Latin American diplomacy

Friends of opportunity

Nov 27th 2008
From The Economist print edition

China, rather than Russia, is the new partner that matters

AFP

FOR those who think a new cold war has broken out, this week seemed to provide some evidence. The Peter the Great, a nuclear-powered cruiser, and two other Russian warships, arrived in the Caribbean to exercise with the Venezuelan navy. Onshore, Russia’s president, Dmitry Medvedev, met Venezuela’s Hugo Chávez as part of a Latin American tour. In Peru, he attended the APEC summit, a get-together of leaders from 21 Asian and Pacific countries. Like Mr Medvedev, China’s Hu Jintao (pictured with Peru’s president, Alan García) also used the Lima meeting as a pretext for a Latin American tour, which in his case took in Costa Rica and Cuba. Last year another visitor from far-flung parts, Iran’s Mahmoud Ahmadinejad, turned up in Latin America.

To some in the United States, this flurry of outside interest in a region that they considered their “backyard” is threatening. They see it is a sign that under President George Bush America has lost influence in the region. In fact, Latin America’s international ties have long been more diverse than caricature allows, but they are becoming even more so as the world changes. For some South American countries, Europe has always been at least as important as a trade and investment partner as the United States. Trade with Japan and the Middle East grew in the 1970s, while the Soviet Union sold arms to Peru as well as sustaining communist Cuba.

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It is Mr Chávez’s search for allies in his rhetorical and political battle against the “empire”, as he likes to call the United States, that pricked the interest of Russia and Iran. For Russia, its Caribbean naval jaunt is a symbolic riposte to America’s plan to place missile batteries in Poland and to its dispatch of naval vessels to distribute aid in Georgia after Russia’s incursion in August. The same goes for its recent revival of ties with Cuba.

But Mr Medvedev’s main purpose in Latin America is business. Mr Chávez has already bought arms worth $4.4 billion from Russia—including a Kalashnikov factory due to start producing 50,000 rifles a year in 2010. Russia was reported this month to have signed a contract to sell Venezuela portable air-defence missiles. That would alarm Colombian officials, who will fear their onward unofficial sale to the FARC guerrillas. Russian oil, gas and mining companies have signed deals to invest in Venezuela. Mr Chávez would like the Russians to build a nuclear power station.

Mr Medvedev arrived in Caracas from Brasília. Brazil is close to signing an arms deal with France, which has agreed to pass on jet-fighter technology. But it may buy Russian helicopters, and sees scope for collaboration with Russia on civilian nuclear technology and aerospace. Mr Medvedev said in Rio de Janeiro that he hoped trade between the two countries would soon double from last year’s $5 billion. Russian companies are interested in extracting Brazilian oil too. After initially embracing Mr Chávez as an ally, Brazil’s government has recently sought quietly to neutralise his influence. By inviting Mr Medvedev Brazil’s message to Russia is: “if you want to have a significant relationship in South America, have it with us,” says Paulo Sotero, a Brazil specialist at the Woodrow Wilson Center, a think-tank in Washington, DC.

The motive for Iran’s recent interest in Latin America seems to be a desire to add to its small stock of diplomatic friends around the world, and to score propaganda points against the United States. Mr Chávez has signed no fewer than 200 co-operation agreements with Iran. Venezuelan officials say that Iran has invested more than $7 billion in their country—in plants to assemble cars, tractors, farm machinery and bicycles, as well as oil—and that bilateral trade has reached $4.6 billion. But these figures may be exaggerated. Last year Ultimas Noticias, a pro-government newspaper, reported big delays on some Iranian investments and rake-offs by local officials involved in them.

