American specialists of hemispheric affairs have been complaining about the Obama administration. After encouraging signs, during his campaing and in the first few months after the election, his administration appears to have done little of substance. The Western Hemisphere looks no more important to it than it has been for every other administration since Ronald Reagan's Cold War adventures in Central America. This should come as no surprise. Beyond Mexico, Colombia (for now), and to a lesser extent the Caribbean, the region does not matter much to the US. An indifferent policy reflects the absence of strong interests in the region, and the resulting lack of the strong domestic constituencies that would force the government to become serious towards it.
The Americas have long been seen as the US backyard. In fact they have been claimed as such by the United States since James Monroe famously barred European powers from interfering on the continent, at the beginning of the XIXth century. For a long time, there was not much substance to that claim and Britain, in particular, did as it wished, dominating the continent economically until World War II. For sure, a US-dominated Pan-American Union—which became the OAS in 1948—was created at the turn of the XIXth century, US marines and "advisors" have been roaming in the hemisphere since then, American multinationals have invested massively in the resource sectors of much of the continent and, from the 1950s until the 1990s, they had little "foreign" competition. From those standpoints, there was something like an American domination of the continent.
A closer look, however, reveals a much different picture. Throughout the XXth century, true imperial dominance was largely confined to the Caribbean and Central America, with the South largely free of outright intervention. Cuba, Nicaragua, Haiti, Guatemala, Grenada, and Panama bore the brunt of the Empire's dominance. The sub-continent, however, had a very different history.
Much fuss was made about US support for the military regimes of the Southern Cone and the coups that launched them in the 1960s and 1970s, but it was just that: support for regimes whose claim to power were largely self-sustaining. A convergence of interest between Cold War America and anti-communist and reactionary military and economic elites has long been painted as the manipulation by Washington of political establishments utterly dependent on that support to stay in power. It is easy to forget how nationalist and profoundly anti-liberal those regimes were, how free they all felt not to play into US' anti-Cuban policy or, to take specific examples, how nationalized Codelco became the cash-cow of the Chilean military, how it is the Peruvian military launched the land reform in their country, how Brazil's generals were not keen at all on US multinationals, how their economic policy is best understood as state capitalism and how quick they were to establish relations with communist Angola and to cut military cooperation with Jimmy Carter's America. Similarly, when the time came for the generals to leave, US influence proved marginal: elites turned their back on them, civil society mobilized and in some cases—Argentina and Chile for instance—sheer hubris brought them down. Differently from Central America and the Caribbean, in sum, domestic factors overwhelmingly determined both the rise and the fall of South Americas military dictatorships, not US schemes and manipulations.
Something has broken down since the end of the 1980s, but that something is partly an illusion, for the Empire's backyard had always been smaller than it looked. Still, what hard ground there was for that illusion is shrinking as American strategic and economic interests in the region as a whole diminish.
Strategically the most important challenges to America have disappeared, like the communist threat in Central America, they are wildly exaggerated, like the Chavez threat, or self-created, like the prohibition-induced illegal drug market and the "War on Drugs"-induced drug violence in Colombia and especially Mexico. Between 2001 and 2008, US military financing to the region represented less than 2% of world total, and 80% of that 2% went to Colombia. Moreover, when the US does not realize on their own that a strong presence is not a good idea, they are told. As the Colombian government's progressively wins its civil war, the legitimacy of a significant American presence in, and military cooperation with, the country will also shrivel. Recently expelled from Ecuador, the American military looks doomed to fully abandon the region soon, which may not matter that much, primarily because the stronger trend takes the region towards increasingly developed and democratic societies, whose interests are unlikely to conflict fundamentally with those of America.
Economically, the US is also losing interest in South America, whose proportion of US stock of investments has declined radically over the last ten years, from 6% of its global portfolio in 2000, to 3% in 2008. Much of US investments in the Americas—beyond Canada—is concentrated in Caribbean fiscal havens: Bermuda and the British Caribbean, with 9% of the global stock of investments, have more weight than South America and Mexico combined (6%). Trade numbers look slightly better, but much of that trade is made up of commodities which, by definition, are globally traded and priced. In 2008, Brazil, with 50% of South America's GDP, represented 1.45% of total US exports, and 2.48% of its imports. From the standpoint of US companies, consumers and economic policy-makers, in other words, South America, with or without free trade agreements, is a very minor part of the world.
The flip side of that declining interest has been a growing presence of new players in the region. Canadian companies dominate the mining sector of most Andean countries, and of the continent as a whole for exploration. European banks, particularly Spain's, along with Canada's Scotia, have aggressively invested in the region. China, while still tentative and not particularly welcome, should soon make significant forays in the resource sector. Russia and France are strong players in the regional arms market. Even Iran is now expressing interests, albeit essentially for diplomatic reason. The overall effect is that while the Americas decline in US global portfolio, the US also declines as an investor in, and trade partner for, the region.
The breakdown of imperial America's continental hold makes hemispheric arrangements superfluous. The project of a Free Trade Area of the Americas collapsed less as a result of Brazilian resistance than of Washington's and especially Wall Street's indifference. The OAS has long been a diplomatic backwater, notwithstanding its recent ventures –sometimes successful—into local crises. Its recent reinvention as a bulwark of democracy on the continent, already tested in the recent Honduran crisis, could soon break on the reefs of Chavez' autocratic consolidation, in the face of which it will likely be impotent and divided. The Summit of the Americas' process is quickly sinking into irrelevance. There simply is no more need for such arrangements and their survival is becoming at best a matter of inertia: meetings follow meetings, treaties beget commitments, diplomats sustain posting locations, and bureaucrats hold on to their jobs.
The region is left without a frame, but the idea of one survives, and ideas still matter. This one still structures much of the diplomatic activity in the region, and it explains why in the face of low and declining interdependence, existing if weak institutional arrangements survive and why new ones keep popping up, just as weak and institutionally deficient. It also explains why the United States remains a constant reference in the region's nationalist discourse while, paradoxically, American analysts keep deploring their country's indifference towards the region.
[A slightly different version of this piece has recently been published by the Robarts Centre's Canada Watch]
Photo Jonathan Blair
Tuesday, November 23, 2010
Sunday, November 21, 2010
Brazil: Defense policy as industrial policy, and more
This morning's Estado de São Paulo has a piece on Brazil's plans for a massive development of its submarine stable, with six nuclear ships and twenty conventional ones, six of which refurbished. The project is big and long-term, with at least 3 billion Euros for the nuclear part alone and a schedule of delivery for the program as a whole that extends to 2047.
