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Is Your Town Nearing Extinction? Try Turning It Into a Resort

Welcome to the world of alberghi diffusi, where tiny villages are going all-in on tourism to save themselves.

Civita di Bagnoregio, in the mountains north of Rome, is home to Corte della Maestà.

Photographer: Andrea Frazzetta/Institute for Bloomberg Businessweek

September 20, 2018 at 1:00 AM EDT

Roughly 2,500 villages in Italy and almost 3,000 in Spain are at risk of becoming ghost towns. In Japan, 8 million or so buildings sit vacant. As better jobs and modern lifestyles lure young people to cities, what happens to the crumbling hamlets they leave behind?

A few aspiring hoteliers are fighting brain drain and rural flight by turning abandoned buildings in their villages into hospitality hubs. The Italians even have a name for these towns-turned-resorts: alberghi diffusi, or "scattered hotels."

In Matera, a mountain town in Puglia, one called Sextantio has almost single-handedly put the region back on the tourism map. The hotel’s 18 well-appointed rooms, tucked into cave dwellings that were once part of a sprawling Benedictine monastery, bring travelers from the world over to live the medieval life in this once-forgotten spot. Likewise, entrepreneur John Papadouris has been so successful resurrecting his hometown of Kalopanayiotis in Cyprus—thanks to his 40-room hotel and spa—that the country’s president asked him to join the government and do the same for 115 other communities in the area.

A visit to such properties can feel like a journey to a long-lost, simpler time, but in reality these places are a harbinger of the future, a template for how to save dying towns all around the world. In Romania, the owners of Village Hotel Maramures are attempting to revive Breb, one of Transylvania’s best-preserved traditional hamlets, where residents still ride in horse-drawn carriages. The bed-and-breakfast has rooms in four houses, near the reported doorstep of Dracula’s castle.

Next year, in the Italian-speaking Ticino region of Switzerland, the 10 or so remaining residents of Corippo will complete a transformation of their town into a luxury hotel, with rooms in once-abandoned stone cottages and a "lobby" in the main square. The model is really taking off in Japan, where Sasayama Castle Town Hotel—five villas throughout an Edo-era municipality known for its quality beef—is now the flagship for Nipponia, a budding brand of village hotels.

Aerial view of Nipponia’s Sasayama location, with the town’s castle in the center.Source: Sasayama Castle Town Hotel

Giancarlo Dall’Ara, an Italian hotelier and tourism marketing professor, set the first and only standards for these accommodations in 2012, when he created the National Association of Alberghi Diffusi. He penned a manifesto identifying their core components: They cannot occupy new structures, the scattered buildings that make them up should be no more than 500 meters apart, and they must contribute to sustainable socioeconomic development. They must also act more like hotels than Airbnbs, with clearly marked reception areas, hot breakfasts, and other amenities. According to Dall’Ara, the concept should be able to stem depopulation and create jobs, alleviating the immediate crises facing many of these fading rural communities. "This is an emergency," he says. In some places, entire villages have been put up for sale. Towns in the Jura region of France or Galicia in Spain can be had for as little as €150,000 ($175,000), the way of life there having effectively ended.

Dall’Ara estimates there are roughly 110 alberghi diffusi in Italy, up from about 20 in 2008. The Airbnb revolution has inadvertently contributed to the rise of this sort of accommodation. The home-sharing platform has exposed travelers to off-the-beaten-path destinations where large hotels have yet to arrive and fueled the rise of so-called authenticity seekers.

"Thanks to Airbnb and thanks to the fact that travelers care more about sustainability now, this idea of ‘living like a local’ feels current," Dall’Ara says.

Here are four to book now.

At Casale Panayiotis, Cyprus, a stone-walled church on the grounds.Source: Casale Panayiotis

Casale Panayiotis

Location: One hour west of Nicosia, the capital of Cyprus
Best room: A Loutraki suite; the building has the best valley views and its own restaurant
The vibe: Hillside retreat

John Papadouris, a civil engineer by trade, grew up in Kalopanayiotis, one of the tiny towns dotting the Troodos Mountains. Pampering was the area’s local claim to fame: Legend held that the Greek goddess Aphrodite bathed in natural grottoes in the nearby Paphos Forest. Kalopanayiotis itself first emerged as a spa town, thanks to the curative properties of its abundant sulfur springs.

However, it wasn’t a place where anyone could find fortune—"there were poor people and merely well-to-do people," Papadouris recalls. After college, he found brighter, more profitable pastures in Dubai, a city that he helped transform from sand to skyscrapers over a long career with the infrastructure contracting company Wade Adams.

By the time he revisited his hometown in the late 1990s, most everyone had moved to Nicosia to find employment, and the cobbled streets were in disrepair. "The village had not died completely," he says. "But if it originally had a capacity of 1,500 people, only 200 remained. In another 10, 15 years, it would have been completely dead."

In 2000, Papadouris downgraded his role at Wade Adams and moved home. Not long afterward he became mayor—winning the election by six votes—on a campaign promise to bring the village back to life.

Papadouris bought a few abandoned homes, envisioning them as potential Airbnbs. The effort helped him secure European Union grants for townwide historic preservation efforts. By 2010 his renovations had morphed into a 13-room hotel, with a conference center in the former home of a prosperous family. He estimates that it cost $6 million in both private and public funding, or twice his initial budget.

The spa at Casale Panayiotis uses the area’s famous, sulfur-rich springs.Source: Casale Panayiotis

In the years since, the hotel has grown to include an additional 27 rooms across multiple buildings and a spa. Besides therapeutic bath rituals, it also offers a mosaic-tiled Rasul mud chamber (for mineral-rich scrubs) and a couples treatment room that can be booked for candlelit nighttime massages. Most recently, Papadouris added a small vineyard on the village’s periphery; this summer it began bearing fruit.

"Nobody was employed in the village itself when I started," says Papadouris; locals traditionally found work, agricultural or otherwise, beyond the town limits. "Now we must have 100 or 120 people employed, half of them in my hotel."

His estimate doesn’t include the thriving businesses that have sprung up to support the village’s newfound tourism industry—apartment rentals, tavernas, small grocery stores, and the like. That’s why last August, Nicos Anastasiades, the president of Cyprus, asked Papadouris to replicate his tourism scheme across the entire Troodos region, covering 115 dying towns in total.

