Photo Jonathan Blair

Tuesday, December 22, 2009

Venezuela on the war path?

This, from a friend of mine currently unable to publish on this blog: "I'm starting to wonder how long it will be until the Venezuelans have another 'accident' like the one that bombed a dredging unit in Guyanesse waters. The diversionary theory of war is looking more and more applicable."

Well, at the very least, Hugo Chavez seems to be looking for a way to divert Venezuelans' attention from inflation, corruption, shortages of basic goods, power outages and especially violent crime. His main theme is obviously Colombia, whom he accuses now of using unmanned drones to attack Venezuela. This accusation, moreover, is only a tiny bit of his big campaign against the military agreement between Colombia and the US that will enable American aircraft to use Colombian airbases as part of their support for that country's war against the FARC and narco-traffickers.

Now, the way in which the US has managed this file is worse than incompetent, like much of their policy towards the region under Obama -Honduras is the other prominent example. However, the idea that Colombia, which is just now --for the first time in its history-- getting close to controlling its own territory, would be looking for a war with Venezuela, is preposterous. What has to be on Uribe's mind, however, is the support that the FARC --which now has allied with the ELN, the other Colombian guerrilla movement-- is getting from its neighbours, Ecuador and Venezuela. That thesis was recently bolstered by a report from an unlikely source: the Commission named by Ecuador President Rafael Correa, to investigate the circumstances surrounding Colombia's attack on a FARC base on Ecuadorian soil. The report shows clearly that Ecuadorian officials and organizations linked to Venezuela were indeed collaborating with the FARC and meeting its representatives in Ecuador. No mention is made of weapons' provision or direct financial support, but there is enough in that report for Colombia to claim that its neighbours are supporting the guerrilla. Nobody in the region and few countries in the world would accept that as a legitimate excuse for Colombia's to engage in hit-and-run operations in either country, but this may not be enough for the Colombian government who, with massive public support, now appear to be moving for the kill. Such operations, however, could clearly be enough for Venezuela to take the confrontation to a higher level. This would be a high risk gamble, however, and one unlikely to get much support from Brazil and friends in the region (but that's another story).

Chavez, however, is not stopping there. He has also accused the Netherlands (yes!) of planning an aggression against his country. In his own words (though in my translation): "I am accusing the Netherlands, along with the Yankee Empire, of planning an attack against Venezuela." He has in mind the presence of 250 US naval personal in Dutch autonomous islands Aruba and Curação, from where they work on drug interdiction in the Caribbean. Both islands, by the way, are in Venezuela's territorial water.

The problem, in sum, is that if Chavez is looking for trouble, he won't have a hard time finding it: Colombia is indeed aggressively present in border areas, so is the US -both in Colombia and the Caribbean. Moreover, and in spite of the formal archiving of the country's claim over more than half of Guyana's territory, that old claim would be easy enough to resuscitate, for the greatest pleasure of Venezuela's ultra-nationalist circles.

The truly sad thing is that Venezuelans already have enough problems on their plate. It is not surprising in fact that most, according to recent polls [Globe and Mail, Dec. 22: A-13], are utterly uninterested in a war with Colombia, which is the most likely diversionary scenario. Still, would that stop a Chavez who is getting deeper in a hole of his own doing from "jumping"? It's not clear to me. Let's just hope my friend is wrong...

Monday, December 21, 2009

Venezuela in Mercosur: Insights from Copenhagen (out of all place)

Brazil's Senate has finally approved the entry of Venezuela in the Mercosur bloc. The only hurdle remaining now is a vote from the Paraguayan Congress.

Brazilian advocates of the move, like Celso Amorim, the country's foreign minister, point out that this will make the bloc significantly larger and more powerful. For Brazil and Argentina, it could also pay handsomely if Venezuela complies with Mercosur rules and fully eliminates tariffs on imports from bloc countries: both already have huge trade surpluses with Venezuela and the latter exports basically nothing but oil.

There will be a price to pay, however. Mercosur acts as a bloc in trade negociation, i.e. no member country can sign an agreement with anybody without the other bloc members agreeing to it. For the foreseeable future, this will mean making deals that Hugo Chavez approves of. And the problem is, Venezuela has very little at stake in trade negotiations, because markets are fully open to the only thing it exports, namely its thick oil. In other words, it is free to be as rigid as it likes. Clearly, moreover, Venezuela under Chavez appears keen on doing just that.

