Thursday, December 31, 2009

2010 for Latin America (the failure of Lula?)

This map lifted from the Economist will do fine to introduce a Latin American forecast of 2010 because it explains a lot. If you observe well, all of Hispanic America is in trouble, besides Costa Rica, Uruguay and Cuba (then again, how could trouble start in totalitarian Cuba?). Flanking that zone of probably social unrest there is the US and Brazil. This last country has decided to take advantage of the relative USA weakness to make a gamble and establish it area of influence across the sub continent.

For quite a while I have been writing about Brazil imperialism, US withdrawal, and such things. But when we look at the result of Honduras elections, not the vote count but the reactions around, it seems that suddenly a few cards are falling. The clearer hint comes probably from Uribe deciding to recognize the new Lobo government while a few yards away at the Lisbon summit Lula kept saying that there is no way Brazil will recognize the Honduras vote, just as he was fresh from receiving Ahmadinejad who has killed infinitely more people than Micheletti, and quite deliberately at that. At least on a morality point of view Lula would do better to shut his big mouth.

The Honduras election of November, I am convinced, will mark a turning point in the inner politics of our continent and as such are probably the most important event of 2009, the event that unmasked a lot of pretensions and that will explain the major moves of 2010.

What has started in the months since Zelaya was ousted is the division of the Americas between the US and Brazil, or rather between the free market democratic economies and the other guys.  It is really not a new concept: divisions of the Americas in areas of influence dates from almost Columbus trip.  At Tordesillas Spain and Portugal split America on a meridian.  That old map below shows that division and also shows how successful was Luso-Brazilian "imperialism".  Without neglecting of course other European powers, in particular England who did carve quite a zone of influence, eventually all inherited by the US.

The open shift in the Americas games

It all started indeed when Obama took over and in a nice gesture went all smiles to the Americas summit at Trinidad. He put up with Ortega's insults. He shook hands with Chavez and put up with his show when he gave Obama an outdated book. Obama and his administration genuinely thought that the Latin Americans were hating Bush and that a few smiles would go a long way to ease things. They were wrong.

First they noticed that after Trinidad there was really no improvement. In fact Brazil was, if anything cozening up further with Venezuela against the safest ally of the US in the Americas after Canada: Colombia. But the US stayed quiet.

Second, there was the OAS summit at San Pedro de Sula which saw the return of the Cuban dictatorship among the "civilized" nations. The US had all the trouble in the world to limit the reunion to a suspension of sanction to Cuba while still demanding that Cuba improves its internal conditions before it could become a full member of the OAS. It was hard swallowing for the US even though Obama had already proved his best intentions toward Cuba through a dialogue.

Third there was the Honduras coup. At first the US in a gesture of good will followed the cues of the OAS, that is, punish the small country, expel it form the OAS and wait for the OAS to find a solution. Months went by and the Obama administration learned what other administrations had learned the hard way: the OAS is a club of presidents that would be much happier if there was no US ambassador in its midst.

The US got tired and seeing the incompetence and partisanship and idiotic positions of too many within the OAS (and we are not talking Chavez only here), and thus the US decided to move and broker some Honduras deal that they suspected Zelaya could never carry. Zelaya foolishly signed on the deal, did not respect it and allowed thus elections to take place. He has ruined his chances as now the solution will not go through his restoration (which for once, in a rare sign of common sense, he had admitted by "refusing" to return to office even if the outgoing Honduras Congress had voted his return).

But Honduras is only the more apparent sign of the fight for America's control between its two giants, Brazil and the US. True, in Honduras the heavy and very clumsy hand of Brazil was to be seen everywhere, even before it allowed Zelaya to use its embassy. The fact of the matter is that Brazil attitude toward the US has changed considerably since Obama was elected. I suppose that before Obama's election Brazil did not worry much thinking that Bush could really not threaten its growing influence. That Brazil was so confident was seen when it received Bush quite well to discuss the future of ethanol. However when Obama came into office he, who was supposed to be a natural ally for a socialist Brazilian president, was seen in fact as a threat.

