Photo Jonathan Blair

Monday, October 21, 2013

Do No Harm (or at least try): Canada, Latin America, and international drug policy

More than a million people have been murdered in Latin America and the Caribbean over the last ten years, many and possibly most of them in fights over drugs, drug turf or drug trafficking routes. Violence, and by implication, drug trafficking, preoccupies the public and has become a priority in the region’s policy debates. Now, having trod the bloody path of prohibition and law enforcement for decades, the governments of the region are exploring new avenues. Some are toying with decriminalization and even legalization. In doing so, they join several European countries and various American states.

Standing in the way of this trend toward experimentation, however, are the international arrangements that currently govern drugs policy. For more than 50 years, a global drug regime centred on prohibition has tried to reduce consumption by eliminating production, and by punishing producers, traffickers, and consumers. Success has been elusive, to say the least. Global consumption of illegal drugs is at an all-time high; unregulated consumption of injection-drugs has been, and continues to be, a major vector of HIV and hepatitis; tens of thousands of mostly young men are dying in the trenches of the drug war; and hundreds of thousands more are spending their most productive years behind bars.

 Now a movement is under way to modify the current international drug prohibition regime, for instance by reclassifying cannabis as a less dangerous substance, or by formally enshrining harm reduction – like heroin substitution or safe-injection facilities­ –within existing treaties. A report commissioned by the Organization of American States and launched in May 2013 called for a more flexible approach involving systematic experimentation and suggested that decriminalization and even legalization should be considered, given the disastrous effects of current policies. Brazil, Colombia, and Mexico have decriminalized possession for private consumption of all illegal drugs and, in November 2013, following a vote by the country’s senators, Uruguay will  become the first country to legalize the commercialization of marijuana.

While the international organizations charged with enforcing the drug conventions have predictably criticized liberalization measures, they would have to change their tune if the legal regime were made more flexible. Resistance, however, is fierce; a number of countries oppose taking any steps toward liberalization, domestically or internationally. Japan, Thailand, Russia and China, as well as Saudi Arabia lead this group, but their position is strongly supported by many other states in Asia, the Middle East and Africa, all regions where many states still threaten and carry out the death penalty to deal with drug traffickers.

In this global debate, the United States, despite the increasing liberalization of its domestic policies towards addiction and cannabis consumption, has sided with the hardliners, and so has Canada. In the face of increasingly broad public – and police – support for a softer policy that would focus less on repression than on non-criminal sanctions, treatment and education, both countries are actively engaged in protecting the current regime and maintaining its rigid emphasis on repression.

Arguably, compared to the glaring hypocrisy of the Obama administration, the Harper government is at least consistent, walking the same rigid line in international circles that it does at home, where it is fighting harm reduction initiatives – such as Vancouver’s Insite safe-injection clinic – and, against all evidence and in the face of declining levels of violence, progressively implementing its law and order agenda, with mandatory minimum sentences and increasingly strict guidelines regarding the enforcement of drug prohibition.

More importantly, however, both governments are behaving in an equally callous way. At home, they must answer for their policies and can pay a political price for it. Abroad, they ride free as the horrendous consequences of the current international regime are felt by foreigners to whom they are not accountable. It is these foreigners whose bodies are piling up in the war on drugs across Latin America, and in Iran’s and Asia’s epidemic of injection drugs. They should be the ones setting the international drug policy agenda.

Decriminalization and legalization are certainly not silver bullets and their long-term consequences are still largely unknown. But given the disastrous failure that is the current international drug regime, it is cruel and counterproductive to actively prevent Latin American countries, and others, from asserting their right to try something else.

The decent thing for the government of Canada to do – and the United States, for that matter – is to abstain from pushing their domestic position on drug policy in hemispheric and international discussions. We should let those who are paying the price call the shots or, as they say in Mexico, those who pay the Mariachis pick the tune.

Tuesday, October 8, 2013

The Brazil-Canada spying scandal: What boys with toys have wrought

With their Anglosphere friends, a bunch of irresponsible boys playing computer games with their expensive toys have done lots of damage to Canada's relations with Brazil. After years of childish confrontation around planes, beef and petty criminal affairs and thanks to a large diplomatic effort, the bilateral relationship had become "normal." Two countries with distinct outlooks and increasingly divergent paths in global arenas (Brazil up, Canada down) were finding ways to work together in a variety of fields, while investments and trade, in both directions, were increasing, sometimes significantly. 

The spying scandal matters, but not because that relationship is important for either country. Notwithstanding the hues and cries of the Globe and Mail, trade with Brazil remains marginal for Canada, representing less than 1% of this country's imports and exports (see the graph below). Don't get sidetracked by the big numbers: trade with Brazil was worth $6.5bn in 2012 (down 2.7% from 2011, by the way), but in a sea of $916bn, this is nothing. Investment is a similar story. Don't let the number of companies involved fool you: most of the value is linked to a very small number of investments. Were Vale to sell Inco--which they would do for economic not political reasons--Brazil would disappear from the top ranks of foreign investors in this country. 

In fact, it is the very thinness of the relationship that makes this scandal so damaging: with so little at stake, good will and trust become critical, and this is what has been damaged here. From that standpoint, in other words, tapping Paulo Cordeiro's phone is at least as bad as penetrating the mining ministry's computers, for he was as good a friend of Canada as you would find in Brazil's diplomatic service. If he could be treated like this, everybody is fair game.

Manners matter where stakes are low. Obviously, manners have never been the forte of the gaming crowd…

Friday, August 16, 2013

Hamster Wheel Diplomacy

Over the last eighteen months, Latin America has been one of our ministers’ favorite destinations: Ed Fast spent three days in the region in March 2012, and nine more in April; Diane Ablonczy, on Fast’s behalf, visited for five days in November; John Baird for ten in February 2013; Stephen Harper travelled South for three days in May; and John Baird is just back from another thirteen days trip to the region. Colombia was visited four times, Peru three times, Chile and Mexico twice and Panama, the Dominican Republic, Cuba, Costa Rica, Nicaragua, Argentina, Paraguay, Uruguay and Brazil once each. Of the hemisphere’s significant countries, only Bolivia, Ecuador, and Venezuela were left out, the latter dropped at the last minute as the scheduled visit overlapped with Hugo Chavez’ death. There is clearly nothing flimsy to this government’s commitment to the region, which it identified as a priority almost as soon as it was elected. That simple fact is no doubt welcome in a region that has seen Canada’s interest flutter wildly over the years. But at some point, both Latin Americans and Canadians will be wondering what all these trips are about. And that point may well have been reached.