As for Casale Panayiotis itself, the hotel is finally profitable, after almost a decade of breaking even. It’s selling out just about every weekend of the year. Still, Papadouris cautions, "You can’t treat a project like this as an investment. As a businessman, I would never do it." From $134;

A guest room at Nipponia’s Sasayama location, Japan.Source: Sasayama Castle Town Hotel


Location: 40 miles west of Kyoto, Japan
Best room: Nokon 801 looks straight onto Sasayama Castle
The vibe: Minimalist chic

Most village hotels are one-offs—but not Sasayama Castle Town Hotel, which opened in 2015 and was expanded this August. It’s the flagship of a new hotel brand, Nipponia, which is an initiative from a Japanese historical preservation developer. Set in an Edo-era trading post, the property has a cluster of 10 rooms spread across seven centuries-old homes, including the landmarked former residence of a wealthy banker and a onetime geisha house. Walking amid Sasayama’s ceramic-tiled roofs, mossy gardens, and traditional pottery workshops is a time warp.

In March, Nipponia opened its second location, Sawara Merchant Town Hotel, with rooms occupying 100-year-old wooden structures in a sake- and soy-brewing town some 50 miles east of Tokyo. Guests use it as a base for taking boat rides down Sawara’s willow-lined canals and enjoying indulgent, kaiseki-style meals with many, many courses, often featuring local shellfish. From $234;

Dinner service at Corte della Maestà, Italy.Photographer: Andrea Frazzetta/Institute for Bloomberg Businessweek

Corte Della Maestà

Location: Lazio, a 90-minute drive north of Rome
Best room: The Writer, which features a dark, floral wallpaper reproduced from Virginia Woolf’s London home
The vibe: Magical realism, Italian-style

One of the smallest and most picturesque alberghi diffusi sits on a hilltop that juts out of the earth like a divine throne. Corte della Maestà makes up the majority of a town called Civita di Bagnoregio, founded 2,500 years ago by the Etruscans as a trading post.

Time hasn’t been especially kind to Civita: Earthquakes and erosion knocked out the bridges that once connected it to neighboring communities, leaving its chestnut-lined, cobblestoned streets and pastel buildings accessible only by a narrow, 300-meter-long catwalk.

A drone’s-eye view of Civita di Bagnoregio.Photographer: Andrea Frazzetta/Institute for Bloomberg Businessweek

Among Civita’s 10 full-time residents are poet and psychiatrist Paolo Crepet and his wife, Cristiana Melis, who moved here to raise their daughter "surrounded not by richness but by beauty." He says that when a real estate agent offered him the grandest building in town, a towering structure from the 15th century that was once the archbishop’s residence, "I thought she was crazy—I’m not that type." But the original frescoes in the private chapel, now his living room, inspired him to undertake an ambitious restoration. "The whole thing took 20 years, and it was just the beginning," Crepet says with a laugh.

Eventually an elderly neighbor decided to move closer to the conveniences only a city could offer. So the couple bought her home, too, with the idea of turning it into a guesthouse. "Cristiana and I had space enough, but we decided, why don’t we think about it as a place to welcome somebody?" he says. Inside the Maestà Suite, the kitchen walls are festooned with copper pots and pans, the living room’s historic stone fireplace and wood floors have been refinished, and the bedroom upstairs is lined with rare French wallpaper.

The "Wolf’s Lair," where guests can curl up with a book.Photographer: Andrea Frazzetta/Institute for Bloomberg Businessweek

The narrative played out a few more times, and Corte della Maestà now has five suites around town, most of them clustered around the archbishop’s former garden. Crepet claims that none of the buildings he owns—or any of the structures in town, for that matter—were built after the 1700s. "There’s no other village that can say that in all of Italy," he adds.

Today he and Melis serve their guests breakfast in the garden, send them on olive oil tastings or horseback rides during the day, then hire local women to cook rustic dinners in the archbishop’s old canteen before arranging late-night glasses of wine in the village square. "It’s not a hotel," Crepet says. "It’s part of our home." And it’s busy, booking up with corporate retreats, families, and honeymooners from early March through November. From $350;

A pool at the hotel’s Villa Rouge.Source: Chateau Castigno

Chateau Castigno

Location: Southern France, 40 miles from the Mediterranean
Best room: The former grape pickers’ home, Maison de Famille, has its own pool
The vibe: Oenophile oasis

Assignan, a tiny town in the wine-producing Languedoc region, is the ideal of countryside charm. On any given morning, you can stroll its sun-dappled streets and stop at its quaint cafes with pastel flower boxes so impeccably manicured, you may as well be in Belle’s village from Beauty and the Beast. The population numbers 120, many of whom are engaged in agriculture and winemaking. (According to local lore, the nearby vineyards are older than the Roman Empire.) The family with the longest connection to the area has lived here since the 10th century.

These days, almost as many people work at the village’s hotel, Chateau Castigno, as in the wine trade. The resort, which opened in 2016, employs up to 20 percent of the town depending on the season. It occupies a 12th century castle—where its owners live—plus a dozen other buildings, all of them blissfully free of Wi-Fi. Dinner is at any of the property’s three restaurants: a fine-dining spot called La Table; the Asian bistro Le Thai; and La Petite Table, a wine bar.

"This might look like a typical French village," says property director Elsa Manelphe de Wailly. "But behind the scenes it has nothing to do with a traditional French village. We speak Spanish, English, German, Italian. It’s kind of a laboratory of hospitality." From $304;

La Petite Table, one of four restaurants at Chateau Castigno, France.Source: Chateau Castigno
Dining at Chateau Castigno’s Thai restaurant.Source: Chateau Castigno

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    A US Nuclear Revival — and Net Zero — Depends on Westinghouse

    The Alvin W. Vogtle nuclear power plant in Waynesboro, Georgia. The fourth unit (far right) of the first nuclear power plants built in the US for three decades is expected to come online in 2024, nearly seven years behind schedule and billions of dollars over budget.

    Photo: Courtesy of Georgia Power Company

    var(--tw-content)Jonathan Ford

    A US Nuclear Revival — and Net Zero — Depends on Westinghouse

    Climate change and geopolitics have restored the fortunes of the onetime world leader in nuclear technology. But without more help from Washington, a budding renaissance in this reliable zero-carbon energy source will stall.

    December 3, 2023 at 8:00 AM EST
    Jonathan Ford is a freelance writer. He was the chief leader and city editor of the Financial Times, and has held senior editorial positions at Prospect Magazine, Reuters and Breakingviews.

    Along a corridor in Westinghouse Electric Co.’s nuclear fuel factory, not far from Columbia in South Carolina, a giant map of the world adorns the wall. Dotted across it are colored labels denoting the US company’s customers. These are the power plants to which Westinghouse delivers batches of atomic fuel.

    Traditionally, most were in North America and Western Europe, with some in the more far-flung regions of Asia. There were fewer in Central Europe or the former Soviet Union. That was Russian territory, dominated by the old Soviet nuclear giant, Rosatom. In recent years, however, Westinghouse has started filling in that section of the map.

