Nikolas Kozloff

The recent election of former Bishop Fernando Lugo as President of Paraguay poses a sticky dilemma for the Vatican and underscores the hostile political environment facing incoming Pope Benedict XVI in South America. Lugo, who was known to his constituents as the "Bishop of the Poor" for his support of landless peasants, advocates so-called Liberation Theology, a school of thought which took shape in Latin America in the 1960s.

 

Recognizing the pressing need for social justice, Liberation Theology was minted by Pope John XXIII to challenge the Church to defend the oppressed and the poor. Since its emergence, Liberation Theology has consistently mixed politics and religion. Its adherents have often been active in labor unions and left-wing political parties. Followers of Liberation Theology take inspiration from fallen martyrs like Archbishop Oscar Romero of El Salvador and Dorothy Mae Stang, an American-born nun who was murdered by ranching interests in Brazil.

 

Romero, an outspoken voice for social change, was gunned down in 1980 by a right wing death squad during a Mass in the chapel of San Salvador's Divine Providence hospital. Stang, an advocate of the poor and the environment, was shot to death in the Brazilian Amazon in February 2005; her assailants were later linked to a powerful local landlord.

 

Joseph Ratzinger: Doctrinal Czar

 

During the 1980s and 1990s Benedict, then Cardinal Joseph Ratzinger, acted as John Paul II's doctrinal czar. At the time, John Paul was in the midst of a fierce battle to silence prominent Church liberals. "This conception of Christ as a political figure, a revolutionary, as the subversive of Nazareth," the Pontiff once said, "does not tally with the church's catechism."

In 1983 the Pope wagged his finger at Sandinista government minister and Nicaraguan priest, Ernesto Cardenal on a trip to Managua, warning the latter to "straighten out the situation in your church." Cardenal was one of the most prominent Liberation Theologians of the Sandinista era.

 

Originally a liberal reformer, Ratzinger changed his tune once he became an integrant in the Vatican hierarchy. As prefect of the Congregation for the Doctrine of the Faith, the Vatican's doctrinal watchdog agency, Cardinal Ratzinger warned against the temptation to view Christianity in an exclusively political light. Liberation Theology, he once said, was dangerous as it fused "the Bible's view of history with Marxist dialectics."

 

Calling Liberation Theology a "singular heresy," Ratzinger went on the offensive. He blasted the new movement as a "fundamental threat" to the church and prohibited some of its leading proponents from speaking publicly. In an effort to clean house, Ratzinger even summoned outspoken priests to Rome and censured them on grounds that they were abandoning the church's spiritual role for inappropriate socioeconomic activism.

 

As Pope, Ratzinger has not sought to hide his lack of esteem for Liberation Theology. During a recent trip to Brazil, he was pressed by reporters to comment on Oscar Romero's tragic murder in El Salvador. The Pope complained that Romero's cause had been hijacked by supporters of liberation theology. Commenting on a new book about the slain archbishop, the Pope said that Romero should not be seen simply as a political figure. Hoping to avoid any meaningful political discussion on the matter, Benedict said "He was killed during the consecration of the Eucharist. Therefore, his death is testimony of the faith."

 

How to Handle Lugo?

 

Despite his best efforts however, Benedict has not been able to impede the rise of the Bishop of the Poor in Paraguay. Lugo has had long time differences with the Vatican, which could now create some political friction between Paraguay and the Papal See. When Lugo left the priesthood to pursue politics, the Vatican refused to accept his resignation, arguing that the Bishop already made a "lifetime commitment." Defying the Pope, Lugo formed the center left Patriotic Alliance, which brought together leftist unions, indigenous people and poor farmers.

When Lugo announced his intention to run in what turned out to be his victorious presidential race, the Vatican sent him a letter declaring that the Holy See had "learned with surprise" that some political parties "have the intention of presenting him as a candidate in the coming Presidential election in Paraguay." It added: "The acceptance of that offer would be clearly against the serious responsibility of a bishop … Canon Law prohibits priests from participating in political parties or labor unions." The letter asked Lugo "in the name of Jesus Christ" to "seriously reflect on his behavior".

 

Lugo replied tartly, "The Pope can either accept my decision or punish me. But I am in politics already." Hardly amused, the Vatican suspended Lugo from his duties "a divinis," meaning that he could no longer say Mass or carry out other priestly functions such as administering the sacraments. This was enough to enable Lugo to stand in the Presidential elections, but his victory now presents the Vatican with a dilemma over whether to "reduce him to lay status." Vatican officials said it was up to the Pope to decide, and that Benedict would "take time to study the situation".

 

Brazilian Challenge

 

Though Benedict has long opposed Liberation Theology, it's unclear what he might do at this point to halt its spread. Unlike the 1980s when South America was in the midst of right-wing military rule, the region has now undergone a decided shift to the left which is confounding the Papacy.

 

In Brazil, the world's most populous Roman Catholic nation, some 80,000 "base communities," as the grass-roots building blocks of liberation theology are called, are flourishing. What's more, nearly one million "Bible circles" meet regularly to read and discuss scripture from the viewpoint of the theology of liberation.

 

Liberation Theology advocates have strong links to the labor movement which helped propel the current regime into power; this history turned President Luiz Inacio Lula da Silva into being a long time ally. The movement has been particularly strong in poorer areas of the country such as the Amazon, the hinterlands of northeast Brazil and the outskirts of large urban centers like São Paulo, which has a population of 20 million people.

 

In the latter city, the followers of liberation theology prominently display their politics. For example, during last year's May Day celebration, liberation theologists draped a wooden cross with black banners labeled "imperialism" and "privatization" and applauded when the homily criticized the government's "neoliberal" economic policies, the kind backed by Washington.

 

Chávez and Pope Benedict

 

Try as he might, Benedict has been unable to halt the re-emergence of Liberation Theology, and Paraguay and Brazil are just the tip of the iceberg. For years Venezuela has been a religious battleground, with President Chávez pursuing a combative relationship with the Catholic Church. Unlike some other Latin American countries which had a stronger liberation theology movement, the Venezuelan Church never had a leftist tendency except among diocesan priests.

 

A clash between the government and the Church was probably inevitable, and shortly after taking office Chávez started to chastise Venezuelan bishops, accusing them of complicity with the corrupt administrations that preceded his rule. The Venezuelan leader accused the Vatican's former representative in Venezuela, Cardinal Rosalio Castillo Lara, of allying himself with the country's "rancid oligarchy." Memorably, Chávez suggested that priests such as Castillo Lara ought to subject themselves to an exorcism because "the devil has snuck into their clerical robes." Incensed, the cardinal compared Chávez to Italian dictator Benito Mussolini.

 

During the April 2002 coup, prominent Catholics such as Cardinal Ignacio Velasco sided with the opposition against the president. Velasco was even accused of offering his residence as a meeting place for the coup plotters. What is more, he signed the "Carmona decree" that swept away Venezuela's democratic institutions. Senior Catholic bishops themselves attended the inauguration ceremony for Pedro Carmona, Venezuela's Dictator-For-a-Day.

 

But when Chávez was able to quickly overturn the coup and return to power, the hard line Church establishment was humiliated. Relishing his triumph Chávez launched a rhetorical broadside on the Vatican, calling on the Pope to apologize, on behalf of the Catholic Church, for the "holocaust" of the indigenous peoples of Latin America during the colonial era, and for the imposition of Christianity. The Pope, who is close to Castillo Lara, is reportedly anti-Chávez but has met with the Venezuelan leader at the Vatican.

 

Hoping to neutralize the power of the Catholic Church, Chávez frequently quotes from the Bible. Puckishly, he also tells his supporters in his public addresses that Christ was an anti-imperialist. Even as Chávez spars with the Church, Protestants have provided a key pillar of the president's political support. Over the last few years, Chávez has done his utmost to cultivate the support of Protestants, which make up 29% of the population. He even declared that he was no longer a Catholic, but a member of the Christian Evangelical Council.

 

In The Andes, Pope Faces Hostile Political Environment

 

In the Andes, the situation is not much more promising for Pope Benedict.
Ecuadoran President Rafael Correa is a Catholic Socialist and has called for a "new Catholicism" in the 21st century which would challenge globalized capitalism. The President has said that his real education came from working as a lay Salesian missionary in the mid-1980s in the largely indigenous province of Cotopaxi. During his speeches, Correa invokes the words of Leonidas Proaño, probably Ecuador's most famous liberation theologian.

Bolivia's Evo Morales has never been a fan of ecclesiastical authority and has said that Catholic bishops "historically damaged the country" by functioning as "an instrument of the oligarchs." What's more, Morales tapped Rafael Puente Calvo, an ex-Jesuit and a staunch liberation theologian, to be his Deputy Minister of the Interior.

 

In Paraguay, Brazil, Venezuela, and up and down the Andes Pope Benedict faces a very changed political climate from the 1980s. A new generation of leaders, allied to the Pope's ideological foes, has to be making life difficult for the conservative church hierarchy. If he wants the Vatican to maintain its influence in the region, Pope Benedict is going to have to be creative, diplomatic and extremely cautious in his regional initiatives.

