“Soft despotism is a term coined by Alexis de Tocqueville describing the state into which a country overrun by "a network of small complicated rules" might degrade. Soft despotism is different from despotism (also called 'hard despotism') in the sense that it is not obvious to the people."
While we destroyed our economy fighting our two Islamic wars, our perpetual nemesis, Iran, has been smartly and methodically generating economic ties and broad support in (would you guess?) Latin America.
They have been joined by the Russians and the Chinese, who have been happily investing their US dollars in Latin America as well. The latest host is Brazil. Our efforts to isolate Iran have been laughable.
Iran is supported by economic ties with Russia and China. Russia and China have been picking up support for Iran in China and Africa. Care to count the countries in Latin America that have extended substantial and political ties with Iran, Russia and China over the last ten years?
It would be easier to count those that have not.
Two countries left in our column would be Colombia and Honduras.
What has the US done in those two countries?
We recently shafted Honduras as they tried to stop their president from breaking their constitution and we have failed to extend a simple trade agreement with Colombia.
The economies of Latin America will revive, and when they do, the give-away contracts signed with the Chinese will look very sour. Why it is taking so long for this to sink into the collective American skull is beyond me.
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Deals Help China Expand Its Sway in Latin America
By SIMON ROMERO and ALEXEI BARRIONUEVO Published: April 15, 2009 NY Times
CARACAS, Venezuela —
As Washington tries to rebuild its strained relationships in Latin America, China is stepping in vigorously, offering countries across the region large amounts of money while they struggle with sharply slowing economies, a plunge in commodity prices and restricted access to credit.
In recent weeks, China has been negotiating deals to double a development fund in Venezuela to $12 billion, lend Ecuador at least $1 billion to build a hydroelectric plant, provide Argentina with access to more than $10 billion in Chinese currency and lend Brazil’s national oil company $10 billion. The deals largely focus on China locking in natural resources like oil for years to come.
China’s trade with Latin America has grown quickly this decade, making it the region’s second largest trading partner after the United States. But the size and scope of these loans point to a deeper engagement with Latin America at a time when the Obama administration is starting to address the erosion of Washington’s influence in the hemisphere.
“This is how the balance of power shifts quietly during times of crisis,” said David Rothkopf, a former Commerce Department official in the Clinton administration. “The loans are an example of the checkbook power in the world moving to new places, with the Chinese becoming more active.”
Mr. Obama will meet with leaders from the region this weekend. They will discuss the economic crisis, including a plan to replenish the Inter-American Development Bank, a Washington-based pillar of clout that has suffered losses from the financial crisis. Leaders at the summit meeting are also expected to push Mr. Obama to further loosen the United States policy toward Cuba.
Meanwhile, China is rapidly increasing its lending in Latin America as it pursues not only long-term access to commodities like soybeans and iron ore, but also an alternative to investing in United States Treasury notes.
One of China’s new deals in Latin America, the $10 billion arrangement with Argentina, would allow Argentina reliable access to Chinese currency to help pay for imports from China. It may also help lead the way to China’s currency to eventually be used as an alternate reserve currency. The deal follows similar ones China has struck with countries like South Korea, Indonesia and Belarus.
As the financial crisis began to whipsaw international markets last year, the Federal Reserve made its own currency arrangements with central banks around the world, allocating $30 billion each to Brazil and Mexico. (Brazil has opted not to tap it for now.) But smaller economies in the region, including Argentina, which has been trying to dispel doubts about its ability to meet its international debt payments, were left out of those agreements.
Details of the Chinese deal with Argentina are still being ironed out, but an official at Argentina’s central bank said it would allow Argentina to avoid using scarce dollars for all its international transactions. The takeover of billions of dollars in private pension funds, among other moves, led Argentines to pull the equivalent of nearly $23 billion, much of it in dollars, out of the country last year.
Dante Sica, the lead economist at Abeceb, a consulting firm in Buenos Aires, said the Chinese overtures in the region were made possible by the “lack of attention that the United States showed to Latin America during the entire Bush administration.”