    First came Ukraine in 2014, when the state nuclear utility, Energoatom, scrambled to offset its almost total dependence on Rosatom after Russia’s seizure of Crimea. Then, more recently, the switching accelerated. The Czech state-owned utility, CEZ AS, announced it would replace Russian fuel at its Temelin and Dukovany stations. Soon after, Bulgaria and Finland said they were switching too.

    Customers aren’t moving their business out of convenience or to save money. Changing nuclear fuel suppliers is time-consuming, and Westinghouse fuel isn’t cheap. The reasons are geopolitical: a lack of trust in Russia’s bona fides, magnified dramatically since February 2022 when Moscow launched an all-out assault on Ukraine.

    Down in the South Carolina factory’s cavernous main hall, where workers are constructing the tall latticework towers that hold the reactor-powering fuel, some are already working on distinctive ones for Russian-built reactors. Until now, these have been made in Westinghouse’s plant in Sweden, but more capacity is needed. Given the surge in orders, the learning process has necessarily been swift, explains Karen Gay, a plant spokesperson. "It went from a two-year-down-the-line thing to a now thing," she says.

    Ukraine and the Net Zero Imperative

    Roll back a few years and the idea of Westinghouse as some sort of Western champion juggernauting into Russian export markets would have seemed preposterous. In 2017, the company filed for bankruptcy after running up some $7 billion of losses on two nuclear contracts in the American South. The first big deals it had won at home in a generation, these involved a new large reactor, the AP1000. One of the contracts was abandoned after $9 billion had been spent, and the customer’s chief executive was subsequently jailed for fraud.

    For a company that had once driven the development of commercial nuclear energy — building America’s first atomic power station in 1957 and then around a fifth of the world’s 440 operating civil reactors — it was a humiliating comedown. When, in 2018, Westinghouse was purchased from its previous owner, Toshiba Corp., for $4.6 billion by Brookfield Asset Management Ltd., a giant Canadian fund manager more associated with commercial real estate than atomic engineering, there was even talk of it abandoning new nuclear development altogether. That would have left the US without a large reactor maker for the first time since the dawn of the atomic age.

    The surgery was ultimately less radical. Under Patrick Fragman, a French engineer who had once worked for France’s nuclear safety agency, the new management cauterized the wounds left by Toshiba’s ill-advised growth dash. Instead of building reactors from scratch, Westinghouse would just supply the designs and install components. Finishing the surviving US project — at the Alvin W. Vogtle plant in Georgia — would prove it could bring an AP1000 into commission in America. "Countries didn’t want to touch new build programs with a 10-foot pole at the time," Fragman says. "But I was saying that the facts are stubborn: There is no way we will get to net zero without having some sort of nuclear component in many countries."

    That toehold now looks potentially very valuable. The US Department of Energy recently estimated that to reach its decarbonization goals, the US would need to triple its nuclear capacity by 2050 to around 300 gigawatts. Vladimir Putin’s invasion of Ukraine, meanwhile, has transformed the need to move away from fossil fuels into something urgent: a now thing, not a one-to-two decades down-the-line thing. Nuclear energy — long out of favor — has re-emerged as the only zero-carbon and reliable baseload alternative for European countries seeking to wean themselves off the drug of Russian gas or dirty, carbon-belching coal.

    The Rivne nuclear power plant in Ukraine became the first Soviet-built plant to receive US fuel for VVER-440 reactors, from the Westinghouse Electric plant in Vasteras, Sweden, produced jointly with Energoatom, Ukraine's national nuclear energy company.Photographer: Roman Pilipey/AFP via Getty Images

    For Westinghouse this means more than just a rush of orders. It opens dizzying visions: a way back from perdition to the front rank of nuclear suppliers in a reinvigorated industry. As one of the few Western companies with all the pieces in place — a reactor licensed and ready to sell with examples already in operation, and a big fuel-making business — it is critical to the West’s efforts not just to rebuild its nuclear infrastructure, but also to deprive Russia of a vital source of power and income and to strengthen the transatlantic alliance.

    Yet Westinghouse is very far from turning this dream into reality. Its recovery is lopsided and confined largely to the servicing business. That bustle and optimism have yet to transfer to the new reactor side — and for deep-seated reasons. Years of inertia have denuded the company of capital, skills and willing customers. While rhetorically committed to building new nuclear plants, policymakers in Washington have yet to grasp the sheer difficulty of getting reactor construction moving domestically. That will require a wholesale reboot of the compact between the state and industry — what you might call the nuclear-industrial complex. Without it, Westinghouse will continue firing solely on one cylinder, and the odds of America, and the West, missing its climate targets will soar.

    An Industry’s Rise and Fall

    About an hour’s drive east of Nashville, Tennessee, a giant lone cooling tower looms above a line of trees. This is almost the last physical manifestation of the Hartsville atomic station. Once intended to be the world’s largest, it was to have four giant reactors pumping out 5,000 megawatts — enough to power around 3 million homes. Then in the early 1980s, after oceans of concrete had been poured, its owners, the Tennessee Valley Authority, decided there would be insufficient customers for Hartsville’s colossal output to make it viable. First, two of the reactors were scrapped and then, in 1984, after $700 million had been spent, the project was abandoned. These days part of the site is occupied by the Trousdale Turner Correctional Center. For the rest, the owners are turning it into a business park.

    Hartsville’s story is in miniature that of the wider US civil nuclear business. Possessed of lavish federal support in the 1950s, the industry flourished under the benevolent gaze of Congress, feeding off the fruits of US military research. Westinghouse’s first commercial reactor, at Shippingport in Pennsylvania (also the first in America), started life as the power plant for an aircraft carrier, repurposed after President Dwight Eisenhower’s "Atoms for Peace" speech in 1953, which was intended to seize the high ground in the intensifying nuclear rivalry with the Soviet Union.

    Atomic Energy Commission Chairman Lewis L. Strauss and Senator Clinton Anderson (left) review a photograph of America's first full-scale nuclear power plant under construction in 1956 at Shippingport, Pennsylvania.Photographer: Bettmann via Getty Images

    A period of intense technological excitement followed. Utilities bet on new reactors, buoyed by the public’s seemingly endless demand for more electricity. Then came the 1970s downturn. Dogged by mounting construction costs and environmental red tape, nuclear lost its luster. Washington’s response to the energy crises of the mid-1970s was not to follow European nations such as France and Sweden down the path of strategic nuclear-building programs, but to hold off providing federal assistance. As a result, America’s investor-owned utilities found themselves wrestling with reactor orders that were unviable given slumping electricity demand growth, and the soaring cost of financing. More than 75 US projects were abandoned between 1978 and 1985, including 28, like Hartsville, in mid-construction. Even before the Three Mile Island accident, the nuclear spell was broken, leading to a dearth in American orders that would span more than three decades.