There is a security rationale to the move, with Brazil's growing reliance on off-shore oil and gas deposits possibly justifying the development of a capacity to protect them. The problem is, over such a long time frame, who knows what threat will emerge and how handy submarines will be to tackle it, making for a somewhat flimsy case for such a massive investment.
In the shorter term, however, the project fits very well with two central objectives of Brazil's industrial and foreign policy. On the development side, the plan is consistent with Brazil's systematic preference for technology transfer and the development of a domestic capability in high-tech industrial capacity. The forthcoming announcement regarding fighter jets will clearly rely on a similar rationale, with technology transfer, not narrowly-defined military capabilities THE critical factor (more on this on this blog soon). The technology will come from France and Brazil will pay dearly for it (the cost of the first subs is currently estimated at 2bn Euros), as it probably will for the fighter jets. But construction will be done in Brazil, and Brazilian companies will get the know-how.
Beyond a pattern that is generalized in Brazil's military procurement--another example is the new large transport plane being developed by Embraer--there is a second component to the submarine announcement whose implications are clearly short-term: Brazil is trying to gain a louder voice in the global nuclear debate without--for now at least--getting nuclear weapons. This in turn is part of an equation that underlies much of Brazil's recent behaviour on the nuclear front, including its disastrous foray in the Iran controversy: all the members of the security council have nuclear capabilities, and Brazil wants in, badly.
So, while developing a nuclear weapons program looks like a very risky proposition, from a diplomatic standpoint, Brazil tries to claim a piece of the nuclear turf by making a minor fuss on inspection, by announcing plans to develop a domestic nuclear capability that arguably it does not need--given its already ultra-diversified and low-carbon energy matrix--and now, by moving into nuclear-powered submarines.
There is a security rationale to the move, with Brazil's growing reliance on off-shore oil and gas deposits possibly justifying the development of a capacity to protect them. The problem is, over such a long time frame, who knows what threat will emerge and how handy submarines will be to tackle it, making for a somewhat flimsy case for such a massive investment.
In the shorter term, however, the project fits very well with two central objectives of Brazil's industrial and foreign policy. On the development side, the plan is consistent with Brazil's systematic preference for technology transfer and the development of a domestic capability in high-tech industrial capacity. The forthcoming announcement regarding fighter jets will clearly rely on a similar rationale, with technology transfer, not narrowly-defined military capabilities THE critical factor (more on this on this blog soon). The technology will come from France and Brazil will pay dearly for it (the cost of the first subs is currently estimated at 2bn Euros), as it probably will for the fighter jets. But construction will be done in Brazil, and Brazilian companies will get the know-how.
Beyond a pattern that is generalized in Brazil's military procurement--another example is the new large transport plane being developed by Embraer--there is a second component to the submarine announcement whose implications are clearly short-term: Brazil is trying to gain a louder voice in the global nuclear debate without--for now at least--getting nuclear weapons. This in turn is part of an equation that underlies much of Brazil's recent behaviour on the nuclear front, including its disastrous foray in the Iran controversy: all the members of the security council have nuclear capabilities, and Brazil wants in, badly.
So, while developing a nuclear weapons program looks like a very risky proposition, from a diplomatic standpoint, Brazil tries to claim a piece of the nuclear turf by making a minor fuss on inspection, by announcing plans to develop a domestic nuclear capability that arguably it does not need--given its already ultra-diversified and low-carbon energy matrix--and now, by moving into nuclear-powered submarines.
Tuesday, November 2, 2010
Brazil's Halloween elections: Too much mystery?
Elections are supposed to tell us something: where a country is heading, how it will be governed, or at the very least who will govern it. Brazil's Oct. 31 presidential elections told us nothing of the sort. The meaning of Dilma Rousseff's victory is shrouded in mystery, not only for outside observers and most Brazilians, but for Dilma Rousseff herself.
Clearly a few things won't change, and they matter a lot: state-led but market-friendly economic policy are here to stay, there is no real debt repayment to suspend, and inflation is widely seen as too dangerous a monster to let out again. Above all perhaps, Bolsa Familia, the country's famously successful conditional cash transfer program, is a sacred cow nobody will touch. In a sense, this election was thus about nothing much, an accident of institutional design that prevented Luis Inácio Lula da Silva, Brazil's most popular politician ever, from staying in power for at least four more years, doing roughly what he has done since 2002.
Yet Lula will soon be out, and Dilma Rousseff in, as quite a different political game will get under way. That game has many levels and their dynamics and combinations are so complex that nobody can say what will come out. Hence the mystery.
The first of these levels is the Partido dos Trabalhadores (PT, Labour Party) itself. Having finally reached power in 2002, but exclusively thanks to Lula’s charisma, the party had to let him govern, which he did, but often in a way and with people the party establishment did not quite like. The petistas have swallowed it for eight years but now, many feel that the party's time has come and they will clearly try to stake their claims on government priorities and budgets.
It may not be easy. Their first problem is with Lula, who is out, but not quite, and could well be tempted by a comeback in 2014. Call him the party's zombie: dead in a sense but well alive in another. Their second problem is with Lula's social base, which some analysts have called lulismo. As it now appears, lulismo forms a large movement, mainly rooted in the Northeast but spanning the whole country through its poorest sectors. Those sectors were not reached by the social movements and political organizations linked with the PT and to this day they remain impervious to the orthodox leftism or sophisticated post-Marxism of PT intellectuals. They are devoted to Lula himself and to what he has given them: stability and a sense of security through prudent economic policy, and a cheque every month that for the first time enables them to make ends meet. They used to be the social base of the old oligarchy and they are resolutely conservative, in part by necessity as they know they will be the first to fall off if the boat is rocked, but also by choice as the vast majority —Catholic or Protestant— is intensely religious. Rousseff discovered it the hard way when her ambiguous stand on abortion became a major issue and probably played a key role in pushing the presidential contest into a second round.
If Rousseff takes a chance, sides with the petistas, and moves a bit to the left, will the lulista base follow? Above all, will Lula let it happen, leaving his chosen successor —"himself with a skirt" as he put it, perhaps already thinking about Halloween— turn against "his" people?
