Canada and the Americas at the turn of the Century: A Mostly Light Footprint, and Inconsistent Policy
Latin America and the Caribbean do not matter much for Canada and, conversely, Canada does not matter much for the Americas. With a weak economic, political and strategic foundation, Canadian foreign policy towards the region has oscillated over the last twenty years between bouts of enthusiasm and periods of neglect. Behind policy inconsistency, however, a small number of issues have become and will remain significant dimensions of Canada's presence in the region: economic relations with Mexico, Canadian mining and financial interests in a few liberal Andean countries (Chile, Peru, and Colombia), and continued foreign assistance to Haiti.
Weak, very weak interdependence
The Department of Foreign Affairs and advocates of a deepening commitment to the region make a big fuss about the scale of Canadian investments in the region, insisting on the total value of the stock of investments in Latin America and the Caribbean: at $130 bn, it is indeed very significant, representing about 20% of total Canadian FDI in the world. A close look at the numbers, however, reveals that almost 80% of that money (2008) is in fact parked in a few Caribbean tax heavens. The rest of the continent's share has been hovering around 5% of total Canadian FDI since 1995, never exceeding 6% and in fact representing less than 4% in 2008.
Trade relations tell a similar story: the region has been and remains a marginal trade partner for Canada. While increasing by about 30% between 2000 and 2007, to reach $4.03bn, exports were down to 2.92 bn in 2008. In relative terms, the region has never received more than 2.5% of Canadian exports, with about half that total represented by Mexico. On the imports side, the picture is brighter, with the region representing more than 7% of Canadian imports. In absolute terms, however, imports have only grown by 3.5 between 2000 and 2007, and they are now significantly lower than ten years ago. Moreover, more than half that amount and almost all the growth are attributable to Mexico.
About 20,000 individuals from Latin America and the Caribbean have become landed immigrants in Canada in 2008, a quarter of which from Colombia. This, however, only represent 11% of the total for that year, which means that the weight of the regions in Canada's immigrant population is in fact declining.
Canada has no significant strategic interests in the region and the much-discussed links between gangs in Canada (especially in British Columbia) and in the region appear to have little bearing on the evolution of crime and homicide rates, which, contrary to what is happening in much of the Americas, has been declining regularly in Canada over the last ten years.
Peculiar Politics
Four constituencies dominate the policy discussion. The first one is quite vocal and focuses on human rights and trade issues. It is centred in large unions' permanent secretariats, in NGOs and academia and is particularly noisy about Cuba --and now Hugo Chavez and friends- Canadian mining in the region, and free trade (which it opposes). The second, very quiet, is made up of a small clutch of financial services and mining companies and of a few large investment funds. It focuses on those Andean countries that are open for business (Chile, Peru and Colombia) but also looks towards Brazil, though with little hope for easy access to that market. A small sector of what I would call the foreign policy establishment is the third group involved. It includes a small number of mostly government players in the Privy Council Office, Foreign Affairs, Finance, CIDA, and a spate of other departments, and also a small number of outside experts that are not part of the "rights" constituency. Though sometimes emotionally or professionally attached to the region, they are mostly preoccupied with Canada's standing in the world and see the region as the last place where Canada can find a home away from North-America and the relative powerlessness that comes with it Part of that constituency also sees Latin America as a card to play in the bilateral relationship with the United States. Finally, the Haitian community is also a significant player. As the only organized diaspora community from the region, it wages a disproportionate influence because it is vocal, has well-connected advocates in academia, among civil society organizations and these days even in the Governor General's mansion, and because it is heavily concentrated in a francophone federalist riding in Quebec.
In practice
None of these constituencies is particularly strong and as should be clear, they do not all push in the same direction. In particular, government support for the liberal policy favoured by the private sector constituency meets with strong resistance from the "rights" coalition. In addition, the broadly inconsequential character of government policy towards the region implies that re-orientations are largely costless politically. As a result, public moods (currently a strong popular interest in Haiti), the personal bends of the Prime Minister (for instance Stephen Harper's personal sympathy for Alvaro Uribe), or the sudden need for resources and involvement on another issue or in another part of the world (say Afghanistan), can make the region or a sub-part thereof a priority one day and a forgotten file the next.
A few country relations have nonetheless been gaining heft over the last twenty years: The relationship with Mexico, which is deeply embedded in Canada's north-americanity, is here to stay. Canada's energy and mining sector is one of the most dynamic in the world and its involvement in Andean countries will continue and deepen, whatever the government does. Finally, the fact that Haiti matters in Quebec, and that it matters for Canada's relations with the United States, probably means that the country's involvement in what must be called a development quagmire, will continue for years to come.