    Satellite view of the Fukushima Dai-ichi Nuclear Power plant in Futaba, Japan, taken three days after a massive earthquake and subsequent tsunami on March 11, 2011.Photographer: DigitalGlobe/Maxar via Getty Images

    Not even rising concern about the climate could arrest the downward spiral. A brief comeback in the 2000s, largely in response to high fossil-fuel prices, did little to reverse the loss of industrial capacity. The rise of fracking and its attendant cheap gas stubbed out any chance of rebuilding it in America. And in March 2011, the tsunami that engulfed Japan’s Fukushima plant and ensuing meltdowns shuttered the country’s nuclear reactors, casting a seemingly terminal pall over the global industry’s prospects.

    The Return of Leviathan

    Ironically, it was President Donald Trump who called time on the shambolic years of leaving nuclear to free markets. Not, it should be said, out of any great concern about the climate; his interest was geostrategic, and even crudely mercantilist. But his administration was the first to sound the alarm about the state-backed push by Russia and China into the global nuclear energy sector. This posed a "significant risk" to the US economy, energy security and national security, as well as that of allies, it warned.

    The first attempts to halt the slide focused on keeping reactors open — especially in the US where 13 had closed in the decade since 2013 on economic grounds. Incentives were introduced to offset low gas prices. Regulators started extending reactor lives out to 80 years — at least twice what many were originally designed for — to bridge the gap before new plants were built. And after President Joe Biden took office in 2021 the nuclear embrace tightened. He junked his predecessor’s climate denial, rejoining the Paris Agreement on climate change on day one and returning emissions targets to the agenda.

    All this activity boosted the fuel and servicing side of Westinghouse, which accounts for roughly 70% of group income. Longer plant lives translate directly into higher revenues, especially when these involve massive refits designed to keep reactors going for another 20 years.

    Its impact on new reactor sales was far more muted. Granted, as well as throwing an arm round old plants, Washington gave a push to nuclear exports. In an echo of "Atoms for Peace," the US pursued bilateral nuclear deals to promote Western sales, fighting back against Russia and China, which between them accounted for 75% of global reactor exports over the previous decade. It even found a way to overcome its historic aversion to offering financial support. There followed accords with several Central European countries which opened the door both to fuel deals and new reactor sales. In late 2022, Westinghouse was selected by Poland to build the first three units of a six-reactor scheme on the Baltic coast.

    But there was no echo of this hubbub in Westinghouse’s home market. Despite generous fiscal incentives, which showered tax credits on "clean" energy producers and lumped nuclear into that classification for the first time, American utilities remained on the sidelines. As of today, there are still no committed orders for new nuclear reactors in the US.

    According to John Kotek, senior vice president at the Nuclear Energy Institute, a trade body for reactor-owning utilities, this doesn’t reflect fundamental skepticism about atomic technology. Public support for nuclear is higher than it has been for decades, and utilities are acutely aware of the pressure coming not just from politicians, but from heavy electricity users such as Amazon and Google, to decarbonize. What really discourages utilities is the terrible record of building gigawatt-scale reactors. "The large price tag and long construction times associated with large plants are a big disincentive," Kotek says.

    If They Come, Can You Build It?

    Delays and budget overruns are not a new problem. They became the leitmotif of the so-called "Great Bandwagon Market" of the late 1960s and 1970s, when US utilities ordered most of the 94 reactors currently in operation. It was a time when construction costs rocketed, going up ten-fold in the decade to 1983 — more than three times the rate of consumer price inflation.

    Part of it was a regrettable American tendency for each utility to commission idiosyncratic plant designs — sometimes almost unit by unit. Contractors had to learn to build them afresh each time. But a big reason was also the growing complexity of light-water reactors — a type pioneered by Westinghouse that had become the global industry standard. As these became ever larger to exploit the economies of scale in nuclear, the temperatures in the core mounted, raising the risks of a reactor-busting meltdown if the flow of cooling water was ever choked off. The solution was to install backup systems. But power-dependent pumps, valves and miles of pipework not only raised fears about their vulnerability to failure; they also made reactors increasingly difficult to build.

    The promise of Westinghouse’s AP1000 was to get round all this. Licensed by the US regulator around the turn of the millennium, it used passive safety systems that employed gravity and convection to cool it safely if ever something went wrong. The need for all those pumps, pipes and other potential points of failure was much reduced, making it far less prone to meltdown. As David Jones, a retired Navy engineer who runs the computer simulator used to train future AP1000 operators, told me, "People often ask me to do Three Mile Island," referring to the famous 1979 meltdown. "But I say, ‘I can’t do it.’ You couldn’t have that sort of accident at a passive plant." The AP1000’s simplicity also permitted the design to be modular, meaning parts could be manufactured offsite in blocks.

    Westinghouse pitched these virtues when it persuaded some Chinese and US utilities to buy AP1000s in the early 2000s. Indeed, so confident was it of its smart new design that it agreed to build Vogtle as a turnkey project, taking all the construction risk. The Chinese units went up without undue mishap and have since set "world records for operational performance," according to the head of the new reactor business, David Durham. But the domestic experience was little short of disaster. Of the four US reactors ordered, two were canceled in mid-construction, and only one, at Vogtle, has been completed. That was connected to the grid only in recent months, seven years late and at vastly inflated cost.

    What went wrong? Partly it was Westinghouse’s own folly: It rushed to construction on the reactors before finishing the design. But the failure also stemmed from a loss of nuclear knowhow. For instance, most of the modular parts were produced by Shaw Group, an industrial pipe maker from Texas with no nuclear experience, whose output was plagued by substandard workmanship and defective welds.

    What made it all worse was the company’s blithe expectation that construction would be a breeze. History suggests quite the contrary: that "first of a kind" nuclear plants rarely go up without some hitch. Reactors are, after all, complex beasts, and contractors have to learn the hard way how to build them. The payback only comes when those clued-up workers build fleets of similar units, perfecting the supply chain that allows for consistent delivery and more efficient techniques. (In a recent paper, the US Department of Energy estimated it might take "10 to 20 reactors" for the optimal point to be reached, with each successive unit before then costing steadily less.) It is why South Korea, having built programmatically since the 1980s, can throw units up for $2,000-4,000 per kilowatt of capacity, against close to $10,000 for Vogtle 3.

    Having learned to build one AP1000, Durham believes Westinghouse is now poised to benefit from this same benign effect, although the gains will perforce be muted by the need to transfer hard-won knowhow across the Atlantic to Poland, and the promise made to Warsaw to source almost half the content locally. The plan is to smooth the process by sticking rigidly to the same reactor plans with each project. "Our attitude is very much that we will not change the design," Durham says. "That is the key point everywhere we go."

