day-to-day living, such as whether the light goes on when you hit the switch. Ecuador has faced power shortages for months, and Chile, Honduras and Argentina have all experienced major blackouts in the past two weeks alone. The wave of outages can be traced to a complex mix of climate risks, infrastructure neglect and policy failures. But these are all converging at a politically sensitive moment because, coincidentally, Ecuador, Chile, Honduras and Argentina all have big elections scheduled this year.
Ecuador’s power cutoffs became a regular occurrence late last year, with Ecuadorians at one point enduring up to 14 hours of blackouts daily. The root cause was climate-related, as the worst drought in 61 years reduced water levels in hydroelectric reservoirs that provide over 70 percent of the country’s electricity. However, the problems also pointed to previous governments’ failure to invest in infrastructure, which in turn highlighted the country’s experience with corruption-riddled Chinese megaprojects. The nightly blackouts reduced economic growth and contributed to security fears driven by the rising gang warfare in the country. President Daniel Noboa recently declared that the crisis was officially over, as rains have now refilled the reservoirs. However, the months of blackouts, curfews and reduced business hours linger over the upcoming second-round presidential election in April, in which Noboa faces a tight runoff against Luisa Gonzalez.
On Feb. 25, Chile suffered its worst blackout in 15 years. Most of the country and over 90 percent of the population lost power when a major northern transmission line failed, triggering a cascade through the interconnected grid. That meant that Santiago, a city of over 8 million people 600 miles to the south of the initial failure, went totally dark. President Gabriel Boric declared a curfew for security reasons, while Interior Minister Carolina Toha—who unrelatedly resigned just days after the power outage to run in the country’s presidential election this fall—took over crisis management. The incident revealed serious gaps in Chile’s electrical redundancy and raised questions about how regulators have overseen the private companies managing transmission lines.
On March 1, the failure of an interconnection with Nicaragua triggered a nationwide blackout in Honduras. The state utility company admitted the outage revealed a “structural problem due to lack of investment in transmission over 15 years,” exacerbated by what government officials described as “public-private corruption.” The outage occurred a week before primary elections to nominate presidential candidates for the November election, meaning the government of President Xiomara Castro was particularly incentivized to blame her political opponents for the electrical breakdown. Though resolved within a day, the outage highlighted serious infrastructure failings that could easily resurface in the absence of more investment.
Finally, over 1 million people lost power in Argentina’s capital of Buenos Aires during a Southern Hemisphere summer heatwave last week. As temperatures soared above 110 degrees Fahrenheit, multiple high-voltage transmission lines overloaded and failed. One major problem is that the equipment undergirding the country’s electrical grid is more than 50 years old, but is still in service due to decades of underinvestment. Argentina has faced periodic bouts of hyperinflation, but successive governments also froze electricity prices for years, leaving them unable to afford an upgrade. As part of his structural reforms, President Javier Milei has begun removing the price freezes on electricity costs, which makes life more expensive for people and businesses. But the country is still far from having enough money to invest in major grid upgrades, which in any case wouldn’t be completed before congressional mid-term elections in October.
All four of these outages point to infrastructure challenges that preceded the current presidents’ administrations. At least three of the four were likely exacerbated by climate change. For those reasons, it’s not fair to place all the blame on Noboa, Boric, Castro or Milei. At the same time, as the presidents currently in office, they are responsible for keeping their countries running. Voters cannot be faulted for taking the infrastructure failures into consideration when they enter the voting booths later this year.
These aren’t the only countries with electricity challenges. Even the two largest countries in the region face similar problems. Mexico’s Federal Electricity Commission has had trouble keeping up with demand during recent summers, as government policy favoring the state-owned utility has held back private investment. Meanwhile, an article in the Guardian last week described how data centers in Brazil compete for electricity with local populations. While the article focused on Brazil, this issue is likely to emerge in nearly every country from Mexico to Argentina, as U.S. and Chinese technology companies build out their electricity-hungry data centers across Latin America.
All of these examples highlight the difficult balances that governments must strike between short-term crisis management and long-term resilience, between affordability and investment needs, and between state control and private sector participation. National and cross-border interconnections are important, but grids must be built so that an outage in one spot remains a localized failure that doesn’t end up cutting off the power to millions of customers hundreds of miles away. And they must do all of this at a moment when climate change and new green energy technologies are making the old models of energy planning obsolete.
That’s a big task, far bigger than any one president can solve in a single presidential term. Countries need the political and economic stability to allow for many years of investments and upgrades. They need political systems that will support those projects across multiple administrations. While every president and legislature is entitled to put their mark on policies and regulations, there must be some guarantees of stable and fair rules offered to private sector actors in order to attract foreign investments.
Latin America is already in the midst of an anti-incumbent political environment, and it’s quite possible that these presidents and their parties will face a voter backlash for electricity failures. To combat that risk, many of them will likely try to point fingers at their predecessors, as well as at systemic corruption and climate change. That’s understandable given the nature of electoral politics. But countries will better position themselves to succeed if they can work across party lines to turn these types of energy and electricity investments into generational projects that go well beyond any single election cycle.
*James Bosworth is the founder of Hxagon, a firm that does political risk analysis and bespoke research in emerging and frontier markets, as well as a global fellow at the Wilson Center’s Latin America Program. He has two decades of experience analyzing politics, economics and security in Latin America and the Caribbean.