In Mr Chávez’s wake, socialist presidents in Bolivia, Ecuador and Nicaragua have also developed ties with Iran. Mr Ahmadinejad promised investments of $1.1 billion in developing Bolivia’s gas, and $350m to build a port in Nicaragua. But there is little sign of either investment materialising. Brazil’s foreign minister, Celso Amorim, recently visited Tehran and delivered a letter from President Luiz Inácio Lula da Silva inviting Mr Ahmadinejad to visit. Since Iran is the subject of United Nations sanctions, and Brazil has been actively, if fruitlessly, pursuing a permanent seat at the UN, this raised eyebrows in Brazil. Mr Amorim’s visit was “inexplicable” and “gratuitous”, according to Luiz Felipe Lampreia, a former foreign minister.

The intercontinental ambitions of Iran, Russia and Venezuela have all been puffed up by oil, and so are vulnerable to the steep fall in its price. The lasting change for Latin America is its burgeoning ties with China. At the APEC summit, Mr Bush’s last trip abroad, it was Mr Hu who was the centre of attention. Mr García treated him to a parade around Lima’s colonial centre before they announced that they had wrapped up a free-trade agreement between their two countries. That matches a similar accord China concluded with Chile in 2005.

China’s total two-way trade with Latin America has shot up from just $12.2 billion in 2000 to $102 billion last year. Though Chinese investment—mainly in mining and oil—has grown more slowly, it is now picking up. Last month China became a member of the Inter-American Development Bank. But China has also disappointed some Latin Americans. Some Brazilians complain that Brazil sells raw materials to China while buying manufactures from it. Brazil is frustrated that neither China nor Russia has helped its Security Council bid.

All Latin American countries are naturally keen to diversify their economic relations, and some seek wider political ties. But Europe ($250 billion last year) and the United States ($560 billion) remain Latin America’s biggest trade partners. And the foreign leader that most Latin American politicians will be keenest to see over the coming year is Barack Obama.