The Conservatives’ agenda, like the Liberals’ before them, focused mostly on free trade. But now that agreements have been signed with virtually all the governments interested, there is little of substance left to do. Those who haven’t joined the bandwagon won’t do it soon. Indeed, it is hard to see any hint of free trade in the political debates of Brazil and its Mercosur partners, which now include anti-liberal Venezuela and soon Bolivia and Ecuador. Some would like Canada to join the Pacific Alliance, but with free trade agreements already signed with all its members and support from them for Canada’s Asian/Transpacific Partnership strategy already secure, there simply is nothing substantial to gain without a readiness to liberalize immigration, something this government is not willing to contemplate.

Obviously, there is much more than trade to Canada’s relations with the region – a plethora of programs, ranging from technology and student exchanges to peacekeeping, human rights, good governance, public safety cooperation, training, and support have been set up.  In addition, with each visit, a slew of mostly small projects and programs are dusted up, renamed, refinanced or truly introduced. None of those announced recently, however, are really significant for these countries, and none truly matter for Canada.

Both critics and cheerleaders will say that active and visible diplomatic efforts impact Canadian companies present in those countries, sometimes positively, sometimes not. A number of large Canadian firms have become fixtures in the region’s mining and financial sectors but the complicated relations these firms often have with local governments rarely benefit when poorly-informed ministers breeze in for a short stay before returning to Ottawa.

At some point, insisting on progress in the face of paralysis becomes counter-productive. Consider the official press release from the meeting between Baird and Brazilian foreign Minister Antonio Patriota according to which the ministers “initiated work toward the inaugural meeting of the Canada-Brazil CEO Forum”, a forum that was established during Stephen Harper’s visit in… August 2011. One can’t help but conclude that the two countries’ “Strategic Partnership Dialogue” is weaker than it sounds, and that it may struggle when awkward questions pop up about real problems and deeply conflicting views.

Two such delicate themes immediately come to mind: visas and drug policy. The cost and difficulty of obtaining visas is developing into a major impediment to closer economic relations with the region. Indeed, the only article from one of the region’s major papers to mention Baird’s most recent visit, published in Colombia’s El Espectador, points out that trade between the two countries has declined substantially in the last year, and it fingers visas as an important reason for this. The regions’ increasingly liberal view of drug policy, feeding on years of bloody confrontation with traffickers, is also clearly incompatible with the rigid stance of the Harper government on the issue. Without anything to offer on these fronts, Canada’s hyperactive, hamster wheel diplomacy looks at best irrelevant, and at worst counterproductive.

The sustained efforts of the last fifteen years have probably established for good Canada’s credentials as a significant political and economic player in Latin America. Mexico, Chile, and now Colombia, Costa Rica, and Peru have become real and reliable partners. Linkages with Brazil are increasingly deep and diversified, and, although the two countries often don’t see eye to eye, their mature relationship befits their status as serious global players. Canada’s trade, investment, and aid presence in the smaller countries of the region has become “normal,” which means usually welcome, but sometimes criticized. Now, until the government has something substantial to put on the regional table, it would be wise to adopt a lower profile and let the diplomats posted in the region quietly do their job. Repeatedly showing up empty-handed will make even our friends wish we hadn’t shown up at all.

[Originally published in]

Thursday, August 8, 2013

Brazil’s diplomats and the Canadian model

Canadian International Council head Jennifer Jeffs has an intriguing piece in the August 7 Globe. She argues that Canada should look to Brazil for lessons on how to engage the world effectively. I am not sure I agree, when I look at the very few hard results that Brazil got from all its efforts of the last decade. Clearly however, Foreign Minister John Baird, who is arriving in Rio for a two-day visit, will not be impressed with his hosts' "efficiency" when he hears the latest news about Brazil's diplomatic machinery.

Brazil’s Federal Account Tribunal, best thought of as an auditor general with judicial power, has just told Itamaraty, Brazil’s foreign ministry, that the top salary of its diplomats could not exceed $28,000 Reais per month (about C$14,000 or C$ 182,000 dollars a year as Brazilians are paid on a 13-months European schedule). This will come as a shock to Brazilian diplomats, some of whom currently make up to $60,000 Reais per month, or about C$ 390,000 a year...

Perhaps, reversing Jeff’s advice, Brazil's rank-and-file diplomats will be keen to “import” the tactics of their much, much poorer Canadian counterparts, who have been delaying the treatment of visa applications and refusing to take phone calls in foreign countries to get better salaries. For his part, and in keeping with his customary modesty, Baird may well try to sell his rigid stance in the face of those demands.

[Thanks to Fabricio Chagas Bastos for the tip on salaries]

Tuesday, August 6, 2013

Who is bleeding and who notices? Iraq through a Latin American lens

"Iraq is Bleeding and the world has barely noticed" writes Scott Taylor in Embassy Magazine: 500 deaths this month, 3,000 this year.

Awful? Yes, awful. But how awful?

Sorry to get into bleak death accounting, but if the point is for the world to notice, context matters.

Yesterday, Vanda Felbab-Brown sent me a report just published by Brazil's Institute of Applied Economic Research (IPEA) showing that homicides in Brazil between 1996 and 2000 have been under-reported by about 18%. Instead of the roughly 700,000 homicides that we thought had taken place in the country over these fourteen years, Daniel Cerqueira's study suggests that the true number is in fact about 850,000.

So we are talking about 60,000 homicides per year, or 5,000 per month, year after year after year. Obviously, Brazil is larger than Iraq, six times larger. But 6 times 500 is still "only" 3,000. In other words, as bleeding goes, Iraq looks like a mild case. Oh, and by the way, 15 to 16,000 people are murdered every year in the US, or 1250 per month...

The study of civil wars in the last decade has been skewed by a systematic neglect of criminal violence. The division of labour between war and crime specialists and the media prominence of the first has led to a massive exaggeration of the scale and severity of war-related violence and to a corresponding neglect of the ravage caused by criminal violence. 