Photo Jonathan Blair
Wednesday, March 10, 2010
Wednesday, February 17, 2010
Honduras: The crisis as an oligarchic squabble
Pepe Lobo has been invited to Spain for the EU-Latin America Summit, next May. This is it. The crisis is over. Honduras and its government are back in the embrace of the donours and partners that count. The US and Canada no doubt will follow suit.
Deposed-President Manuel Zelaya had already left for the Dominican Republic, promising that he would be back, but looking happy enough to be out of the whole mess in which he put himself --with a little help from Hugo.
The crisis and its outcome have been variously painted as another instance of a return to authoritariasim in the region, as the latest instalment of a continental fight between a progressive pink wave and the rest, and as a test of the Americas' and the world's commitment to democracy. All of the above make some sense, but none gets to the hearth of the matter, which lies much deeper into the fabric of Honduras politics and society. For the little catfight between Zelaya, Michelletti, and Lobo, with neighbours and the US dabbing into it, looks in fact like a carbon-copy of the oligarchic squabbles that characterized Central American political life for much of the XIX and XXth Century.
The players were the sons of the few families that dominated those city-states --as Enrique Baloyra so neatly put it so neatly-- and basically considered state power like a prize to be sought and kept as private property. Competition was often violent, with each side recruiting among its dependents a small number of soldiers to be sacrificed. In good machista manner, the oligarchy's scions would join in, though very few would die in action. Typically (wait for this one), the noble leader of the defeated faction would be caught alive and... sent in exile to a neighbouring country, from which he would come back, generally chastened, a few years later, to be welcome by his old enemy in a gentlemanly fashion. The whole thing was very much "entre nous" because they all knew one another, they had all been to the same balls and married in the same pool of oligarchic daughters.
A few things have changed, but not that much: in most countries of the region, politics remains an extended family affair and the same names keep popping up in the social and political pages of national papers that are always local. A few outsiders have joined in --and some have dropped out-- but this happened in the past too and anyway, the newcomers quickly took up oligarchic mores and just added their own names to the local pantheons.
To the reader of XIXth and early XXth Century central american history, for instance, the Zelaya patronym is a throw back to a notorious multi-national liberal clan, whose most famous representative was a general who for a while was President of Nicaragua and kept invading neighbouring countries to put in power somebody from the local liberal family networks. His adventures played an important role in the US decision to send marines to the region, so as to ensure that a degree of stability would prevail and that governments would pay their debts to English banks. For doing otherwise could have led to English involvement in the region, something the US wanted to avoid at all costs.
But back to Honduras. Here we have another Zelaya, now coming to power through the electoral process that was imposed from the outside on local oligarchs as the way to decide who is to "have" the state, if only for a while. To avoid jealousies, indeed, the elites have consitutionalized the prohibition of keeping power for more than one mandate. Lobo, who lost the last elections, had to wait in the wings, but he, like the other pretendants, expected to have his turn.
Zelaya threatened to break the deal however. After two-hundred years of patrimonial domination and poverty, there was understandable discontent in the population. The space afforded by democratization was being used by social movements who pushed for real political and economic reforms. Moreover, Hugo Chavez was out there with his money and promises of support. Zelaya fell for it. His own money no doubt safe, he jumped into the bolivarian bandwagon in the hope of keeping the state for himself.
He had misread his hand, however, and his bluff was called. That the struggle was about saving an oligarchic pact was clear from the fact that all major parties and political institutions joined in to denounce Zelaya and contain and repress social movements. In the fight that ensued, the poor paid the price, as they did in XIXth century caudillo wars, both in blood, and in money. For this time, the international community joined in and cut financial support to the country, at a cost estimated at $2bn (Haiti's reconstruction, by comparison, has been assessed at $14bn). Strikingly, those sanctions did not deter the Honduran Congress, one more proof that their deal was worth much more for the oligarchy than the crisis' cost to the country as a whole. In the end, as we saw, Zelaya was punished for his deed, but the old fashionned way. He was sent into comfortable exile, his life safe and, no doubt, most if not all his properties untouched.
Deposed-President Manuel Zelaya had already left for the Dominican Republic, promising that he would be back, but looking happy enough to be out of the whole mess in which he put himself --with a little help from Hugo.