First, Obama did not sign an FTA with Colombia, but kept the close relation with the country, a close relation which keeps intensifying with the permission by Colombia for a few hundred US technical personnel to be permanently based in selected Colombia bases to monitor drug trafficking and Chavez bellicosity.  Can an FTA be that far behind?

Second we must note that during all the UNASUR inner conflict that followed that US-Colombia agreement we never saw any serious understating of Colombia's problem by Brazil. That is, Lula has always been complaining about the bases but never we did heard a true statement of support for Colombia fight against the terrorist FARC, and even less about the open support of the FARC by Venezuela. The partiality of Lula speaks volumes.

UNASUR is Lula creation, an instrument through which Brazil would become the umpire of South America conflicts and through which Brazil could exert an increasing control. For Lula, the founder of the Sao Paulo Foro, it was also a security system that would consolidate the left supremacy over South America where the only country with an open center right government is Colombia. Things were going well for Lula and he could advance in his plans without being too obvious. But that worked until this year when the election of Obama coincided with the renewal of the Colombia-Chavez conflict.

It is important to note that I write Colombia-Chavez conflict instead of Colombia Venezuela because there is one important detail that pundits tend to forget only too easily when they describe the situation: Uribe has certainly his own political interests at stake, but he has also those of Colombia in mind, and they are his priority. Chavez has only his personal interests at stake and all that he does against Colombia is actually hurting Venezuela.

How would this all play out?  A country by country visit

We must look first at Lula new found ego. With high popularity as he finishes his second (and last?) term in office he wants to leave with a bang. He has thus forgotten the wiser counsel of his foreign experts at Itamaraty palace and put his diplomatic legacy into the hands of a leftist hack, Marco Aurelio Garcia (and friends). For some reason these guys have decided that the time was right to make a continental move. Chavez is under control: the extent of Venezuela debt toward Brazil allow this one to use Chavez as a scarecrow whenever it is needed. Chavez check book also allow for the indirect control of the ALBA country, from Cuba to Bolivia. MERCOSUR is comprised by two small countries already under the Brazilian orbit and a big one half bankrupt which cannot afford to alienate Brazil. Only Chile, Peru and Colombia escape the Brazil orbit.

Peru is still too politically weak to be of any threat.

Chile is just too far, clinging to Andes to avoid falling into the ocean.

But appearances deceive!

There is only Colombia left to challenge Brazil in South America; but a Colombia which has the best trained army in the Americas after the US one; a Colombia which economy has been steadily growing; a Colombia which has a strategic position and a climate wet enough to become an economic power at some point the more so as Venezuela is self imploding. And more importantly, a Colombia with the support of the US even when an administration changes as radically as it did going from Bush to Obama.

There are many reasons why Colombia is under such pressure this end of year, including the vile assassination of one of its local governors.  But all, from Brazil to the FARC and Chavez, know that Colombia must be stopped A.S.A.P. because time is running for Chavez and the FARC and that a post Chavez administration could well abandon Brazil and reconcile very fast with Colombia.  Of course Brazil cannot go much further than being unfair at UNASUR when Colombia is discussed.  But Chavez for domestic reasons and the FARC for the survival reason seem decided to go to the bitter end and do Lula's dirty work. 

Due to its mercurial leader and its interior complicated situation Venezuela, or rather Chavez, will appear as more of a threat to many, and a saboteur regime to all.

Chavez has suffered two major defeats this year: he lost its Honduras colony and he lost his seemingly bottomless check book.  Thus no new friend has come to join Chavez gang and even some of the gang as Correa or Lugo are questionable.  For Venezuela 2010 will be a time of reckoning and as such Chavez foreign actions will reflect his troubles at home, the graver those, the more strident or violent Chavez risks to become when faced with Colombia or the US.  Heck, even the little Netherlands have been threatened by Chavez!