    Yet none of this has reassured potential American buyers. The calamitous experience post-2008, which saw the fire sale of one of Westinghouse’s customers, Scana Corporation of South Carolina, to Dominion Energy, reminded utilities of the reasons they had pulled back from nuclear in the first place. Of the 15 US AP1000s licensed in the brief "nuclear renaissance" of the 2000s, no more were built, and eight permits simply allowed to lapse.

    A Financing Catch-22

    By the early 2020s, Westinghouse had put its losses behind it. What with all the extra servicing work, together with hopes of new reactor contracts, its value was rising. And last autumn its owner, Brookfield’s private equity unit, agreed to sell it to a sister fund, Brookfield Renewable, which specializes in wind, solar and hydro energy, and Cameco, one of the world’s largest uranium miners. The price was $7.8 billion — almost twice what Brookfield had paid four years previously.

    The number seems impressive, at least until you consider the financial risks in gigawatt-scale reactor contracts. The overruns on one deal alone — the $14 billion contract for the twin reactor Vogtle plant — may end up topping $17 billion. A scheme by Electricite de France SA in Finland originally budgeted at €3 billion ended up costing between €11 billion-12 billion. "It shows you could in theory liquidate the entire company and not deal with a single Vogtle-style hit," says Tim Stone, the head of Britain’s Nuclear Industry Association and former adviser to five UK energy secretaries.

    The question of who should bear this risk is the biggest hot potato in nuclear construction. Understandably, Fragman is determined that the company won’t take any more than the minimum it can get away with. Westinghouse is, he points out, a vendor of reactor technology and not a construction company. "You do well what you do often," he says. "If you asked GM or BMW to build a car every 20 years it will for sure be very expensive and take much longer than you expected."

    Meanwhile Bechtel Corp. — the engineering giant to which Westinghouse intends to delegate oversight of the Poland AP1000 project — is no keener to put itself on the hook. "There might be elements of risk-sharing in contracts based on the overall success," says Ahmet Tokpinar, general manager of Bechtel’s nuclear business. "But these are cost-reimbursable projects, meaning the contractors cover their costs. That is the way the US built the 100 units it has today."

    The problem is that no one else wants to take the risk either. Utilities have good reason to be very cautious. Failed projects can lead to defaults, or situations where customers and investors end up with huge bills but no power station to show for it. The result can be a blitz of lawsuits against the company and its executives. In the 1980s, utilities such as Washington Public Power Supply System and Long Island Lighting Company collapsed after nuclear projects ran over budget or hit regulatory walls.

    Only in Europe, where utilities are more likely to be national in scale and government-owned, is there a possible recipient in the shape of the taxpayer. Most willing are Central European states, which share a strong geopolitical desire to stop buying Russian hydrocarbons and to plant their nation firmly inside America’s nuclear tent, although Poland’s new government has recently called for Westinghouse and Bechtel to shoulder some of the risk by taking an equity stake of as much as 30% in the project, costing possibly $2 billion. (Claiming that they were "not the right partners" to invest in the deal, the US companies dismissed that idea.)

    Even those Western European states that formerly privatized their utilities are now moving toward state financing. The UK, for instance, has established a government-owned vehicle, Great British Nuclear, to take stakes in the development of new reactors, while France has fully renationalized the nuclear energy side of EDF. It is why Durham regards the continent as his most promising market, with prospects bubbling in countries such as Czechia, Slovenia and Bulgaria. "Europe is committed to decarbonize," he says. "The US is getting there as a country but it isn’t quite there yet."

    A Question of Size

    America has been left trying to square the desire to build more nuclear plants with its longstanding phobia about federal taxpayers footing the bill. (Twice before, once in the 1950s and again in the 1970s, first Congress and then President Gerald Ford’s administration threw out proposals that would have permitted this to happen.)

    As pressure mounts on utilities to invest in carbon-free generation, developers of so-called small modular reactors (SMRs) have seized on the financing catch-22 as an opportunity. Originally these were not seen as suitable for mainstream electricity generation; they were for specialist applications, such as powering industrial sites or remote communities. Indeed, Westinghouse is developing its own version of this idea, the five-megawatt eVinci micro reactor. But increasingly, developers pitch them as an alternative to large units such as the AP1000.

    Smaller reactors naturally produce more expensive power than large ones. Their main selling point is the diminished risk of crushing overruns. With the promise of shorter lead times and comparatively low sticker prices of, say, $1 billion-$5 billion, SMR vendors such as GE Hitachi and NuScale Power Corp. argue they pose far less of a risk to utility balance sheets. "The theory is that a 20% cost overrun on a $1 billion project is a heck of a lot better than a 20% overrun on a $15 billion project," said Patrick White of the Nuclear Innovation Alliance, a think tank.

    Although most designs are still years away from commercial development, deals are emerging, especially for GE Hitachi’s BWRX-300, which has interest both from Ontario Power in Canada and the Tennessee Valley Authority. In May, Westinghouse abandoned its previous reluctance to jump on the SMR bandwagon and launched its AP300, essentially a scaled-down version of the AP1000. By using many of the latter’s components, it hopes to rush the reactor into production by the end of the decade.

    Artist’s rendering of GE Hitachi’s BWRX-300 small modular reactor to be built at Ontario Power Generation’s Darlington nuclear power site, the first contract for a grid-scale SMR in North America.Picture courtesy of GE Hitachi Nuclear Energy

    Whether SMRs are the "get out of jail free" card their proponents hope is unclear. Their prospect of breaking the doleful pattern of overruns is unproven. NuScale’s project for a six-module 462-megawatt plant in Utah recently collapsed after its anticipated power costs doubled before construction even started, leading the utilities that would have bought its power to pull out. Its shares, listed in May 2022 after a merger with a special acquisition company, have declined by 75%.

    Other projects remain years away from licensing approval, raising questions about whether SMRs will simply come too late to help the US hit net zero. The central premise, which involves the ability to factory-build standardized reactors in sufficient volume to drive down costs, is unlikely to be realized until the mid-2030s. According to Mike Hogan of the Regulatory Assistance Project, "We need to be most of the way down the road to decarbonization of the electricity system by then."

    A Giant ‘To Do’ List

    Whatever reactors are chosen, the US faces a massive task in rebuilding the sinews to construct them. In March this year, the US Department of Energy published a report looking at "pathways to commercial liftoff" for nuclear energy. This laid bare the holes in America’s atomic infrastructure, from fuel enrichment capacity (whose lack is rendered more acute by Russia’s banishment from the roster of acceptable suppliers) to the long-running failure to build a geological storage facility for nuclear waste.

