Nikolas Kozloff

In an effort to appease Beijing, so-called leftist leaders in South America are backing the Chinese "Communist" Party's crackdown in Tibet, or remaining neutral. Chinese troops have brutally silenced protests calling for independence in Tibet and have reportedly killed scores of people. Nobel Peace Prize winner the Dalai Lama has condemned the repression and requested an international investigation. Communist China has occupied Tibet, a Buddhist region previously ruled by monks, since a military invasion in 1950.

 

Latin leaders' failure to challenge the Chinese over the Tibet question is a sorry spectacle. It's a slap in the face of socially progressive forces in South America as well as those on the US left which have been generally supportive of the Pink Tide sweeping across the region.

 

Chile's Bachelet Makes a Mockery of Human Rights

Let's first consider the case of Chile.

 

To be realistic, Chilean President Michele Bachelet's pro-China policy is not very surprising. Chile worships free trade and will do everything it can to further export-led growth. Bachelet signed a free trade deal with China in late 2006 in an effort to boost sales of copper, fruit, and fish oil to Asia's second-biggest economy. Since then, Bachelet has traveled to the Asian nation in an effort to enhance ties. The Chilean president boasted of figures showing a $1.4 billion increase in trade between the two nations last year.

 

"When Chile considers how to continue its development, Chile thinks big," Bachelet remarked. "And to think big means to think China."

 

When asked by the press about the Chinese crackdown in Tibet, Bachelet was tight-lipped lest she offend her trade partners. "Chile has taken a clear stance on the issue through our Chancellery [Ministry of Foreign Relations]," she remarked. "The Chinese government knows of this position, and it understands it and respects it."

 

Bachelet, whose regime boasts of its adherence to human rights and overcoming the brutal military legacy of Gen. Augusto Pinochet, has fallen under heavy criticism for its "neutral" position on human rights abuses documented in Tibet and China in the build-up to the June Olympic Games in Beijing. To her discredit, Bachelet has ignored calls by Amnesty International to take a tougher stance in denouncing such violations.

 

Bachelet's caving on human rights is all the more puzzling in light of her own personal story. Bachelet's own family suffered considerable violence during the 17-year regime of former dictator Pinochet. Bachelet's father, former Air Force Gen. Alberto Bachelet, died from a torture-induced heart attack and Michele and her mother were forced into exile.

 

Chileans are starting to see through Bachelet's hollow rhetoric on human rights. During a recent pro-Tibet demonstration in front of Santiago's presidential building, Amnesty International coordinator Pablo Galaz remarked, "Chile maintains a very weak and hypocritical position today" regarding human rights in China. One onlooker remarked, "It's embarrassing... At the bottom of if it's about how much does Tibet weigh in copper? That's how I'd sum up the government's attitude." Copper one of Chile's main exports to the Asian market.

 

Within the government too, some voices of dissent have questioned official policy. Jaime Navarro, a socialist and head of the Senate's Human Rights Commission, insisted that the international community take action "to avoid a new genocide in Tibet, especially considering that China is a permanent member of the United Nations' Security Council. We ought to raise our voices against this repression against the Tibetan people. First there are human rights and—much later—our economic and commercial interests."

 

Unconvincingly however, Chilean officials have justified Bachelet's position by claiming that business and human rights are two distinct areas and should be treated as such when making political decisions. The government used the same argument previously when Foreign Minister Alejandro Foxley presented the free trade agreement with China to Congress.

 

Now hoping to outfox Foxley, Chile's lower-house Chamber of Deputies recently approved a resolution calling upon the Minister to "condemn the violence and repression in Tibet and request that the Government of China open direct conversations with the Dalai Lama to find a peaceful solution" to the conflict. The resolution passed 35-8, with one abstention.

 

In a further slap in the face of progressive forces, however, the Bachelet government opposed the resolution. In seeking to blunt calls from the Chamber of Deputies, Bachelet has resorted to some rather remarkable moral acrobatics and jujitsu. To take up the cause of the Tibetan people, argued presidential spokesman José Antonio Viera Gallo, could invite similar criticisms of Chile. Remarking upon an outstanding conflict with indigenous peoples in Chile's south, he declared: "I don't know if we would like it if a foreign parliament opined on situations like that of the Mapuche."

 

The Mapuche have long suffered abuses at the hands of the government and accuse the security forces of killing indigenous activists and occupying Indian lands. In an ironic twist on the Tibet imbroglio, the pro-indigenous Web site MapuchExpress remarked, "The government of Bachelet and Viera Gallo know that they have their own Mapuche Tibet."

