How will Obama handle economic and security challenges south of the border?
by Jaime Daremblum
12/10/2008 12:00:00 AM
RECENT EVENTS SUGGEST that Barack Obama will be facing a veritable
perfect storm of challenges in Latin America. The death toll in Mexico's
war on drugs is mounting. The future of Plan Colombia, which began as a
U.S.-backed anti-drug initiative, is uncertain. Argentina may be on the
verge of yet another economic collapse. The global financial crisis is
affecting countries throughout the region. Venezuelan President Hugo
Chávez is attempting to remove the constitutional limits on his power
and is using his oil wealth to fund anti-American populists. Chávez is
also pursuing a strategic partnership with Iran. In Nicaragua, the
ruling Sandinista party stole recent municipal elections and has been
harassing the opposition. In Cuba, the island's Communist rulers are
trying to preserve a creaking dictatorship and squash hopes of
democratic transition.
Meanwhile, Russian and Chinese influence in Latin America is growing.
Just last week, Russian warships arrived in Venezuela for a series of
military exercises. The Russian fleet included a nuclear cruiser. As the
Guardian noted, "It was Moscow's first show of naval force in the region
since the Cold War."
How will Obama respond? Unfortunately, Latin America got little airtime
during the 2008 presidential campaign, so we don't know much about his
plans for the region. We do know that Obama routinely criticized free
trade and opposed the FTA with Colombia. We also know that he promised
to increase U.S. economic aid to Latin America.
Regional officials are hoping that his anti-trade posturing was just
campaign rhetoric. As for boosting development assistance, the financial
crisis and a U.S. recession will probably scuttle that idea. Obama also
famously pledged to meet with Chávez and Cuban President Raúl Castro
"without preconditions." He has since backtracked from that promise.
Obama is taking office at a critical moment in Latin American history.
After a lengthy stretch of strong GDP growth, the region must deal with
the headwinds of a global financial crisis and economic downturn. The
massive drop in oil prices has eroded Chávez's petro-power, at least
temporarily. But Venezuela is moving to enhance its economic and
security cooperation with Russia and China.
According to a recent Moscow Times article, "the volume of trade between
Russia and Latin America has been growing at a clip of 25 percent to 30
percent annually." The Russian-Venezuelan war games highlight their
burgeoning defense ties. In September, Chávez traveled to Beijing and
purchased two dozen K-8 military aircraft. During the same visit,
Venezuela and China agreed to expand their energy cooperation. As Agence
France-Presse reported, "Caracas provides 500,000 barrels of oil per day
to Beijing, a trade expected to grow to one million barrels a day by 2012."
The presidents of both Russia and China recently toured Latin America.
Russian President Dmitry Medvedev met with Chávez last week in Caracas.
The two leaders reached several agreements on energy, economic, and
military collaboration, including a pact that will help Venezuela
develop its own civilian nuclear program. Medvedev also stopped in Peru,
Brazil, and Cuba. He was in Peru for the Asia-Pacific Economic
Cooperation summit, as was Chinese President Hu Jintao, who declared
that "China and South America have already become extremely good friends
and partners." Hu also traveled to Cuba, where he signed economic
accords, met with both Raúl and Fidel Castro, and spoke of the
friendship between the Cuban and Chinese peoples. As the Associated
Press noted, China is Cuba's second largest trading partner (after
Venezuela), with annual bilateral trade eclipsing $2.6 billion, and
Chinese trade with all of Latin America increased from $10 billion in
2000 to $103 billion in 2007.
China seems eager to expand its trade relations throughout the region.
One hopes that U.S. lawmakers are paying attention. The U.S.-Colombia
FTA remains stuck in Congress, as does the U.S.-Panama FTA. Their
approval would send the right message to Latin American officials. Obama
claims he is committed to the region. But will he endorse the Colombia
and Panama deals?
Closer to home, Obama will have to coordinate anti-drug activities with
Mexican authorities. The drug war in Mexico has become increasingly
violent, with horrific bloodshed plaguing many Mexican border towns. As
the Washington Post reported last week, Mexico's drug war "has claimed
more than 4,500 lives since President Felipe Calderón unleashed the army
and police against the cartels and corrupt officials in early 2007."
Despite its worsening drug problem, Mexico has experienced strong
economic growth in recent years, and President Calderón has championed
important reforms. The same can be said of Colombia and its president,
Alvaro Uribe. But now both countries are dealing with fallout from the
global financial crisis. Colombia has seen massive reductions in all
types of violence under President Uribe, yet it is still plagued by drug
trafficking. Obama will have to work with Bogotá to determine the future
of Plan Colombia, a U.S.-funded military aid program that began under
President Clinton as an anti-drug initiative and now includes
anti-terrorism assistance.
Thanks to their recent economic reforms, most Latin American countries
are in a relatively good position to address the financial turmoil. But
one country that may be on the brink of an economic disaster is
Argentina, whose last meltdown occurred in 2001. The Argentine
government made way too many spending commitments when commodity prices
were sky-high; now that they have fallen dramatically, Buenos Aires is
in a fiscal crunch. As the Economist reports, Argentina "must repay $23
billion of expiring bonds over the next two years that it cannot roll
over because investors fear Argentina may be heading for another debt
default and are demanding a prohibitive interest rate."
If all that were not enough, Obama must also contend with the erosion of
democracy in Nicaragua and Iran's creeping influence in Venezuela.
Chávez has embraced Iran as a strategic partner, and there is evidence
that Hezbollah, the Iranian-backed terrorist group, may be reaping the
benefits. The U.S. Treasury Department has accused the Venezuelan
government of "employing and providing safe harbor to Hezbollah
facilitators and fundraisers." The Los Angeles Times has reported that
Western anti-terrorism officials fear Hezbollah is now "using Venezuela
as a base for operations." Last month, a Venezuelan state-run media
outlet said that Tehran and Caracas are launching a new program at
Venezuela's Bolivarian University that will educate students in
"21st-century socialism," as Chávez calls his brand of politics.
Most of Latin America has enjoyed a lengthy period of economic and
political progress, which should be celebrated. Broadly speaking, the
region is in relatively good shape. But there could be turbulent times
ahead. While Obama will probably devote most of his foreign policy
attention to the Middle East and Asia, he won't be able to ignore the
many challenges in Latin America.
Jaime Daremblum, Costa Rica's former ambassador to the United States, is
director of the Center for Latin American Studies at the Hudson Institute.
http://www.weeklystandard.com/Content/Public/Articles/000/000/015/900phcyl.aspA
No comments:
Post a Comment