Alternative Insight

The Liberation of South America

A not too quiet revolution is occurring, and it will change the geopolitical alignment of the world. From the Orinoco River to Tierra del Fuego, South American nations are electing left-wing governments and seeking economic and political policies that are independent of United States demands. The U.S. administration failure to forecast these occurrences and its lateness to implement policies to prevent the trends suggests the end of American economic and political dominance of South America. Regional trade treaties will hinder U.S. exports to South America, radical governments will increase their demands on investors, national cooperation will counter U.S. influence and local considerations will combat globalism. The United States can either continue on a path towards isolation that will lead to economic decline, or start a new era of genuine cooperation that will raise Latin America's living standards and enable America to maintain its own quality of life.

The Revolutionists
Almost every South American nation is adopting a course propelled by a left-leaning wind. The 2002 election of Worker's Party candidate Luiz Inacio Lula da Silva to Brazil's presidency signaled a new Latin American political direction. Lulu's election in Brazil set the stage for the election of indigenous labor leader Evo Morales to president of Bolivia on the first ballot and for the 46% win of Socialist candidate Michelle Bachelet, making her the favorite in the run-off race for president of the Chile Republic. Lets' examine the record:

Venezuela: President Hugo Chavez controls a government with vast oil riches that eschews distribution of the wealth and favors local rather than global agreements.
Brazil: Workers Party's President Lulu da Silva leads one of the world's more dynamic economies. Although troubled by party corruption and decreasing popularity, Lulu remains in a commanding position to dictate and not blindly follow.
Uruguay: President Tabaré Vasquez arrived in January 2005 with far left credentials and, although pursuing conservative domestic policies, he has become identified with Hugo Chavez's global policies.
Argentina: Argentina's president, Nestor Kirchner at the Summit of America's meeting in November, 2005, emphasized his nation's independence by saying that past American policies "not only generated misery and poverty but also a great social tragedy that added to institutional instability in the region, provoking the fall of democratically elected governments." Kirchner has aligned his government with the policies of the other Socialist leaning presidents of South America.
Bolivia: Evo Morales, who has titled himself as ''Washington's nightmare," achieved a spectacular victory as a populist candidate. Morelos wants to use Bolivia's extensive gas reserves to benefit the nation's less fortunate citizens, who inhabit most of the country.
Chile: Socialist Michelle Bachelet won the January 15 run-off for president.
Ecuador: Leon Roldos Aguilera is critical of the U.S. and is slightly favored in the upcoming Ecuador election. Analysts believe his government would "tend to be leftist in matters of security or politics, but rightist in terms of economics."

Alignments
Venezuela's Hugo Chavez leads the drive for intensive economic, social and political cooperation between all South American nations, desiring to create a supra-national Latin state that is not subordinate to global treaties. The other South American leaders are less idealistic and more pragmatic:

Despite difficulties in integrating their economies and cooperating in ventures, agreements are being made, mainly between Chavez and other nations.

Local Agreements
Chávez has promoted the Petrosur regional oil production project. An accord between Brazil's oil company Petrobras, Venezuela's oil company PDVSA, and Argentina's energy company Enersa considers construction of an oil refinery, that will process 200,000 barrels of oil/day in northeastern Brazil as part of a plan for regional energy integration. The accord also allows joint exploration for oil off Venezuela's coast and in Argentina.

Petrosur, which also operates as as a joint venture of the Argentina and Venezuela state energy companies, has proposed a gas pipeline from Venezuela to Argentina, of eventually 6,000 km length and estimated cost of $10 billion. Other Latin American public energy companies could join Petrosur's pipeline project.

Venezuela's state-run Petroleos de Venezuela (PDVSA) and Uruguayan oil company ANCAP are negotiating a project for expanding Uruguay's La Teja refinery in order for it to process 50,000 barrels of heavy oil.

But Chávez is still the person talking money. He has offered to buy more than $1 billion of Argentina bonds and $500 million of Ecuadorean bonds.

Will South America be liberated, and if so, where will that leave the United States?

Liberated South America
South American has a history of nationalist governments that promised riches and justice for all and then returned to 'business as usual' - corruption, oligarchic rule and dependence on foreign capital. What is different in the present situation? Three phrases summarize the difference:Yankee imperialism is dead, South American nationalism is alive and China breathes heavily.