For a recent example, take Copenhagen. Everybody agrees that the agreement is at best a rough starting point. At least, arguably, everybody appears willing to start something. But wait a bit: not everybody. Out of 193 countries, five refused to sign the agreement: Bolivia, Cuba, Nicaragua, Sudan and Venezuela. But for Sudan--which also enjoys a perverse kind of "freedom" thanks to its oil--, this little club is Chavez' club.

Dear Argentina, Brazil, Paraguay and Uruguay: unless the Paraguayan Congress holds out indefinitely, expect more of the same on everything that Mercosur gets involved with. One more nail on the bloc's coffin?

Friday, December 4, 2009

Lula and Ahmadinejad

Moisés Naím has published in El País a marvelous little piece about Mahmoud Ahmadinejad's recent visit to Brazil . It is called "Lula's secret documents," and is purely fictional.

For those not in the know, Moisés Naím is the editor of Foreign Policy Magazine. He was one of the technocrats that Venezuela's then-President Carlos Andrés Pérez (CAP) had brought to him to un-paralyze the country's economy and government in the 1990s. As you may remember, that attempt collapsed in death, fire, and humiliation in 1992 when CAP's economic shock therapy met with massive public protests in Caracas --the Caracazo-- whose repression led to the death of more than 100 people. Shortly thereafter, CAP, his ideas, and his policies were further discredited when he was demoted by the Country's Supreme Court and condemned for corruption. Naím could be described as a modern social-democrat, in the mold of Felipe Gonzalez and perhaps Tony Blair. Perhaps more relevant, he is also a standing member of that transnational elite -almost an aristocracy- of Latin-American technocrats, academics and intellectuals, highly-cultivated, usually well-off, superbly educated (generally in the United States, Paris, or both), and as much at ease in the salons, offices and universities of Washington, Paris, New York or Madrid, as they are in the region's capitals themselves (think of Mario Vargas Llosa, Fernando Henrique Cardoso, Jorge Castañeda, Ricardo Hausman, Andrés Rozental, and so on. But that's another story. The key thing is: able and well-connected, Naím was quickly back on his feet and he has led the transformation of Foreign Policy, a staid and somewhat boring quarterly, into the hypest, most lively and best-looking international affairs web-journal in existence today. For what I know, he is based in New York, but he also writes in El País.

His column tells of a briefing note written by Lula's advisers, selling him the idea of welcoming Ahmadinejad. At once, it argues, Lula could poke a finger in the eye of the US, thus affirming Brazil's independence, and remind the world that Brasilia, as the capital of a world power, must be involved in big multilateral endeavors like containing Iran's nuclear program, which is not the case at the moment. Naím has obviously never seen such a note, but given the track record of Lula advisers Marco Aurelio Garcia and Samuel Pinheiro Guimarães, it is very easy to imagine just such things being wispered in the President's ear.

Naím follows with a ficticious letter from a friend of Lula, a companion in the fight against the military regime, in the 1970s and 1980s, who has qualms about his getting too too close to people like Ahmadinejad. The trick is old, and could easily be cheap, but it is not. In fact, it borders on the poignant. The friend is understanding: yes, politics, domestic or foreign, calls for compromise, but there is a limit and, he feels, Lula has crossed it. Here is an excerpt, which I have translated from the Spanish original:

"I felt a great sadness when I saw you embrace the president of Iran. Did it cross you mind, old friend, that if you and I had been doing in Iran today what we did in Brazil when we were young -protest against the dictatorship- this president would have condemned us both to death? Iran's official TV announced death sentence for eight people. Their crime? To have protested against the government and against what they felt was the fraudulent election of the president that you received with all the honors. In other words, Lula, they will die in the hands of your guest for being what you were when you had their age and, just like them, could not stand in silence in the face of dictatorship. Moreover, in Iran, hundreds of students and political leaders are in prison and for sure many were being tortured while you were offering a banquet to the man responsible for it. I don't object to your inviting this tyran: I understand that these are "State" calculations. I hope that, in private, you told him that Brazilians don't like governments that kill their opponents. But I am saddened to see you holding his hand. There is blood on them, not on yours."