Perhaps one of the more unlikely but compelling stories to come out of South America in recent years has to do with the budding strategic relationship between Venezuela and Argentina. Together, the two countries constitute a formidable bloc that could make all the difference in defining South America's future geopolitical trajectory.  

 

But now, Chávez is testing the revolutionary fervor of his Argentine counterpart, Cristina Fernández de Kirchner.  

 

The Venezuelan President has set his sights on Sidor, an Argentine-owned steel plant.  The firm is one of Latin America's most important steel factories and was Venezuelan state property until 1997 when it was privatized and sold to a consortium of corporations.  The largest majority stakeholder is currently Argentine company Techint.

 

As part of his assault on the neo-liberal economic policies of the past, Chávez has long sought to "nationalize everything that was privatized" by previous Venezuelan administrations.  Having already taken over the cement industry, several milk producing plants, dozens of large farms, as well as the electricity, telecommunications and petroleum industries, Chávez is now moving on to the strategically important steel sector.  

 

On April 9th, Venezuela put its incipient alliance with Argentina to the test by announcing the government's decision to nationalize Sidor.  It was the first time that Venezuela had acted to nationalize a company from an allied nation.  Rubbing salt in the wound, Venezuela's Vice President Ramón Carrizalez denounced Sidor's management for its "colonizer attitude" and "barbarous exploitation" of workers.  "This is a government that protects workers and will never take the side of a transnational company", Carrizalez added.
    
Despite Nationalization, Argentina and Venezuela Still on Track

 

Chávez's moves put Kirchner in a tight bind.  Paolo Rocca, Techint's President, is close to the Buenos Aires government and has pleaded with Kirchner to "confront the Venezuelan government in defense of national capital."  Thus far, Kirchner has been tight lipped about the imbroglio, which has made other Argentine investors jittery.  In the wake of the nationalization, some Argentine firms in Venezuela said they would "think a little more" and called the Sidor nationalization "an alarm."  

 

However, Rocca is unlikely to persuade Kirchner to take tough action against Venezuela.  Fundamentally there is just too much at stake in the relationship for either country to sever ties.  The Argentine President herself has admitted that Venezuela has been an important ally, helping Argentina "at a time when no one else did."  If it weren't for Chávez, who has bought more than $5 billion in Argentine debt in the last two years, Argentina might still be struggling to cope with economic troubles associated with the financial meltdown of 2001.  

 

What's more, energy strapped Argentina badly needs fuel and Chávez has generously agreed to barter oil for meat and ships. While in Buenos Aires researching my new book, Revolution! South America and the Rise of the New Left (Palgrave-Macmillan), I interviewed Cristian Folgar, the Undersecretary of Fuel.  Speaking with him at his office off the Plaza de Mayo, Folgar explained that energy links between Venezuela's state oil company PDVSA and the Argentine government were quite solid.  Indeed, the Venezuelan firm now has an office in Buenos Aires.  

 

"Today," he remarked, "the president of PDVSA Argentina was here asking for information about Argentine gas.  This month, I spent 10 days in Caracas.  I have made 15 trips to Caracas in total."

 

Chávez's energy benevolence has paved the way for closer economic integration: currently Venezuela and Argentina barter and trade everything from ships to oil to cattle to agricultural products.  According to Folgar, energy integration has been "fundamental" in enhancing Argentine-Venezuelan ties.  "Venezuelan and Argentine businessmen view each other as potential partners in many areas," he remarked, "which was not the case before."

 

Radical Hotel Inspires Venezuelans

 

Even as Venezuela and Argentina encourage business ties, workers in the two countries have also begun to coordinate their efforts.  Venezuelan laborers have been inspired by their counterparts in Argentina, who took over companies following the 2001 economic collapse.  Currently there are some 250 "recuperated" enterprises in Argentina, providing jobs to more than 10,000 workers.  

 

Encouraged by the Argentine example, Venezuela has hosted conferences dealing with the future of worker-owned firms in South America.  Argentine experts have participated in the conferences, providing crucial expertise to Venezuela.

 

An interesting example of the reciprocal exchanges between Argentine and Venezuelan workers is Hotel Bauen, located next to the headquarters of the Communist Party along a busy Buenos Aires thoroughfare.  A cooperatively-owned, three-star hotel, Bauen has served as a political symbol to many Venezuelan workers.  Indeed, some Bauen employees have even traveled to Venezuela in order to speak about their experience in setting up a cooperative system.

 

Argentines' Changed Political Consciousness

 

Because of these increasingly more frequent day-to-day exchanges between Venezuelans and Argentines, it would prove politically problematic for Kirchner to suddenly switch gears and reduce her country's ties to Chávez.  The Venezuelan leader continues to remain popular amongst Argentina's radicalized poor.  Kirchner, who has been busily trying to build up her populist credentials, and who holds mass rallies denouncing the agro-export elite in her country, cannot afford to alienate this key constituency.

 

For many, Chávez's anti-imperialist rhetoric resonates because of Argentina's unfortunate experience with the International Monetary Fund and neo-liberal economic policies backed by Washington.  Psychologically, the country has changed immensely from the go-go free market years of the Carlos Menem administration.  Politicians who fail to recognize the new underlying reality do so at their own peril.  

 

Therefore, notwithstanding the recent buffeting, the Venezuela-Argentina alliance looks like it will continue on track.  What's more, if the bloc manages to attract smaller countries such as Ecuador and Paraguay, it could prove to be a formidable force indeed.  Washington may find the consolidation of this left bloc unappealing, but there is little that Beltway foreign policymakers can do at this point to halt the rising political tide in South America.  

The tiny, land locked nation of Paraguay has not been blessed with political good fortune. For decades, anti-Communist General Alfredo Stroessner, who “disappeared” and tortured thousands of dissidents, ruled over this country of some 7 million people. Stroessner was dislodged by his military subordinates in 1989 and later died in exile in Brazil at the age of 93.

However, the Colorado Party, which backed Stroessner during his 35-year dictatorship, maintained a tight lock on political power while enriching itself and the wealthy at the expense of ordinary Paraguayans. Under Colarado rule, Paraguay became renowned as a haven for fugitive Nazis, smugglers and drug traffickers.

For years, the U.S. backed repressive military rule in Paraguay in an effort to keep a lid on progressive social change. For Washington, Stroessner, a strong anti-communist, could do no wrong. A willing U.S. ally during the Cold War, Stroessner supported Lyndon Johnson’s invasion of the Dominican Republic in 1965 and even offered to help send troops to Vietnam.

Even in Paraguay’s darkest hours, while Stroessner harbored Nazi war criminals, crushed non communist peaceful opposition and persecuted the indigenous population (including forcibly assimilating the Ache population, a policy which ended in bloodshed, sexual slavery and servitude), the U.S. continued to back the General. It wasn’t until the late 1970s, with the arrival of Jimmy Carter in the White House, that the U.S. withdrew its support.

From Dictatorship to Kleptocracy

Despite the passing of Stroessner, most Paraguayans are even worse off today than under the dictatorship. Encouraged by Washington, Paraguay instituted a program of neo-liberal economic reform and privatization which thrust tens of thousands out of work. Paraguayan exiles once fled their country for political reasons. But today, it’s economic misery which has driven many Paraguayans to travel abroad. Currently some two million people live abroad in Argentina, Spain, and the United States.

The legacy of corrupt Colorado rule is evident for all to see. Currently, almost 50 percent of the country’s population lives on less than $2 a day and 38 percent of the citizenry is either unemployed or under-employed. In 2007, GDP per capita stood at roughly $4,000 while 32% of the population lived below the poverty line.

Land ownership is concentrated in the hands of a few large companies which are resorting to more and more soya farming. Amidst the concentration in land ownership, hundreds of thousands of landless farmers have been pushed to the cities by hunger.

The Power of Liberation Theology

On the other hand, today’s presidential election, which has brought Fernando Lugo to power, stands to shake up Paraguay’s politics and could even exert an impact upon the course of wider hemispheric integration. In light of the fact that Lugo has never held any elective office, his ouster of the Colorado Party is truly remarkable. When you consider that kleptocratic Colorado had managed to hold on to power for more than sixty years, Lugo’s accomplishment is even more striking.

Like his counterpart Rafael Correa in Ecuador, who once taught math to poor Indians while working with the Catholic Salesian Order, Lugo also comes from a religious background. Born into a middle-class family of political activists, his three brothers and uncle were forced into exile under the Stroessner dictatorship. In 1977 he was ordained a priest and enjoyed stints as a schoolteacher and missionary.

The following year Lugo left for Ecuador where he lived with indigenous communities and peasants. The young priest became a believer in so-called Liberation Theology, a school of thought which took shape in Latin America in the 1960s. Recognizing the pressing need for social justice, Liberation Theology challenged the Church to defend the oppressed and the poor.

Falling Afoul of Stroessner

Returning to Paraguay in the early 1980s, Lugo became a rural bishop known for both his political activism and conciliatory skills. It wasn’t long before he ran afoul of Stroessner’s military intelligence. Concerned for his own well being, he departed for Rome to study social science.