    The requirements are staggering: For instance, the US will need an extra 375,000 skilled workers simply to build and run all those extra nuclear plants if the decarbonization target is to be met.

    How is all this to be financed? Few expect a private sector bruised by past nuclear failures spontaneously to stump up to plug all the gaps. "To get private investment into nuclear, you need to make it very investor friendly," says Darryl Murphy, head of infrastructure at Aviva Investors, who worked on the financing of Britain’s Hinkley Point C project, which is building two giant 1,650-megawatt EDF reactors in southern England.

    The No. 1 necessity is certainty on policy to bring down the cost of capital — critical in an industry that requires huge sums upfront. Financing represents around 70% of the cost of nuclear per megawatt-hour. And that in turn means thinking more than one reactor project ahead. "You need to have a program so investors can see there is more coming down the line," says Murphy. "It is hard to justify going through the whole process of getting comfortable with the sector just for one project."

    The biggest problem is time — or its absence. To build 200 gigawatts of nuclear by 2050, the US needs to start switching on new reactors by the early 2030s, with a sufficient pipeline to break through the "first of a kind" barrier and start driving down costs. Given the lead times involved, it is hard to see how this can be done without Westinghouse — the one US company with a proven type available on the market. (The only realistic alternatives are EDF of France, which is redesigning its EPR reactor, and AECL of Canada, which has never sold a plant in the US.) But critically, it also requires Washington’s direct participation. "All capital providers agree that the government would need to play a significant role for nuclear to take off in the next 10 years," notes the Energy Department’s report.

    Quite what form this could take remains unclear. Some of the ideas envisage direct financial involvement — from forking out federal grants to fund construction (with the most financial support going to first movers), to full government ownership. Another idea is to offer guarantees to purchase nuclear plants’ output, the absence of which sank the NuScale scheme.

    But a less contentious route might involve state-backed insurance for cost overruns — effectively a federal cap above a certain financial threshold. Structured to offer some shelter from Vogtle-scale bills on first-of-a-kind projects, these could unlock investment in the larger reactor designs now shunned by fearful utilities.

    True, the scheme would require political sanction, the hurdle that tripped all previous attempts at federal financing. "A direct statute would be necessary from Congress to allow the US Government to fill this role," the Department of Energy notes laconically. But precedents exist: The Price-Anderson Act (1957) provides a cap on private insurance losses relating to nuclear accidents. Atomic energy is one of the few areas which commands bipartisan congressional support.

    Without some solution, Durham thinks domestic orders will remain elusive, leaving the company stuck in an all too familiar doom loop. "You know, you build two units and then don’t build any more for 20 years and lose all of that institutional knowledge," says Durham. "This time we need to keep building."

    Start the Renaissance Without Me

    For all the talk of future programs, there’s no certainty that the nuclear industry’s weary cycle of jagged stops and starts won’t continue. When the workers finally down tools at Vogtle — hopefully next year — the project has no obvious successor, save for thousands of miles away in Poland, starting perhaps half a decade from now. In the meantime, Westinghouse is quietly becoming the business some expected when Brookfield acquired it: one where the share of new reactor revenues is steadily ebbing away.

    From a purely commercial standpoint, a pivot toward servicing has some logic, offering the stability of long-term, inflation-linked contracts. Connor Teskey, boss of new owners Brookfield Renewable, likes to point out that servicing customers "never leave Westinghouse," adding that the firm has a "99% retention rate."

    Compare that with the uncertainties involved in selling AP1000s in Europe or developing and licensing an SMR. "Basically, if Westinghouse screws up one of the Polish contracts, they will never sell a reactor in America again," says one consultant who declined to be identified.

    Brookfield can sometimes sound ambivalent about the whole idea of building reactors. "Westinghouse does well if the nuclear fleet round the world just ticks along and doesn’t change," observes Teskey. Growth in reactor numbers is viewed as "upside" — a windfall. Others however see it as more of an imperative. According to the US government, failure to start deploying reactors at scale by 2030 could lead it to miss its emissions targets, or force the industry to overbuild capacity wastefully simply to catch up.

    Tim Stone worries about countries placing all their eggs in the SMR basket. "Any rational energy strategy should involve putting in gigawatt-scale reactors, together, in due course, with small ones whose cost of electricity is as yet unknown" he says.

    Turning one’s back on large reactors is a high-stakes gamble. "We are talking about the future of our countries in the 2050s and beyond. If we don’t get it right, our economies will suffer."

    More From Bloomberg Opinion:

    ​​​​​Want more Bloomberg Opinion? OPIN . Or you can subscribe to our daily newsletter .

    — With assistance from Elaine He and Dave Merrill

    This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

    To contact the author of this story:
    Jonathan Ford at [email protected]

    To contact the editor responsible for this story:
    James Gibney at [email protected]

    Jonathan Ford is a freelance writer. He was the chief leader and city editor of the Financial Times, and has held senior editorial positions at Prospect Magazine, Reuters and Breakingviews.

      In this Article

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      1901 political cartoon with caption: Europe: You're not the only rooster in South America! Uncle Sam: I was aware of that when I cooped you up!

      Source: Fotosearch/Archive Photos via Getty Images

      var(--tw-content)Hal Brands

      America’s Best Strategy for Cold War II Is 200 Years Old

      The Monroe Doctrine is disparaged in Washington and Latin America, but it remains the foundation of the liberal international order the US leads today.

      December 3, 2023 at 8:54 AM EST
      Hal Brands is a Bloomberg Opinion columnist and the Henry Kissinger Distinguished Professor at Johns Hopkins University’s School of Advanced International Studies.

      "I believe strictly in the Monroe Doctrine, in our Constitution and in the laws of God," one American religious leader declared in 1923. That same year, 10 million American schoolchildren were subjected to a centennial recitation of President James Monroe’s famous doctrine in class.

      "The American continents, by the free and independent condition which they have assumed and maintain, are henceforth not to be considered as subjects for future colonization by any European powers," Monroe said in December 1823. For generations thereafter, that statement was a cardinal principle of US policy. It fused America’s founding ethos of anti-imperialism to the fierce nationalism and outrageous ambition that ultimately allowed the country to surpass every empire on Earth. It even became central to the America’s understanding of itself.

      There have been no such celebrations this weekend to mark the 200th birthday. Most Latin American observers consider the Monroe Doctrine an imperial imposition. Even US officials now see it as an embarrassing anachronism. "The era of the Monroe Doctrine is over," said Secretary of State John Kerry in 2013. Yet two centuries after it was issued, that policy remains more relevant than many might like to admit.