The sad fact is that the average Iraqi is probably safer than the average Brazilian and also much safer than a poor black male in Cleveland or New Orleans. Time to get real folks.

Thursday, July 11, 2013

The Queen is Naked: Dilma Rousseff and Brazil’s season of discontent

The profound weakness of Brazil’s political leadership is now in full display. For ten or so days at the end of June, angry middle-class citizens took to Brazil’s streets, spewing rage against shoddy and expensive public services, corrupt politicians, a slow and inefficient justice system, and the government’s spending orgy on sport facilities in the lead up to the 2014 World Cup and the 2016 Olympics. Increases in public transportation fares in several cities sparked the protests but the demonstrations quickly became an outpouring of disgust at the abuses of power that have come to define the behaviour of the country’s entire political class.

Governments and politicians were stunned. Mayors and state governors quickly retreated and canceled the fee increase. Reactions at the federal level, however, fed the chaos: President Rousseff immediately committed billions to public transportation. She asked Congress to devote all the forthcoming oil royalties to education (about $140bn). And she announced that a constitutional assembly would be convened to change key components of the electoral system. Legislators also pitched in and Congress rushed through a law that made corruption a grave crime and to a voted—partly against Rousseff’s will—to use oil royalties for education and health care. Meanwhile the Senate even adopted a law making public transportation free for students.

Most of those panicky moves were not really on the political agenda prior to the demonstrations, and none of them are part of a coherent program. Some proposals are no more than pipedreams, while others could end up being counterproductive: most of the oil whose royalties are now pegged to health and education is still extremely deep under the ocean, the effective freeze on transportation fares greatly reduces the net value of any new investment in the system, and the electoral reform is already in limbo. Indeed, the day after Rousseff announced a constitutional assembly, it became clear that such a move would be illegal, forcing her instead to announce a plebiscite whose results would then be used by Congress to modify electoral rules in time for the 2014 elections, i.e. before the end of October 2013 . What will apparently be put to a vote, moreover, looks more like an advanced political science exam than the kind of issue that even an informed citizenry can decide upon: first-past-the post or proportional voting; open or closed list if proportional voting is chosen; full, partial or no public financing of political parties; rules governing electoral party coalitions, and so on, with a plethora of possible—and possibly inconsistent—combinations.

Why such panic and precipitation and why such incoherence in the response? The demonstrations were sometimes large but they rarely reached beyond 100,000, and on average they had less than 400 people – in an extremely wired country of 200 million people in the middle of a football-induced semi-holiday. They were mostly pacific, although significant vandalism at times took place, but always only from small groups. The Brazilian police, the most lethal on the continent, and quite brutal initially, in the end proved shockingly restrained and the three deaths directly related to the demonstrations were all accidental: a participant was killed by a car, another one died of cardiac arrest after inhaling tear gas, and a third one fell from an overpass.  Moreover, and in spite of broad public discontent with the oversize spending on soccer events, the Confederation Cup went ahead without a hitch, and while facilities were obviously well-protected, there were no significant confrontations around the stadiums or disruptions during games. And as Brazil got closer to the final, the whole country appeared to retreat to bars and living rooms to watch the country’s latest soccer sorcerer, Neymar, work his magic.

In other words, the government’s fearful and confused rush to action should be traced less to the scale and force of the movement than to the weakness of the country’s political leadership, primarily of President Dilma Rousseff herself. Elected “by” Lula, who presented her publicly as “me, with a skirt,” she surfed for a while on her predecessor’s popularity and was able to distance herself from the corruption scandals that involved his closest collaborators. For a while, her calm self-possessed and professional public image and even her aloofness appeared to put her somewhat above the dirty and expensive politics of the Congressional coalition upon which she relied to govern. Slower growth, higher inflation, a large trade deficit, and a growing discomfort with lavish government spending, however, began to undermine her popularity. Her handling of the crisis, the first real political test of her mandate, showed her to be wanting: devoid of charisma, lacking political skills, poorly supported and isolated; her quickly calling Lula for help probably killed any claim she may have had to significant political credibility of her own. By the end of the crisis, her popularity hovered around 30 percent, less than half of what it was barely four months earlier.

Rousseff is now the lamest of ducks. Without public appeal of her own, confronted by slower growth and tied by huge financial commitments, she has few if any cards in hand. Governance will get even trickier from this point on as she will have to pay dearly for any concessions from Congress. The expensive deals that this will involve will feed public despondency and the plebiscite, if it takes place, will only add to the confusion.

So, what’s next? The Queen is dead, long live the King? The most obvious outcome of the crisis is the increasingly loud calls for the return of Lula. The wily man stayed out of the limelight during the chaos and will likely do so for a few more months, letting Dilma take all the hits while little real policy work gets accomplished. He could then arrive as a savior and, given the still strong support he enjoys among the poor, his chances of winning an election would be as good as anyone’s. The Lula that would return, however, would be very different from the one that governed in an earlier age of easy prosperity. With his party just as discredited as the others, his rule would likely be more personalist, populist, and even less transparent and accountable than it had become by the time he left power.  More than the plebiscite on electoral reform currently being debated, the return of Lula under such conditions would strongly shape Brazilian democracy, and not for the good.

As for Congress, its old mores look unlikely to change. In the midst of the crisis, and against all rules, Henrique Alves, the President of the Chamber of deputies, took his family with him to the final of the Confederation Cup on an Armed forces plane (the President of the Senate, Renan Calheiros, had done the same thing two weeks earlier). In the end, in sum, far from truly shaking politicians into substantive reform, the brief Brazilian Spring could very well worsen an already detested political system. But, if Brazil wins the World Cup next summer, the politicians who brought the people to the streets could still get away with it all.  The weakness of Brazil’s leadership may have been revealed, but their grip on the political system looks  strong enough to see them through the current upheaval.

[Originally published on Open Canada as “Brazil’s season of discontent”]

Wednesday, May 29, 2013

Brazil's rough patch

Dilma Rousseff came to power three years ago as the heiress of Brazil's most popular president ever and in the wake of a decade that truly stands as a golden age for Brazil. She remains extremely popular, surpassing in fact the numbers of her mentor at a similar point in his first mandate, and she will most probably win the next elections. And yet, neither her government nor Brazil itself is doing very well right now. In fact, one is left wondering if the past decade will stand as another one-time "miracle" from which the country, in spite of its huge size and tremendous potential, will go back to the mediocre routine that has been the hallmark of most of its XXth Century history.