Five years later however he was back in Paraguay. This time he was chosen bishop of San Pedro, a diocese which lay in the poorest area of the country. The bishop learned Guaraní, an indigenous language spoken by peasants and urban poor who make up the majority of the Paraguayan population.

Working amongst the flock in San Pedro, Lugo began to take up the cause of landless peasants and earned a reputation as “the bishop of the poor.” Lugo’s advocacy, however, landed him in trouble with local landowners who accused him of protecting guerrilla fighters and supporting kidnappers.

The Road to the Presidency

In 2004, incensed by the social injustice that he witnessed all around him, Lugo resigned his position in the Church to pursue his political ambitions. Shortly afterwards he was the main speaker at a huge anti-Colorado demonstration in Asunción. Unionized workers, as well as leftist and indigenous organizations, began to rally behind Lugo. The ex-Bishop helped to form the Patriotic Front for Change, a grouping of some 20 Indian, farm peasant and union organizations.

Lugo is the first former Bishop to be elected president of a country (the Vatican refused to accept his resignation as Bishop, but experts believe that the church will grudgingly accept a Lugo Presidency rather than break off diplomatic relations with Paraguay) and frequently invoked the Bible while on the campaign trail. During one rally outside Asunción, he told 2,000 Indian peasants that he felt like a "Paraguayan David fighting the monstrous Goliath." The disenfranchised majority in Paraguay views Lugo as “The Bishop of the Poor.”

The former Bishop, heavyset, bespectacled and sporting a salt-and-pepper beard and priestly sandals, focused on social inequality during his campaign, questioning why “there are so many differences between the 500 families who live with a first-world standard of living while the great majority live in a poverty that borders on misery.” Lugo, who says that he has some affinity with socialism, wants to institute land reform and to re-establish Paraguay’s energy sovereignty.

As a politician and orator, Lugo would seem to differ somewhat from firebrand Hugo Chávez or Rafael Correa of Ecuador. The former Bishop stresses cooperation and dialogue rather than confrontation and a cult of personality. He reportedly has an uncanny ability to bring people together who don’t trust one another.

Lugo and Chávez

During a recent trip to Washington, Lugo assured the State Department that he was not like Hugo Chávez because he, unlike the Venezuelan leader, was a religious man. The future Paraguayan President remarked, “I am not of the left, nor of the right. I’m in the middle as a candidate sought by my people.”

The Paraguayan moreover criticized Chávez’s decision not to renew the broadcast license of Radio Caracas Television, a station which served as a hotbed of the Venezuelan opposition. In an interview, Lugo remarked that in Venezuela, there were “elements conspiring to attack the strengthening of public freedoms.” Under Chávez, Lugo added, Venezuela had pursued a political model which was “dangerous for a real democracy,” and “totally at the service of one person.”

On the campaign trail, Lugo was dogged by relentless accusations that he was receiving money from Chávez, a charge he has vehemently denied. "It’s part of a dirty campaign against me. None of this is true", he insisted.

Despite his close affinity with Paraguay’s Guaraní Indians, Lugo has likewise sought to distance himself from Bolivia’s indigenous President Evo Morales. “Individual leaders,” he has said, “can cause polarization, as I believe is happening in Bolivia. I don’t believe in creating a polarized society.” “I will not be a Paraguayan Morales,” he adds. “Paraguay will have to pursue its own political destiny.”

On the other hand, some of Lugo’s other comments may have raised eyebrows in Washington. He has praised the Venezuelan “experiment” for its positive social accomplishments, as well as “the better distribution of wealth for the benefit of the poor majority.” Furthermore, Lugo supports Chávez’s land reform program and calls the Venezuelan leader’s 21st-century socialism “interesting,” and “very stimulating.”

Lugo believes the U.S. should keep its distance from the political transformation now sweeping through South America. "I don’t think the United States has any choice but to accept these changes," he has said.

Lugo’s Paraguay: What Impact on South American Integration?

Hoping to undercut Chávez and his appeal, the U.S. has sought to cut free trade deals with individual South American countries. Unfortunately for Washington, Lugo has already stated that he has no intention of signing on to such an agreement as President. Historically, Paraguay has not played a very significant role in regional affairs. In the midst of South America’s Pink Tide and shift towards the left however, the country has taken on new geopolitical importance.

In an era of reduced U.S. influence, it’s now Brazil and Venezuela that are vying for the allegiance of smaller countries like Paraguay. Traditionally, Paraguay has formed part of Brazil’s geopolitical orbit but the relationship has recently come under strain.

Some of the friction has to do with Mercosur, a South American trade bloc. Paraguay has been a long time member of the group, while Brazil constitutues the most important economic hub. However, Paraguayans have been chafing under Brazilian influence. They charge that Brazil has bullied them by slapping crippling export restrictions upon Paraguay. As a result, Paraguay’s trade deficit has skyrocketed.

Lugo has said that he would keep Paraguay within Mercosur, but he sees the bloc as “inadequate” because it lacks a firm commitment to social and economic equity. Mercosur is unfair, he adds, because Brazil has registered greater economic growth than smaller countries.

Though the debate may sound Byzantine or obscure, it strikes at the heart of dramatic geopolitical currents shaping South America today. At stake is nothing less than the contours of future hemispheric integration and the social and economic future for millions of the region’s poor.

Venezuela’s Chávez says that Mercosur is a backward and ossified model for economic development. However, he has sought to bring Venezuela into Mercosur and hopes to subvert the bloc from within, presumably by shifting the entity’s focus from free trade to more equitable, reciprocal trade. However, Venezuela’s bid to join Mercosur has still not been ratified by Brazil, a country which has a more market-based vision of the future than the avowedly socialist Chávez.

Paraguay too has failed up until now to ratify Venezuela’s bid. Lugo has been coy about his intentions towards the issue, but he could play a key role now in helping Venezuela join the trade bloc. With a left of center government in power in Asunción, the center of political gravity within Mercosur could tilt a little towards Chávez.

The Politics of Hydro-Power

In other key respects, a Lugo presidency could shift geopolitical momentum away from Brazil and towards Venezuela. One issue which has rankled relations between tiny Paraguay and Brazil has been hydropower. To the chagrin of Brasilia, Lugo seems determined to follow in the footsteps of Hugo Chávez by pursuing a policy of resource nationalism.

Under Stroessner, Paraguay built the largest hydroelectric power plant in the world located in Itaipu. Though Itaipu, as well as the subsequently built Yacyretá Dam displaced tens of thousands of Paraguayans from their homes without any restitution, it greatly increased economic growth.

Itaipu, which is operated jointly with Brazil, is now at the center of a political firestorm in Paraguay. The dam is hugely important within the region, providing a full 20% of Brazil’s electrical power. But Lugo has declared that the contract agreed to between his country and Brazil is unfair. Currently, Paraguay is obliged to sell Brazil its surplus electricity from Itaipu at prices far below those set by the market. Lugo wants Brazil to pay more.

The Paraguayan President also wants a greater energy surplus from the dam. Currently Paraguay uses much less than half the energy from the dam while Brazil takes the rest. Paraguay would like to trade more energy so as to generate much needed income. To the dismay of President Lula in Brasilia, Lugo has said that he would like to alter the current energy accord. Such a move however would surely result in a great shortage of energy distribution to the Brazilian south and southeast.

When he talks about hydropower, Lugo strikes a nationalist chord: under his leadership, the President elect has said, Paraguay won’t “fall into submission to any other bigger country.” Lugo says that he is even prepared to take Brazil to the World Court in The Hague if necessary.

Paraguay, which historically has not had much of a political voice on the South American stage, now has a unique opportunity to tip the geopolitical scale towards Venezuela. Up until recently the international media ignored Paraguay. That could change now however with the rise of the country’s new Bishop President.

Cristina Fernández de Kirchner, Argentina’s new president, must have heaved a huge sigh of relief. Though politicians feared that protests could mar the arrival of the Olympic torch in Buenos Aires, the day passed uneventfully enough. Athletes ran the torch through the city streets as Chinese guards ran in formation alongside. The torch, which has toured the world ahead of the Olympic Games in Beijing in August, has been a magnet for protests over China policies. The Chinese leadership has fallen under international criticism for cracking down on unrest in Tibet and for propping up Sudan.

As the torch headed to Argentina on its ongoing tour, activists protesting against China’s rule of Tibet pledged to hold peaceful demonstrations. Jorge Carcavallo, a member of Argentina’s Free Tibet group, interrupted a press conference about the torch’s visit to warn of upcoming protests. When the torch arrived in Buenos Aires from San Francisco, authorities quickly hustled the torch off the plane and, in what was now rapidly becoming a comic odyssey, canceled a planned photo opportunity on the tarmac. The Olympic flame, in an ornately decorated lantern, was protected by Chinese guards who jumped onto a bus and rushed away to a secret location. The Chinese guard was escorted by wailing police cars and an ambulance. Local security officials wouldn’t disclose where the vehicle was headed. On the day of the torch’s tour through the streets of Buenos Aires local authorities braced for the worst, deploying some 1,200 police officers and 3,000 traffic cops. Though demonstrations were scattered, the police penned in protesters within fences along the 8_-mile relay route.