      The Monroe Doctrine is a reminder that America’s strategic interests have always been intertwined with its revolutionary values. It represents the regional foundation of the liberal international order the US leads today. And although American policymakers often say the Monroe Doctrine is dead, they don’t — or shouldn’t — really mean it.

      The Western Hemisphere was once an imperial battleground. At the start of the 1820s, Spain’s empire stretched from California to the Tierra del Fuego. Britain had territories and interests from Canada to Chile. France was clinging to imperial fragments around the Caribbean; Portugal was trying, vainly, to keep Brazil. Russia’s holdings included Alaska and outposts farther south. Powerful empires sought advantage in the Americas — and tried to keep a subversive republican newcomer well contained.

      In 1823, America’s strategic landscape was menacing. The collapse of Spanish and Portuguese empires in Latin America was birthing new nations. But a coalition of European monarchies — the Holy Alliance of Austria, Prussia and Russia — was considering intervention to recolonize those countries; just two years earlier Russia had threatened a push down North America’s Pacific Coast. The Western Hemisphere was potentially facing a two-pronged absolutist assault. The US would then be surrounded by hostile, antidemocratic empires, foreclosing its future expansion and perhaps threatening its survival.

      Monroe’s answer, drafted by Secretary of State John Quincy Adams, combined self-assertion with self-denial. Monroe warned European powers not to seek new colonies in the Western Hemisphere (implicitly counting on Britain, which also opposed its rivals’ expansion, to enforce that ban), pledging that America, in return, would steer clear of Old World conflicts. After a slow start, Washington ultimately honored the first part of the doctrine more faithfully than the second.

      By the mid-19th century, the US had foreclosed European expansion in North America by taking much of the continent itself. Washington then began pushing European powers out of its neighborhood, forcibly evicting Spain from the Caribbean in 1898. During the early 20th century, the US intervened in unstable nations from Nicaragua to Haiti, primarily to deprive prowling Europeans of chances to meddle. Over the subsequent decades, Washington beat back challenges from countries — Imperial Germany, Nazi Germany and the Soviet Union — that sought Latin American footholds amid the epic global clashes that defined the age.

      No other country in the modern era has dominated its surrounding region so thoroughly, and for so long, as the US. In this sense, America denied imperial prerogatives to its rivals, only to claim them for itself. But it is ironic that the doctrine is now considered a historical relic — because it continues to influence the long arc of US statecraft around the globe.

      First, the Monroe Doctrine asserted an enduring principle of US strategy — that America requires a balance of power that favors liberalism. "It is impossible," Monroe declared, "that the allied powers should extend their political system" — monarchy — to the Western Hemisphere "without endangering our peace and happiness."

      This wasn’t some rhetorical flourish. America’s founding struggle had been a revolt against monarchy. Its republican government cast it, immediately, into sharp ideological conflict against Europe’s absolutist regimes. So Monroe was simply explaining that the US could not flourish in an environment ruled by regimes that were inherently, even existentially, hostile to its liberal experiment. Nearly a century later, President Woodrow Wilson argued more or less the same thing in calling on his country to make a "world safe for democracy" in World War I.

      The Monroe Doctrine also enshrined a related American tradition — hostility to rival spheres of interest. The modern era has seen the astounding growth of a US sphere of interest that began in North America and now reaches around the globe. Yet American leaders have never been as comfortable with other powers, especially autocratic powers, carving out their own domains.

      Such arrangements, Monroe said, could be established only by coercion: Free peoples would never accept them "of their own accord." Autocratic empires, whether in the Americas or elsewhere, would serve as platforms for subversion, intimidation and aggression against the world beyond. Since the early 20th century, America has fought hot wars and cold wars to keep Eurasian autocracies from establishing globe-threatening spheres of interest in their own regions — an extension of Monroe’s doctrine, but one he and Adams would have understood.

      Finally, the Monroe Doctrine established the regional primacy that underpins America’s global power. If the US faced serious threats close to home, it would have to deploy vast armies to defend its long land borders. But if America faced no major threats within the Western Hemisphere, it would be free, eventually, to roam the world. Which means that the quasi-imperialistic Monroe Doctrine was vital to the liberal order the US eventually built.

      A country plagued by nearby challenges could not have intervened three times, in the two world wars and the Cold War, to prevent autocratic powers from dominating Eurasia. It could not have secured overseas regions through globe-spanning alliances after 1945. It could not have anchored a thriving international economy and helped democracy spread more broadly than ever before.

      America’s enemies understood this: Imperial Germany, Nazi Germany, and the Soviet Union all meddled in the Western Hemisphere because they knew that keeping the US preoccupied was essential to imposing their own, darker visions on the world.

      The Monroe Doctrine cast its share of darkness, of course. The tools of US primacy included military interventions in Central America and the Caribbean; coups, covert action and aid for ugly counterinsurgencies in countries throughout the region; and land grabs in strategic points like Puerto Rico and the Panama Canal Zone. Hegemony is a messy business. No country can dominate a vast region while keeping its hands entirely clean.

      When other powers pursued regional empires, in fact, they invoked US policy as their guide. Japan portrayed its aggression in China in the 1930s as a sort of Asian Monroe Doctrine. Today, when Chinese expansionists advocate "Asia for Asians," or call Central Asia "China’s Latin America," they are making, explicitly or implicitly, a similar claim. The truth is a bit more complicated.

      Whatever its failings, the Monroe Doctrine did — with tacit support from the British Royal Navy — gradually curtail formal European colonialism in Latin America, an achievement of real value to the independent countries of the region. In the 20th century, moreover, a hemisphere free of US imperialism might well have been more susceptible to fascist or communist influence.

      True, during the Cold War especially, the US protected its regional position through cooperation with friendly dictators. But preventing countries from going communist at least preserved the possibility they would later evolve toward democracy — as many eventually did, once their economies matured and the politics stabilized, in the 1970s and 1980s. The US placed itself firmly behind this democratic movement: Which of America’s great-power rivals would have done that?

      American primacy has had other benefits. The fact that Latin America — a region suffused, sadly, with internal violence — has seen so little interstate conflict in the past century might, perhaps, testify to the role of US power in enforcing a hegemonic peace. Not least, insofar as Latin America has benefitted from the larger liberal order — one in which trade has surged, living standards have increased and global wars have been avoided for the last 80 years — it has also benefitted from the US regional supremacy that has enabled a degree of global progress.

      Whatever the costs and benefits, the Monroe Doctrine long ago came to look like an imperial remnant in a post-imperial age. US officials mostly stopped publicly invoking the doctrine after a regionally polarizing CIA intervention in Guatemala in 1954. When Secretary of State Rex Tillerson mentioned the doctrine favorably in 2018, his comments were mostly treated as a costly gaffe. A policy Americans had once venerated now seemed painfully out of date.