Rousseff's Workers' Party (PT) remains rattled by the condemnation of Lula's closest advisers in the "mensalão"  scandal, which saw Congress members receive regular payments in exchange for their support for the government's legislative agenda. The fact that those most severely sanctioned--who also happen to be closest to Lula himself--could still escape prison terms feeds a growing disenchantment with the sole major party that truly stood apart from old-style corrupt and clientelistic politics. Current electoral manoeuvering does not help as Rousseff gets ever closer to the old political establishment to contain the threat represented on the left by widely respected--and ex-PT--Marina Silva and by the increasingly credible governor of Pernambuco, Eduardo Campos.

The state of the economy doesn't help. Brazil, which essentially escaped the throes of the global financial crisis, grew by a meager 0.12% in 2012 while inflation, at 6.7%, was higher than even the soft target set by the government allowed. In spite of government efforts, the country's deindustrialization continues apace and the country's export matrix, increasingly dominated by primary goods, is slowly going back to what it was before the big industrial push of the second half of the XXth century. To make things worse, the awful state of Brazil's infrastructure, particularly its ports, is proving to be a major obstacle to the expansion of its extremely productive agricultural sector. Public insecurity remains a major concern, as progress in Rio de Janeiro, Recife and São Paulo (where violence is increasing again) is perversely compensated by an explosion of violence, particularly in the Northeast of the country: what must stand as the major stain in Brazil's recent record--more than 500,000 people have been murdered since the beginning of the century--continues to defeat government efforts, harming the poor above all.

To make things worse, the forthcoming World Cup (2014) and Olympic Games (2016), both meant to showcase the country's new status as a global powerhouse, are shaping up as major challenges: the reversal is epitomized by the fate of the renovated Maracanã, Rio's famous soccer stadium, which stood in limbo as major structural weaknesses were found and, for a while, felt to be beyond repairs. Under massive government pressure and with no--financial--holds bared, things were patched up in the end and Dilma--as she is called by the public and media alike--herself presided over a star-studded symbolic inauguration game. With construction behind schedule in a number of sites, this kind of last-minute firefighting could well become the model for much of the infrastructure needed for both events, turning them into massively expensive public relations stunts.

Things look no better on the foreign policy front, which, thanks to Lula's marvelously engaging personality and hyperactive travel agenda, contributed immensely to the country's emergence as a global player on most international issues. Rousseff has neither the charisma of her predecessor nor his interest for world issues or, let's be frank, personal stardom. More fundamentally, Brazil is reaping little results from Lula's activism: a permanent seat at the UN Security Council is as far-fetched as it was ten years ago and the BRICs--with Russia India and China--or IBAS--with India and South Africa--as "South-South" groupings in which Brazil has invested heavily, are proving to be either most unreliable "alliances" or marginal vehicles for the country's ambitions. Brazil's foray into global nuclear diplomacy, around Iran's "civilian" program, has not been particularly glorious, and its continuing--and effective--veto on global trade liberalization is being circumvented by new regional and trans-regional schemes, from the Trans-Pacific Partnership to the Latin America's Pacific Alliance.

The formal launch of the latter, in Colombia last week (May 24), is probably most damaging for Brazil's foreign policy outlook. Just as the threat to the country's regional prominence that Hugo Chavez' ALBA represented was fading with the death of its founder and its messy follow-up in Venezuela, the consolidation of the Pacific Alliance emerges as a credible challenge to Brazil's dominance of the region's integration dynamics. The prominence in the Alliance of perennial regional outsider Mexico and of heretofore largely isolated Colombia represent the PA's most troubling aspect from Brazil's standpoint. The facts, moreover, that the Alliance brings together the continent's most dynamic economies, that all of its members have free trade agreements with the United States--and Canada--and that all of them, unlike Brazil, have no qualm whatsoever with engaging Asia, make the challenge to Brazil's regional stature even more powerful. The expanded Mercosur, which is absorbing ALBA's South American remnants, looks by contrast like a club of troubled losers, with Argentina and Venezuela in the throes of economic crisis and both of them, along with Bolivia, confronting massive public discontent. Ecuador's Rafael Correa, who is about to start his third presidential term, stands as an exception, with substantial support and an economy that is doing rather well, but Ecuador is a tiny thing and the man has stature and a mind of himself and, as a result, he is the most unwieldy ally. Little Mercosur member Uruguay's joining the Pacific Alliance launch as an observer, finally, adds insult to injury for a country that still sees Mercosur as the foundation of its regional prominence.

In this context, and rather pathetically for a budding world power, Brazil must content itself with the election of one of its diplomats as Director General of the World Trade Organization. It doesn't mean much in practice, however, and in fact, it should not: the director-general of the WTO is a facilitator, expected to help countries reach agreement on the rules that govern global trade. His personal views must not really matter and he certainly cannot be seen to favour his own country. And yet, the Brazilian government had invested heavily in his election, taking him around the world over the last five months and involving President Dilma Rousseff in heavy lobbying in his favour. Defeating a Mexican candidate that had the support of Colombia, moreover, emphasizes the depth of the continent's division that is embodied in the emergence of the Pacific Alliance. Paradoxically, in other words, this "triumph" gives the measure of Brazil's current predicament, getting little more than crumbs for all its diplomatic activism.

Now, this rather bleak portrait should not be read as a dismissal of Brazil's place and role in the world. More than any country of the region except the United States, Brazil has the means to be self-centred, slow moving, and to play gingerly the globalization card. Its population and economy will remain among the planet's largest. It will remain an agricultural and mining superpower as well as a tremendously creative society, and its "gentle giant" attitude towards its neighbours will keep providing the region with an anchor of stability. Slower growth and sometimes nauseating political compromise may be the price to be paid for less volatile economic and social conditions and for the slow and pacific consolidation of its democracy: compared to Brazil's cautious game, the Pacific Alliance's bet on globalization looks a lot like, well, a bet, and one whose ultimate fate is largely unknown. The current undoing of Brazil's regional strategy may also just be what the country's diplomacy needs to put a cross on all those half-baked, unwieldy, poorly-institutionalized and ultimately feckless integration schemes. In spite of its roaring integrationist rhetoric and while never completely dismissive of the continent, Brazil has always turned its back to it and its leaders should perhaps recognize that the world, not South America, is really its playground: leading the likes of Maduro's Venezuela's, the Castros' Cuba or Kirchner's Argentina is not only fiendishly difficult and unrewarding, but also utterly useless.