Why is the Honduras defeat so bad for Chavez?  Although the Honduras situation is far from settled, the actors that started the tragedy, Zelaya and Chavez are going to fade as new actors will take over and try to benefit politically of Honduras troubles.  Thus no matter what, Honduras remains a major setback for Chavez.  In fact it is much worse for Chavez than what you may think at first.  The intemperate actions of Chavez and Brazil through the OAS have probably alienated Central America as a whole.  These countries do not depend at all for their prosperity from Brazil, and little from Venezuela besides cheap oil.  There is thus no reason for these countries to put up with the bullying of Lula and Chavez.  Panama and Costa Rica are already all but in open disagreement.  Honduras, never mind!  And Guatemala and Salvador, in spite of their left office holders have been careful in marking their distance.  Nicaragua is weakening fast and Ortega retaining office looks everyday more of an uphill battle.  And Mexico, to the great surprise of many, is seeing a PRI becoming the next political option as the PRD slowly implodes due to the naked ambition of its leaders.  A putative PRI administration will neither be pro Lula nor pro Chavez: it will be pro Mexico.

The ripple effect of Tegucigalpa goes from Mexico City to Panama City.

The issues here are simpler: all are waiting for Fidel's death to see how the chips fall.  Cuba is bankrupt and survives courtesy of its colony: Venezuela.  None of the other countries is important or prosperous enough to have a role except for Trinidad and Barbados who are already distanced with Chavez.  The Dominican Republic plays an ambiguous role but it has nothing to fear from anyone: an island offers security advantages to play "dare".

And none of them, except somewhat Cuba and Haiti, depend from Brazil.  For all of its useless intervention in Tegucigalpa, Brazil is finding the hard way that its influence and arm twisting power does not reach Panama City or Port of Spain.


And thus we return to South America, the area Brazil should not have left.  Argentina should be a major player but more than half a decade of Kirchner rule is bringing all of its internal contradictions leaving still the country in the edge of bankruptcy.  With the opposition gaining a congressional majority this month things are going to become more difficult for Cristina Kirchner.  Argentina is probably going to be, by necessity, the biggest enabler of Brazilian ambitions for the time being, probably more so than Chavez who is in many aspects a mere tool of Brasilia.

Uruguay and Paraguay are too small to have a significant effect.  Or do they?   Paraguay holds the key to Venezuela's entry in Mercosur and one is allowed to suspect that it fits everyone just fine that Paraguay is nowhere close to welcome Venezuela.  See, the divide between the troubled Lugo presidency and a seante that laready thinks about a post Lugo era gives unexpectedly a bigger role to Paraguay than expected.

Uruguay is an enigma.  An ex-guerrilla as its new president all is possible, the more so that his coalition is not as united as people think and his election was more difficult than expected in spite of the good Tabare years.  But does Uruguay matter much today?


Ecuador and Bolivia are going to face a difficult year.  The autocratic temper of its leaders is going to face increasing opposition, though of different nature.  As such, depending of the nature of their inner trouble, both will require more or less help from Chavez.  Lula does not seem to like either much.

Correa still has the best chance to weather the coming storm since he has some economic resources.  But his ambition and ideology are alienating fast the indigenous population that was crucial for his power take over.  He is drifting away from Chavez more because he thinks he is hot stuff than because of real pragmatism.  But his recent rapprochement with Colombia allows us to hope that maybe he will wise up.All in all, Ecuadoran diplomacy is set to remain as mercurial as its leader.

Bolivia is another story.  Morales has exploited the real racial divide and has succeeded in a reelection where numbers, no matter how high, are meaningless.  The country is likely to drift apart, even break up, as the minority will rebel against a majority that will become inexorably oppressive and vengeful.  As such Santa Cruz might be an easy prize for Brazil.  The paradox for Bolivia is that the strong Morales victory is in fact a sign of weakness and a harbinger of trouble ahead..

These two countries must be treated together in spite of their huge differences.  The reason is that the eventual success of Chavez and Lula in the international stage will depend greatly on what will happen there, more even than what will happen in Colombia.

Chile and Peru are the two real success story of South America and as such the counter model of Brazil semi success and Venezuela open failure.  The ideological challenge resides there, between a further drift to a controlling left, represented in the extreme by Chavez or in moderation by Lula, or a staid course in Liberal economics with a significant state supervision, as the capitalist world is accepting since last year crisis.