      True, after the Cold War, it had certainly seemed unnecessary. With US power unchallenged, with markets and democracy sweeping the region, everything was going Washington’s way. That’s no longer the case.

      For years, the region’s politics have been deteriorating. In Venezuela, Nicaragua and other countries, illiberal populists have set about destroying democratic norms and institutions. Democracy is fragile and political instability is rising across much of the region.

      Peru is on its fourth president in the last three years; Argentina has elected a Donald Trump acolyte who promises to take a chainsaw to the political system. Mexico, which not long ago was moving toward stronger democracy and better ties with Washington, has regressed in both dimensions under Andrés Manuel López Obrador. Economic challenges often exacerbate political problems: Covid battered societies that were already suffering from high levels of economic insecurity.

      Meanwhile, the US — which, since the 1990s, has seen the region primarily through the lens of illegal drugs and immigration — has been bleeding influence. And given that every great-power rivalry of the modern era has ensnared the Western Hemisphere, the bill for that strategic neglect is coming due.

      One US antagonist, Russia, is forging anti-American alliances by making common cause with the region’s most thuggish leaders. When, in 2019, there was talk of US intervention in Venezuela to end the humanitarian catastrophe of Nicolas Maduro’s repressive rule, Russian military contractors raced to the country to protect his regime.

      Russian weapons and intelligence support have bolstered another anti-American dictator, Nicaragua’s Daniel Ortega. Russian sniper rifles were used to kill pro-democracy protestors in 2018; Moscow and Managua have pursued cyber-cooperation to surveil and suppress Nicaragua’s opposition. Russian propaganda and disinformation fuel anti-US sentiment in Latin America and around the globe.

      Russia’s presence in Latin America remains modest in comparison to the Cold War. But it is supporting states that brutalize their people and oppose US influence as part of a larger "raiding strategy" meant to keep Washington off balance by making it play defense around the globe.

      There is also a Chinese challenge. Beijing is building influence for the long term by inserting itself into Latin American economies, infrastructure and communications networks. Through its Digital Silk Road strategy, China is proliferating surveillance technology that bolsters illiberal governments. Its larger Belt and Road Initiative features investments in nuclear power plants, space stations and other significant projects. Under its Global Security Initiative, Beijing is expanding internal security and intelligence programs in the region, as well.

      There’s also a military component to Chinese policy, one that has, so far, remained somewhat disguised. From Cuba to Argentina, Beijing has been seeking — and sometimes acquiring — access to "dual-use" facilities with potential military uses. US officials reportedly worry that these facilities, such as the Amachuma Ground Station in Bolivia, could enhance China’s global military surveillance network, or eventually lay the basis for power projection in the Western Hemisphere.

      Today’s autocracies aren’t recolonizing Latin America or supporting communist insurgencies. But the strategic implications of their behavior are real.

      In the 20th century, Eurasian powers stirred the pot of political instability and anti-Americanism in Latin America in hopes of putting Washington on the defensive in its own backyard. Present-day US rivals know that playbook well.

      America’s regional immunity underpins its global influence: A US fending off enemies in its own region will struggle to confront them in Eastern Europe or the Western Pacific. And if Russia or, more likely, China someday dominates its own region, it will have greater leeway to reach into the Western Hemisphere. If anything, the premium on preserving US sway may be higher today than it was in the past, given that pervasive Chinese economic influence in Latin America could spoil plans to nearshore critical supply chains.

      The core of the Monroe Doctrine is as important as ever; another epoch of competition foretells another struggle for influence in the region to America’s south.

      That’s not to say US officials should start waxing nostalgic about James Monroe and John Quincy Adams. There’s no profit in rhetoric that reminds even generally sympathetic Latin American observers of the region’s sometimes-humiliating experience with US power. The best way of obtaining a negative objective — denying America’s rivals strategic advantage in the Western Hemisphere — is through a positive program of regional cooperation.

      The US will fare best at countering Chinese economic influence if it pursues a deeper regionalization of trade, manufacturing and financial relationships in the Western Hemisphere. If Washington wishes to turn countries away from Chinese digital and physical infrastructure deals that entrench debt, repression and corruption, it must find ways — whether alone or with democratic allies — of financing less-corrosive alternatives.

      Alerting Latin American populations to the downsides of engagement with Moscow or Beijing requires helping governments and private citizens shine greater light on the role of Russian disinformation or China’s tightening grip on some of the region’s most vital resources. Investments in democratic institutions and civil society are good value amid political backsliding; so are efforts to rebuild long-atrophied relationships with the region’s militaries.

      Containing hostile states, in the region and beyond it, entails consolidating relationships with friendly ones. The tighter the bonds of integration within the Americas, the better positioned the US will be within a fragmenting world.

      That’s admittedly a tall order right now. Rather than sensibly discussing strategic challenges in Latin America, Republican presidential candidates are fantasizing about fighting the drug war by bombing Mexico. Neither major US political party has the courage to promote trade deals that might meaningfully increase economic integration with Latin America. Generating resources for the region has been a challenge for decades.

      The problem, alas, goes well beyond Washington: From Mexico to South America, many once-reliable partners have been replaced by leaders who view the US with ambivalence at best. But the effort is worth making, because the more America struggles to secure its hemispheric position through positive policies, the more it may eventually rely on harder-edged measures instead.

      Would the US really be more tolerant of its adversaries establishing military bases in Latin America today than it was during the Cold War? If it seems unthinkable that Washington might engage in covert meddling against an authoritarian strongman inviting America’s enemies into the region, or try to sway the outcome of a pivotal election in a pivotal state, that’s only because a generation of easy post-Cold War primacy left the US less reliant than it once was on such distasteful remedies.

      As the longer history of US involvement in Latin America reminds us, even relatively respectable democracies will — when their strategic vitals are sufficiently threatened — do some dirty things.

      Two centuries ago, the Monroe Doctrine asserted that the US must keep its rivals at bay within its own hemisphere. In the present era of rivalry, America will need to pursue the same policy, by one means or another.

      Brands is also a senior fellow at the American Enterprise Institute, the co-author of "Danger Zone: The Coming Conflict with China" and a member of the State Department's Foreign Affairs Policy Board. He is a senior adviser to Macro Advisory Partners.

      More From Hal Brands at Bloomberg Opinion:

      Want more Bloomberg Opinion? Terminal readers head to OPIN . Or you can subscribe to our daily newsletter.

      This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

      To contact the author of this story:
      Hal Brands at [email protected]

      To contact the editor responsible for this story:
      Tobin Harshaw at [email protected]

      Hal Brands is a Bloomberg Opinion columnist and the Henry Kissinger Distinguished Professor at Johns Hopkins University’s School of Advanced International Studies.
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