(This piece was first published on under the title "Off Its Game")

Saturday, April 20, 2013

Why Venezuela matters for Brazil

Some may have been surprised by the swiftness with which the Brazilian government recognized the victory of Nicolás Maduro in Venezuela. Along with Venezuela’s closest allies, from Cuba and Argentina to Bolivia and Ecuador, Brazil congratulated Maduro Sunday night, even before the chavista-dominated National Electoral Council even declared him president-elect, early Monday morning. Why would Brazil, which has in fact been the target of Venezuela’s claims to regional prominence under Chavez, be so keen to secure the sympathy of his successor?

Ideology played its part, with Lula himself openly rooting for Maduro’s victory and the knee-jerk leftism of the Workers' Party's (PT's) core constituency predictably pushing for the a quick and strong affirmation of solidarity, especially once the United States had expressed reservations.  As Paulo Sotero has pointed out, however, most leaders of Brazil’s ruling Workers’ Party were to say the very least measured in their praise of Chavez and the disputed election provided an opportunity to play out the global “seriousness” that the country’s elites, right and left, so strongly strive for.

Security worries may also have been at play. Brazil shares a long border with Venezuela and the prospects of political instability right over a poorly-controlled frontier area must have worried Brasilia. The extent to which an early recognition could help stabilize the country in the face of strident resistance and the mobilization of the opposition, however, is far from clear. Why then move so quickly?

I think the answer lies deeper than ideology or even security preoccupations and reaches to the very core of the Brazilian government’s economic model, which is still rooted in old and increasingly far-fetched dreams of industrialization. The ten-year-long Golden Age of Lula’s presidency was based on low inflation and the effective redistribution of reasonably high growth. The axis of that growth, however, has lied in growing exports of primary products, primarily agricultural. For twenty years now, Brazil has been quickly de-industrializing. The fast decline of its manufacturing sector has taken place in the face of strenuous efforts of the government, particularly under the PT, to shore up and protect what a half-century of state efforts had produced, until the brief neo-liberal opening of the early 1990s triggered a debacle that China’s rise, and the primary goods bonanza it produced, only deepened. 

Much of Brazil’s industry is not competitive globally. Domestic protection and support for national “champions” have consequently been crucial to its survival, but so has regional integration, particularly Mercosur. Hiding its industries behind a common tariff with even less competitive—and even keener protectionist—Argentina, ensured that a market would be found for Brazilian products. Bringing Venezuela on board was an even better deal: with no industry to speak of, Venezuela brought no competition within the bloc but putting its sizeable market behind the tariff wall broadened the reach of Brazil’s uncompetitive manufactured products.

Deepening economic instability in Argentina is now threatening the whole scheme. Cristina Kirchner’s attempts to protect its own industrial sector by imposing barriers to Brazilian products, along with declining demand in Argentina, is hurting Brazilian manufacturing exports to that country which, to take a recent example, have declined by 10% in the first three months of this year. With mass protests against Kirchner in the streets of Buenos Aires and most of the country’s major cities last week, continuing high inflation and falling confidence, things are not looking up.

In such a context, what export market is left for Brazil’s industrial goods but troubled Venezuela, whose oil revenues “protect” from economic collapse? Mercosur is a raw deal for Venezuelan consumers, who would be much better off importing from the cheapest world producers, but the chavista mix of ideological blindness and economic incompetence is proving to be a boon for Brazil. In that context, quickly recognizing Maduro and keeping a clearer-eyed opposition out of power was a no-brainer.

Thursday, April 18, 2013

Venezuela's soon-to-be coup-maker? Meet Diosdado Cabello

As Hugo Chavez' health was declining, discussions about his succession focused on a small group of individuals, two of whom dominated the field. One was Nicolás Maduro, a long-time follower of Chavez who had been President of the National Assembly, foreign minister and most recently vice-president. The other one was Diosdado Cabello, a former military officer—he joined Hugo Chavez in a military coup attempt, in 1992—governor, government minister and President of the National Assembly since January 2012. While Maduro had little power of his own and was largely dependent on Chavez, Cabello had built on his close relationship with the military and he was seen as a force of his own within chavista ranks, in spite of the many accusations of corruption that have followed him over the years. In the dramatic press conference Chavez held before leaving for his last journey to Cuba, he put an end to the speculations and told Venezuelans that his chosen successor would be Maduro. Cabello complied and, once the leader was gone, he very publicly embraced Chavez' designated heir.

During the campaign itself, Cabello was given little space while Maduro himself—along with Chavez' ghost, regularly brought in through birds and tweets—completely dominated the party's public presence. Cabello may have been working on his own power base in the background but, clearly, Maduro was trying to fully exploit the Great Man's unction to consolidate his position within the party. He blew his chance however, barely squeaking through with a still contested advantage of 270,000 votes.

Cabello was quick to pounce. On the very night of the "victory" and right after Maduro's confused and shaky speech, Cabello, wearing a military shirt and Chavez' signature red scarf, said very publicly that the tight results called for "a profound auto-critique," a comment clearly directed at Maduro. Suddenly, his lesser presence in the doomed campaign had become a major asset. He has been on the offensive ever since.

Maduro, who had claimed in his post-election speech that he did not fear a full recount, quickly backtracked, no doubt under pressure from those, Cabello chief among them, who had made their sums and saw the danger involved in playing too clean. The government thus made it clear that the results would stand.  Maduro, in an "express ceremony" held Monday morning, was formally declared president-elect by the head of the country's electoral commission, Tibisay Lucena, something she had conspicuously avoided to do the night before, when announcing election results. President Maduro now has to contend with a divided international reaction and a very calm but determined opposition.  His standing among chavistas, meanwhile, is at its nadir.

Cabello is grabbing an increasingly large share of the post-election crisis media coverage. His well-publicized rants at the National Assembly have been extremely aggressive. He keeps calling opposition presidential candidate Henrique Capriles a "fascist" and has just dismissed a number of opposition members from their position as heads of various National Assembly commissions. Part of his vehemence can probably be traced to his 2008 defeat to Capriles in the race for governor of the state of Miranda, but as one of the regime's leaders most commonly associated with corruption—a leading "narco military," as Venezuelans put it—he may also have an awful lot at stake in his party's keeping control of the state.