Peru has been rather quiet in the international scene because its economic recovery is still fragile and because the election of Alan Garcia was rather weak.  But he has proved that at least on occasion second terms can be infinitely better than first terms.  His challenge is to organize a succession that will not jeopardize Peru's hard earned relative prosperity.  On its borders Peru has two hostile regimes in Bolivia and Ecuador while Chile and Colombia have less access to Peru (though the never ending border problem with Chile make this country of little help for Peru).  Thus 2010 will be a year of diplomatic quiet where Peru will prepare for the 2011 political transition.  That is, depending what happens in Colombia and Chile.

The paradox of it all is that suddenly the Chile second round presidential vote of January 17 might be a crucial moment in diplomacy for the Americas.  Chile has always remained discrete in the past two decades, worrying about its growth more than anything else, and thus engaging in all sorts of free trade associations, with great success.  But the second round vote will yield a new Chile.  Either we will see the return of Frei who will this time be held hostage by the left and thus be forced to side more and more with Lula and, gasp, Chavez.  Or Piñera will win and might become after Panama the second country not afraid to be vocal about the democratic violations in other South American countries, in particular Venezuela.

Imagine what a Piñera victory means.  Add to it that either Uribe or its chosen successor keep the Colombian reins.  Imagine that Alan Garcia feeling more supported joins an informal front with Colombia and Chile, and a friendly relationship with the US.  Suddenly the entire edifice that Chavez and Lula have tried to establish will start cracking!


The calculation of Marco Aurelio Garcia  and Lula da Silva was very simple: this was the time for Brazil to take over. That Brazil is in fact far from ready does not seem to have crossed their mind. And that is where sadly you realize that being a trade union leader is just not enough to make you a true statesman, even though you can still be a rather good president of your country. The statesman condition is reserved to a very few men and this year Lula has revealed himself not only to be sorely lacking it, but of being in fact a crass manipulator with little vision.

It is also worthy to recall that Brazil aspires to a permanent seat at the UN security council. There is certainly a lot of merit for such a quest, but the country needs to demonstrate a certain acumen to deserve it: we are not anymore in 1945. Maybe Marco Aurelio and Lula thought that they could buy their ticket faster by controlling half a continent? The fact of the matter is that Lula da Silva has been accumulating errors, and huge ones, all through this year. There was the ganging of UNASUR against Colombia which has resulted in this one moving steadily out and possibly dragging with it Peru, and making Chile increasingly weary. Thus would die the brain child of Lula. There was the meddling of Brazil in Honduras, a place where it had nothing to do and of which it ignored pretty much everything. This only brought the antagonism of the US. And there was the obscene reception of Ahmadinejad, the contested president of Iran, the one who routinely kills political opponents, who veils its women, kills its gays. Has Lula forgot all about the Rio Carnival? the freedom it stands for? Has the trade union leader who knew jail forgotten his origins, renounced them by receiving the Teheran butcher?

I think the US has seen the light. Embroiled as they are in Afghanistan and Iraq and health care and other issues the Obama administration has decided that it cannot put up with spoiled brats. This is how we must understand Uribe speedy recognition of Lobo election in Honduras fast followed by other countries.  Thus started the division of the Americas in two blocks, sped up unnecessarily by Lula and Chavez mistakes.

Lula gambled heavily thinking he controlled Chavez and that the US was much weaker and more friendless than it really was.  Certainly not all is said, but right now Brazil is retreating unnecessarily, and grievously for its pride.

The first test of this unexpected (one year ago anyway) re-arrangement will have its first test when the election of the new OAS secretary takes place.  Stay tuned.


  1. Anonymous6:18 AM

    you must really feel better. Good article.

  2. Barqui

    It is not that I am feeling much better, I do but I still tire easily. These two posts about 2010 were already on draft before I came down with dengue. So I was able to finish them. But if you look closely, I am not covering much the current situation as I read few papers and watch little TV these days, preferring to read and rest in my hammock watching the papagayos bloom.