As if these uncertainties were not enough, Rousseff will also need to piece together majorities for every law she will try to push through Congress. To do that, not only will she need to garner support from the whole PT delegation, a large part of which got to power thanks to lulistas' support, but like all Brazilian presidents, she will need to threaten or buy off a great many "centrist" deputies and senators, mostly from the PT's major ally, the Partido do Movimento Democrático Brasileiro (PMDB, Brazilian Democratic Movement Party). Though not quite the "gang of bandits" former governor and presidential candidate Ciro Gomes called them, most of its elected members move only under threat or when bought off with ministerial posts for party members, jobs for their followers, expenditures for their constituents, or raw cash. Lula, whose immense popularity meant he could impose political sanctions, nonetheless had to resort to one or another of those other ways to get what he wanted. Rousseff, who is devoid of her predecessor’s massive political legitimacy and most unlikely to build it in the short or medium term, won't have a choice: she will pay dearly to get what she wants from Congress. How much? Nobody knows because what the lulistas will think, what Lula will do, how PT congresspeople will react, how much the centrist "allies" will demand, and how all this will play out, is anybody's guess.
By the way, nobody knows too well what lies behind the mask Rousseff has been wearing during the campaign, how much of a lulista or petista she is, how she plans to deal with the Zombie and how much she is willing to pay to get her way in Congress. Her program tells us nothing either and, as if to emphasize its irrelevance, it was launched in the last week of a two-month-plus campaign...
In the end, for the next few years, all this may not matter much, because Brazil's "fundamentals" are so sound. But over the longer term, or soon if Goddess Crisis strikes again, Brazilians may wish to have had a less mysterious election night.
Clearly a few things won't change, and they matter a lot: state-led but market-friendly economic policy are here to stay, there is no real debt repayment to suspend, and inflation is widely seen as too dangerous a monster to let out again. Above all perhaps, Bolsa Familia, the country's famously successful conditional cash transfer program, is a sacred cow nobody will touch. In a sense, this election was thus about nothing much, an accident of institutional design that prevented Luis Inácio Lula da Silva, Brazil's most popular politician ever, from staying in power for at least four more years, doing roughly what he has done since 2002.
Yet Lula will soon be out, and Dilma Rousseff in, as quite a different political game will get under way. That game has many levels and their dynamics and combinations are so complex that nobody can say what will come out. Hence the mystery.
The first of these levels is the Partido dos Trabalhadores (PT, Labour Party) itself. Having finally reached power in 2002, but exclusively thanks to Lula’s charisma, the party had to let him govern, which he did, but often in a way and with people the party establishment did not quite like. The petistas have swallowed it for eight years but now, many feel that the party's time has come and they will clearly try to stake their claims on government priorities and budgets.
It may not be easy. Their first problem is with Lula, who is out, but not quite, and could well be tempted by a comeback in 2014. Call him the party's zombie: dead in a sense but well alive in another. Their second problem is with Lula's social base, which some analysts have called lulismo. As it now appears, lulismo forms a large movement, mainly rooted in the Northeast but spanning the whole country through its poorest sectors. Those sectors were not reached by the social movements and political organizations linked with the PT and to this day they remain impervious to the orthodox leftism or sophisticated post-Marxism of PT intellectuals. They are devoted to Lula himself and to what he has given them: stability and a sense of security through prudent economic policy, and a cheque every month that for the first time enables them to make ends meet. They used to be the social base of the old oligarchy and they are resolutely conservative, in part by necessity as they know they will be the first to fall off if the boat is rocked, but also by choice as the vast majority —Catholic or Protestant— is intensely religious. Rousseff discovered it the hard way when her ambiguous stand on abortion became a major issue and probably played a key role in pushing the presidential contest into a second round.
If Rousseff takes a chance, sides with the petistas, and moves a bit to the left, will the lulista base follow? Above all, will Lula let it happen, leaving his chosen successor —"himself with a skirt" as he put it, perhaps already thinking about Halloween— turn against "his" people?
As if these uncertainties were not enough, Rousseff will also need to piece together majorities for every law she will try to push through Congress. To do that, not only will she need to garner support from the whole PT delegation, a large part of which got to power thanks to lulistas' support, but like all Brazilian presidents, she will need to threaten or buy off a great many "centrist" deputies and senators, mostly from the PT's major ally, the Partido do Movimento Democrático Brasileiro (PMDB, Brazilian Democratic Movement Party). Though not quite the "gang of bandits" former governor and presidential candidate Ciro Gomes called them, most of its elected members move only under threat or when bought off with ministerial posts for party members, jobs for their followers, expenditures for their constituents, or raw cash. Lula, whose immense popularity meant he could impose political sanctions, nonetheless had to resort to one or another of those other ways to get what he wanted. Rousseff, who is devoid of her predecessor’s massive political legitimacy and most unlikely to build it in the short or medium term, won't have a choice: she will pay dearly to get what she wants from Congress. How much? Nobody knows because what the lulistas will think, what Lula will do, how PT congresspeople will react, how much the centrist "allies" will demand, and how all this will play out, is anybody's guess.
By the way, nobody knows too well what lies behind the mask Rousseff has been wearing during the campaign, how much of a lulista or petista she is, how she plans to deal with the Zombie and how much she is willing to pay to get her way in Congress. Her program tells us nothing either and, as if to emphasize its irrelevance, it was launched in the last week of a two-month-plus campaign...
In the end, for the next few years, all this may not matter much, because Brazil's "fundamentals" are so sound. But over the longer term, or soon if Goddess Crisis strikes again, Brazilians may wish to have had a less mysterious election night.
Wednesday, October 13, 2010
Killing the strategic partnership with Venezuela
So, PDVSA, Venezuela's oil company, is not paying its part for the joint refinery it was supposed to be building with Petrobras in Pernambuco. That refinery project was the linchpin of the "strategic partnership" between the two countries that was launched with much fanfare five years ago. With the linchpin gone, not much is left and all the rhetoric in the world simply will not compensate for the lack of substance in the realtionship between the two countries. Chavez' poor management of "his" oil company must shoulder the blame. But does it?
Because the whole thing gets better: PDVSA, like all such large companies, often borrows to invest in such large projects. So the company, meaning Chavez, went to the BNDES, Brazil's development bank, and was turned down TWICE!
Now the BNDES is well-managed and all in all, massively successful financially. But it has always been used for political purposes and its current president, Luciano Coutinho, is very, very, very close to Lula and the PT. No doubt, had the King wanted it, the money would have flown. So the King did not...
Because the whole thing gets better: PDVSA, like all such large companies, often borrows to invest in such large projects. So the company, meaning Chavez, went to the BNDES, Brazil's development bank, and was turned down TWICE!
Now the BNDES is well-managed and all in all, massively successful financially. But it has always been used for political purposes and its current president, Luciano Coutinho, is very, very, very close to Lula and the PT. No doubt, had the King wanted it, the money would have flown. So the King did not...
Wednesday, August 25, 2010
Now the question is: What kind of regime will Dilma head?