adair uk wrote:
November 29, 2008 20:31
racecake you must be a widow of FHC, people like you will say anything against the Brazilian people or the country, because you speak a Xuxa's English, you think that you are Anglo-Saxon. People like you are stupid in thinking that if Brazil had been a British colony it would be a developed country, just look at Jamaica or other poor Caribbean Islands. Brazilian are hard worker people, they 44 hours/week, while the majority of HM subjects just work 35 or less so they can get benefit and stay more hours at home scratching you know what and eating fat stuff,(the reason why they are so fat), that is the main reason why the employers in UK prefer the Polish and other Eastern European. They smoke like a chamine, they ask for brake for a fag each half hour. I live in UK because my wife is British and I have two kids, and being British(Anglo-Saxon) she don't have enough brain to learn other language. I am proud of being Brazilian, and I am proud also of President Lula.The Anglo-Saxon world is FINISHED.RecommendReport AbuseBird73 wrote:
November 29, 2008 19:19
I think there is an overstatement about the importance of China to Latin America. It is a simplification. And also: what is Latin America ? Can you really put Cuba, Chile, Brazil, Uruguay on the same sack?
China depends on Latin America's raw materials as much as Latin America depend on China to buy them. Dependence is a relation of power, and there exists no such a thing in the relations between China and LatAm...
The importance of Iran and Russia to LatAm is ZERO.
US and Europe's influence is waning. Europe's is practicaly gone, no one cares for Europe in LatAm. US's is going on the same line....
Recommend (1)Report AbuseTed Magnuson wrote:
November 29, 2008 17:03
As a recent visitor to Bolivia, I read with interest the reference to
the 'socialist' government of Bolivia. When foreign interests were
extracting minerals at firesale prices, was the government of Bolivia
tagged 'shadow, puppet, or sellout?' That Bolivians want to extract a
higher 'rent' for the extraction of their minerals by foreigners, that they want a
constitution, more autonomy and some degree of ecological cleanliness,
this hardly seems 'socialistic.' Wouldn't 'representative, sensible,
and 'government of the people, by the people and for the people be more
descriptive?RecommendReport Abuseperguntador wrote:
November 28, 2008 20:37
This article has something to set it apart from the caricature of Latin America we usually find in the English-speaking press (read US papers): it recognises that Latin American international ties have always been diverse and are getting more so.The "backyard" thing is insulting, but American writers and politicians use it without seeming to notice it. Don't they see the obvious 19th-century-imperialism association? It makes them sound like, say, a Russian autocrat explaining his deep worries about the Caucasus republics or the Baltic states.RecommendReport Abuseperguntador wrote:
November 28, 2008 20:08
Take ricecake's shopkeeper friends on one side and Bandeirante on the other, and we'll have a good sample of Brazil's twin self-delusional myths: either we are the "lazy people", good for nothing but enjoying samba and football, or its opposite, a self-appointed, unrecognised superpower. Both sides have noisy followers.Fortunately, there are also people in Brazil who know we still have some huge catch-up to do. But we can work hard at it and enjoy life at the same time - why not? we're not Puritans and have plenty of motive for it :-). Pity they don't show up more often. The twin self-delusion usually sets the pitch of the debate on anything Brazilian at The Economist's forums.RecommendReport Abusecornejod wrote:
November 28, 2008 16:05
The UK is not, as many British people incorrectly see them, as having a slave or servant relationship with the United States. They are both equal partners in the pursuit of world domination as the UK’s main goal is to crush France (its archenemy), and the US to maintain control over all of the Americas, granting a small concession to the UK in the Falklands/Malvinas as a token or gesture of gratitude for being a useful nation. Her Highness Margaret Thatcher has mentioned a "New Anglo-Saxon World Order" several times in public speeches and writings, however few take her seriously - at their own risk.Recommend (2)Report Abusecornejod wrote:
November 28, 2008 15:59
Whenever a Latin American nation tries to establish closer ties and trade agreements with Europe, Russia or China it is viewed as a “threat to American influence in the region”, as if the American Revolution were fought to liberate the entire American Continent, rather than the original 13 colonies. The idiotic mentality of the United States Government and its mis-educated people is that the United States has the right and God Given Mission to control all nations from Canada to Argentina In The Name Of Freedom And Democracy, belittling and dangerously ignoring these nations’ struggles against the Spanish or the French as they each fought for their emancipation at great cost. In the Sacred Quest For Freedom And Democracy, the US Government has supported corrupt regimes, bloody coups, assassinations of leaders they did not approve of, terror tactics, US Firms that obscenely disregarded local environmental, tribal and property laws, and massive lending of funds that never arrived at those nations’ central banks, but were only for the purpose of indebting them in perpetuity – as British or Spanish brutal style of colonization is so out of fashion these days, but yet yearned for by Wall Street Journal editors and columnists. Little wonder then, that socialist leaders are welcomed with open arms by the people thorough revolution or the ballot, as US/UK style, unfettered, unregulated, and uncontrolled capitalism and greed has failed to yield a better life for those people but for a few white corrupt elite, or the useful dark-skinned idiots like Carlos Menem or Carlos Andres Perez. However these two idiots (as many others) did get standing ovations from this yellow rag, the British Government, and the Queen himself, al the while these nations fell into even deeper poverty and disarray.Recommend (3)Report AbuseBandeirante wrote:
