The Hemisphere In-Flux 🌎 The LatAm-Southeast Asia Startup Corridor
Southeast Asian startups eye Latin America for expansion, Latin America emerges as a haven for global investors following U.S. financial turmoil and El Salvador cracks down on civil society.
The Hemisphere In-Flux features selected stories and news from journalists and media organizations covering Latin America and the Western Hemisphere's most pressing challenges – and opportunities: security, migration, the environment and technology and innovation. The Hemisphere In-Flux is published weekly. By Roberto Patiño and Tony Frangie.
🔥 The Hot Topic
⚙ The Cutting Edge
Innovation and digitalization in the hemisphere
Southeast Asian Startups Eye Latin America for Expansion
The Big Picture: Startups from Southeast Asia are looking to Latin America as their next growth frontier, encouraged by similar demographics, digital penetration, and regulatory frameworks that support fintech innovation. Both regions share a median age around 30 and boast large, digitally connected populations—Brazil and Indonesia lead in online time per day. Venture capital firms Saison Capital and Valor Capital are actively building bridges, each setting aside $100 million for LatAm investment and opening offices in Brazil and Mexico.
What’s at Stake: The opportunity lies in tackling familiar problems—credit access, fragmented financial systems, underserved MSMEs—but in new markets. Southeast Asian firms like Credolab and Moneythor have already entered Latin America, while Brazilian fintech giant Nubank has begun investing in Southeast Asia. Still, challenges remain: language barriers, market fragmentation, and the lack of direct connectivity between the regions mean that success depends on strong local partnerships and region-specific strategies.
Why It Matters: This emerging South-South corridor marks a shift in global innovation flows—where capital, ideas, and products move between emerging markets rather than through traditional North-South pipelines. As Latin America and Southeast Asia align in needs and capabilities, a new transpacific startup axis is taking shape, potentially reshaping how we think about globalization, digital finance, and the next wave of global tech leadership.
⚡ Power Lines
Business and energy in the region
With Wall Street Battered, Latin America Emerges as a Haven for Global Investors
The Big Picture: With global markets rattled by war, tariffs, and geopolitical turbulence, Latin America is attracting a new wave of investment. Brazil and Mexico, the region’s twin giants, are leading the charge—boasting stock markets at record highs, resilient currencies, and policy-driven rate cuts. From sovereign bonds to tech startups, the region’s assets are proving to be high-yield, underpriced, and relatively shielded from global shocks. Even Argentina, long avoided by global investors, is back in the spotlight after President Milei’s reforms lifted capital controls.
What’s at Stake: While LatAm’s weight in global indices remains small, even marginal reallocations from the U.S. and China can generate outsized effects. Brazil’s real and other regional currencies have surged amid carry trades, and equity valuations remain historically low compared to both developed markets and Latin America’s own past. As interest in emerging markets rebounds, investors are shifting attention from crowded Asian plays to untapped opportunities in Latin America—though infrastructure gaps, liquidity constraints, and political risk still limit scale.
Why It Matters: This renewed investor appetite could offer a critical boost to Latin America’s middle-income economies at a time of global capital rebalancing. Countries like Brazil, Mexico, Chile, and even Argentina are positioned to benefit—if they can sustain reforms, deepen capital markets, and convert portfolio flows into long-term growth. Latin America’s moment in the sun isn’t just about attractive multiples and strong currencies; it’s a bet that the region may finally offer both returns and relative stability in an increasingly fragmented global economy.
🦅🐉 The Eagle and the Dragon
Great power competition in the Americas
Crisis in the Crossroads: Protests, Canal Tensions, and Panama’s Strategic Drift
The Big Picture: Panama’s political and economic stability is unraveling as mass protests, foreign investment flight, and U.S.-China tensions converge in the canal country. Chiquita Brands shut down operations in Bocas del Toro amid unrest over pension reforms, marking the third major foreign investor to exit in two years. Behind the turmoil lies U.S. pressure to curb Chinese influence in the Panama Canal—an issue supercharged by Trump’s threat to "take back" the waterway. President Mulino’s deal to expand U.S. military presence has further fueled domestic tensions.
What’s at Stake: Once hailed as the “Singapore of Latin America,” Panama now risks becoming a flashpoint in the U.S.-China Pacific-centered great power competition. Washington's actions—targeting Chinese port operators and reinforcing its military footprint—mirror a broader strategy to assert control over key trade infrastructure. But the local backlash is growing. Panama’s unrest jeopardizes U.S. interests in regional logistics, threatens crucial shipping flows, and exposes the fragility of governance in a country central to hemispheric commerce. If mismanaged, the canal could become a geopolitical liability rather than an asset.