The latest polls are crystal clear: Dilma Rousseff is heading for an assured victory, probably in the first round of the November elections in Brazil.
The debate is now moving to the type of government that Dilma will head. Two big questions dominate that debate: 1) What role Lula will play, and 2) What will the PMDB need to play along?
The Lula issue is tricky. Critics have been saying for a while that he wants to come back in 2014 and could thus not allow Dilma to become too autonomous. In yesterday's Estado de Sao Paulo, political scientist and PSDB sympathizer --and possibly still member-- Bolivar Lamounier paints the picture of an emerging semi-authoritarian regime, along the lines of the old Mexican PRI "model". The key is the articulation by the PT of unions, social movements, state institutions and companies, along with allied parties, into an overwhelming political force that pushes the opposition to the margins. He sees Lula playing a key role in that construction, controlling from the sidelines through his prestige and influence in the "civil society" part of that big conflation. The idea is quite compelling, for it is difficult to see how Dilma could confront Lula given his influence in the PT and his ability to launch massive social mobilizations through his links with the unions and social movements. In many ways, this would fit his main strengths better to stay in charge of something, a-la-Putin, with all the dreary administrative stuff that comes with it. He would strictly do politics.
This analysis fits quite well with the demise of all those rumours about Lula's hopes of becoming Secretary-General of the UN. Indeed, leaving aside the fact that he doesn't speak English and has shown little interest in the minutiae of diplomacy or administration, there is no reason to deny Ban Ki Moon the standard second term in his position --a denial that would anyway be received as a shocking slight by South Korea-- and above all, the recent row over Iran's nuclear program has clearly dampened the P5's enthusiasm for Brazil and for Lula personally, who engaged personally and very publicly in the whole discussion. With the UN out, it becomes almost impossible to find a place for Lula outside Brazil that would fit his now considerable ego.
Now, would Dilma play along? What's in it for her? Being the first woman to become Brazil's president and barely keeping the seat warm for the big man to come back does not quite fit with the trajectory and the personality of a woman who is very bright, clearly independent-minded and apparently quite a decisive and even authoritarian manager. Moreover, it is far from clear that no constituency exist, within the PT, the Congress and Brazil's electorate, for her to build a government that would bear her very own mark.
Interestingly, a big boon in her quest for autonomy from Lula could come from the PT's main partner in this year's electoral coalition, the PMDB. Indeed, the traditional vultures of Brazilian politics are back, this with Michel Temer as Vice President and likely with the largest representation in both chambers of Congress. The party has already staked his claims on important chunks of the next government, beginning with the Ministry of Finance and the core policy-making team of the new President.
Assuming she is "her own woman," and not a lulista hack, the key for Dilma would thus be to arbitrate the lulistas and the old clientelist crowd of the PMDB, so as to manage both the street and Congress.
I will leave it at this for now, but "stay tuned", because the parallel drawn by Lamounier with Priista Mexico is worth going back to.
The debate is now moving to the type of government that Dilma will head. Two big questions dominate that debate: 1) What role Lula will play, and 2) What will the PMDB need to play along?
The Lula issue is tricky. Critics have been saying for a while that he wants to come back in 2014 and could thus not allow Dilma to become too autonomous. In yesterday's Estado de Sao Paulo, political scientist and PSDB sympathizer --and possibly still member-- Bolivar Lamounier paints the picture of an emerging semi-authoritarian regime, along the lines of the old Mexican PRI "model". The key is the articulation by the PT of unions, social movements, state institutions and companies, along with allied parties, into an overwhelming political force that pushes the opposition to the margins. He sees Lula playing a key role in that construction, controlling from the sidelines through his prestige and influence in the "civil society" part of that big conflation. The idea is quite compelling, for it is difficult to see how Dilma could confront Lula given his influence in the PT and his ability to launch massive social mobilizations through his links with the unions and social movements. In many ways, this would fit his main strengths better to stay in charge of something, a-la-Putin, with all the dreary administrative stuff that comes with it. He would strictly do politics.
This analysis fits quite well with the demise of all those rumours about Lula's hopes of becoming Secretary-General of the UN. Indeed, leaving aside the fact that he doesn't speak English and has shown little interest in the minutiae of diplomacy or administration, there is no reason to deny Ban Ki Moon the standard second term in his position --a denial that would anyway be received as a shocking slight by South Korea-- and above all, the recent row over Iran's nuclear program has clearly dampened the P5's enthusiasm for Brazil and for Lula personally, who engaged personally and very publicly in the whole discussion. With the UN out, it becomes almost impossible to find a place for Lula outside Brazil that would fit his now considerable ego.
Now, would Dilma play along? What's in it for her? Being the first woman to become Brazil's president and barely keeping the seat warm for the big man to come back does not quite fit with the trajectory and the personality of a woman who is very bright, clearly independent-minded and apparently quite a decisive and even authoritarian manager. Moreover, it is far from clear that no constituency exist, within the PT, the Congress and Brazil's electorate, for her to build a government that would bear her very own mark.
Interestingly, a big boon in her quest for autonomy from Lula could come from the PT's main partner in this year's electoral coalition, the PMDB. Indeed, the traditional vultures of Brazilian politics are back, this with Michel Temer as Vice President and likely with the largest representation in both chambers of Congress. The party has already staked his claims on important chunks of the next government, beginning with the Ministry of Finance and the core policy-making team of the new President.
Assuming she is "her own woman," and not a lulista hack, the key for Dilma would thus be to arbitrate the lulistas and the old clientelist crowd of the PMDB, so as to manage both the street and Congress.
I will leave it at this for now, but "stay tuned", because the parallel drawn by Lamounier with Priista Mexico is worth going back to.
Monday, July 12, 2010
A tough one for Chavez to swallow...
Hugocito cannot like this one from fellow-Albista Correa
From Stratfor (Intelligence Guidance: Week of July 11, 2010): "July 13: Naval forces from Ecuador, the United States, Colombia, Mexico and Chile will participate in the Unitas naval maneuvers in Peru." Unitas indeed!
Now: How about a military cooperation program between Ecuador and the US, perhaps along the line of the Brazil-US one?
As Fidel once said (speaking for some strange reason of dissidents' leaving "his" island): "The rats are abandoning the sinking ship."
The real point is: People will take Chavez money and sometimes even applaud his rhetoric, but on serious things, like regional military cooperation or relations with the US, the region's progressives (from Evo and Correa to Lugo and Lula) look noticeably tepid towards the big red friend.
[By the way: sorry for the break. The blog is on again...]