November 28, 2008 15:55
The United States and Brazil have always been allieds and Brazilians are the only ones in the American Hemisphere that can be compared to the United States in terms of a big territory, a big military history, a big population, culture, natural resources, energy, a strong national identity and future economic prospects for this current century. So Brazil is not like Mexico, Germany, Japan or the small and weak NATO countries that were beaten or depend on the US military or the US economy. Remember that after Pearl Harbour in 1941 the US came in panic with the Pan-American agenda calling the Brazilian help to win the war: Read the Time Magazine, Monday, Jan. 19, 1942:
"In Rio de Janeiro this week U.S. diplomacy faces its first severe test since World War II came to the Americas. It is a test that may spell victory or defeat in the war. For as Japanese diplomatic treachery on war's eve cost the U.S. the first round of the Battle of the Pacific, so a setback at Rio might well lead to discord in the hemisphere, Axis inroads, even defeat in the Battle of the Atlantic".Recommend (1)Report AbuseNacalense wrote:
November 28, 2008 12:05
As I remember, the "comodities boom" last only few years and has not change the basics economies in the region. Still Brasil and Argentina are some of the bigest producers of soy, corn, etc. etc. and have a balance surplus once the parasitic and artificial debt with the western economies is paid Of course with the complicity of pro-westerns, liberals local people. (Liberal in Latin America means pro USA, just as "republican" in Spain mean a very diferent thingh than in USA...). Bilateral links in comerce trought long time trade agreements (at fixed prices, not depending on speculative operators in Chicago) can ake a lot for the regional and world economy. If God and Obama let it be.RecommendReport Abusesurg onc wrote:
November 28, 2008 10:46
Russian and China should help Brazil become a declared nuclear power just like what the U.S. did for India. after all, if India, which refused to sign the NPT, can be embraced by the U.S. because it is a "responsible" country, then Brazil should be too, since Brazil has behave even more appropriately than India with regards to its neighbors.Manolo Delgado wrote:
November 28, 2008 10:34
The backyard comment comes, I believe, as an intent to show how the US saw Atin America, and I think is true enough of a statement. From proxy wars during the cold war, to tacit or overt control of many countries in the Caribbean, to pressing disadvantageous clauses in Free Trade Agreements, no one can deny the massive influence of the US in Latin America. Saying this does not mean that our countries are and have been responsible for our destinies. Being Peruvian and having lived in the US, Europe and now Asia, it is pretty obvios to me that there is a need for pragmatism in the region. Countries like Peru that focus in developing a healthy environment for investment, agressively seeking FTA -not only in the US, but across the whol globe- have a future. Pathetic populisms with a anachronic rhetoric only bring instablity and chaos as in Venezuela, Bolivia and Ecuador. The first one living on petrodolares (oildollars) and fragrantly raping democracy; the second one one with a good set of good hearted intentions to improve the life of poor indeigenous bolivians, but in a country so divided that it is almost inviable; the third which has changed president maybe 10 times in the last decade. The true angle for development -if I may simplyfy- is an economy that takes advantages of tis competitiveness, which respects tha balance of powers to attract FDI an national investment, and who "sells" itself to the world, always remebering to invest in human capital to ensure success in the future. This has to be long run policies that do not change every election as a new maniac decides to get into power by saying all the "right things".Recommend (3)Report Abusebloxar wrote:
November 28, 2008 09:01
It is funny the imagination of the author of this article. The only backyard of US in the world is England always on her knees wanting for instructions from Uncle Sam. France always was against the UK to join the EU for that reason. UK politicians always keep saying that they have a “special relationship” with USA, but it is an ironic way to say submission. We only have to read what happened with the Suez channel to understand the influence of US over UK.