Thanks to his much stronger base among the party and the military, Cabello's hand should grow stronger as things deteriorate and tensions rise. If Maduro attempts to resist his influence, or if Cabello is just unhappy with having to wait six years before getting his chance at power, a forced resignation—or a removal by a simple decision of the chavista-controlled Supreme Court (as per art. 233 of the Constitution)—would offer an easy cover for a legal coup. While formally out of the country's line of executive succession, Cabello's position as President of the Assembly is in fact perfect to take over power. In cases of resignation or incapacity, indeed, the Executive Vice-President is prevented by the Constitution to run in the new elections, which must be held within thirty days. Cabello by contrast would be free to run...

Tuesday, April 16, 2013

Nicolás Maduro's Disastrous Elections and the Coming Chaos in Venezuela

Nicolás Maduro had all the cards in his hands: personally and very publicly anointed by Chavez himself and free to use all the resources of the state to promote himself, he was running a two-week campaign in the wake of the massive outpouring of grief that followed the death of the country's most popular politician ever. No wonder he was universally seen as a shoo-in. The opposition, still reeling from an 11% -margin defeat barely six-months old and with little time to organize or raise money, could only hope for a miracle. It almost happened.

Maduro's utter lack of charisma, his claim to have seen portly Chavez appear to him as a cute little bird and to have received tweets from the late Chavez himself were rightly seen as crass and demeaning attempts to exploit the quasi-religious fervor in which the late leader was held, and they no doubt played a role in his disastrous performance. But the results should probably be traced to the dreadful situation in which a decade of Chavismo has placed the country. Without Chavez himself to whip the crowds, and in spite of the very real impact that his programs were having on the poorest everyday life, the utter emptiness of his legacy showed starkly: stratospheric homicide, common crime and corruption levels, the highest inflation rate in Latin America, incompetent public administration, declining oil production with the world's largest reserves, crumbling transportation infrastructure, regular and sometimes extended electricity blackouts, and so on. The inability of his successors to move early enough to embalm the great man—decomposition was too advanced—should stand as the eternal symbol of their incompetence and disorganization. Chavez' hyperactive and constant presence, epitomized by his weekly hours-long "Allo Presidente," television show, had been propping up a chaotic and unsustainable "model," and when his death put an end to the telenovela, reality came back with a vengeance.

What happens now? The opposition is asking for a full recount, but the government has decided to recant from Maduro's commitment in the speech he made right after the results was announced, and now refuses to do it. The missing one percent of the roughly 15 million votes counted (150,000) comes mostly from outside the country, where the opposition dominates. With a difference of about 250,000 votes between the two candidates, errors on the domestic front could turn Maduro's tight victory into a defeat. The opposition is already taking to the street and things could quickly turn very ugly. In the end, however, the opposition doesn't have guns and the ruling party, its militias, and the army do: the rebellion should quickly be quelled, though possibly in blood.

Over the medium term, what the opposition does may matter less than what happens within Chavista ranks. Chavez had been stuffing an ever-expanding state with his followers and for them, who have everything at stake in staying in power, Maduro has proven to be a huge liability. The problem is also acute for the Cuban regime, whose economy has become deeply dependent on the injection of cheap oil from Venezuela. Maduro, who held power strictly by virtue of Chavez' trust and support, finds himself in a desperate position: the kind of reforms needed to put the country back on track call for a kind of leadership and a legitimacy he doesn't possess. The problem is, nobody among his "colleagues" has them either.

Those who could lose everything in the next elections, six years down the road, have two options: grab as much as they can, while they can, or make sure that, even without reform, they win the next context. The first path leads to a deepening economic and social crisis, the second one to a crisis of the country's political institutions. In this landscape, the military is likely to become increasingly central. As an institution, they have less at stake than the Chavista establishment because the opposition in power would still need them, and probably fear them too. With growing violence and chaos, moreover, calls for some authoritarian solution are likely to be heard, and support for it to be broad.

The next six years will be troubled in Venezuela, and the 2019 elections even more, if they ever take place. The regime's bet on a clean electoral process now looks a lot like the hubris that led Chile's Pinochet to dream of a victory in his 1989 plebiscite. Don't expect anybody to make the same mistake again: if Chavez' men are still in power in 2019, they won't let a disaster like this year happen again.

Monday, April 1, 2013

Brazil's "Responsibility while Protecting"

Some people are gushing about Brazil's challenge to the "Responsibility to Protect" (R2P) doctrine.

Brazilian diplomats have indeed come up with a twist, calling their own version of R2P "responsibility while protecting." Those looking for new leadership and a more humane, empire-free and sexier version of the good old "humanitarian intervention" think that Brazil could be "The One."

The Canadian International Council has a new "In Depth" (!!!) piece on the issue. Its ends with a question that is beyond laughable: "With the economic and political decline of traditional Western powers, will Brazil lead the world’s police force in a new multipolar world?"

Let's just mention two little problems that should give CIC's deep thinkers a few clues to an answer.

1) Brazil has an extremely limited capacity to deploy serious forces on any significant scale anywhere in the world. Their mission in Haiti is the largest and most extensive venture they have engaged in since the Brazilian military's excellent adventure in the Dominican Republic, in 1965, and it fully occupies them.

By the sad standards of this world, Haiti is much closer to a Club Med than to a failed state war zone. As a Brazilian military analyst who certainly prefer my not mentioning his name, the best thing about engaging in Haiti is that nobody can ask Brazil to go to the DRC, Sudan, or other really hot spots.

2) About 40,000 people are murdered every year in Brazil and in the country's two main cities, Rio de Janeiro and São Paulo, at least a thousand are executed by the police. "Resistance to arrest" is also a major cause of death in most of the country's large cities. Trials of policemen accused of such executions are exceedingly rare and condemnations even more.

At home, in other words, Brazil neither protects, nor shows much responsibility when apparently trying to. And that's our candidate for global police chief...

So what should we make of the Responsibility while Protecting? Not much.