From Stratfor (Intelligence Guidance: Week of July 11, 2010): "July 13: Naval forces from Ecuador, the United States, Colombia, Mexico and Chile will participate in the Unitas naval maneuvers in Peru." Unitas indeed!
Now: How about a military cooperation program between Ecuador and the US, perhaps along the line of the Brazil-US one?
As Fidel once said (speaking for some strange reason of dissidents' leaving "his" island): "The rats are abandoning the sinking ship."
The real point is: People will take Chavez money and sometimes even applaud his rhetoric, but on serious things, like regional military cooperation or relations with the US, the region's progressives (from Evo and Correa to Lugo and Lula) look noticeably tepid towards the big red friend.
[By the way: sorry for the break. The blog is on again...]
Wednesday, June 2, 2010
Two hubs, many spokes, no frame: The Shape of Post-American Americas
Fareed Zakaria's Post-American World doesn't say much about the Americas: a few remarks on Brazil, fewer still on Mexico's regional assertiveness, a dismissive reference to Hugo Chavez' rants, and peppered here and there, brief allusions to some of the smaller countries of the region. Why say more? The fate of American power was not played out in the Western Hemisphere and nothing that happened there over the last twenty years weakens his general thesis: US influence is declining and challengers are more assertive while, on the whole and sometimes slowly but without much prodding, market economies and democracy consolidate their hold on politics and state policy, from Alaska to Tierra del Fuego.
This, however, does not tell us much about what those post-American Americas look like, which is what this short piece is about: how does the global lessening of America's power leave the rest of the hemisphere?
My answer is simple, but not straightforward: the post-American Americas have broken into a strange contraption: one America that is at least as American as ever, tightly organized around the United States; a second one that is less American than ever, for the most part loosely organized around Brazil; and between the two halves, a relationship whose importance for each side gets ever slighter. Think of the whole as a surreal bicycle.
1- A tight wheel in the North
The United States remains the hub of a system that includes Canada and Mexico, but also the Caribbean, Central America, and possibly even Venezuela. Among the spokes, not much goes on, but their relationship with the hub is the most important foreign issue for their economic prosperity and political stability.
The nature of existing hub-and-spoke relationships varies. America is the primary trade partner of all the spokes, but only Canada, Mexico and the US share extensive value chains. A massive amounts of energy flows into the US from Canada, Mexico, Venezuela and Trinidad and Tobago. Capital movements contribute to the tightness of the wheel, with investments flowing freely and in large quantities between the US, Canada and Mexico. Beyond that core, the movement is largely unilateral, as massive amounts of private capital goes from the US to the Caribbean fiscal havens while migrants, both legal and illegal, send remittances from the US back to Mexico, Central America and the Caribbean. People and drugs move in the opposite direction. Mexico and –through the latter—Central America represent the main source of migrants to the United States, of whose economy they have become critical cogs. Cocaine from Colombia, Bolivia and Peru, penetrates the US through Central America, the Caribbean and Mexico. High-potency marijuana crosses southward from Canada and northward from Mexico.
That system is diverse and dynamic, with heavily interdependent formal and informal economies and deeply intertwined social universes. In most ways, it "works," with massive movements of goods, people and money circulating smoothly; but in others it doesn't, as violence ravages its peripheries, from Mexico's Northern border to the shantytowns of San Salvador, Guatemala City and Kingston, Jamaica.
Overall the region remains dominated by the United States. It is however by no means governed or even actively managed by Washington. There is instead the overwhelming sense and the reality that what happens in the United States is profoundly consequential for its neighbours, whereas the opposite is not true. The mostly uncontrolled character of US domination reflects a decline of America's ability to effectively control its environment whereby its tremendous economic and political prominence cannot effectively be mustered for any purpose.
2- A wobbly wheel in the South
A superficially similar structure is emerging in South America, with Brazil as the hub, and its neighbours as spokes. The wheel is smaller though: Brazil truly matters only for Bolivia, Argentina, Paraguay, Uruguay and to some extent for Venezuela. Colombia shares a huge frontier with Brazil, but aside from substantial cocaine exports, it has never had much interaction with it. Ecuador and Chile, out of immediate reach and with economies tuned increasingly to the Pacific are also largely out of the system.
The southern wheel is also far from tight. Quite a few things happen between the spokes but the region remains massively extroverted. Above all , there is no integrated core with significant value chains and circulation of capital. Instead, except for Brazil's dependencies (Bolivia and Uruguay, to some extent, and especially Paraguay), much of the region's exports, mostly agricultural commodities and minerals, are sent the world over. Imports are just as globalized, as are investment inflows. In the its most integrated part, capital and manufactured goods go from Brazil to its neighbours, while people, agricultural products and—for Bolivia and Paraguay—energy flow in the other direction. Argentinean car exports to Brazil is an exception, still significant, but since they began decades ago, little has grown around them, especially not integrated production chains. The other exception, electronic and consumer goods from Paraguay, are in fact Asian exports—many of them illegal—merely transiting through the notoriously porous Paraguayan customs.
Much has been made of an alternative system emerging around Venezuela, and articulating Bolivia, Ecuador, Paraguay, Nicaragua, and Cuba into a progressive alliance. This more openly "anti-imperialist" coalition, however, has even less substance than the Brazilian-centred wheel: its member countries are poor—Venezuela excepted—socially restless and politically divided, they are all utterly dependent on the export of a few commodities, and neither invest nor trade much among themselves—except for oil, from Venezuela to non-energy producers. As the Venezuelan core decays economically and sickens politically, what substance this alternative has had may soon dissipate.
Regional interdependence is thus limited and in fact declining. Even energy, long touted as the potential backbone of an integrated sub-continent, is losing much of its steam because oil and gas discoveries, everywhere but in Chile and Uruguay, are making everyone a net energy exporter. The commodity boom further lessens interdependence as most countries compete with one another for shares of the global market.
The large and growing asymmetry between Brazil and the rest of the sub-continent further weakens the local system, for low interdependence and high —and growing—asymmetry is no recipe for integration. And yet, shared governance arrangements abound: the Common Market of the South (Mercosur), the Union of the Nations of the South (UNASUR), the Bolivarian Alternative for the Americas (ALBA), the Amazon Cooperation Treaty Organization (OCTA), the Andean Community, the Mercosur Parliament and soon its South American counterpart, along with multi-yearly presidential summits, to name but a few. In theory, these should provide the region with substantial governance capability. In practice, none of these arrangements has much organizational substance, resources or political legitimacy. Regional governance remains a matter of ad hoc and "variable geometry" presidential diplomacy.