Case closed, no?

One more thing: this translation just cannot convey the palpable sadness of the original, so if you read Spanish, get the article itself, it almost feels like Jorge Luis Borges, still alive, delving in foreign policy commentary...

Wednesday, December 2, 2009

Let's be serious: Mercosur is over

Mercosur has become a bad joke. Continuous little crises belie the assurances of confidence and progress that are periodically uttered by the foreign ministries of Brazil, Argentina and their partners in grime. The latest source of tension, which has been termed "The Toy War," is one more example of the pathetic state of a process of regional economic integration in which much effort and resources has been invested, with little to show for it. So little in fact that closing the file would probably be of little real consequence for the countries involved: they would still have their little fights, their good days together, and regular meetings to discuss common problems. They would be freer to negotiate commercial agreements but, above all, they would stop having to patch up a cover for a process that, honestly, has never gone far institutionally, and that has made very little difference to dynamics of cooperation, integration and conflict that would have developed anyway.

Mercosur stands for Mercado Comun del Sur: the Common Market of the South. Made up of Argentina, Brazil, Paraguay and Uruguay, it is a common tariff zone, i.e. its member countries not only trade freely with one another, but also share external tariff barriers. As such it is more ambitious than a simple free trade zone like NAFTA, but less so than a full-fledged economic community, like the EU. It has been touted as the region's answer to ultra-liberal NAFTA, as a way for its members to build-up their export capacities behind some protection, and as a political springboard for its member countries, to gain influence in the world by acting collectively, particularly but not exclusively in trade negotiations, where the bloc stands as one.

Mercosur has a little secretariat, a Presidency that roves from one country to the next every six months, and even a Parliament, but every decision of import are taken by the Presidents of the countries. The president has no autonomy, the secretariat no capacity, and nobody cares about the Parliament or knows anything about who its members are or what they do. If you don't believe me, go check the website of any of the major journals of any of the four countries, seach for "Parlamento" and "Mercosur" --or "Mercosul" for Brazilian papers. If you find something, PLEASE do send it to me because my files are empty...

The history of commercial conflicts between Mercosur countries, particularly Argentina and Brazil, is long, lively, and pathetic. Fortunately for the student of trade issues in the region, the press in the region has long decided to treat those conflicts lightly. Among others, we have thus had the Cellulose War (between Argentina and Uruguay, still raging, by the way), the Chicken War, the Fridge War, the Shoe War, the Stove War and now, in step with the holiday season, the Toy War, all of them between Argentina and Brazil. The Toy War story is typical: the government of Argentina, to protect its toy industries, announced last week that it was imposing import license for Brazilian toys and would limit the quantities brought into the country. This week, Brazil announced that they would do the same to Argentinian toys. This is happening a few days after a meeting between President Lula and Argentina's President Cristina Kirchner, a meeting meant precisely to tackle the fast-growing list of little commercial skirmishes that is poisoning the relationship between the two countries.

The problem is much deeper than toys, or shoes, or fridges or even all this together. As The Economist was noting a few weeks back, Brazil is taking off, and Argentina remains stuck. The asymmetry between the two countries has been growing consistently since the mid-90s, with Brazil's relative weight in Mercosur, for trade, investment, GDP per capita, military power or almost any other metric, growing steadily. Argentina appears to be living on borrowed time, with a new economic crisis in the offing. Perhaps most damaging, Brazil's dependence on the bloc is also steadily diminishing. It is as if Germany were getting ever more powerful relative to all the other members of Europe, while becoming increasingly tied up politically, strategically and economically with China and the US. The exact opposite, by the way, is happening, with the European bonds getting stronger and the relative weight of its big players --Germany and France-- diminishing progressively, as new countries join in and as growth in smaller and more backward economies is typically stronger than in the larger ones.

To make things worse for Mercosur, a vote in the Brazilian senate is the last obstacle to Venezuela's joining the bloc as a full member. This would mean that the commercial policy of all of its members would suddenly become hostage to the whims of Hugo Chavez. A vote in time for Chrismas would make for great titles though: Santa Chavez gets involved in the Toy War.

No, really: Time to bury this one.