The crisis and its outcome have been variously painted as another instance of a return to authoritariasim in the region, as the latest instalment of a continental fight between a progressive pink wave and the rest, and as a test of the Americas' and the world's commitment to democracy. All of the above make some sense, but none gets to the hearth of the matter, which lies much deeper into the fabric of Honduras politics and society. For the little catfight between Zelaya, Michelletti, and Lobo, with neighbours and the US dabbing into it, looks in fact like a carbon-copy of the oligarchic squabbles that characterized Central American political life for much of the XIX and XXth Century.
The players were the sons of the few families that dominated those city-states --as Enrique Baloyra so neatly put it so neatly-- and basically considered state power like a prize to be sought and kept as private property. Competition was often violent, with each side recruiting among its dependents a small number of soldiers to be sacrificed. In good machista manner, the oligarchy's scions would join in, though very few would die in action. Typically (wait for this one), the noble leader of the defeated faction would be caught alive and... sent in exile to a neighbouring country, from which he would come back, generally chastened, a few years later, to be welcome by his old enemy in a gentlemanly fashion. The whole thing was very much "entre nous" because they all knew one another, they had all been to the same balls and married in the same pool of oligarchic daughters.
A few things have changed, but not that much: in most countries of the region, politics remains an extended family affair and the same names keep popping up in the social and political pages of national papers that are always local. A few outsiders have joined in --and some have dropped out-- but this happened in the past too and anyway, the newcomers quickly took up oligarchic mores and just added their own names to the local pantheons.
To the reader of XIXth and early XXth Century central american history, for instance, the Zelaya patronym is a throw back to a notorious multi-national liberal clan, whose most famous representative was a general who for a while was President of Nicaragua and kept invading neighbouring countries to put in power somebody from the local liberal family networks. His adventures played an important role in the US decision to send marines to the region, so as to ensure that a degree of stability would prevail and that governments would pay their debts to English banks. For doing otherwise could have led to English involvement in the region, something the US wanted to avoid at all costs.
But back to Honduras. Here we have another Zelaya, now coming to power through the electoral process that was imposed from the outside on local oligarchs as the way to decide who is to "have" the state, if only for a while. To avoid jealousies, indeed, the elites have consitutionalized the prohibition of keeping power for more than one mandate. Lobo, who lost the last elections, had to wait in the wings, but he, like the other pretendants, expected to have his turn.
Zelaya threatened to break the deal however. After two-hundred years of patrimonial domination and poverty, there was understandable discontent in the population. The space afforded by democratization was being used by social movements who pushed for real political and economic reforms. Moreover, Hugo Chavez was out there with his money and promises of support. Zelaya fell for it. His own money no doubt safe, he jumped into the bolivarian bandwagon in the hope of keeping the state for himself.
He had misread his hand, however, and his bluff was called. That the struggle was about saving an oligarchic pact was clear from the fact that all major parties and political institutions joined in to denounce Zelaya and contain and repress social movements. In the fight that ensued, the poor paid the price, as they did in XIXth century caudillo wars, both in blood, and in money. For this time, the international community joined in and cut financial support to the country, at a cost estimated at $2bn (Haiti's reconstruction, by comparison, has been assessed at $14bn). Strikingly, those sanctions did not deter the Honduran Congress, one more proof that their deal was worth much more for the oligarchy than the crisis' cost to the country as a whole. In the end, as we saw, Zelaya was punished for his deed, but the old fashionned way. He was sent into comfortable exile, his life safe and, no doubt, most if not all his properties untouched.
Monday, January 18, 2010
Canada in Haiti: The US connection
Chantal Hebert suggests that Canada should take a central role in Haiti's reconstruction. She lists a series of arguments: long involvement in the country, in all fields, tight social links through the large Haitian community in Montreal, significant expertise into Haiti's dreadful problems, at CIDA, but also in the various layers of the country's aid industry, from NGOs to consulting and engineering firms. The fit would be better than Afghanistan, where Canada is a true foreigner, lost in a losing cause, and from where it is about to take its troops out. And the humanitarian and development challenges are not less great.
What Hebert leaves out, however, is at least as important. She says at one point that Canada will still be there when the others have left. This is mostly true, with one huge exception: the US, which has always been there and which, in the relief and reconstruction effort, is taking the lead. This could seen as a problem for her proposal, but in fact, it is an opportunity, and a big one: Haiti matters for the US because of security and migration issues. At the same time, it is also a development quagmire into which it has invested hundreds of millions of dollars. A much-enhanced Canadian security and development involvement could very well substitute for the large --and now huge- US presence. And it could be sold as a kind of compensation for our retreat from Afghanistan.