In that game, Brazil plays the key role, but not as a regional leader. The country's economic and political weight is accepted as a fact, but its clout and influence is actively and tenaciously denied by all. No major country in the region, for instance, supports Brazil's claim to a permanent seat at the Security Council and Brazilian candidates to the head of the WTO and the Inter-American Development Bank have failed to get support from South America. In fact, Brazil does not seem to have much leverage over its neighbours. Its efforts to dissuade Bolivia from nationalizing the assets of Brazilian flagship Petrobras in the gas sector went to naught and Argentina keeps imposing special tariffs and quotas against Brazilian products, in open violation of Mercosur rules. Brazil's successes at defusing tensions between Colombia, on one side, and Ecuador and Venezuela, on the other, appear to have depended exclusively on the personal qualities of Lula and on the dexterity of its diplomatic service. In a severe confrontation opposing Mercosur members Argentina and Uruguay about the location of a huge paper mill, however, the Brazilian government did not even dare test its influence.
Brazil's regional leadership, in other words, exists more in the imagination of Davos Summit guests and heads of states in North America, Europe, Africa and Asia, than on the ground. Even more than the US, it "dominates" the region on paper, but cannot translate that dominance into significant influence.
3- No frame
The Americas have long been seen as the US backyard. They have been claimed as such by the United States since James Monroe famously barred European powers from interfering on the continent. For a long time, however, there was not much substance to the claim and Britain did as it wished, dominating the continent economically until World War II. Still, the OAS traces its roots back to a "Pan-American Union" established in 1890, US marines have been roaming around the Caribbean basin since then, American multinationals have invested massively in the resource sectors of much of the continent and, between 1950 and the end of the 1990s, they had little "foreign" competition. From those standpoints, Zakaria is thus warranted to speak of an American domination of the continent.
A closer look, however, reveals a much different picture, and shows the break I have documented earlier to be less significant than it looks. Throughout the XXth century, true imperial dominance was largely confined to the Caribbean and Central America, with the South largely free of outright intervention. Cuba, Nicaragua, Haiti, Guatemala, Grenada, and Panama bore the brunt of the Empire's dominance. The sub-continent, however, had a very different history.
Much fuss was made about US support for the military regimes of the Southern Cone and for the coups that launched them in the 1960s and 1970s, but that support was never critical and those regimes' claim to power were largely self-sustaining. A convergence of interest between Cold War America and anti-communist and reactionary military and economic elites has long been painted as the manipulation by Washington of political establishments dependent on that support to stay in power. It is easy to forget how nationalist and profoundly anti-liberal those regimes were, how free they all felt not to play into the US' anti-Cuban policy or, to take specific examples, how nationalized Codelco became the cash-cow of the Chilean military, how the Peruvian military launched the land reform in their country, how Brazil's generals were not particularly keen on US multinationals, how their economic policy is best termed state capitalism and how quick they were to establish relations with communist Angola and to cut military cooperation with Jimmy Carter's America. Similarly, when the time came for the generals to leave, US influence proved marginal: elites turned their back on them, civil society mobilized and in some cases—Argentina and Chile for instance—sheer hubris brought them down. Differently from Central America and the Caribbean, in sum, domestic factors, not US schemes and manipulations, overwhelmingly determined the rise and the fall of South America's military dictatorships.
What has broken down since the end of the 1980s is thus partly an illusion, for the Empire's backyard has always been smaller than it looked. Still, what power and influence there was is indeed shrinking as American strategic and economic interests in the region as a whole diminish.
The most important strategic challenges to America are either wildly exaggerated, like the Chavez threat, or self-created, like the prohibition-induced illegal drug market and the "War on Drugs"-induced violence in Mexico, Central America and the Caribbean. When Washington does not realize on its own that a strong presence is not a good idea, it is told. As the Colombian government's progressively wins its civil war, the legitimacy of significant American military cooperation with, and presence in, the country will also shrivel. Recently expelled from Ecuador, the American military looks doomed to fully abandon the region in the next decade.
Economically, the US is also losing interest in South America, whose proportion of US stock of investments has declined significantly over the last ten years, from 11% of its global portfolio in 1998, to 7% in 2008. Trade numbers tell the same story, with 68% of US exports to Latin America (2008) going to Mexico, and with Brazil (at 1.8% of world total) the only exporter from the region to rank among the 15 top sources of US imports. From the standpoint of US companies, consumers and economic policy-makers, in other words, South America, with or without free trade agreements, is a part of the world like any other.
The flip side of that declining interest has been a growing presence of new players in the region. Canadian companies dominate the mining sector of most Andean countries, and of the continent as a whole for exploration. European banks, particularly Spain's, along with Canada's Scotia, have aggressively invested in the region. China, while still tentative and not particularly welcome, should soon make significant forays in the resource sector. Russia and France are strong players in the regional arms market. Even Iran is now expressing interests, albeit essentially for diplomatic reason. The overall effect is that while the Americas decline in US global portfolio, the US also declines as an investor in the region, further weakening hemispheric interdependence.
The breakdown of imperial America's continental hold makes hemispheric arrangements superfluous. The project of a Free Trade Area of the Americas collapsed less as a result of Brazilian resistance than of Washington's and especially Wall Street's indifference. The OAS has long been a diplomatic backwater, notwithstanding its recent ventures –sometimes successful—into local crises. Its recent reinvention as a bulwark of democracy on the continent, already tested in the recent Honduran crisis, could soon break on the reefs of Chavez' autocratic consolidation, in the face of which it will likely be impotent and divided. The Summit of the Americas' process is quickly sinking into irrelevance. There simply is no more need for such arrangements and their survival is becoming a matter of inertia: meetings follow meetings, treaties beget commitments, diplomats sustain posting locations, and bureaucrats hold to their jobs. The Inter-American Development Bank is a partial exception: for a long time larger a player in the region than the World Bank, well-managed, largely controlled by borrowers and devoid of the market fundamentalism of other Washington-based IFIs, it has developed into a useful financing tool for the region's governments. As the integration agenda that has underlain much of its recent work breaks down, it should lose what political drive it had and become strictly a prudent and well-managed source of relatively cheap credit.
The region is left without a frame, but the idea of a shared identity endures, and ideas matter. "Latin America" still structures much of the diplomatic activity in the region, and it explains why in the face of low and declining interdependence weak institutional arrangements survive and why new ones keep popping up, just as spineless and institutionally deficient. It also explains why the United States remains a constant reference of nationalist discourse while, paradoxically, American analysts keep deploring their country's indifference towards the region.