The original R2P is little more than a clever conceptual fig leaf to hide--barely--challenges to the sovereignty of smaller powers by the large ones that still dominate global governance institutions. There are good reasons for those who have little say in the decision to worry about entrenching a principle that could make intervention easier. Brazil's RwP is just one way they have found to try to neuter R2P (if you can forgive the twisted mixed metaphors). Nothing more.

Wednesday, March 20, 2013

Fertilizers (yes) and international affairs: the Argentina-Brazil potash feud

At the beginning of March, mining giant Vale announced that it would close its massive Rio Colorado potash project in Argentina. The move was justified strictly on economic grounds: even though the company had already invested some $2bn in the project, the size of the investments required and the problems created by inflation and an overvalued currency were said to have forced it to cut its losses and leave. Predictably, Argentina's government was outraged but the move was well-received by markets that saw the whole venture, well, as an expensive adventure. The stock in fact went up after the announcement.

On the surface, in other word, run of the mill behaviour by a run of the mill multinational. The hitch is, Vale is anything but a run of the mill multinational. While formally headquartered in the Netherlands, it is in fact Brazilian and a strategic tool that the Brazil's government is keen to use to project and protect its interests in the world. Through investments by a public sector pension fund it controls (Previ) and by its National Bank for Economic and Social Development (BNDES), and also via its influence over the company's largest private sector equity holder and Brazil's second largest bank (Bradesco), the federal government exerts a tremendous influence on the company. This became clear in 2011, when its then-CEO, Roger Agnelli, was forced to resign by President Dilma Rousseff, following rising tensions about patterns of investments that, she and her predecessor Lula, felt neglected the domestic scene.  

The Rio Colorado investment had a strategic quality that went well beyond Vale's typical activities in the iron, nickel, manganese, copper and coal businesses. Potash, with phosphorus and nitrogen, is one of the three fundamental fertilizers on which agriculture depends. It is also increasingly scarce and its production highly localized: 60% of global production is concentrated in only three countries (Canada, Russia and Belarus) and 80% in the top five (with China and Germany added). Brazil, which derives a larger part of its exports from agricultural goods than any other major economies, only produces 1.5% of global output and thus has to import 90% of what it uses. On that increasingly tight market, it competes with the whole world, but especially with China, India and the United States.

Once completed the Rio Colorado project was planned to be under exploitation for 50 years and it would have made Argentina one of the world's four largest potash producers, with about 12% of current global output (4.3/34.4bn tons). For Brazil, it would have represented a secure supply of one of the few strategic commodities it does not have aplenty, and certainly one of the most critical to its present and—given global food price prospects—future export revenue.

And yet, Vale decided to let it go, most probably for good given the reaction the move is generating. Indeed, the Argentinian government is apoplectic and has announced that they would sue for compensation and look for new investors. With Buenos Aires knowing very well that no such decision by the company could have been taken without, literally, presidential approval, the termination of the project will also poison a relationship with Brasilia that is already rocky.

From all this, three issues of note, from where we sit:

1) The economics of the project and the general prospects of the Argentinian economy must truly have looked awful to Vale and Brazil for such a decision to have been taken. And, thanks to years of hyper-inflation and intimate relations with their neighbours, few global investors are as difficult to shake up or as knowledgeable about Argentina as Brazil's. In other words: don't bet your pension fund on Argentina.

2) For Canada, the world's largest producer, this is probably good news. Brazil, already a good client of Saskatchewan's Potash Corp, will be even more dependent on it and the disruption to the project will keep prices high.

3) Finally, this is just further meat for the grinder of people like me, who think that Latin America is really dis-integrating and that behind all the talk of solidarity and converging interests, there is little of substance really going on. 

Tuesday, March 12, 2013

Empty stardom: Hugo Chavez's international legacy

Hugo Chavez was a global star. A photogenic and rotund figure with a warm personality, his aggressive self-promotion and bombastic attacks against the United States have made him famous around the world. With his friend Lula from Brazil, he has given Latin America a visibility the region had not enjoyed since the Castro-Guevara duo ruled the waves in the 1960s and 1970s. A self-declared revolutionary trying to sell his ways as "socialism for the XXIst Century," Chavez has been spending much of the country's oil wealth on social programs at home, which made him immensely popular among poor Venezuelans. He has also used Venezuela's oil revenues to build a broad coalition in Latin America and the Caribbean and his diplomacy has courted any world leader willing to denounce Yankee imperialism. While alive, he really made his mark on the world. What of all this will survive him?

The Chavez "model" was about spending money: on food, education and social services. Producing that money was not really part of the picture and the whole endeavour would quickly have run empty without Venezuela's oil wealth.  Lacking investments, even the oil sector is now struggling and the rest of the economy is in shambles. The country's massive energy resources, however, could easily draw foreign interest and relaunch domestic production, sustaining further social spending. As a model for a country that does not have the same riches—and that means almost everybody on the planet—there is not much of use in Hugo Chavez'  version of socialism.

Oil was also the honey that held together his "Bolivarian Alliance of the Peoples of the Americas" (ALBA). Most of its members were small oil-dependent countries from the Caribbean and Central America and for them, Chavez death is tragic. Most severely threatened is Cuba, which was getting some 10 to 13 billion dollars a year—for a country with a GDP of about $70bn—in subsidized oil and credits from Venezuela. Haiti's annual support, worth $400million, is also at stake, as are the checks going to Nicaragua, Dominica, Surinam, and so on. The rationale for the whole program was tied to Chavez' personal pretentions to regional leadership. Devoid of his charisma and soon to confront strong pressures to keep together a fractious domestic coalition, his successors are likely to put much of this money to domestic use.  Neither Argentina, nor Bolivia or Ecuador, the next largest and richest members of ALBA, are in a position to provide glue money. Without much of a joint agenda, it is hard to see a real future for that coalition.

Aside from the predicament of ALBA's retinue of oil-dependent states, could Chavez' death mean trouble for the region and beyond? The consolidation of what is really a new regime in Venezuela will likely be messy. The country is already the most violent in South America, drug trafficking, corruption and nepotism are rife, and Chavez had done little to consolidate political institutions that would exist without him. Political uncertainty, in turn, will not help the economy. The United States, Colombia and Brazil have significant trade with Venezuela. With about 1 million barrels a day, Venezuela is the US' fourth largest source of oil. Colombia and Brazil have large trade surpluses with the country and find there a welcoming market for their manufactured exports. Instability, moreover, could perhaps trickle over the long and poorly controlled borders they share with Venezuela. In a worst-case scenario, deepening corruption and violence could lead to the emergence of a large, rich and messy narco-state at the northern tip of South America.