Behind the headlines and all the melodrama surrounding the torch, however, there’s a more significant story. For years, Argentina has been courting China diplomatically and has pointedly gone out of its way not to criticize the Asian Tiger in regard to its appalling human rights record. Kirchner is interested in maintaining important economic ties with the Asian Tiger, and in this sense the President could ill afford a public relations nightmare that might put the China relationship in danger.

On the other hand however, China ties could pose a thorny political problem for Kirchner and other South American leaders in the long term. Increasingly, Argentina is becoming entwined with Beijing and this has only served to intensify social tensions in the country.

Argentina Embarks on a New Trajectory

To understand why Argentina invested so much in its China relationship, you have to go back to 2001. In that year, the once prosperous South American nation faced economic ruin after confronting a catastrophic financial collapse. The Argentine political class had followed globalization’s dictates by dismantling protectionist trade and business regulations and embarking on an ambitious wave of privatizations. During the Asian economic crisis, a huge outflow of capital led to a depression and financial panic.

Although Argentina had experienced a number of economic crises over the years, this one was one was without precedent in severity and human consequences: overnight the currency lost two-thirds of its value and banks were closed so that ordinary Argentines could not access their funds. In December 2001, amidst bloody riots, President Fernando de la Rúa was forced to resign after hardly eighteen months in office. Parts of the majestic Congress building in downtown Buenos Aires were torched by angry protesters.

Over the last five years however, Argentina has undergone a remarkable economic recovery, partly due to a drastic devaluation of the currency by two-thirds. The currency devaluation suddenly made Argentina’s exports highly competitive on the world market.

The government’s move coincided with dramatic economic developments half a world away. In China, the government was facing a dilemma: the country’s farm output had reached its limit, and massive rural to urban migration was creating an insatiable demand for more soy. China simply did not have the necessary land or water to produce more of the crop.

Argentina to the Rescue!

As it turns out, Argentina, with its fertile soil and favorable climate, was well situated to produce soy. In conjunction with my new book, Revolution! South America and the Rise of the New Left (Palgrave-Macmillan, 2008), I interviewed Gonzalo Sánchez Paz, a lecturer in international affairs at George Washington University and an expert on South America’s ties to Asia. "You cannot understand the miraculous Argentine recovery after the financial crisis of December 2001 without considering the boom in soy exports to China," he told me.

In an effort to curb inflationary pressures, former President Néstor Kirchner placed export caps on beef, thus flooding the local market with meat. Argentines, who are passionate about their beef, consuming 154 pounds of meat per capita per year, and who hold Sunday barbecues with a religious fervor, embraced the new measures as prices were kepT low (incoming President Cristina Kirchner has pledged to maintain a high export tax that makes outbound beef too costly for many foreign buyers).

Simultaneously, many cattle ranchers were tempted to switch over to soy owing to increased market prices and the government’s export caps on meat. Argentina, which was the world’s biggest beef exporter until the 1950s, now went to fourth in U.S. Department of Agriculture rankings, behind Brazil, Australia and India.

Some experts say Argentine soybean farming is currently three times more profitable than cattle ranching. Indeed, the trend against ranching is so powerful that today, remarkably, half of all cultivated farmland in Argentina is dedicated to soy. The explosion in production has been aided by the fact that soybeans need just eight months to reach harvest, far less than the 2-3 years needed to raise a cattle herd.

Clearly, farmers aren’t complaining: they’re making a killing on their new soybean crop.

Soy Has Its Consequences

Argentina, a land of vast, fertile plains, has benefited hugely from high international prices for commodities. But the country is divided over how best to distribute windfall profits from soy. Though China trade has represented an economic boon, Argentina’s relationship to the Asian Tiger has exacerbated social tensions. The soy trade has encouraged the rise of an export elite in Argentina which has become an important political actor in its own right.

Determined to check the growing power of the farmers, and strapped for cash, the regime recently raised export taxes on soybeans from 35% to 45%. The move, Kirchner said, would help to control rising inflation on domestic food goods. What’s more, the policy would serve to redistribute wealth in a country where nearly a quarter of the population lives in poverty.

The soy farmers however went on strike, presenting Cristina with her first political crisis as Argentina’s new President. Blockading roads in protest of the tax increases, the farmers strangled the flow of farm goods to cities and caused acute shortages of meat, milk and fresh produce across the country.

At a political rally attended by 20,000 supporters including trade unionists, Kirchner railed against the soy farmers. "Is it good that highways are cut so that food cannot be transported to market?" she asked. "Don’t do more harm to the people, lift the roadblocks so Argentines can get food," the President said.

Though the farmers recently agreed to end the road blockades, they have stated that they will resume the strike if the government refuses to rescind the tax measures. The current peace between the parties seems tenuous, as both the farmers and government have failed to reach substantive agreement during negotiations.

Historically, the U.S. sponsored local economic elites and multinational business in South America in an effort to secure raw resources. Now that the U.S. has lost some of its former position, China has stepped in to fill this familiar role. In order to keep growing at high rates, China needs access not only to food but to iron, oil, copper, and gas. Usually China is willing to help with infrastructure projects such as ports or railroads but only if this helps to facilitate the transport of raw materials.

Across the region, countries strain to satisfy insatiable Chinese demand.

From Argentina, China imports soybeans, crude oil, leather and steel. In Bolivia, China will invest $1.5 billion in the onshore oil and gas sector. China is also interested in developing the country’s largest tin mine, Huanuni. Meanwhile China has imported millions of tons of oil and iron ore from Brazil and has signed a deal to help construct a major natural gas pipeline. In Chile, China will set up a joint venture with the state copper company, Codelco. In Ecuador, a Chinese-led consortium bought oil and pipeline assets for $1.4 billion. In Venezuela, China has invested millions in the oil sector.

As evidenced by the peaceful and largely uneventful passage of the torch in Buenos Aires, China is not perceived as a major exploitative presence.

This could change with time, however.

China’s economic and development vision for the region, designed to serve its own growing needs, has already exacerbated class tensions in Argentina and could give rise to social conflict in neighboring countries as well.

With the Pennsylvania primary fast approaching on April 22, Barack Obama will have the opportunity to end the race for the Democratic nomination once and for all. If he wins by only a slim margin in the state, the "punditocracy" will declare him the presumptive choice of the party and the pressure will build on Hillary Clinton to withdraw. Obama should do well in Philadelphia amongst black voters and will probably pick up a decent percentage of the white affluent vote in the city’s suburbs.

In order to clinch the victory, however, Obama will have to make inroads amongst blue collar workers in the more industrial, western section of the state. In Ohio, Obama lost that constituency to Clinton and he’s desperate to cut into her lead amongst this critical voting bloc. But with less than two weeks to go, how can he turn things around?

In one word: Colombia.

The Scandal Breaks

Recently, Clinton handed Obama a golden opportunity to sew up the nomination when her chief strategist, Mark Penn, was caught up in a scandal involving the pending free trade deal with Colombia. Bush has been pushing hard for the agreement, which would allow for duty free commerce with the United States. Many Democrats and most unions oppose the initiative because of Colombia’s appalling labor record.

Penn’s ties to Team Clinton go back some time: the PR man was originally admitted to Bill’s circle by consultant Dick Morris in an effort to shore up the 1996 presidential campaign. Penn headed up a global public relations firm called Burson-Marsteller; the company has offered public relations help to such unsavory entities as Blackwater, the security contractor accused of killing Iraqi civilians, and Countrywide, a major lender of risky subprime mortgages.  Penn was employed by the Colombian government to help win passage of the trade agreement in Congress. Penn’s ties to the Colombian government were revealed when the Wall Street Journal reported that the PR man held a private meeting with the Colombian ambassador.

News of Penn’s ties to the Colombian government proved acutely embarrassing to Clinton, who has gone on record as opposing the agreement. Surely fearing that she might lose out amongst the blue collar constituency in western Pennsylvania, Clinton promptly demoted Penn—though he remains on the campaign staff as a pollster and adviser.

It’s odd to think that the Penn-Colombia story could exert an impact on domestic U.S. politics. Most Americans, if they are aware of Colombia at all, probably associate the country with drug cartels and little else. The media has done a swell job of ignoring Colombia as a news story, despite the fact that successive administrations in Bogotá have been proud recipients of billions of dollars in U.S. foreign aid.

Álvaro Uribe: Creating a Climate of Fear for Colombian Labor

On the other hand, the recent scandal within the Clinton camp might touch a nerve among angry, blue collar workers in the industrial heartland. Colombia is the most dangerous country in the world for labor organizers. In the six years since President Álvaro Uribe took office, over 400 labor activists have been murdered, according to Colombia’s National Trade Union School (Escuela Nacional Sindical). In 2008, almost one unionist a week has been murdered, while 39 unionists were murdered in 2007, far more than in any other country. In addition, threats of violence and murder are now sufficient to halt an organizing drive or to abort a strike.

