Nikolas Kozloff

To read my latest article on Brazil's emerging drone surveillance program, click here.

Unfortunately, there is a pay wall so one cannot read the entire piece though you get a clear gist from the introduction. The article deals with the extreme diplomatic and political sensitivities associated with President Rousseff's drone program. Brazil is an emerging world power, and must tread lightly in neighboring countries like Paraguay and Bolivia which guard their sovereignty closely.

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My big piece about up and coming power Brazil and what's behind the story in terms of big power rivalry with the U.S. To read the article, click here.

For some time, I have been writing about revelations stemming from correspondence between the State Department in Washington and various U.S. embassies based around Latin America.  Leaked WikiLeaks documents have revealed growing U.S. concern over the left tide in the wider region and crucial strategies to derail progressive change.  More surprisingly, perhaps, the cables also hint at key fissures within the South American left --- tensions which the U.S. has been all too willing to exploit.

 

Divide and rule tactics may work to a degree with Ecuador, Venezuela or Bolivia, but the U.S. will have a tougher time managing Brazil.  Indeed, what struck me most as I poured through the documents was the marked difference in tone between U.S. embassy cables emanating from Quito, La Paz and Caracas on the one hand, and Brasilia on the other. 

 

It's clear from just a superficial read that American diplomats are much more cautious and level-headed with the Brazilians than elsewhere in the Andes, where U.S. officials tend to be much more direct and confrontational.  For Washington, Brazil promises to be the chief geopolitical worry in the decades to come, not Venezuela.

 

An exporting dynamo and powerhouse with a growing middle class, Brazil is using its newfound economic clout to venture into world politics like never before.  Unlike the Andean region, which has been plagued by chronic volatility, Brazil's political institutions look relatively stable.  Provided that Brazil's economic fortunes continue to soar, the South American juggernaut will surely be a force to be reckoned with in future. 

 

Behind Mercosur's Façade

 

Speaking with the Americans, leading members of the Brazilian political establishment remarked that their country should serve as "the natural leader of Latin America, or at least of South America."  Leading, however, is obviously a very different concept from standing shoulder to shoulder with smaller nations, and for those who view South America as essentially marching relentlessly toward regional integration along leftist lines, WikiLeaks cables can serve as quite a corrective.  Indeed, Brazilian conservatives were reportedly very unhappy with their government's "overly acquiescent approach to Bolivia, Ecuador, and Venezuela." 

 

As one reads the cables, a more complex and nuanced picture emerges of Brazil, a country torn by many conflicting impulses and agendas.  To be sure, Brazil is a member of trading bloc Mercosur which has helped to politically align sympathetic leftist regimes in South America.  Yet, if the diplomatic cables can be believed, many influential Brazilians view Mercosur with a healthy degree of skepticism and during the era of former president Luiz Inácio "Lula" da Silva, "most parts" of the Brazilian government were opposed to the trade bloc, seeing little benefit to their country from such integration. 

 

Lula, who himself came up from the ranks of organized labor, favored Mercosur but recalcitrant elements including the Ministries of Finance and Development saw matters differently.  Chafing under Mercosur's yoke, these technocrats complained that Brazil provided too much money toward the trade bloc's infrastructure fund, while other countries donated much less.  In particular, the influential industrial lobby complained that Mercosur was "selling out" commercial interests for the mere sake of preserving the trade bloc's unity.  Like the U.S., then, where Republicans routinely complain about multilateralism, the United Nations and doling out foreign aid to needy countries, Brazilian officials too "complained that underdeveloped areas in Brazil's northeast will get short shrift compared to needy areas" elsewhere in South America. 

 

As Brazil starts to accrue more power, the country may run into an image problem.  Like the U.S., which has been criticized for its sorry environmental record on climate change, Brazil too could find itself politically isolated from its more radical neighbors.  According to one WikiLeaks cable, environmental subjects within Mercosur are "very messy" with "no cooperation of note."  Reportedly, Argentine officials believed that Brazil was "focused on its position as a major player with China and India, not as part of Latin America, while Venezuela, Ecuador, Cuba, and Bolivia form a separate block with their own interests."

 

The Cocaine Connection

 

Brazilian skittishness was also evident toward its radical neighbor Bolivia.  Publicly, Lula and the Brazilian left proclaimed their solidarity with Chávez protégé Evo Morales, a radical indigenous coca grower.  But cables reveal Brazilian concern over political stability and the drug trade.  As early as 2004, prior to Morales' election as president, the Brazilians viewed instability in Bolivia with "grave concern," including the "disturbing convergence of an energized indigenous movement with the drug problem."

 

In some ways, then, the Brazilian relationship to Bolivia echoes U.S. ties to Mexico, a country which has also been convulsed by the drug trade.  For years, high level officials at Lula's GSI or Institutional Security Cabinet had viewed Brazil as essentially a corridor country for outbound narcotics to other nations, but "the brutal reality of violent, drug-driven crime in Brazil's cities has shattered that outlook…and huge quantities of cocaine and other drugs appear in large and small Brazilian communities throughout the country."    

 

The GSI, as well as the police were concerned "about the potential for increased cocaine flows into Brazil from Bolivia in the event of a Morales victory."  "We are clearly the target," remarked one GSI official, "for the low-grade coca based narcotics produced in Bolivia, which are flooding Brazilian cities, with devastating social consequences."  Feeling increasingly frustrated, the Brazilians had sought to convey their concerns to La Paz, via "indirect channels" and even through policy suggestions.  When Brasilia suggested that its Andean neighbor should substitute alternative crops for coca leaf, however, Bolivia balked and "fell back on the traditional crop argument," thus "shutting down further discussion." 

