Latin America: Alliances, friction, and global access
(International Relations and Security Network 21/12/2007)
This past year has been one of geopolitical consolidation across the region with most countries realizing there is a world of trade and economic development beyond what Washington has to offer.
As new presidents have settled into office, they have worked with one another to establish a landscape of alliances, both regional and international - alliances, which, at a glance, reveal prospective geopolitical tensions in 2008. Yet any regional-level friction will be overshadowed by what looks set to be a year in which Latin America takes a strong step forward on the global stage as an important trade and economic partner for many countries.
Venezuela and Brazil: Friction
In 2008, the most notable friction point will be between Venezuela and Brazil. Venezuelan President Hugo Chavez recognizes Brazil as an important business partner, especially where agreements between his country's state energy company PDVSA and its Brazilian counterpart Petrobras work in Venezuela's favor. Petrobras is a global leader in oil exploration and drilling and is able to build refineries close to Venezuela. As PDVSA struggles to meet global demand, Petrobras is a logical partner in facing these challenges.
Yet despite such obvious business connections, Chavez has repeatedly attacked the Brazilian Congress, referring to the legislative body as a "pirate's parrot" of the US. The response has hardened into a determination on the part of many Brazilian politicians to prevent Venezuela from entering the MercoSur trade union. It is an agenda clearly set against doing business with Venezuela. Many Brazilian politicians are tied to business interests in their states and listen to business leaders who believe that proximity to Chavez is bad for global Brazilian business interests. While Brazilian President Luis Inacio "Lula" da Silva would rather keep relations positive, he is forced to listen to the increasing clamor against close relations with Venezuela.
Meanwhile, Venezuela's pursuit of sophisticated military toys has riled some Brazilian leaders, especially Jose Serra, the governor of the state of Sao Paulo and a political heavyweight. His close ties with the Brazilian military are well known and, when Serra warns of an arms race due to Venezuela's destabilizing military purchases, many believe he speaks for some of Brazil's uniformed leaders.
So far, the resultant tensions have maintained a low level, but given Brazilian reticence with regard to Venezuelan membership in MercoSur and Chavez's propensity for exaggerated rhetoric, relations between the two countries could deteriorate in 2008 if Brazil definitively blocks Venezuela's entrance into the trade bloc.
Colombia and Venezuela: Trade vs FARC
Turning to Venezuela's western neighbor, Colombia, we see an on-again, off-again relationship between Chavez and Colombian President Alvaro Uribe. Politically speaking, they couldn't be further apart, but the two countries also could not be closer in terms of business and trade.
Uribe cancelled humanitarian exchange talks with the Revolutionary Armed Forces of Colombia (FARC) when he learned Chavez had made a personal call to a Colombian military leader against Uribe's clear wishes. The Venezuelan president's reaction was as exaggerated as it was predictable. He was embarrassed on the international geopolitical stage and, at the time of writing, had recalled his ambassador to Colombia for consultations.
Such political strains are frivolous compared to the trade relationship between the two countries, estimated at around US$4 billion for 2006 and heading toward US$5-$6 billion for 2007, according to The Economist.
Nevertheless, when egos are damaged there is a predictable degree of political fallout. In 2008, it is likely the relationship between the neighbors will balance out so long as Chavez swallows his pride and Uribe does not push his real agenda publicly. The latter's agenda has everything to do with destroying FARC and much less to do with a humanitarian exchange that would give the leftist rebel group some political capital to use against his administration.
Drugs and politics
Rotating to the north, Chavez's relationship with Mexico has been less than ideal. The two countries have no real business ties, so the only real gain for the Venezuelan president is to take a position opposing a country his followers would easily believe acts as a "lapdog" of the US.
But Mexican President Felipe Calderon couldn't care less about Chavez's rhetoric. Calderon considers Chavez a political clown and would not dignify him with verbal sword-play. Given Mexico's current drug-trade-fuelled murder rate of over 2,000 people a year for 2006 and 2007, Calderon has more important items on his agenda than the Venezuelan leader's rhetorical jabs.
In 2008, we will see Colombia and Mexico gravitate toward each other as dozens of officials from both work together, from presidential offices down, to dismantle the varied and complex drug smuggling networks established between the two countries.