The connection between this horrific labor climate and the Uribe government is pretty clear. Indeed, there’s been mounting evidence of collusion between many of Uribe’s allies and right wing paramilitaries who assassinate labor leaders. Colombia’s Supreme Court has even ordered the arrest of fourteen members of congress on suspicion of collaboration; thirteen of the legislators back Uribe. The president’s former intelligence chief is also facing charges of passing information to the paramilitaries to help them target and kill opponents. Recently, Uribe’s cousin, a Senator, was forced to resign in an effort to avoid a Supreme Court inquiry into whether he had ties to the paramilitaries. Mario Uribe was a key ally of the President.

So far, Álvaro Uribe has not been directly implicated, but the President has been accused of letting paramilitary groups use his family’s farms to kill opponents during the 1990s. Democratic Senator Patrick Leahy cut off $55 million in military aid to Colombia over the allegations.

At the very least, the Uribe regime has created a climate of impunity in which labor activists have been targeted. Recently, human rights groups wrote a letter accusing a top Uribe adviser of endangering the lives of labor leaders by claiming that a protest march against right-wing death squads had been organized by FARC left wing guerrillas. The letter charged that four people involved in the march were subsequently murdered, and dozens more threatened with death.
In Colombia, there’s little chance that the paramilitaries will face justice: since the reign of terror against trade unionists began in the 1980s, only three percent of the cases have been clarified.

Riding the Colombia Gravy Train

The Colombian government has already received billions of dollars in military assistance and economic development from the United States, but clearly that is not enough: the Uribe regime wants more and is hiring Washington lobbyists and power brokers to push for its free trade agreement. The winners in this equation include U.S. corporations which for years have been trammeling human rights in Colombia. Big business sees the trade deal as opportunity to increase its fast-track looting of Colombian human and natural resources.

Together, the Colombian government and its lobbyists have launched an all out assault in an effort to sway members of Congress into signing on to the deal. According to the New York Times, there have been all-expense paid trips to Colombia for more than 50 members of Congress, featuring coffee tastings and dinner at a posh restaurant inside an old Spanish fort. Uribe has visited Washington to make personal appeals. Collectively, the Colombian government has paid more than $1 million to firms that have negotiated or lobbied on behalf of the deal.

In this fight, Clinton staffers like Penn are intent upon picking off as many Democratic legislators as possible in an effort to secure the trade deal for the Colombian elite and U.S. multinationals. Major corporations such as WalMart, Citigroup and Caterpillar stand to benefit and are working double time to ram the deal through Congress.

From Colombia to Pennsylvania

Colombia’s sorry track record is not lost on the likes of organized labor in the U.S., which says the Andean nation’s record in curbing assassinations of labor organizers by paramilitaries remains poor. In Pennsylvania, the Colombia story has political traction: one of four primary voters in the state hails from a union household.

Just yesterday, Teamsters President Jim Hoffa went to a Hershey-owned York Peppermint Patty Plant in Reading, Pennsylvania to denounce the Colombia free trade agreement. Hoffa was in Reading as part of a three-day tour through the state, meeting with Teamsters in Scranton, Wilkes-Barre, Allentown, Reading and Pittsburgh.

"These so-called trade deals are killing American jobs," he said. "They aren’t about trade; they’re about helping companies move their factories to countries with cheaper labor. The last thing American workers need is a trade deal with Colombia, one of the most anti-union countries in the world," Hoffa added.

In traveling to Reading, Hoffa was making a political statement about Latin American free trade deals. The Hershey plant will move to Monterrey, Mexico by year’s end, resulting in the loss of 260 jobs. It’s yet another painful blow to the residents of Reading, which has already lost one-fourth of its good-paying manufacturing jobs since January 2001.

Appearing at an Obama rally in Scranton, Hoffa declared, "In 1998, we lost 1,000 jobs at Tops Chewing gum, those jobs went to Mexico. In York, Pennsylvania, Peppermint Patties is closing 600 union jobs will go to Mexico (where) they won’t pay health care. They won’t pay unemployment it’s about money. And these CEOs don’t care about America."

Pennsylvania has been especially hard hit by foreign trade. More than 44,000 jobs were lost due to NAFTA since it took effect in 1994, and Hoffa claims that 1,583 plants, offices and warehouses have closed in the state as a result of the trade deal. Pockets of the state have suffered from chronic unemployment and low wages since many factories and steel mills closed.

What this adds up to is a fired up electorate which is prone to punish any candidate tied to corporate-friendly free trade agreements. Change to Win, a labor alliance which has endorsed Obama, called Penn’s meeting with the Colombian ambassador "outrageous" and urged Clinton to fire him. "We have questioned Penn’s role in the Clinton campaign in the past for his representation of union busting employers," Change to Win executive director Greg Tarpinian said. Meanwhile, significant union leaders like Hoffa continue to call for Clinton to fire Penn outright.

Pressing Colombia’s Agenda: Hillary’s Sleazy Advisers

Though Clinton herself has opposed the Colombia free trade agreement, her campaign is knee deep in Colombia sleaze. In addition to his public relations work lobbying for the Colombia free trade agreement, Penn also worked as an adviser to Coca-Cola, a company which faces legal action in connection with its bottling plants in Colombia.

A lawsuit filed in U.S. District Court in Florida accused the Coca-Cola Company, its Colombian subsidiary and business affiliates of using paramilitary death squads to murder, torture, kidnap and threaten union leaders at the multinational soft drink manufacturer’s Colombian bottling plants. The suit was filed by the United Steelworkers of America and the International Labor Rights Fund on behalf of SINALTRAINAL, the Colombian union that represents workers at Coca-Cola’s Colombian bottling plants.

The story doesn’t end there, however.

Another top Clinton campaign aide ­ spokesman Howard Wolfson ­ is an owner of the Glover Park Group, to which the Colombian government pays a $40,000 per month retainer to lobby for the US-Colombia free trade agreement. In the wake of the scandal involving Penn, Clinton promoted Wolfson to take over the campaign’s "strategic message team."

In other words, Hillary’s clarifications on Colombia notwithstanding, Glover Park Group has been arguing the same position on the free trade agreement as Penn (several other Glover Park employees have deep connections with the Clintons, including founding partner Joe Lockhart, who served as the White House press secretary under President Bill Clinton, and Joel Johnson, who was a senior communications adviser in the Clinton White House).

Bill’s Sordid Colombia Past and Present

In addition to Penn and Wolfson, there’s also husband Bill to consider.  As President, Clinton went to bat for Andrés Pastrana, whose administration was equal to if not worse than the sordid Uribe regime when it came to protecting human rights. Clinton backed so-called Plan Colombia and approved $1.3 billion to the Andean nation while waiving human rights conditions. More than $900 million of the U.S. contribution went toward military and police equipment, including attack helicopters and other lethal aid, ostensibly in an effort to prosecute the drug war.

What’s particularly jarring is that Clinton backed the Pastrana government despite rampant human rights abuses in Colombia at the time. According to Human Rights Watch, right wing paramilitaries massacred civilians, committed selective killings, and spread terror with the tolerance and open support of the armed forces.

Labor was hit particularly hard during the Pastrana years: the Colombian President enacted strict austerity measures and began selling off state-owned banks and other nationalized enterprises. When some 800,000 state workers struck in protest, Pastrana declared the strike illegal.

Meanwhile, labor leaders were assassinated.

Bill’s Colombia advocacy has continued under the Uribe regime. According to the Politico, the former President was paid $800,000 by the Colombia-based Gold Service International to give four speeches throughout Latin America. The organization is ostensibly a development group tasked with bringing investment to Colombia and educating world leaders about the country’s business opportunities.

As early as 2005 Clinton remarked that he was in favor of a Colombian free trade agreement. In that year, he went to Bogotá personally to meet with Uribe. The Colombian President said that he needed Clinton’s support to ensure the passage of the free trade agreement. Clinton agreed to follow up on the request once he returned to the U.S.

After speaking with the Colombian President, Clinton accompanied Uribe on a walk through downtown Bogotá. The two headed from the Tequendama Hotel to the Gonzalo Jiménez de Quesada Convention Center. During their walk Bill greeted the city’s many street vendors, many of whom were surely cast out of the formal economy as a result of Colombia’s draconian labor policies.

On Colombia, Hillary is little Better

Though Hillary hasn’t made personal junkets to Bogotá, her record on Colombia does not inspire much confidence. In the Senate she has been careful not to stick her neck out on behalf of human rights in Colombia, leaving this task to more principled liberal folk.

In 2002, The Latin American Working Group singled out the late Paul Wellstone, Patrick Leahy, and Russ Feingold for their tireless efforts to raise the issue of human rights in Colombia. All three denounced aerial fumigations of coca leaf which had dire environmental consequences in Colombia. Clinton was nowhere to be found on the issue.