China is also seizing opportunities in Latin America when traditional lenders over which the United States holds some sway, like the Inter-American Development Bank, are pushing up against their limits.
Just one of China’s planned loans, the $10 billion for Brazil’s national oil company, is almost as much as the $11.2 billion in all approved financing by the Inter-American Bank in 2008. Brazil is expected to use the loan for offshore exploration, while agreeing to export as much as 100,000 barrels of oil a day to China, according to the oil company.
The Inter-American bank, in which the United States has de facto veto power in some matters, is trying to triple its capital and increase lending to $18 billion this year. But the replenishment involves delicate negotiations among member nations, made all the more difficult after the bank lost almost $1 billion last year.
China will also have a role in these talks, having become a member of the bank this year.
China has also pushed into Latin American countries where the United States has negligible influence, like Venezuela.
In February, China’s vice president, Xi Jinping, traveled to Caracas to meet with President Hugo Chávez. The two men announced that a Chinese-backed development fund based here would grow to $12 billion from $6 billion, giving Venezuela access to hard currency while agreeing to increase oil shipments to China to one million barrels a day from a level of about 380,000 barrels.
Mr. Chávez’s government contends the Chinese aid differs from other multilateral loans because it comes without strings attached, like scrutiny of internal finances. But the Chinese fund has generated criticism among his opponents, who view it as an affront to Venezuela’s sovereignty.
“The fund is a swindle to the nation,” said Luis Díaz, a lawmaker who claims that China locked in low prices for the oil Venezuela is using as repayment.
Despite forging ties to Venezuela and extending loans to other nations that have chafed at Washington’s clout, Beijing has bolstered its presence without bombast, perhaps out of an awareness that its relationship with the United States is still of paramount importance. But this deference may not last.
“This is China playing the long game,” said Gregory Chin, a political scientist at York University in Toronto. “If this ultimately translates into political influence, then that is how the game is played.”
Simon Romero reported from Caracas, and Alexei Barrionuevo from Rio de Janeiro.
Trade between China and Latin America reached a record of more than $140 billion last year, 40 percent higher than the $101 billion of 2007. U.S. exports to Latin America, in the same year, grew at 9.1%.
I wonder how much trade the US will end up with between itself and say Iraq and Afghanistan? How much trade has the US lost to China in Latin America? Take a look:
There is little doubt that deals will be done when Venezuelan President Hugo Chavez arrives for top-level talks in Beijing Wednesday. His mission, after all, is to improve his nation's ties with China. But no matter what agreements he pens with President Hu Jintao, it will be little more than a diplomatic triumph, likely having little impact on the lives of common Chinese citizens. Right?
Wrong, claims 72-year-old Huang Shikang, the ex-ambassador to Chile, Mexico and Colombia between 1986 and 2000, who feels the bonds brokered today herald a better future and seem far from the days when relations with South America were first forged.
Trade between China and Latin America reached a record of more than $140 billion last year, 40 percent higher than the $101 billion of 2007. But decades ago, it was a very different story.
"In 1986, Chinese commodities could hardly get on to the shelves in supermarkets in Chile, and it was the same in Mexico in early 1990s," recalled Huang, who witnessed the progress of Sino-Latin American ties on the frontline.
Huang first arrived on the continent in 1959 as an interpreter with a visiting Chinese media group. Eight years later, he started his diplomatic career as part of the first long-term delegation to Chile under the China Council for the Promotion of International Trade (CCPIT).
"For many Latin Americans, China was a mysterious country, far away," he said, adding that Beijing had occasionally sent music groups and staged Chinese art shows for locals.
Apart from his daily job of reading the local press for the chief representative of the CCPIT office in Chile and accompanying him to meetings with Chilean officials and communities, Huang said another major task was to "make more friends".
Former Chilean president Salvador Allende, whose term saw the first diplomatic ties with China in 1970, became a good friend, he said, but it was clear that, for Latin American countries, recognizing China was mainly a political need before the 1980s as the country was a permanent member of the United Nations' Security Council.