 

Brazil's Voracious Energy Needs

 

Like Mexico, which supplies oil to the U.S., Bolivia is an energy supplier to Brazil and provides natural gas.  In 2005, the Brazilian Minister of Mines and Energy said his country was "worried" about the reliability of its natural gas supply emanating from Bolivia.  If the gas supply decreased or prices skyrocketed, the official conceded, Brazil would "face a serious problem."

 

So concerned was Brazilian intelligence that high level officials developed contingency plans.  At the GSI, analysts sought to evaluate what the likely impact of an energy shortfall might be.  In the midst of Bolivia's presidential election season, Lula hoped that any new regime would "not allow radical new government policies or general instability to damage Brazilian energy industries."  If need be, Lula would reportedly take the same tone with Bolivia that "a parent would take when firmly disciplining an errant child."

 

Brazil to Chávez: We Run Things Here

 

Publicly, Brazil has demonstrated solidarity with Hugo Chávez and his protégé in Bolivia, Evo Morales.  However, WikiLeaks cables suggest that Brazil is ambivalent about the volatile Andean region and skeptical about Venezuelan leadership.  In 2007, for example, Brazil was reportedly skittish about Chávez's moves to establish a so-called "Bank of the South" which would counteract the International Monetary Fund.  Brazil already had its own development bank known as BNDES, and would "need to be convinced" of the efficacy of further institutions.  In the effort to foster its own regional agenda, Brazil has promoted BNDES, which finances infrastructure development through the trans-Andean highway. 

 

Whatever his own interest in BNDES, Lula was reportedly willing to go along with Bank of the South as long as Brazil was given a prominent place at the table.  In a snub, however, Chávez reportedly went behind Lula's back and negotiated with Argentina, causing the Brazilians to become "absolutely livid."  Perhaps, these types of developments made Brazil even more skeptical of Chávez and determined to assert its own independent leadership in the wider region.

 

Further cables underscore this subtle geopolitical shift.  In August, 2009 Lula traveled to Bolivia's coca growing region of Chapare.  There, the Brazilian met with Morales in a stadium "amid a festive atmosphere" of 10,000 cheering coca leaf growers.  Publicly, the two praised each other but beneath the surface lurked tensions.  Speaking to U.S. officials, Brazilian diplomats said they had grown quite frustrated with Bolivia on counter-narcotics and economic policy, adding that they wanted to "provide Morales with alternatives to the radical advice he is receiving from Venezuela and Cuba." 

 

Are Brazilians the New Gringos? 

 

It would be an overstatement to claim that Bolivia is a Brazilian satellite, but some WikiLeaks documents suggest that the small Andean nation could be quietly moving away from Venezuela in the hopes of gaining a new benefactor.  As far back as 2008, Brazilian legislators claimed that Bolivia was "tired of the Bolivarian idea."  According to Brazil's Chairman of the National Defense Committee and Senate Foreign Relations, the Bolivian ambassador in Brasilia "apologized…for some disagreements between presidents Lula and Morales a couple of years ago and agreed…that the two countries need to continue their tradition of friendly relations."

 

The WikiLeaks cache ends in early 2010, so we don't know much about the further ins and outs of this diplomatic game.  What's clear though is that Brazil's footprint has only increased in its own "near abroad," leading to new political frictions.  Today, the Bolivian left and indigenous peoples are probably just as prone to attack Brazilian imperialism as Washington's dictates.  At issue once again is BNDES, an institution which is fast outstripping the World Bank.  When BNDES announced it would support road construction through remote indigenous territory in Bolivia, the effort sparked protest from local Indians who accused Evo Morales of being a foreign lackey.  

 

BNDES, which seeks to create strong Brazilian multinationals via below-market loans, could fall under greater criticism in the years ahead.  With support from BNDES, companies like oil giant Petrobras, iron flagship Vale, and steel maker Gerdau have been conducting a big push into neighboring countries.  The Brazilian wave however has been met with wariness and resistance from Paraguay to Guyana to Peru to Ecuador, where local residents have protested large boondoggle projects. 

 

Big Power Rivalry in the Southern Cone?

 

As BNDES extends its influence, and Brazil ramps up diplomatic and political ties to Peru and even Colombia, Chávez's Venezuela has become eclipsed.  Such developments have not escaped the attention of Argentina, Brazil's historic rival for dominance in the Southern Cone.  If WikiLeaks cables are any indication, Buenos Aires has become increasingly alarmed by the unpredictable nature of Brazilian foreign policy, and even fears that its South American neighbor may be tempted to back up its interests through military means.   

 

My interest was particularly piqued by one cable dated to 2009, in which Argentine nuclear non-proliferation officials complained to U.S. diplomats "about the direction of Brazilian security policy in the final years of the Lula Government."  The Argentines were concerned about "yellow lights," such as Lula's outreach to Iran and North Korea.  Moreover, Argentine officials were worried about "the pace of Brazilian military purchases," and had even pondered what Buenos Aires might do in the event that Brasilia chose to develop a nuclear weapon.

 

The Argentines were particularly looking forward to Brazil's presidential transition in 2011, because Lula's "unmatched popularity and his late-in-the-term detachment from political considerations had allowed him to become a risk-taker in foreign and defense policy."  Any successor, the Argentines hoped, "would shy away from such controversial policies in his or her first years, perhaps retrenching on the Iran relationship and becoming more cooperative on new nuclear confidence-building instruments."

 

While it's true that Brazil has become somewhat less of a "risk-taker" under Lula's successor, Dilma Rousseff, the South American giant will certainly be a huge force to be reckoned with in the years to come.  How Brazil's rise reconfigures South American politics, particularly in regard to Argentina, could be interesting to watch.  What is most importantly reinforced from the WikiLeaks documents, however, is the notion that the U.S. may now face a real competitor in the region.

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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.