This would suit everybody: Washington, which has enough on its hands in Iraq and Afghanistan; the Haitians, who have had enough of Washington since their Independence; and the Canadians electorate, who could at last feel that we are doing good, without collateral damages.
What Hebert leaves out, however, is at least as important. She says at one point that Canada will still be there when the others have left. This is mostly true, with one huge exception: the US, which has always been there and which, in the relief and reconstruction effort, is taking the lead. This could seen as a problem for her proposal, but in fact, it is an opportunity, and a big one: Haiti matters for the US because of security and migration issues. At the same time, it is also a development quagmire into which it has invested hundreds of millions of dollars. A much-enhanced Canadian security and development involvement could very well substitute for the large --and now huge- US presence. And it could be sold as a kind of compensation for our retreat from Afghanistan.
This would suit everybody: Washington, which has enough on its hands in Iraq and Afghanistan; the Haitians, who have had enough of Washington since their Independence; and the Canadians electorate, who could at last feel that we are doing good, without collateral damages.
Bye, bye Pink Wave. Hello boring alternance?
Sebastián Piñera will be Chile's next president. He has won a clear victory over Eduardo Frei, who was unable to build on the performance of his predecessor Michelle Bachelet and her government, whose popularity hovers around 80%.
Don't expect big changes in the country's policy, however. Chile has become dreadfully serious over the last two decades, which means that its domestic and international policies hover around centrist policies, just as they do in most developed democracies. This makes for boring politics, with marginally meaningful party alternance the only game in town. But boring politics is the privilege of the wealthy. Think of Canada...
In the region as a whole, there is more in the offing. Next month, Costa Rica will have elections that no one will talk about, because they will largely be inconsequential. If Uribe does not run in the May elections in Colombia (and time is running out to change the constitution and enable him to do it), a less conservative politician take could well take over the country's presidency, with not much of a change in public policy, even on security. While nothing is settled yet, Brazil will probably also elect a more liberal president than Lula next October, once again with few substantive policy changes in sight. In all those countries, the economy is stable, inflation is low, poverty is declining, as are homicides and kidnappings.
Compare this with the recent referendums and elections in Honduras, Nicaragua (municipal) or Venezuela (on the Constitution) where politics is indeed most interesting, where inflation is high, growth prospects are bad, crime is rising and poverty increasing. Compare this also to Argentina, which is teetering on the brink of a constitutional crisis and where a lot of nasty things could happen between now and 2011, when the term of Cristina Fernandes de Kirchner ends.
The big division of the continent is not between Right and Left, but between boring but serious regimes, and lively but irresponsible ones, where wild things can happen at any time.
My hunch is, most Latin Americans would take the bore...
[I just found out that Michael Shifter of the Inter-American Dialogue, in DC, has a similar take on the meaning of that election and those that are coming up.
Don't expect big changes in the country's policy, however. Chile has become dreadfully serious over the last two decades, which means that its domestic and international policies hover around centrist policies, just as they do in most developed democracies. This makes for boring politics, with marginally meaningful party alternance the only game in town. But boring politics is the privilege of the wealthy. Think of Canada...
In the region as a whole, there is more in the offing. Next month, Costa Rica will have elections that no one will talk about, because they will largely be inconsequential. If Uribe does not run in the May elections in Colombia (and time is running out to change the constitution and enable him to do it), a less conservative politician take could well take over the country's presidency, with not much of a change in public policy, even on security. While nothing is settled yet, Brazil will probably also elect a more liberal president than Lula next October, once again with few substantive policy changes in sight. In all those countries, the economy is stable, inflation is low, poverty is declining, as are homicides and kidnappings.
Compare this with the recent referendums and elections in Honduras, Nicaragua (municipal) or Venezuela (on the Constitution) where politics is indeed most interesting, where inflation is high, growth prospects are bad, crime is rising and poverty increasing. Compare this also to Argentina, which is teetering on the brink of a constitutional crisis and where a lot of nasty things could happen between now and 2011, when the term of Cristina Fernandes de Kirchner ends.
The big division of the continent is not between Right and Left, but between boring but serious regimes, and lively but irresponsible ones, where wild things can happen at any time.
My hunch is, most Latin Americans would take the bore...
[I just found out that Michael Shifter of the Inter-American Dialogue, in DC, has a similar take on the meaning of that election and those that are coming up.