Things improved dramatically after China started economic reform and its wealth began growing, and Huang found more countries in the region keen to learn more about this "economic powerhouse". By 2004, the annual growth rate of trade volume between China and Latin America stood at 50 percent.
After an extensive working life in Latin America, Huang said the prospect for developing ties further is "promising".
And, today, cooperation between the two has moved on to a much broader agenda than trade.
On March 24, Chavez inaugurated the construction of an $800-million, 290-mile railway project in central Venezuela, financed by the China-Venezuela Strategic Development Fund set up last year. Meanwhile, the nation's first satellite roared into space last October from a launch pad in Sichuan province.
China signed the Free-Trade Agreement with Chile in 2005, extending cooperation from trade to service sectors, while talks on a similar deal with Peru is expected to be finalized soon, according to media reports. And following the onset of the global financial crisis in January, China jointly formed the Inter-American Development Bank.
But China's initial links with countries in Latin America and the Caribbean drew harsh comments from skeptics who questioned Beijing's motives.
The Council of Hemispheric Affairs (COHA), a Washington-based think tank, published a paper last month arguing the blooming ties between China and Costa Rica were Beijing's "aggressive expansion" into the "backyard of the United States".
"China's multifaceted involvement in Latin America means it is expanding its economic and political presence in a region the US concretely has long regarded as its preeminent sphere of influence," it said in its report "China Courts Costa Rica; Expands its Presence in Washington's Backyard".
The COHA also added China's deeper involvement had come at a time when US President Barack Obama's administration had still to "react to new Latin American realities".
In May last year, while still running for office, Obama said: "While the US fails to address the changing realities in the Americas, others from Europe and Asia, notably China, have stepped up their own engagement."
But analysts have not been pleased with this view, not least Peter Lewis, a researcher at the University of Chile's institute of international studies, who wrote in a recent article that China's strategic goal had been over-estimated as people have not understood Beijing's "internal goals".
Lewis said that when China develops its ties with South and Central America, it is because the country is looking for new markets for its exports and for natural resources to power its domestic growth. He added: "Without such comprehension, China will be strategically over-estimated by the US, causing harmful economic and politically consequences for the US, Latin America and China, amongst many others."
In Beijing, Wu Guoping, a professor in Latin America studies at the Chinese Academy of Social Sciences (CASS), said any claim China had branched out into the US' "backyard" was absurd and based on a "Cold War mentality".
"In the age of globalization, a viewpoint like 'Who is within whose sphere of influence?' doesn't stand," Wu said, adding that seeking closer ties with Latin America "aims at no one while no one in Latin America would consider their homeland as the US' backyard."
Barbara Schieber, editor of the Guatemala Times, agreed and has already urged the US to stop referring to Central America as its "backyard". "We find that term offensive and a sign of outdated imperialistic thinking", she wrote online when commenting on the COHA paper.
Along with COHA's controversial viewpoint, though, others have also accused Beijing of trying to "grab" natural resources from Latin America.
"China has been hoovering up South America's commodities to satisfy its booming economy: soya and iron ore from Brazil, soya and oil seed from Argentina, copper from Chile, tin from Bolivia and oil from Venezuela," said the British Broadcasting Corporation, based in London.
Chinese analysts have strongly denied the claims leveled at the nation, while pointing out that the cooperation deals are to the benefit of both countries involved.
Professor He Shuangrong, also with the CASS, agreed China needed resources from Latin America but added the nation's economic growth was "surely a good thing for Latin America", while the need for Chinese investment in the Americas, mainly to build and improve infrastructure, was "very, very big".
The money used in joint-funded projects helped to create more opportunities for people, she added, citing that the Venezuelanalysis had reported the $800-million railway project will create more than 1,800 jobs in the country. The progress of Sino-Latin American relations alongside China's increasing globalization was "only natural", He added.
Last November, Beijing published its first policy paper on Latin America and the Caribbean and, as a general guideline, it outlined the intention to strengthen "comprehensive cooperation" in the region in areas of politics, economics and culture, as well as on peace, security and judicial affairs, said the Foreign Ministry.