For every 10 tonnes of cocaine produced in Colombia, nine pass through Mexican hands before entering the US for distribution. Mexican criminals operate in Colombia and everywhere in between. If passed by the US Congress, the Merida Initiative will facilitate work toward professionalizing the Mexican authorities' anti-drug trafficking activities. It will be a modernization process sure to involve both American and Colombian anti-narcotic expertise.
The same anti-narcotics regime - also known in the international press as Plan Mexico - involves a small-scale but important focus on Central America. As the Caribbean trafficking corridor has been shut down, land routes through Central America and along the sub-region's coasts have forced governments on the isthmus to consider drug trafficking organizations as a bullet point on the political agenda. Many of these countries are ill-prepared for the fight; particularly Nicaragua, where President Daniel Ortega is slated to receive only US$1.9 million of the US$50 million requested for Merida Initiative funding in 2008.
It is not a stretch to believe that Ortega's close ties with Chavez might have something to do with his country's relatively low allotment of cash and anti-narcotic assistance. Guatemala, by comparison, is expected to receive US$9.2 million. Costa Rica, which is arguably in a considerably better position to combat drug trafficking with greater national-level resources than Nicaragua, will receive US$2.7 million.
But Ortega has placed his bets on Chavez, as, to a lesser degree, have Bolivian President Evo Morales and Ecuadorian President Rafael Correa. Both Morales and Correa will always put their own constituencies ahead of Venezuela, but their proximity to Chavez and proclivity for a more progressive, populist agenda have set them apart from Washington.
In 2008, we will see Bolivia and Ecuador both remain at a distance from the US. Yet it is unlikely they will gravitate closer to Venezuela. The opposite might be true. If Chavez's hot temper foments more trouble with Brazil, how Bolivia and Ecuador treat Venezuela may well serve as a litmus test for the recognition of Brazil's regional leadership - a position Chavez has challenged with limited success in 2007.
Alliances beyond the continent
Beyond the continent, we will see China continue to make diplomatic, trade and business forays into Latin America. Most notable may be the talks surrounding the future of the US air base at Manta, Ecuador. Used as a Forward Operating Location (FOL), this base has been a cornerstone of US air superiority in the region. However Correa does not plan to renew the US lease when it runs out in 2009, preferring to leverage the base's location and modern runway to foster increased business ties with China.
Ecuador plans to use the airbase as an international airport, and the port at Manta as a regional import/export center for trade between South America and China. The development of this strategy is made all the more real by plans to build a freight rail line between Manta and the Amazonian city of Manaus in Brazil.
China's presence in Latin America will continue to develop along the lines of strong, pragmatic business proposals and a low-level diplomatic presence. The Chinese do not want to upset Washington, which is probably why they have not been more aggressive in courting Chavez and his oil.
Yet Chavez is useful for some. Apart from the billions he has spent on Russian military supplies, his proximity to the Kremlin has pierced global perceptions of the Monroe Doctrine - that no one should play in America's backyard.
As much as Washington meddles in what Moscow considers Russian affairs in the former communist bloc countries, Russian President Vladimir Putin is happy to sell Venezuela weapons, a geopolitical strategy to demonstrate on a global level that Washington does not entirely control the Americas.
The same is true for Iran. Tehran sees Chavez as a useful geopolitical tool. By proving that Iran can influence countries in Latin America, Iranian leaders achieve two goals. They demonstrate a presence in the world beyond the Middle East. And more importantly, they demonstrate an established presence in Washington's backyard, making US President George W Bush appear weak.
In 2008, both Russia and Iran will deepen ties with Venezuela and other countries where there is geopolitical room to weaken US influence.
The prognosis for the regional landscape of alliances and grievances sees little change from today's current arrangement.
Argentina might gravitate closer to Washin gton, or Peru may score a trade agreement with China. The most volatile relationships center on how regional heavyweights position themselves vis-à-vis Venezuela.
Next year could be the year when the region collectively rejects Chavez's pet projects and moves to focus on integration based on political pragmatism and good business sense.
Washington, however, will continue to watch its influence wane as a key player in Latin America's economic development. We have already seen the US lose a significant amount of influence due to benign negligence, and in 2008 there will be relatively little political pressure from Washington to limit Latin American countries from reaching out to the world, or to prevent the world's emerging heavyweights from reaching in.