In 2003, the usual Senate suspects including Dodd, Feingold, Leahy and Kerry sent a letter to Secretary of State Colin Powell expressing serious concern about a speech given by Uribe. In chilling fashion, the Colombian President accused some human rights groups of acting as "terrorist spokespeople," remarks which put human rights defenders in danger. The Senators’ letter of protest also opposed amnesty for paramilitary leaders involved in grave human rights abuses.

Where was Clinton? The junior Senator from New York refused to sign on to the letter.

Fast forward to 2004, and the dire plight of trade unionists continued unabated. Once again it fell to Feingold and Dodd to lead the charge: the two drafted a letter to Uribe urging him to make progress on breaking ties between the Colombian army and paramilitary forces. Feingold and Dodd expressed concern about ongoing attacks against human rights and union activists, and raised concerns about policies granting police powers to the military.

Again, Clinton refused to sign the letter.

In 2005, it was again the same: Leahy, Dodd and Leahy signed a letter to Secretary of State Condoleezza Rice, calling on her not to certify that Colombia met human rights conditions in law until greater progress was made on a series of cases. Clinton passed when it came time to add her name.

And as recently as 2007, Hillary refused to sign a letter sponsored by Leahy and Dodd that expressed concern over public statements by government officials, including Uribe. The statements led to attacks against human rights defenders, journalists, and other members of civil society.

Obama’s Contrasting Record

In contrast to Hillary, Obama has shown some spine when dealing with Uribe. The Illinois Senator has questioned President Bush’s close alliance with Bogotá and, unlike Clinton, signed the letter to Condoleezza Rice. Obama wrote that he was concerned about the links between the Colombian government and paramilitaries.

To his credit, Obama has taken a strong stance advocating the dismantling of paramilitary networks. The Bogotá government, he argued, should undertake measures such as investigating and sanctioning paramilitaries’ financial backers and accomplices in both the government and the military, regardless of their rank. If the Uribe regime did not take more effective action, Obama warned, then "maintaining current levels of assistance will be difficult to justify."

On the pending Colombia free trade measure, Obama should be lauded for his position. He emphatically opposes the pending free trade deal, remarking "I’m concerned frankly about the reports there of the involvement of the administration with human rights violations and the suppression of workers." On the campaign trail, Obama added that he opposed the treaty “because when organizing workers puts an organizer’s life at risk, as it does in Colombia, it makes a mockery of our labor protections.”

On the positive side, Obama recognizes the need to rethink the nature of trade agreements. "I think it is very important for us in our free trade agreements with any country to ensure that basic human rights are being observed, basic worker rights are being observed, basic environmental rights are being observed," he remarked.

Uribe recognizes the potential threat posed by an Obama administration. A few days ago, the Colombian President chastised Obama for not being aware of Colombia’s "efforts" on trade. Apparently, Uribe was referring to the Colombian government’s public relations campaign in Washington, designed to whitewash human rights atrocities.

Obama retorted hotly, "I think the president is absolutely wrong on this. You’ve got a government that is under a cloud of potentially having supported violence against unions, against labor, against opposition…That’s not the kind of behavior that we want to reward. I think until we get that straightened out its inappropriate for us to move forward."

What’s striking is that Uribe would openly meddle in the U.S. presidential campaign, perhaps underscoring the Bogotá government’s deep nervousness about the future. One might ask though: why did Uribe not criticize Hillary, since her stance on the Colombia trade deal is identical to Obama’s? Clearly, Uribe isn’t too concerned about a Clinton administration in Washington. After all, the Clinton machine has a long history of backing the Colombian far right, its politicians and death squads, of whom Uribe is the top leader.

Sewing up the Nomination in Pennsylvania

Mark Penn reportedly believes that the entire Colombia story, and the issue of his conflict of interest within the Clinton campaign, will ultimately blow over. According to Huffington Post, Penn remarked that the fiasco would vanish from the news cycle within a couple of days.

Camp Obama seems to be catching on to the importance of the story, however. A campaign spokesperson sent reporters a note reading, "Just ask yourself [what you would do] if some of my advisers had been having private meetings with foreign governments." For whatever reason, however, Obama doesn’t mention Penn’s name while campaigning in Pennsylvania.

It’s a mistake.

Unfortunately, Obama still hasn’t given white voters in the western part of the state much of a compelling reason to vote for him. He must draw a starker contrast to the Clinton campaign on foreign policy and labor rights. Having already delivered a major speech on race, he could now discuss class within the context of Pennsylvania’s de-industrialization. He could point out, poignantly, how free trade benefits the corporate elite in Colombia and the United States and harms workers in both countries.

Threatening to cut off economic aid to Colombia unless Bogotá improved its labor record would be a gutsy move and make Obama an instantaneous hero to organized labor. He could top it all off by riffing a bit about Clinton and her campaign’s unseemly ties to the Uribe regime (it would be drole, and that is putting it mildly, to see the mainstream media struggle to play catch up on the story. Having systematically ignored the issue of labor in Colombia during the Pastrana and Uribe years, it would now have to explore the underbelly of U.S. foreign policy in the Andes).

If Obama were to take such a daring move, he could sew up Pennsylvania and the nomination. If he fails to electrify working class voters however, the nominating contest goes on, perhaps even to the Convention. The Illinois Senator would still probably prevail, but the public will lose interest in the campaign and "Obama-mania" could fade somewhat.

It’s now crunch time for Bush and his Colombia free trade agreement: the President has sent the deal to Congress, thereby forcing a vote within 90 legislative days.

"The need for this agreement is too urgent — the stakes for our national security are too high — to allow this year to end without a vote," Bush said. "The stakes are high in South America," he added. "By acting at this critical moment, we can show a watching world that America will honor its commitments. We can provide a powerful rebuke to dictators and demagogues in our backyard. We can show millions across the hemisphere that democracy and free enterprise lead to a better life."

The political strategy is clear: facing an uphill battle for his trade deal in Congress, Bush hopes to intimidate the Democrats by linking them to Hugo Chávez of Venezuela. Either pass my deal, Bush is saying, or allow Chávez to further expand his geopolitical influence in South America.

It’s a shrewd move on Bush’s part.

Though the trade deal is unpopular on the Hill owing to Colombia’s appalling human rights and labor record, most Democrats will do most anything to avoid the perception that they are sympathetic to the Chávez regime. Speaker of the House Nancy Pelosi has called Chávez "a thug," but probably fears that Bush may be able to peel off some Democrats by resorting to Chávez bashing. In the House, the Republican leadership is attempting to frame the political debate over the Colombia deal as either a vote for Colombian President Uribe or for Chávez.

The Bush administration, Pelosi has said, should not invoke the specter of Chávez but instead focus on curbing labor abuses in Colombia (more than 700 trade unionists have been killed in Colombia since 2001, and though the number murdered annually has fallen sharply since President Uribe took office in 2002, the 25 killed in 2007 was still more than in any other country in the world. Only a small fraction of the killings have been solved).

"Nobody likes Chávez," Democratic Representative Charlie Rangel remarked, "but I don’t think a bogeyman is going to get people excited into voting for these trade deals." "The problem is that Hugo Chávez is not their main thrust – he is their only thrust," he added.

I’ll Be Your Tour Guide in Colombia

Hardly intimidated by the spineless Democratic leadership, Bush has employed a relentless public relations campaign to get conservative Democrats on board. Commerce Secretary Carlos Gutiérrez, a right wing Cuban and former CEO of the Kellogg Company, has led congressional delegations to Colombia which have included some Democrats. "Colombia has been one of our closest allies in the region," Gutiérrez has remarked. "What an irony it would be if it is punished for its support of the United States." Gutiérrez has been a long time booster of free trade in the hemisphere. For example, he played a key role in the passage of the Central American Free Trade Agreement or CAFTA-DR.

Thanks to Gutiérrez’s tireless efforts, some Democrats seem to be coming round to the Colombia free trade deal. Gregory Meeks and Eliot Engel, both representatives from liberal New York City, recently traveled to Colombia. When interviewed, they agreed that the United States needed to help Colombia and other countries face up to Chávez. "The Chávez issue plays on something important," Meeks said. "What has to be considered is the difference between two economic systems. One is the capitalist model of friends like Colombia based on market access. The other is the failed socialist model of Venezuela. We have to show that our system works." Engel, the chairman of the House Foreign Affairs Subcommittee on the Western Hemisphere, is reportedly still nervous about Colombia’s labor situation but joined his colleague in the by now obligatory Chávez bashing: "He’s saying, ‘Follow me, I’m the wave of the future in Latin America.’ We do have to counter that." Another Congressional Democrat, Jim Matheson of Utah, traveled to Colombia with Gutiérrez. After touring the country he declared that carrying out a free trade deal would shore up Colombia’s status as a key U.S. ally in the region.

Condi Makes Her Case

Yet another leading booster for Colombia trade has been Secretary of State Condoleezza Rice. Writing in the Wall Street Journal, Rice remarked "Some in the Americas today want to shove the region toward authoritarianism. This system has failed before, and it will fail again. The only question is how much harm it will cause in the meantime, and in large part that depends on us ­ on whether we support the vast majority of people in the Americas today who believe, as we do, that security and social justice are best achieved through liberty and the rule of law, free and fair trade, and responsible democratic governance. Colombia shares these values, and we have invested billions of dollars in our ally’s success. How could we possibly retreat now?"