  3. Anonymous6:04 PM

    Daniel: I think that the Rep. of Panama should be colored LOW. This is a very stable country that elected a very conservative capitalist President this year. President Martinelli is clamping down on corruption, crime, drug traffickers etc... too bad he can only serve for five (5) years. The Rep. of Panama is one of the great democratic countries in the world where elections are honored and the rule of law is observed.
    Patrick in Panama

  4. Patrick

    I think the economist looks long term. Democracy in Panama is still relatively recent, still suffering Noriega sequels.

    In addition it is vulnerable to world trade fluctuations. Concentrated mostly in Panama city, any strike there can become quickly a national issue. When the Western part of the country gets at least a third of the GDP then things might look more stable to folks like The Economist.

  5. Mercedes Atencio9:00 PM

    Niño, te hizo bien el dengue. Estás mas lúcido que nunca.

  6. An incredibly good post Daniel.Congratulations for drawing together a host of issues and countries to give an understandable picture of a very complex situation.

    I find the issue of Paraguay an interesting one ;there are some parallels to Honduras.We have the legislative branch of a small LA country standing up to a consensus.All the MERCOSUR governments want Chavez to join, and the Congress of Paraguay is the only one holding out even its own president is in favor.If they can keep it up, it will be another block to Chavez's plans.

    It is incredible that in LA where right wing military dictatorships used to be the obstacle to Democracy, things have swung around so much in the opposite direction that only a right wing president would be willing to defend democratic values against the likes of Chavez.Even moderate left wing leaders shy away from calling 'a spade a spade' when it comes to this issue.

    The example given in the Chilean run off elections is telling.Chavez can expect tolerance or even a degree of support from a moderate Frei government and would only be confronted if the right wing candidate is elected.

    Very interesting the possibility for future alliances between Colombia, Peru and Chile as a barrier to Chavez's and Brazil's influences.Here too this is subject to right wing politicians winning elections.

  7. Illusions, that’s what the map represents when it comes to South America. It wasn’t that long ago, after the Asian Financial crisis that economist rededicated a downturn and troubling time for South America. Ten years later, many parts of South America are now richer, safer and more stable. Take Brazil for instance; their economy like that of Chile & Peru has been booming; relatively speaking in comparison to the rest of the world, including the US of A. Example is Brazils dependence on oil, it has practically illuminated this as they are the biggest producers of Ethanol; and on top of this, Brazil as found the biggest oil reserves in recent history… this they of course will make much a profit from. Chile for example, a little different; it is the largest producer of Lithium… with Argentina, Bolivia also containing the remainder of most of the worlds Lithium supply. Though the world will depend on fossil fuels for some time to come; with more and more cars requiring Lithium, this fuel source will help South American countries to have even more of a boost into their economy AND their influence on the global market.
    As for the bitterness of the author toward Brazil, get over it. Brazil is the 5th largest country by area AND by population, with the 9th largest economy when it comes to GDP PPP (purchasing power, what really counts when comparing influence in this category; GDP). Brazil’s GDP PPP ranking is projected to only increase, as with other South American Countries. Sooner than later, Brazil economy will be larger than that of the UK & France. It’s a shame that no Latin America country has representation in the Permanent Security council; same with the African nations. As for deserving it; this is an opinion! Keep in mind that one tends to side with their own country and/or culture before others; these sort of blinders will warp ones view of World Affairs. It’s not as if the US and other countries that have permanent seats have always acted in the best interest of the world; its first their country, then their richer friends… and then last the poor nations.
    So I disagree with both the Economists data & the author’s observance for one main reason; the industrialized world underestimated Asia’s potential growth in the late 80s & early 90s… it then underestimated South America’s potential growth in the 90s… and once again, it is doing it again.
    BTW, this is coming from a Chilean-American. Viva EEUU y Chile!

  8. Ian

    I think you read in my post way more than what it was there. I discussed long term projects in the international relations field, not economic perspectives which I only touched upon as needed.

    As for any supposed bitterness of the author about Brazil, he can tell you that he has no bitterness but disappointment at Lula actions this year.