USA influence in the region was always overestimated in fact they never could take over Cuba, a little island that not represents a threat to anyone. I recall that Cuba become a US territory after the Spanish war and was taking back by Castro (a Cuban lawyer) and Che Guevara (an Argentinean doctor) very threatening people isn’t it?. The fact is that US cannot take over Cuba because will cause the anger of most southamerican nations, specially Brazil and Argentina and US never had many influence in this counties. They also failed to influence in Venezuela as everyone can see how Chavez makes laugh of Bush every time he cans.
Well England you have a new president right now and his name is Barack Obama and a scottish prime minister enjoy it while you can.
Recommend (3)Report Abusericecake wrote:
November 28, 2008 05:01
"But China has also disappointed some Latin Americans. Some Brazilians complain that Brazil sells raw materials to China while buying manufactures from it."Brazil is a great country with so much natural resource and it's industrial base is many times better than China years ago. Wonder why Brazil seems often in some kind of economic problems in good time or bad? I know few shopkeepers living in a small city in Brazil. They told me that not only the Brazilians don't want to work hard and they love to enjoy their live much more than working. Therefore their work force is not very competitive. The Chinese on the other hand are just the opposite.
Recommend (5)Report Abusericecake wrote:
November 28, 2008 04:54
"Friends of opportunity" It was universally acknowledged that the U.S.A has been the best customers because they are the best happy consumers with lot's of money (borrowed) and love to spent those money. In compare with the Americans, the rest of world are stingy customers who are rarely happy and are much harder to do business with. Now the good customer is gone perhaps never will be back.When U.S was the #1 world's purchase superpower, the Americans could tell others who should be friends with and who shouldn't and people indeed listened. But now no more #1 world's purchase superpower, in order to survive the Chinese must look for more new customers and more new resources suppliers. Business is a lot harder these days because not many people are buying and not many will pay the full price.
Recommend (2)Report AbuseJArbacol wrote:
November 28, 2008 04:53
MISTAKE ON THE ARTICLE --> Mr. Medvedev went from Rio de Janeiro to Caracas, not from Brasilia as it was said in the article. Last week The Economist changed Venezuela by Colombia on its world in 2009 "map". Now it doesn`t know the difference between Rio and Brasilia. What's wrong with your Latin American Correspondent??Recommend (9)Report Abusesuma sin laude wrote:
November 28, 2008 00:52
The very suggestion that a cold war is taking place exposes the anachronistic Monroe-Doctrine mentality of the author. In case you haven't noticed, times have changed in America, we have a black president in the US, an Indian in Bolivia, a woman in Chile, a union worker in Brazil, a priest in Paraguay and a left-wing army officer in Venezuela!
In short, independence has arrived for the second time and the Monroe doctrine is dead.All that Latin American countries are doing is exercising their supreme right to sovereignty. Nothing that should concern those pretentious enough to think of them as their backyard.Recommend (6)Report AbuseEdward Yao wrote:
November 28, 2008 00:31
Economy benefit is more attractive, comparing to the military weapon and the imperialism, during the period of economy crisis. So it is not difficult why Mr. Hu jintao is the centre of APEC Summit. Cooperation with China is win-win result, and provides the benefit and economy flourish to the cooperation partner.Recommend (6)Report Abuseacweber wrote:
November 27, 2008 21:19
I think USA and Brazil has the most complementary economies and both with strong and fair deals cam make their way out of the crisis before every other continent or country.Mr. Bush probably thinks the same and Lula is smart enough to see it too, so, lets join objectives and work for the future. This is best possible outcome to the world but probably will be the greatest envy too.Recommend (2)Report Abusecharapita wrote:
November 27, 2008 20:46
so as to end the paranoia of an Islamo-Russian-Venezuelan "axis-of-evil" "threatening our shores", time to find and implement, broadly, an alternative to oil as a source of energy and raw material for oil-based technologies, A.S.A.P!
Unfortunately the prevailing mentality of the traditional power players in the last 60 years, USA and Russia ,has been to use this same fear to promote and enhance the proliferation of nuclear and conventional arms race.Recommend (1)Report Abusechiduke wrote:
November 27, 2008 19:03
The world economic crisis and the burst of the commodity bubble will undoubtedly take a deep toll on Latin American economies. This dabbling in foreign policy is a luxury that Latin American governments will soon discover is unaffordable. Latin America as a region has always been plagued with internal strife rather than foreign wars. With the economic crisis, they will again look inward and have to focus on domestic issues rather than geo-politics.T. Dimitrov wrote:
November 27, 2008 18:50
I don’t know what it takes the author of this article to call a whole continent somebody’s “BACKYARD”. I think Latin America and its respective countries deserve to be equal among equals in the world politics, trade, international relations. I admire their efforts to be diversified, active and progress oriented. Many of those countries deserve to be among the World’s leading economic and political centers, while others would be very influential regional powers.