Rice and her colleagues are alarmed because, notwithstanding their ideological differences, South American nations appear to be moving towards extensive political and economic integration. The only question now is which economic development model will predominate within the region and what the eventual complexion of integration will look like.

Chávez, whose star is rising, has overseen an avowedly socialist and strong statist approach to the economy. Rhetorically, he rails against the market and globalization and would like to see a more "un-savage" version of globalization spread forth from Venezuela into neighboring countries. In order to advance Venezuelan interests, Chávez provides development assistance and oil at discount prices to sympathetic regimes in the hemisphere. He has promoted the Bolivarian Alternative for the Americas (known by its Spanish acronym ALBA), a scheme based on solidarity and barter trade outside of the usual corporate strictures. The initiative was originally an effort to counteract the U.S-sponsored Free Trade Area of the Americas. Bolivia, Cuba, Nicaragua and Dominica have signed on to the agreement.

Rice seeks to head off Chávez’s ALBA before it can take root amongst left leaning countries throughout the region. In Chile last month, she sought to revive a long-standing, but largely dormant, strategic partnership between Chile and the U.S. state of California. State Department officials argue that both have complimentary economies; spokesman Sean McCormack said that a centerpiece of Rice’s visit was a proposed educational exchange program. For Rice it was important to visit Chile, a country with which the United States has a free trade agreement: the Bush White House hopes the accord will serve as a model for other free trade initiatives in the region, including Colombia.

Avoiding another Ecuador Fiasco

Rice may take some comfort in the fact that the Bush administration was successful in recently ramming through a free trade agreement with Peru. If she can help to ensure a deal with Colombia, this might take some wind out of Chávez’s sail. Bush officials are in a hurry because the tide seems to be turning against them: in Ecuador, maverick Rafael Correa wants his country to join Chávez’s ALBA.

As I explain in my new book, Revolution! South America and the Rise of the New Left (Palgrave-Macmillan), the United States made a serious geopolitical mistake in not securing a deal with the tiny Andean nation. Prior to Correa’s assumption of power, the state-run oil company in Ecuador, Petroecuador, took over assets belonging to the U.S. energy company Occidental, allegedly because the firm had violated its contract by transferring some of its assets to another company.

In the U.S., the mainstream press referred to the government’s action as an "expropriation."

Incensed by Ecuador’s handling of the affair, the U.S. broke off discussions on a free trade agreement that had been going on for four years. As a matter of fact, the two parties had finally agreed on key terms when the talks were abruptly severed.

Correa has signaled that he’s in no mood to enter into new trade talks with the U.S., and has alarmed foreign investors and the moneyed classes by seeking to participate in ALBA. Ironically then, by cutting off free trade negotiations the U.S. may have encouraged Ecuador to strengthen its ties to Venezuela and thereby hasten economic integration along more progressive lines.

Rice and her colleagues are determined not to repeat the Ecuador fiasco again. Securing a free trade deal with Colombia would be more economically significant than any agreement entered into with tiny Ecuador. The real rationale, however, is ideological and political: in its devious game of geopolitical chess, the U.S. badly needs a symbolic victory over Chávez.

The only obstacle in Bush’s path right now is the Democrats, who are deeply divided over the question of Venezuela. While some may be counted on to resist Bush’s relentless Chávez bashing, most are fearful of being labeled as anything but hawkish when it comes to dealing with the United States’ enemies on the world stage.

When you can’t stamp out progressive social change, the next step is to try to desperately derail it or otherwise water it down. That’s exactly the kind of strategy being pursued right now by the likes of Condoleezza Rice, who recently concluded a South American tour designed to ostracize the bad countries, namely Venezuela, Bolivia, and increasingly Argentina, and to cultivate ties with the good countries such as Brazil and Chile.

Rice and her colleagues are alarmed because, notwithstanding their ideological differences, South American nations appear to be moving towards extensive political and economic integration. The only question now is which economic development model will predominate within the region and what the eventual complexion of integration will look like.

The vehicle for closer integration could well be Mercosur, a trading bloc of South American countries. At present the bloc’s members include Brazil, Argentina, Paraguay and Uruguay. Venezuela is in the process of joining the bloc, and a number of countries including Bolivia and Chile are associate members. Mercosur nations have declared their intention of forming a South American Community of Nations modeled after the European Union.

The bloc is beginning to take on political projects rather than pursuing strictly economic objectives. For example, Mercosur now has a European Union-styled regional parliament in Montevideo, and many Uruguayans hope their capital might evolve into the "Brussels of South America." In a repudiation of Washington’s diktat, Mercosur nations openly debated what the future of free trade should be in South America during a heady 2007 summit.

In line with his usual penchant for over the top rhetorical flourishes, Hugo Chávez of Venezuela stressed the need for Mercosur to be "decontaminated" from the ravages of neo-liberal economics. Mercosur, noted the Venezuelan leader, was an "outdated mechanism and is leaking like a sieve." The trade bloc, Chávez added, was "founded in the context of a free- market economic model and offers integration for the élites, for business, for transnational companies, not integration for the peoples." Such remarks have riled the Bush White House which has come to distrust Mercosur, an entity which has acted to block the corporate-friendly Free Trade Area of the Americas.

Having woken up to the fact that its free trade and neo-liberal agenda for the region lies in tatters, and that wielding a Big Stick to defang its enemies cannot work politically in the present milieu, the Bush White House is now pursuing stealthy diplomacy. Rice’s strategy is to divide and rule, to contain radical social change and to steer it within acceptable boundaries.

These are important geopolitical developments which have largely fallen beneath the media radar screen. It’s a deficiency I seek to rectify in my new book, Revolution! South America and The Rise of The New Left (just released with Palgrave-Macmillan), based on extensive interviews with activists, intellectuals, political experts, and government officials in six countries throughout the region.

Venezuela and Brazil: Their Differing Visions for the Future

Officially, Venezuela and Brazil are close allies and are not vying for regional political control. But waning U.S. prestige has led to something of a power vacuum and the two countries are now pushing very different economic agendas. On the one hand, Brazil seeks to create economic opportunities for itself which in turn might offer advantages for smaller South American countries. Within President Lula’s scheme, these smaller nations would buy Brazilian goods and supply Brazil with energy resources. With Brazil as the hub of a southern bloc of countries, the region would head towards a more equitable development model mitigating the savage effects of globalization. Lula’s model is market-friendly though not explicitly "neo-liberal;" it is predicated upon government support for domestic companies which are intent on exploiting regional and global opportunities.

Lula’s agenda stands in contrast to that of Hugo Chávez who has overseen an avowedly socialist and strong statist approach to the economy. Rhetorically, Chávez rails against the market and globalization, thus sparking fear in Brazil that the Venezuelan leader will scare off investors from flocking to the region. Chávez would like to see a more "un-savage" version of globalization spread forth from Venezuela into neighboring countries.

In order to advance Venezuelan interests, Chávez provides development assistance and oil at discount prices to sympathetic regimes in the hemisphere. He has sought to bring Venezuela into Mercosur and hopes to subvert the bloc from within, presumably by shifting the entity’s focus from free trade to more equitable, reciprocal trade. Simultaneously however he has hedged his bets by promoting the Bolivarian Alternative for the Americas (known by its Spanish acronym ALBA), a scheme based on solidarity and barter trade outside of the usual corporate strictures.

Driving a Wedge between Brazil and Venezuela

Rice is trying to exploit these differences and to effectively drive a wedge through South America’s incipient left bloc. "Brazil has a president from the left. He’s one of America’s closest friends and partners in the region and on the globe. I will go on to Chile, another country where the president is from the left and again, we have excellent relations with Chile," the Secretary of State remarked in an interview with Brazil’s Globo TV.

Now that South America is headed on a new trajectory which is more independent of Washington, Rice hopes that the "responsible" left as exemplified by Brazil’s Lula and Chile’s Bachelet will steer the region away from the likes of Venezuela’s Chávez and Bolivian President Morales. "This is not about where you are on the ideological spectrum," she said. "It’s a question of: Do you respect democratic values and democratic institutions; are you working for the good of your people; are you working for the good of your neighbors. Those are the issues that are important to the United States, but it’s certainly not a matter of whether you come from the left or from the right."

Rice then urged nations such as Venezuela to meet their United Nations obligations by keeping terrorists out of their territories. In sounding the alarm, Rice was merely parroting her boss who had earlier remarked that Venezuela’s response to the recent border crisis in Colombia and Ecuador was "the latest step in a disturbing pattern of provocative behavior by the regime in Caracas." (In March, Chávez and Ecuador’s president, Rafael Correa, ordered troops to their Colombian borders and withdrew their ambassadors from Bogotá after Colombia killed a top rebel leader, Raúl Reyes, on Ecuadorean soil. During the raid, Colombia obtained computer hard drives that U.S. officials claim show the Venezuelan government may have had dealings with the Revolutionary Armed Forces of Colombia, or FARC, which the U.S. labels a terrorist group). When she was asked whether the U.S. was considering designating Venezuela a state sponsor of terror, Rice declared: "We will watch the situation and act accordingly."