Conclusion: From Imperium to Condominium
The surreal contraption of this two-wheeled frameless America survives, in the face of the progressive breakdown of its material and strategic basis. Perhaps "post-modern" Americas suits that reality better than post-American. Yet, what is happening in the Western hemisphere does not belie Zakaria. The Americas as a single whole has been a casualty of globalization and of the end of the Cold War. Together, these have broken down what unity Imperial and Cold War America had brought to the region. What is left is typical of the post-American world: a diverse and quite open continent where the United States, still massively dominant, must negotiate with all but the smallest states, and where emerging powers, local like Brazil, or foreign like China, are becoming significant players, though they find themselves at least as constrained as the old empire.
This, however, does not tell us much about what those post-American Americas look like, which is what this short piece is about: how does the global lessening of America's power leave the rest of the hemisphere?
My answer is simple, but not straightforward: the post-American Americas have broken into a strange contraption: one America that is at least as American as ever, tightly organized around the United States; a second one that is less American than ever, for the most part loosely organized around Brazil; and between the two halves, a relationship whose importance for each side gets ever slighter. Think of the whole as a surreal bicycle.
1- A tight wheel in the North
The United States remains the hub of a system that includes Canada and Mexico, but also the Caribbean, Central America, and possibly even Venezuela. Among the spokes, not much goes on, but their relationship with the hub is the most important foreign issue for their economic prosperity and political stability.
The nature of existing hub-and-spoke relationships varies. America is the primary trade partner of all the spokes, but only Canada, Mexico and the US share extensive value chains. A massive amounts of energy flows into the US from Canada, Mexico, Venezuela and Trinidad and Tobago. Capital movements contribute to the tightness of the wheel, with investments flowing freely and in large quantities between the US, Canada and Mexico. Beyond that core, the movement is largely unilateral, as massive amounts of private capital goes from the US to the Caribbean fiscal havens while migrants, both legal and illegal, send remittances from the US back to Mexico, Central America and the Caribbean. People and drugs move in the opposite direction. Mexico and –through the latter—Central America represent the main source of migrants to the United States, of whose economy they have become critical cogs. Cocaine from Colombia, Bolivia and Peru, penetrates the US through Central America, the Caribbean and Mexico. High-potency marijuana crosses southward from Canada and northward from Mexico.
That system is diverse and dynamic, with heavily interdependent formal and informal economies and deeply intertwined social universes. In most ways, it "works," with massive movements of goods, people and money circulating smoothly; but in others it doesn't, as violence ravages its peripheries, from Mexico's Northern border to the shantytowns of San Salvador, Guatemala City and Kingston, Jamaica.
Overall the region remains dominated by the United States. It is however by no means governed or even actively managed by Washington. There is instead the overwhelming sense and the reality that what happens in the United States is profoundly consequential for its neighbours, whereas the opposite is not true. The mostly uncontrolled character of US domination reflects a decline of America's ability to effectively control its environment whereby its tremendous economic and political prominence cannot effectively be mustered for any purpose.
2- A wobbly wheel in the South
A superficially similar structure is emerging in South America, with Brazil as the hub, and its neighbours as spokes. The wheel is smaller though: Brazil truly matters only for Bolivia, Argentina, Paraguay, Uruguay and to some extent for Venezuela. Colombia shares a huge frontier with Brazil, but aside from substantial cocaine exports, it has never had much interaction with it. Ecuador and Chile, out of immediate reach and with economies tuned increasingly to the Pacific are also largely out of the system.
The southern wheel is also far from tight. Quite a few things happen between the spokes but the region remains massively extroverted. Above all , there is no integrated core with significant value chains and circulation of capital. Instead, except for Brazil's dependencies (Bolivia and Uruguay, to some extent, and especially Paraguay), much of the region's exports, mostly agricultural commodities and minerals, are sent the world over. Imports are just as globalized, as are investment inflows. In the its most integrated part, capital and manufactured goods go from Brazil to its neighbours, while people, agricultural products and—for Bolivia and Paraguay—energy flow in the other direction. Argentinean car exports to Brazil is an exception, still significant, but since they began decades ago, little has grown around them, especially not integrated production chains. The other exception, electronic and consumer goods from Paraguay, are in fact Asian exports—many of them illegal—merely transiting through the notoriously porous Paraguayan customs.
Much has been made of an alternative system emerging around Venezuela, and articulating Bolivia, Ecuador, Paraguay, Nicaragua, and Cuba into a progressive alliance. This more openly "anti-imperialist" coalition, however, has even less substance than the Brazilian-centred wheel: its member countries are poor—Venezuela excepted—socially restless and politically divided, they are all utterly dependent on the export of a few commodities, and neither invest nor trade much among themselves—except for oil, from Venezuela to non-energy producers. As the Venezuelan core decays economically and sickens politically, what substance this alternative has had may soon dissipate.
Regional interdependence is thus limited and in fact declining. Even energy, long touted as the potential backbone of an integrated sub-continent, is losing much of its steam because oil and gas discoveries, everywhere but in Chile and Uruguay, are making everyone a net energy exporter. The commodity boom further lessens interdependence as most countries compete with one another for shares of the global market.
The large and growing asymmetry between Brazil and the rest of the sub-continent further weakens the local system, for low interdependence and high —and growing—asymmetry is no recipe for integration. And yet, shared governance arrangements abound: the Common Market of the South (Mercosur), the Union of the Nations of the South (UNASUR), the Bolivarian Alternative for the Americas (ALBA), the Amazon Cooperation Treaty Organization (OCTA), the Andean Community, the Mercosur Parliament and soon its South American counterpart, along with multi-yearly presidential summits, to name but a few. In theory, these should provide the region with substantial governance capability. In practice, none of these arrangements has much organizational substance, resources or political legitimacy. Regional governance remains a matter of ad hoc and "variable geometry" presidential diplomacy.
In that game, Brazil plays the key role, but not as a regional leader. The country's economic and political weight is accepted as a fact, but its clout and influence is actively and tenaciously denied by all. No major country in the region, for instance, supports Brazil's claim to a permanent seat at the Security Council and Brazilian candidates to the head of the WTO and the Inter-American Development Bank have failed to get support from South America. In fact, Brazil does not seem to have much leverage over its neighbours. Its efforts to dissuade Bolivia from nationalizing the assets of Brazilian flagship Petrobras in the gas sector went to naught and Argentina keeps imposing special tariffs and quotas against Brazilian products, in open violation of Mercosur rules. Brazil's successes at defusing tensions between Colombia, on one side, and Ecuador and Venezuela, on the other, appear to have depended exclusively on the personal qualities of Lula and on the dexterity of its diplomatic service. In a severe confrontation opposing Mercosur members Argentina and Uruguay about the location of a huge paper mill, however, the Brazilian government did not even dare test its influence.