Why It Matters: Strategic chokepoints like the Panama Canal are increasingly caught in the crosshairs of geopolitical rivalry. U.S. companies, from the discussion over a Chinese credit line in Argentina to Alphabet’s submarine infrastructure projects in Chile, are racing to anchor the U.S. digital and economic position in Latin America—but the backlash from foreign interference risks deepening instability.
🛡 Shields Up
Evolving threats and security strategies in the Americas
Crackdown in El Salvador: Human Rights Lawyers Jailed as Bukele Tightens Grip
The Big Picture:
El Salvador’s government has escalated its crackdown on dissent with the arrests of two high-profile human rights lawyers, Ruth López and Enrique Anaya—part of a sweeping campaign against critics of President Nayib Bukele. López, known for exposing official corruption, and Anaya, a constitutional lawyer, are being held without trial, joining a growing list of activists, academics, and journalists who have fled or been detained under the country’s increasingly authoritarian rule.
What’s at Stake:
This marks a turning point in El Salvador’s democratic backsliding, echoing patterns seen in Nicaragua and Venezuela. Bukele’s dominance over all state institutions has left civil society with little recourse. A new “foreign agents” law taxes NGOs receiving international funding and has already driven out watchdog groups. Yet unlike previous cases of regional authoritarianism, this wave of repression is taking place with the approval of Washington: the Trump administration is deepening ties with Bukele, praising his security model and even funding the deportation of migrants to El Salvador’s megaprison. Civil space is closing fast—and with it, hopes for accountability.
Why It Matters:
As Bukele’s model of “efficient authoritarianism” gains regional appeal, the silence—or endorsement—of the United States signals a strategic shift: stability and migration control are being prioritized over democratic norms. For civil society across Central America, the message is chilling. The criminalization of dissent in El Salvador could soon be replicated elsewhere, especially if autocratic leaders believe that Washington will look the other way.
🧭 Americas on the Move
Migration and policy responses across the region
Trump Scales Back Deportations in Key Industries Amid Political Blowback
The Big Picture: Facing backlash from farm, hotel, and restaurant sectors —many of which are economically dependent on undocumented workers— the Trump administration has ordered ICE to pause mass workplace raids in those industries. The shift follows protests in Los Angeles and rare public admissions from Trump that his immigration crackdown was “hurting” key domestic constituencies. The internal directive, confirmed by DHS, instructs agents to stop arresting “noncriminal” undocumented workers in sectors critical to the U.S. economy.
What’s at Stake: This policy pivot exposes the tensions at the heart of Trump’s second-term immigration agenda. While deportation figures have surged —topping 2,000 daily arrests— the administration risks economic self-sabotage by targeting the labor backbones of rural and service economies. The rollback also undermines hardliners like Stephen Miller, who continues to push for a baseline of 3,000 daily arrests. Meanwhile, the mixed messaging within DHS leaves ICE agents confused about long-term enforcement goals.
Why It Matters: Migrants make up a vital share of the U.S. workforce in sectors like agriculture, hospitality, and food processing, often taking on roles that are difficult to fill. Trump’s crackdown threatens to destabilize these industries, raise consumer prices, and weaken local economies. Beyond the human toll, the economic impact of mass deportations undermines labor supply, reduces tax revenue, and strains already tight labor markets. The reversal reveals the quiet but powerful dependence of the U.S. economy on immigrant labor, legal or not.
🦜 Spaceship Earth
Climate risks and environmental challenges in the Western Hemisphere
Brazil Pushes Controversial Energy Projects Ahead of Amazon Climate Talks
The Big Picture: Just months before Brazil hosts its first U.N. climate summit in the Amazon, the Lula administration is facing mounting scrutiny over its environmental policies. In a rush of approvals, the federal environmental agency gave Petrobras the greenlight to drill offshore near the mouth of the Amazon River and authorized rock-blasting along 40 kilometers of the Tocantins River to boost inland navigation. Both moves have triggered backlash from local environmental groups and exposed fractures within Lula’s cabinet.
What’s at Stake: These decisions risk damaging Brazil’s credibility as a climate leader ahead of the COP30 talks. While Lula touts the country’s clean energy credentials and climate goals, the concessions to extractive and infrastructure interests suggest a government increasingly responsive to economic and logistical pressures. The projects may have long-term ecological consequences in sensitive biomes and raise questions about environmental governance under Lula’s third term.
Why It Matters: Brazil’s dual role as a climate summit host and Amazon power broker places it under an international spotlight. The tension between its green diplomacy and extractive policies could undermine regional conservation efforts, erode trust from Indigenous and grassroots movements, and signal to other countries that economic interests can override environmental commitments — just as the planet’s largest rainforest faces irreversible tipping points.