  9. Mercedes

    Voy a tomar eso como un cumplido :)

  10. Anonymous1:13 AM

    nice post me bucko.....

    like I've said before to your french annoyance it just boggles the mind to think what S American would be like if the Protestant Anglos had settled there instead of the Catholic Latins.

    one country for the whole continent like Australia....wealthy, healthy and hoards of uneducated children in rags playing in the sewage....oh well....

    have a great year, get a mac for christ's sake and pack your bags fora quick exit

    Sheik Yer Bouti

  11. Anonymous2:08 AM

    Chile is moving up to the big league - they've just been invited to join the OECD. A developing country no more.

  12. sheik

    yeah, right, convicts and all.....

  13. What is missing from this analysis is the viewpoint of most Latin Americans, right or wrong.

    For example, it goes unmentioned that Uribe sought constitutional changes to extend term limits for himself (exposing the hypocrisy of the Latin American oligarchs who tried to argue that Zelaya's constituent assembly poll was a "power grab," even though it couldn't have affected the November elections, while Uribe really WAS making a power grab). Colombia is a narcostate (per Uribe's ties to narco-trafficking & the terrorist AUC groups and the institutional political corruption) and it is hardly seen as an example of regional democracy by the masses.

    Remember that Latin America's populations are waking up from a decades-long nightmare of capitalist military dictatorships -- at least, this is how the vast majority perceives it. Chavez, who has repeatedly won at the ballot box in certified elections, certainly doesn't equate to someone like Pinochet in the minds of most Latinos.

    This, combined with a policy of entrenchment adapted from Cuba, is why the Foro de São Paulo social movements won't go away so easily.

    I do agree about the significance of the Honduran coup d'etat -- however, while it was a blow to Chavez's plans vis-a-vis ALBA, there are three other major side effects: first, the re-birth of a large, leftist Honduran social movement that isn't going away and, second, Obama spent all of his "good will capital" by supporting that coup. Obama might as well be Bush in Latin America, now, especially as he aggressively moves ahead with the expansion of Colombian military bases. Third, I agree that the coup shined a light on regional political realities; even Colombia had to condemn the coup until after the Honduran elections.

    The Economist is obviously right that there is the potential for social change in Latin America as a round of elections is coming up in many key countries -- however, if the left gains a lot of victories in these elections (and it probably will), the Foro de São Paulo strategy will be solidified in Latin America which will severely weaken US hegemony in the region for some time.

  14. ryanbagueros

    "What is missing from this analysis is the viewpoint of most Latin Americans, right or wrong."

    I do not know how true this statement is but from the rest of your post I have serious doubt that you can assume the right of being a Latinoamerican spokesperson.

  15. Anonymous2:51 AM

    God forbid the São Paulo Forum achieves such influence! It's a political and diplomatic aberration constructed without popular agreement. Diplomats don't come to our houses ask what we think of the issue, they just do what the president lets them to do, and Lula is benefited that his electoral support base doesn't understand or care for diplomacy.

    In so doing, they've sullied the reputation of our diplomacy, long honored since Ruy Barbosa and the Baron of Rio Branco, who both had used fair diplomacy to achieve means, ahead of their time. We've been always considered a diplomatic people who wouldn't meddle so grossly in internal affairs of other countries, but now this treachery?

    Lula wants to expand Brazil's influence in other countries to convert them to his ideology, and to vengefully oppose the United States in the international arena, so he can die peacefully with the ghosts of his past buried. But time has moved on; some people in the government and in Itamaraty still treat everything as if we were in 1950-1960, and as if they had just emerged from the US-sponsored dictatorship's prisons here.. However, the Cold War is long gone and we don't need to play these powergames just because we have some power. We should use it to prosper not to expand influence for an ideological gain. Certain sectors of our society, usually public and especially public universities, still live as if they were in the 60s.

    It makes me even more angry that people fall for Lula's talk that easily, as if a developing nation's president were above suspicion. Poor or rich, all nations are capable of imperialism. I use to say that only latin-americans can really know how what their leaders are capable of.


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