While the opposition, which could win the April 14 elections, or the new leadership, whose qualities were not given much space to show, could get the country back on track, these are causes for worry. Not about oil, however: if Venezuela exports much oil to the US, it imports a lot gasoline from there as its refining capabilities are meager. Dependence here is a two-way street and there is much more to lose for Caracas in this game. The risks of political instability and criminalization are much more serious and their management the real challenge for external actors. The US would be ill-advised to get too closely involved, however. Brazil and Colombia, with more at stake and, especially for Brazil, much more access and local credibility, will be best placed to lead an international effort at containing the potential ripple effects of Venezuela's difficult times, and to help along the process of de-polarization that the country will now need to go through. Canada, which has little at play in this all game, should probably content itself with a supporting role. 

Monday, March 4, 2013

Mathematics of dumbness: The Security Council, emerging powers, and Iran's nuclear program

In 2010, Brazil and Turkey made a huge mess after being excluded from the international committee leading the talks on Iran's nuclear program. That committee was called P5+1 because it included the five permanent members of the UN Security Council, along with Germany. It was also called, more euphemistically, the E3+3 because... it included France, Germany and the UK, along with the US, China and Russia. The legitimacy of that little club was challenged, however, by Turkey and Brazil in particular, which at the time were non-permanent members of the Security Council. The little numbers game, in other words, wasn't quite working.

Turkey wondered why it had not been invited: after all, as an immediate neighbour its strategic situation would be massively affected by a nuclear Iran and it would likely suffer ripple effects from attempts to destroy Iranian nuclear infrastructures. The Brazilians were unhappy to be left out. They felt—and still fell—that they are not getting much in exchange for signing the NPT and suspending their own nuclear programs (this is not a typo, they had several). They wondered why Germany was involved while other top candidates to a permanent seat at the Security Council, like themselves, were left out.

So Turkey and Brazil joined force and launched their own little initiative. It did give a degree of legitimacy, however fleeting, to Iran's claim that its program had no military component. Conversely, it weakened the legitimacy of the Security Council's pressures, which really looked like the action of a small group of powerful bullies. In the end, Iran's rigidity helping a lot, Turkey and Brazil voted against the sanctions but announced, somewhat sheepishly, that they would comply with the Council's decision.  

Things have apparently calmed down and discussions have proceeded since without any change to the committee's participants. Brazil's relations with Iran may even have taken a turn for the worse and diplomats are keeping discussions alive with regular meetings, the latest on Feb. 26 in Kazakhstan.  So, all is fine?

Not quite, and not just because Iran appears to be proceeding with its nuclear program unabated.  The P5 may not want to play to the whims of every new kid on the block and, indeed, Turkey and Brazil looked more than a little bit naive when insisting that Iran was really not interested in a military program. But in practice, Turkey has continued to oppose the sanctions, its officials have said that those would not affect the importation of Iranian oil and gas and that Turkey's economic relations with Iran would likely intensify. The problem, however, goes well beyond the case of Iran. The NPT regime is under threat. Current nuclear powers will not fully disarm, contrary to their commitment, and a growing number of countries will acquire the technological capacity to produce their own nuclear devices. If access to the Security Council remains de facto conditional on having nuclear weapons, and if potential nuclear powers can't even have a say in the governance of the regime and in the management of the crises it confronts, what exactly is in it for them?

Thursday, February 7, 2013

The discreet charm of strategic overlap

Or How the US uses lesser powers, and why they like it.

Since the 1990s, France had been nervous about the US in Africa. American allies in Uganda and, after 1994, in a Rwanda since ruled by English-speakers, looked threatening to its old claim over much of Central and West Africa. Brazil felt the same about the close relationship between Washington and Bogotá: the idea of having significant US military assets right in the Amazon, and a close relationship between the only real fighting military in South America and the big Northern power was a nagging worry in Brasilia’s foreign policy and defense establishments.

How things change. France is in charge in Mali, with the Americans—and the Canadians—in the background. And in the mess developing in Venezuela around the coming death of Hugo Chavez, Washington will likely again look to Brazil to take the lead.

From the US’ standpoint, there is no reason to fear the outcome and in fact, its interest in each region are well served by the engagement of those peculiar allies. Like the US, France and Brazil seek stability and they have enough at stake to be willing to get involved, very seriously in the case of France, more lightly, but for certain actively, for Brazil.

How does that work? The US has limited interests in Africa and Latin America. To the dismay of analysts from those regions, and of DC-based cheerleaders for them, the Obama administration, like Bush’s before him, and Clinton’s in his second mandate, have been increasingly neglectful of these regions. And, unfortunately, it makes perfect sense. Asia is where the big economic game is played, Iraq and Afghanistan are still eating away at the US military budget, and the US Congress’ dysfunctions may well castrate the Pentagon in coming months. What is called for in Mali and Venezuela may not be that much and, at least for Mali, even a disaster wouldn’t be that disastrous.

Brazil and France, in turn, far prefer to keep the US out, they like the idea of taking the lead somewhere, and have real stakes in those games. This makes for perfect modern marriages: on one side, the mid-size guys want in and seem to have enough in play to invest what is needed; on the other the big guy wants mostly out and simply doesn’t have enough at stake to invest what is needed. The little guys also get glory out of it, and the big guy looks modest.

Everybody is happy.

Any problem with the fable? Well, yes. If things get out of hand, neither France in the Sahel, nor Brazil in Venezuela can really deliver. France could not hold Rwanda and was forced to leave Côte d’Ivoire, the jewel in its African crown, when the civil war there grew serious. As for Brazil, its military has not ventured out of the country without a blue helmet since 1965, when they were the fig leaf behind which US marines put the Dominican Republic back in order. This has served both quite well: France is slowly shedding its neo-colonial skin and bit by bit ditching the old Françafrique, and Brazil burnishes the Gentle Giant image that has made it such a good neighbour in South America. In other words, they cannot play their hand too harshly. In the background, the US must help quietly, and hope that they succeed.