Brazil's regional leadership, in other words, exists more in the imagination of Davos Summit guests and heads of states in North America, Europe, Africa and Asia, than on the ground. Even more than the US, it "dominates" the region on paper, but cannot translate that dominance into significant influence.
3- No frame
The Americas have long been seen as the US backyard. They have been claimed as such by the United States since James Monroe famously barred European powers from interfering on the continent. For a long time, however, there was not much substance to the claim and Britain did as it wished, dominating the continent economically until World War II. Still, the OAS traces its roots back to a "Pan-American Union" established in 1890, US marines have been roaming around the Caribbean basin since then, American multinationals have invested massively in the resource sectors of much of the continent and, between 1950 and the end of the 1990s, they had little "foreign" competition. From those standpoints, Zakaria is thus warranted to speak of an American domination of the continent.
A closer look, however, reveals a much different picture, and shows the break I have documented earlier to be less significant than it looks. Throughout the XXth century, true imperial dominance was largely confined to the Caribbean and Central America, with the South largely free of outright intervention. Cuba, Nicaragua, Haiti, Guatemala, Grenada, and Panama bore the brunt of the Empire's dominance. The sub-continent, however, had a very different history.
Much fuss was made about US support for the military regimes of the Southern Cone and for the coups that launched them in the 1960s and 1970s, but that support was never critical and those regimes' claim to power were largely self-sustaining. A convergence of interest between Cold War America and anti-communist and reactionary military and economic elites has long been painted as the manipulation by Washington of political establishments dependent on that support to stay in power. It is easy to forget how nationalist and profoundly anti-liberal those regimes were, how free they all felt not to play into the US' anti-Cuban policy or, to take specific examples, how nationalized Codelco became the cash-cow of the Chilean military, how the Peruvian military launched the land reform in their country, how Brazil's generals were not particularly keen on US multinationals, how their economic policy is best termed state capitalism and how quick they were to establish relations with communist Angola and to cut military cooperation with Jimmy Carter's America. Similarly, when the time came for the generals to leave, US influence proved marginal: elites turned their back on them, civil society mobilized and in some cases—Argentina and Chile for instance—sheer hubris brought them down. Differently from Central America and the Caribbean, in sum, domestic factors, not US schemes and manipulations, overwhelmingly determined the rise and the fall of South America's military dictatorships.
What has broken down since the end of the 1980s is thus partly an illusion, for the Empire's backyard has always been smaller than it looked. Still, what power and influence there was is indeed shrinking as American strategic and economic interests in the region as a whole diminish.
The most important strategic challenges to America are either wildly exaggerated, like the Chavez threat, or self-created, like the prohibition-induced illegal drug market and the "War on Drugs"-induced violence in Mexico, Central America and the Caribbean. When Washington does not realize on its own that a strong presence is not a good idea, it is told. As the Colombian government's progressively wins its civil war, the legitimacy of significant American military cooperation with, and presence in, the country will also shrivel. Recently expelled from Ecuador, the American military looks doomed to fully abandon the region in the next decade.
Economically, the US is also losing interest in South America, whose proportion of US stock of investments has declined significantly over the last ten years, from 11% of its global portfolio in 1998, to 7% in 2008. Trade numbers tell the same story, with 68% of US exports to Latin America (2008) going to Mexico, and with Brazil (at 1.8% of world total) the only exporter from the region to rank among the 15 top sources of US imports. From the standpoint of US companies, consumers and economic policy-makers, in other words, South America, with or without free trade agreements, is a part of the world like any other.
The flip side of that declining interest has been a growing presence of new players in the region. Canadian companies dominate the mining sector of most Andean countries, and of the continent as a whole for exploration. European banks, particularly Spain's, along with Canada's Scotia, have aggressively invested in the region. China, while still tentative and not particularly welcome, should soon make significant forays in the resource sector. Russia and France are strong players in the regional arms market. Even Iran is now expressing interests, albeit essentially for diplomatic reason. The overall effect is that while the Americas decline in US global portfolio, the US also declines as an investor in the region, further weakening hemispheric interdependence.
The breakdown of imperial America's continental hold makes hemispheric arrangements superfluous. The project of a Free Trade Area of the Americas collapsed less as a result of Brazilian resistance than of Washington's and especially Wall Street's indifference. The OAS has long been a diplomatic backwater, notwithstanding its recent ventures –sometimes successful—into local crises. Its recent reinvention as a bulwark of democracy on the continent, already tested in the recent Honduran crisis, could soon break on the reefs of Chavez' autocratic consolidation, in the face of which it will likely be impotent and divided. The Summit of the Americas' process is quickly sinking into irrelevance. There simply is no more need for such arrangements and their survival is becoming a matter of inertia: meetings follow meetings, treaties beget commitments, diplomats sustain posting locations, and bureaucrats hold to their jobs. The Inter-American Development Bank is a partial exception: for a long time larger a player in the region than the World Bank, well-managed, largely controlled by borrowers and devoid of the market fundamentalism of other Washington-based IFIs, it has developed into a useful financing tool for the region's governments. As the integration agenda that has underlain much of its recent work breaks down, it should lose what political drive it had and become strictly a prudent and well-managed source of relatively cheap credit.
The region is left without a frame, but the idea of a shared identity endures, and ideas matter. "Latin America" still structures much of the diplomatic activity in the region, and it explains why in the face of low and declining interdependence weak institutional arrangements survive and why new ones keep popping up, just as spineless and institutionally deficient. It also explains why the United States remains a constant reference of nationalist discourse while, paradoxically, American analysts keep deploring their country's indifference towards the region.
Conclusion: From Imperium to Condominium
The surreal contraption of this two-wheeled frameless America survives, in the face of the progressive breakdown of its material and strategic basis. Perhaps "post-modern" Americas suits that reality better than post-American. Yet, what is happening in the Western hemisphere does not belie Zakaria. The Americas as a single whole has been a casualty of globalization and of the end of the Cold War. Together, these have broken down what unity Imperial and Cold War America had brought to the region. What is left is typical of the post-American world: a diverse and quite open continent where the United States, still massively dominant, must negotiate with all but the smallest states, and where emerging powers, local like Brazil, or foreign like China, are becoming significant players, though they find themselves at least as constrained as the old empire.
Wednesday, March 10, 2010
Yo-yoing in the South
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.
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.
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.
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