Yankee imperialism is dead. Since the 1821 Monroe Doctrine, the U.S. has interfered in Latin American politics. Governments have been toppled, leaders eliminated and economic policies steered to assist U.S. interests. In recent decades, the U.S. has been accused of complicity in the overthrow of Guatemala's liberal nationalist Jacobo Arbenz (1954), Brazil's leftist Joao Goulart (1964), Chile's Marxist Salvador Allende(1973) and Bolivia's nationalist Juan José Torres González (1971), in the prevention of Uruguay's Frente Amplio party taking power (1971), in arming El Salvador's government to prevent El Salvador leftist rebels from taking power (1980's), in military attacks against Social Democrat Juan Bosch in Dominican Republic (1963), Marxist Fidel Castro in Cuba (since 1960), Nicaragua's leftist Sandinista government (1980's), Grenada's leftist government (1983) and Panama nationalist Manuel Noriega (1989), and in an intended coup against President Hugo Chavez, Venezuela (2002). The failure to force Chavez out of power signaled the end of Yankee imperialism and the successful rise of South American nationalism.

Successful rise of South American nationalism. The proliferation of Socialist and anti-American governments throughout South America portends U.S. weakness and the inability of the American government and military to exert control over South American affairs. The failure to adopt the U.S. sponsored Free Trade Agreement of the Americas (FTAA) during a 34-country summit in Mar del Plata, November 2005, indicates that the momentum is towards complete independence from U.S. domination. An economically strong Brazil is showing the way, an oil rich Venezuela and its captivating leader are providing incentives and leading the charge, and a newly directed Argentina is displaying what can be done when not tied to the dollar and also how to use intellectual oratory to influence populations.

The U.S. can still hope and expect that many of the governments will fail in their social and economic endeavors, and U.S. capital and advice will still be needed. However, that expectation has a significant impediment - the entry of China into South American affairs.

China breathes heavily in South America. China is only in an early stage of possibly replacing the United States as a force in South America. The Asian nation operates entirely different from the North American nation. The Chinese government has neither interest in its partners' politics nor their ideologies. It only wants to trade raw materials for its basic manufactured goods. The Chinese can supply manpower and knowledge for building infrastructure but it is reluctant and limited in furnishing capital. The United States operates with strings - it wants assurance of friendly politics, is often concerned with a nation's ideology, but can supply huge amounts of capital and technology for creating infrastructure, and South America needs more advanced infrastructure.

China, in the first half of 2005, purchased 5% of Brazil's exports ($2.709 b) and became Brazil's third largest trading partner. The U.S. remained as Brazil's #1 trading partner by accepting 20% ($10.872 b) of Brazil's exports. Notably, Brazil's exports to China fell by 6.6% and rose to the U.S. by 23.4% in the first half of 2005.

Chile and Peru now sell $1 out of every $10 in exports - mostly copper - to China. About eight percent of exports from Cuba and Argentina are headed to China, according to a September 2005 report from the Economic Commission for Latin America and the Caribbean. (Source:China pursues stronger ties with Latin America, Knight Ridder Newspapers, October 10, 2005)

In 2004, trade between China and Latin America approximated $40 billion. During the same year, U.S. trade with the Latinos was about $445 billion. Early predictions had China becoming one the largest trading partners of South America, with an intention to invest up to $100 billion in Latin America over the next five years. The predictions are being reconsidered.

BOGOTÁ, COLOMBIA - A year after China's president swept through Latin America with big promises of trade deals and investments, many deals remain unsigned and relations between the Asian giant and the region have hit a rough patch. The United States has been watching closely as China established cozy trade relationships around the globe, including Europe and Africa, where it has invested billions in oil interests in Sudan. Compared to the United States, some within Latin America have viewed China as a kinder, gentler trading partner, one that attaches no condescending lectures to trade deals.

This struck a chord in Latin America. So when Chinese leader Hu Jintao came to the region in November 2004, promising $100 billion in investments, countries like Brazil, Argentina and Chile welcomed him with open arms.But now, many South American countries are starting to view China the way Mexicans have for years: as unwelcome competition that floods their markets with cheap, often smuggled goods.

And while China one year ago promised to invest $20 billion in Argentina over the next decade, so far "Argentina has not seen a single dollar," Mauricio Mesquita, a trade specialist with the Inter-American Development Bank, told The Associated Press.
South America's attitudes sour on China, Nov. 2, 2005, DAN MOLINSKI, AP

Additional reference at ZNet:
Regional Integration After the Collapse of FTAA, Raul Zibechi, Nov. 24, 2005

Conclusion
The United States has a new role with South America nations. These nations are growing and expanding their trade. The U.S. needs Latin American raw materials and Latin America needs U.S. capital and high technology goods. If South American leaders want to establish a regional order that guarantees their sovereignties and buffers them from being continually disrupted by U.S. old world disorder, the U.S. can assist in this realization and greatly profit from it. Failure to recognize and take advantage of the changing winds of South America is a sure path to decay.

alternativeinsight
january , 2006

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