On China, Chávez is Little Better Than Chile

Unfortunately, Venezuela's President Chávez has little credibility when it comes to human rights since he, like Chile, has embraced Beijing. Venezuela has a lot of economic interests at stake when it comes to China. Chávez has signed a number of agreements with the Asian nation to deepen technological and energy cooperation.

 

In particular, Venezuela seeks to increase the supply of oil to China. Venezuela's strategy is to diversify its markets so as not to depend so much on supplying oil to the United States, its political adversary. Chávez's ultimate goal is to create a more "multi-polar" world in which the United States cannot act unilaterally.

 

Chávez's efforts to counteract U.S. imperial designs are understandable, but China is hardly a model country to lead a multi-polar world. Currently, China's human rights abuses are staggering. For example, the authorities have detained hundreds of thousands of people, including political activists, for "reeducation" programs, or (more to the point) forced labor camps.

 

Given Chávez's championing of labor protections in Venezuela, his support for China is particularly jarring. According to Human Rights Watch, Chinese workers are forbidden to form independent trade unions. Because Chinese workers have few realistic forms of redress against their employers, they have been forced to take to the streets and to the courts in an effort to press claims about forced and uncompensated overtime, employer violations of minimum wage rules, unpaid pensions and wages, and dangerous and unhealthy working environments.

 

"Workers who seek redress through strike action are often subject to attacks by plainclothes thugs who appear to operate at the behest of employers," writes Human Rights Watch in a recent report. In one recent incident, a group of 200 thugs armed with spades, axes, and steel pipes attacked a group of workers in Guangdong who were protesting over not having been paid for four months; they beat one worker to death.

 

Chávez's World Travels: From Saddam to Ahmadinejad

It's not the first time that the Venezuelan leader has exercised a certain lack of moral clarity in his foreign relations. As long as countries pass the crucial litmus test of opposing the US, Chávez will eagerly court their support. The Venezuelan president, for example, went to Iraq in August of 2000 to meet with Saddam Hussein. He was the first head of state to meet with the Iraqi leader since the Persian Gulf War of 1991.

 

"We are very happy to be in Baghdad, to smell the scent of history and to walk on the bank of the Tigris River," Chávez told reporters. "I extend my deep gratitude to him [Saddam] for the warm welcome he gave us."

 

At the time, the Iraqi Foreign Ministry said that Chávez's visit was a slap in the face for the United States. The official Iraqi press hailed the trip and praised Chávez's courage in defying Washington. "We salute him for his principled moral stand and his insistence on going ahead with this trip despite the silly American criticism," a newspaper, Al Thawra, said.

 

In his quest to rattle the US, Chávez has courted some other rather unsavory leaders. The Venezuelan leader for example has solidified ties with Iran and calls fundamentalist President Mahmoud Ahmadinejad "one of the greatest anti-imperialist fighters." Chávez added, unbelievably, that Ahmadinejad was "one of the great fighters for true peace."

 

And Onward to Belarus...

As if that was not questionable enough, Chávez has also carried out an alliance with Belarus President Alexander Lukashenko in order to counter "hegemonic" capitalism. Human rights campaigners say that opposition voices are harassed and stifled and independent media has been all but eliminated in Belarus. Opposition activists are closely monitored by the secret police—still called the KGB.

 

"An authoritarian style of rule is characteristic of me, and I have always admitted it," Lukashenko has remarked. "You need to control the country, and the main thing is not to ruin people's lives." The Belarus president has furthermore warned that anyone joining an opposition protest would be treated as a "terrorist", adding: "We will wring their necks, as one might a duck."

 

Many former Lukashenko allies and government ministers have either fled abroad or joined the opposition. Others, such as former Deputy Prime Minister Viktar Hanchar and former Minister of Internal Affairs Yuryy Zakharanka have disappeared altogether.

 

All of this was seemingly of no concern to Chávez, since Belarus is a fierce critic of the US. In a visit to Minsk, Chávez said, bizarrely, that Belarus was "a model social state like the one we are beginning to create." "Here, I've got a new friend and together we'll form a team, a go-ahead team," Chávez said.

 

Tibet: The Last Straw

If Chávez fans had any doubts about where the firebrand politician stood on the question of international human rights, the Venezuelan leader has surely cleared up the confusion by defending China's nasty crackdown in Tibet. Ridiculing attempts to protest the Olympic Games, Chávez said that Venezuela was strongly behind Beijing and Tibet was an integral part of China.

 

True to form, Chávez remarked, "The United States is behind all that is happening as it wants to derail the Beijing Olympics." The Venezuelan leader added that the protests against the Olympic Torch were an example of the US "empire" "going against China" and trying to divide the Asian powerhouse. "America is the main force behind whatever is happening in Tibet," Chávez said, "and its motive is to create problems in the Olympic games."