Friday, January 8, 2010
A Honduras-type crisis in Argentina?
A Constitutional crisis appears to be in the making in Argentina. President Cristina Kirchner is meeting resistance from Congress, where her Peronista party has lost its majority, from the Central Bank, whose President has refused Kirchner's request to use reserves to pay external debt, and from the Judiciary, with a judge putting the Bank's President back in charge after he was demoted by Kirchner for refusing to abide by her request.
We thus have an interesting situation, very similar to the beginnings of the crisis in Honduras: The Kirchner --Cristina and her husband, former president Nestor- want to stay in power, but there is growing resistance in the political class and in the electorate. In fact, Julio Cobos, the country's vice-president who broke with the Kirchner and has been voting regularly against the government in Congress, is the most popular politician in Argentina right now. By using the country's reserves, the Kirchner appear to be trying to free resources for domestic spending, the only way for them to secure a victory in the coming election. For obvious reasons, however, their plan is opposed by Congress, the Central Bank, and now the Judiciary. To push the parallel even further, Martin Redrado, the President of the Central Bank, just like Cobos, are former supporters of the Kirchner
What is next? Well, either the couple retreats and regroup for a counter-attack a few years down the road, OR they try to get through the street what they cannot get through normal --some say legal-- means.
This is very precisely what Zelaya did...
We thus have an interesting situation, very similar to the beginnings of the crisis in Honduras: The Kirchner --Cristina and her husband, former president Nestor- want to stay in power, but there is growing resistance in the political class and in the electorate. In fact, Julio Cobos, the country's vice-president who broke with the Kirchner and has been voting regularly against the government in Congress, is the most popular politician in Argentina right now. By using the country's reserves, the Kirchner appear to be trying to free resources for domestic spending, the only way for them to secure a victory in the coming election. For obvious reasons, however, their plan is opposed by Congress, the Central Bank, and now the Judiciary. To push the parallel even further, Martin Redrado, the President of the Central Bank, just like Cobos, are former supporters of the Kirchner
What is next? Well, either the couple retreats and regroup for a counter-attack a few years down the road, OR they try to get through the street what they cannot get through normal --some say legal-- means.
This is very precisely what Zelaya did...
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...
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?
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...
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.
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.
Tuesday, November 3, 2009
Why Brazil is displacing Canada on the world stage
As you probably know, not much is expected of developing countries at the forthcoming Copenhagen conference on global warming. For that matter, not much is expected from developed countries either, and especially not from Canada. The rich have to pay is the South's standard line, and they certainly have a point as the West and Japan are responsible for much of the CO2 hanging in the sky. Why should they pay for our sins when they still have hundreds of millions of poor people who aspire to little more than the life expectancy and standard of living of Canadians in 1960? To which the wealthy reply: big Southern economies are now major producer of greenhouse gas, the consequences are bad for everybody, and especially the poor, so pick up your share of the burden, or suffer, because our societies are not ready to make alone the kind of sacrifice that is required.
Nice background for reaching an agreement, no?
Well, Brazil is about to break that mould. According to Nature the Brazilian government is about to announce a plan to "drastically" reduce emissions. In other words, they will do what both the rich and the poor want the other to do.
Brazil's energy situation is unique: essentially self-sufficient in oil and gaz -and about to become a significant exporter-, it currently relies mostly on hydro-electricity and bio-fuels for its transportation and industrial sector's needs (Ricardo Sennes and Thais Narciso have a great chapter on this in a recent book by the Brookings Institution). This does not make their task easier, however, because it means that they already produce less emissions per unit of GDP than most large industrial economies. Still, they apparently have found ways to cut significantly what is left.
Meanwhile, in Canada, we silently hope that oil sands royalties will get our public finances back in the black...
Nice background for reaching an agreement, no?
Well, Brazil is about to break that mould. According to Nature the Brazilian government is about to announce a plan to "drastically" reduce emissions. In other words, they will do what both the rich and the poor want the other to do.
Brazil's energy situation is unique: essentially self-sufficient in oil and gaz -and about to become a significant exporter-, it currently relies mostly on hydro-electricity and bio-fuels for its transportation and industrial sector's needs (Ricardo Sennes and Thais Narciso have a great chapter on this in a recent book by the Brookings Institution). This does not make their task easier, however, because it means that they already produce less emissions per unit of GDP than most large industrial economies. Still, they apparently have found ways to cut significantly what is left.
Meanwhile, in Canada, we silently hope that oil sands royalties will get our public finances back in the black...
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