The paper also clearly marked out China's goals to promote mutual respect and trust, achieve win-win results and boost common progress.
"They share the same principles, with both sides having respect for multilateralism," said Courtney Rattray, Jamaican Ambassador to China, who added China is handling its relations with Latin American and Caribbean countries "based on principles", not just interests.
"China has an understanding as a developing country of what our needs are, and most of the countries in Latin America are developing countries," he said, explaining that China's growing wealth means a "huge market" for Jamaica's exports in "niche products such as coffee, rum and beer".
When asked for his views on the strong ties between China and Latin America, Rattray enthused: "I think it's a perfect match."
Here is a typical Chinese factory that is beating our brains out. Pick out at least ten reasons why that is happening, considering they have to ship half way around the world to the Americas:
The US becomes the repository of all that goes wrong in Latin America. When we gave China a free pass in a ridiculously lopsided trade agreement, the US not only killed off much US manufacturing but also took much of the starch out of the factories in Central and South America.
Cheap Chinese goods transported on subsidized ships filled the stores and bodegas of the Americas. Nascent industries collapsed and a growing underclass fueled with crack and smack spread violence and terror throughout the slums in the southern part of our own continent.
Salvador, a country of six and one half million and two million of them is the US, is the latest American country to select a left-wing government. Many more good people will flee to the US. Along with them will come the refuse of failed ideas.
We continue to consume our treasure and time in the Middle East when our freedom, opportunity and future is in the Americas. We have been screwing around in the Middle East for forty years. Why?
Our presence and attention is needed where it matters and where we can have an effect and that is in our own continent in America.
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El Salvador moves Latin America further left BY DAVION FORD AND JOSÉ ZEPEDA Radio Netherlands 16-03-2009
El Salvador has a new left-wing president. Former journalist Mauricio Funes defeated the ruling right-wing president Rodrigo Avila in Sunday's election, polling 51.2 percent of the votes. He defeated his right-wing opponent from the ARENA party by a mere 60,000 votes.
Mr Funes ) explained the cause of his victory to Radio Netherlands' José Zepeda:
"What matters is not the long time that ARENA was in power, but the way they were in power. (...) A small group got preferential treatment, at the disadvantage of the rest of society. In the end, everybody will rise up against that." The victory seals an historic journey to power for Mr Funes' FMLN party of former Marxist rebels. It also means El Salvador joins the growing tide of socialist-led Latin American countries.
But regional expert Dirk Kruijt told RNW Newsline's Davion Ford that the president-elect is considered a moderate; so is his deputy: "The newly elected president is a former journalist with sympathy for the original guerrilla Frente which transformed in 1992 into the Farabundo Martí political party, FMLN. A late member, and a person who could forge alliances with other parts and segments of the population.
President-elect Funes has always presented himself as a friend of the US. And Sánchez Cerén, the vice president, the representative of the orthodoxy line, stated in several interviews that 'Socialism cannot be decreed from above.'"
Security problems
The regime change will not make much difference for El Salvador's economy, which is not doing too badly. But, Mr Kruit says, the new president has another task on his hands: "The real problem of Salvador is public safety and public security. It is one of the countries with the highest murder rate in the world, in terms of murders per 100,000 inhabitants; it has a stock of small arms that is sufficient to kill 40 percent of the world population, and it is in part terrorised by youth gangs. The country is also suffering from hard crime and organised crime, and that is not attacked by the police authorities."
Shift to the left
El Salvador had been a right-wing stronghold for decades. With the leftward shift in Central and South America, some of the people in El Salvador are saying that the country will become a Venezuelan satellite. But Mr Kruit points out that neither the new man, nor his deputy favour a sharp move to the left, and adds: "The changes will be slow, there is not going to be a process of nationalisation of industry, it wouldn't be in the interest of the national economy, so the claim of a second Hugo Chávez of Venezuela is an enormous exaggeration." The main challenge for the new president is to live up to the hopes of the impoverished one-third of El Salvador's population. The people who elected Mauricio Funes will judge him by his successes in fighting poverty and insecurity in his country.