From Bio Fuels to Free Trade

In the fight for geopolitical influence, energy politics looms large: that’s why the issue of bio fuels was at the top of Rice’s agenda during her Brazilian trip. In recent years, Brazil has become an energy giant by producing ethanol, a fuel made from sugar cane, which is even more environmentally destructive than oil in certain respects. It’s all part of Lula’s bid to rival Chávez, who has used oil for diplomatic and political advantage in the region.

In Brasilia, Rice discussed progress on an initiative launched by Bush last year to develop ethanol industries. At a press conference, she surprised the audience by seemingly becoming a born again environmentalist. Putting bio fuels on the map, she remarked, was "a way to deal with the terrible problems that we face in energy supply and climate change."

Brazil would like to become a more important political player on the world stage, and Rice was careful to bring up the issue of United Nations Security Council reform. The South American giant has long hoped to obtain a permanent seat, and the Secretary of State offered the carrot of possible U.S. backing for the move.

In Chile, Rice sought to revive a long-standing, but largely dormant, strategic partnership between Chile and the U.S. state of California. State Department officials argue that both have complimentary economies; spokesman Sean McCormack said that a centerpiece of Rice’s visit was a proposed educational exchange program. For Rice it was important to visit Chile, a country with which the United States has a free trade agreement: the Bush White House hopes the accord will serve as a model for other free trade initiatives in the region, including a pending deal with Colombia.

Snubbing Argentina by Refusing To Set Foot in the Country

What is truly startling to consider is that Rice altogether skipped Argentina during her tour. That’s a monumental diplomatic snub of a major country within the region. What’s it all about?

Relations between the United States and Argentina have been plummeting ever since Bush’s first term. Argentina still blames the American-controlled International Monetary Fund for its financial collapse in late 2001 (Argentina was forced to default on billions of dollars in debt to the IMF).

In 2003 incoming President Néstor Kirchner played on anti-American sentiment as a means of consolidating leftist constituencies, while simultaneously becoming a key Chávez ally. When I was in Buenos Aires researching my book, I was truly amazed at the extent of the growing Venezuelan-Argentine alliance. The two nations now barter and trade everything from cattle, to oil, to agricultural products and ships.

In 2005, things got worse when, right in front of Bush, Kirchner criticized the neo-liberal policies of the 1990s that the United States sponsored. Kirchner delivered his riposte at a meeting of Latin American leaders in Mar del Plata. The Argentine president did little to stop anti-American protests, leading Bush to leave the summit feeling totally humiliated. In an effort to avoid further embarrassment, Bush avoided Argentina altogether during his South America tour last year, preferring instead to pay his respects to Brazil and Uruguay.

The White House hoped that things might turn around with last year’s election of Cristina Fernández de Kirchner, the former president’s wife. But then relations took a further nose dive when American prosecutors in Miami named four Venezuelans and one Uruguayan in connection with a plot to cover up $800,000 found in a suitcase at a Buenos Aires airport allegedly meant as a secret campaign contribution from Venezuela’s government to Kirchner. The new Argentine president lashed out at the U.S., calling the investigation "garbage operations." Kirchner argued that the investigation was politically motivated and designed to drive a wedge between Argentina and Venezuela.

In retaliation, Kirchner restricted the diplomatic access of the American ambassador in Argentina, Anthony Wayne. Rubbing Bush’s face in the mud yet further, Kirchner has cultivated even greater ties to Chávez: the Argentine leader has continued to sell more consumer products to Venezuela as well as some $4 billion in Argentine bonds to help refinance the country’s debt. What’s more, energy-strapped Argentina will be the proud recipient of more than 10 million barrels of Venezuelan fuel oil and diesel per year.

What’s behind Argentina’s geopolitical maneuvers and what do the Kirchners want from Venezuela? Argentina seems to be playing a rather Byzantine game in an effort to offset Brazil’s big footprint in the Southern Cone. The Brazilians have always seen Mercosur and the Southern Cone as their backyard which offends Argentina’s sense of national pride. When Néstor Kirchner and now Cristina further ties to Venezuela, it’s a way of poking the eye of their northern neighbor.

To an extent, the growing rapprochement is also based on shared ideological affinity. Indeed, Néstor Kirchner once stressed that Mercosur needed to transcend its mere emphasis on economic growth. "We are not interested only in economic integration," he remarked. "We are not interested in a region of the world where integration is full of poverty, exclusion and unemployment."

Chávez to Brazilian Senate: "You’re Parrots"

For Chávez, the advantages of Argentine friendship are eminently clear. By securing important support from his ally to the south, Chávez makes it easier for Venezuela to join Mercosur and hopefully overcome Brazilian skittishness. That support has become more and more critical as Venezuela’s bid to join Mercosur has been held up and stalled. Though Argentina and Uruguay have ratified Venezuela’s bid, Paraguay and Brazil have still not agreed.

In Brazil, the biggest thorn in Chávez’s side has been the Senate, which was outraged by Venezuela’s refusal to renew Radio Caracas Televisión’s broadcast license; the station was a hotbed of opposition sentiment. Characteristically, Chávez flew off the handle and accused the Brazilian Senate of being subservient to the United States. In a move which hardly ingratiated himself amongst the Brazilian elite, Chávez said that the Senators were "puppets of the (U.S.) empire" and "oligarchs" more interested "in their pockets than the people." Memorably, the Venezuelan leader said that the Senate was a "parrot that just mimics Washington." Meanwhile, a Venezuelan negotiator remarked that the United States did not want "the strong bloc of the present Mercosur plus Venezuela leading the way to South American unity."

Chávez’s outburst led the leader of the Brazilian Social Democracy Party in the Senate, Arthur Virgílio, to declare that his colleagues would try to prevent Venezuela’s entry into Mercosur. Both the Social Democracy Party and the Democrat Party declared that Venezuela could not be admitted to Mercosur because it was "a country that cannot respect disagreement in a civil fashion." President Lula himself told Venezuela to mind its own business. In anger, Chávez issued an ultimatum, saying that Venezuela would withdraw its application to join Mercosur unless its bid was approved within three months. "We won’t wait any longer than that. The Brazilian and Paraguayan Congresses have no reason not to approve our entry: no political, legal, economic or moral reasons," Chávez said. Incensed, Brazilian government officials retorted that they would not accept deadlines from anyone.

Contours of Further Integration Unclear

Despite such incendiary tit-for-tats, some experts believe that integration will eventually occur, even though it may take 30 or 40 years to complete the process. While in São Paulo researching my book I caught up with Valter Pomar, Secretary of International Relations with Brazil’s Workers’ Party. Regional integration, he said, would have a significant geopolitical impact because it "would take place within the context of a rising left movement. That is important, because the European Union was pushed for and created under conservative governments."

Perhaps, but what will be the precise contours of economic and political integration? For the time being, the future is still plenty murky. Even if Venezuela becomes a member of Mercosur, the trade bloc faces daunting economic and political pressures which are far too complicated and arcane to even enumerate here. With Mercosur, and implicitly the South American Community of Nations future in some doubt, Chávez has turned his attention elsewhere.

By far the most enlightened and socially progressive initiative guiding South American integration today, Venezuela’s ALBA is designed to serve as a counterweight to free trade blocs. In particular, growing integration between Venezuela, Cuba, and Bolivia has led to important developments in health care which have benefited millions. On the other hand, ALBA has had little effect on the overall volume of trade between member nations. It’s difficult to see how particular South American nations, for example Brazil or Chile, would ever accept ALBA as a viable economic model. Meanwhile, Chávez’s plans to transform ALBA into some kind of a military alliance have foundered and gone nowhere as I have previously explained (see "`We Will Respond Jointly,’ Hugo Chávez’s Anti-Imperialist Army," February 16/17, 2008).

Such lack of political clarity has given the White House a slight opening. Though the Bush administration is reviled throughout the region and Washington cannot hope to turn back the rising pink tide of progressive regimes, Rice believes she can mitigate Venezuelan influence by cutting bilateral energy and trade deals with individual South American countries. As long as Brazil and Venezuela play out their big power rivalry, smaller countries may choose to either wait on the sidelines or secure advantages from either Lula or Chávez based on their particular needs at any given time.

Despite his constant rhetorical outbursts directed at the likes of parrots within the Brazilian Senate, Chávez has expressed regret at the lack of overall diplomatic progress. If they are ever to achieve meaningful integration, the big powers of Venezuela, Argentina, and Brazil must find a way to resolve their differences. Up to now, all three have been engaged in a precarious geopolitical dance, an irony not lost on Chávez himself. Recently the Venezuelan leader remarked, "Neither Venezuela alone, nor Brazil alone, nor Argentina alone can become a world power. We can only achieve that together."