 

One wonders whether the Venezuelan government will soon engage in the same kind of moral jujitsu practiced by the likes of Bachelet. Chávez could claim, like Chile, that economic relations should have no bearing on human rights. If that fails to convince supporters, the Chávez government might claim, in an echo of Chile's PR strategy, that Yanomami Indians of the Venezuelan Amazon have historically faced discrimination in society and that therefore, it would be inappropriate for Venezuela to take the moral high ground and criticize China for its sorry human rights record.

 

It's the last straw.

 

It's time for the incessant hero worship of Hugo Chávez, so common amongst the international left, to end. Venezuelans' right to self determination ought to be defended, and US imperial machinations against Venezuela soundly denounced. The Bolivarian Revolution, which has advanced the cause of the poor and disenfranchised, should be fortified and protected. International admirers of the Bolivarian Revolution, however, should also strongly condemn recent remarks by Chávez, who has lost any semblance of a moral compass.

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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.

Recently, I sat down with Gonzalo Sebastián Paz, a lecturer in international affairs at George Washington University in Washington, D.C. Sebastian Paz is an expert on South America's ties to Asia. He has previously taught graduate courses on the Southern Cone and Latin America at Argentina's La Plata National University and the University of Salvador. At those institutions, he also taught courses on international economics and politics with a heavy emphasis on Asia. He is one of the few Argentines to have lived and worked in South Korea, and was the recipient of a Korea Foundation Fellowship.

NK: Recently we've seen the rise of left leaning regimes throughout South America, many of which have espoused an anti-U.S. discourse. Simultaneously, many South American countries are cultivating greater economic ties to China. What are China's fundamental economic objectives in South America?

SP: I think China's most important focus is economic. In order to keep growing at high rates, 9 or 10% over the past twenty years, China needs a healthy supply of raw resources. I'm not saying there is nothing political, but this is a secondary consideration. The most important goal is to have access to iron, oil, copper, and gas.

NK: What kinds of infrastructure projects has China funded, and what is behind the policy?

SP: Usually China is willing to help with infrastructure projects that are related to sources of raw materials. That is: ports or other facilities or railroads connecting to mines, allowing shipment of the raw materials to China.

China's Growing Energy Profile

NK: What about energy projects: how significant is the Chinese presence here?

SP: The Chinese presence is still not very significant. But, energy is one of China's top priorities and it expects to invest in this area in future. Fundamentally, China does not trust international financial markets, which are dominated by American companies. The biggest oil companies in China are owned by the state. China wants ownership over the sources of energy all over the world, and they want easy access to this energy. So, China has a very different strategy: it seeks the actual ownership of mines and oil fields.

NK: To what extent will China become a player in the Bolivian energy sector?

SP: I think it's an option on the table. I am sure the Bolivians would prefer to have the Venezuelans engaged, or to a lesser extent the Brazilians or Argentines. But, you need to remember that President Evo Morales visited China before taking office. Even before conducting a state visit to Buenos Aires, he traveled to Beijing.

China Not Willing to "Cross the Line"

NK: What about transportation networks, how are they being refashioned to redirect trade towards Asia?

SP: This is a very old idea. The first country to think up this idea was Japan, in the 1950s and 60s. Japan developed a very important relationship with Brazil and Peru, countries that received a lot of Japanese emigration. In the 1960s and 70s the Japanese sought access to raw materials and infrastructure projects were designed around this central objective.

Currently, China is pursuing a very similar strategy but there is a difference between the Japanese and the Chinese. The Japanese were very concerned about the United States. The Chinese are more flexible in this regard, but they will never cross the line. They are operating in the backyard of the United States; they know this and will never risk endangering the relationship. But, they are willing to take more risks than the Japanese.

China is very interested in the expansion of the Panama Canal; the Chinese have said that they would be interested in the creation of an Inter-Oceanic canal in Nicaragua, and in Argentina they are investing heavily in a railway project. The bottom line is that China is not basing its policy around the needs of countries, but wants to extract raw resources for its own benefit.

NK: How large is the Japanese economic presence in South America in comparison to China?

SP: The Japanese presence is older than the Chinese. But recently Japan has been pursuing a new industrialization strategy, relocating many declining industries to other parts of Asia. Fundamentally, Latin America has not been a priority for Japan over the past 25 years. So, China is the new presence in Latin America and its investment in the region is lesser than the United States, Europe or even Japan. However Chinese investment is growing fast.

NK: To what extent has China eclipsed the U.S. in terms of trade, financial investment, and financial assistance?

SP: Fundamentally, China is not buying products from Latin America in order to achieve political influence, or to use this as leverage to pressure countries, or to try to split Latin America off from the United States. The Chinese are buying soy because they need to feed the people. So, the Chinese policy is economically driven though it may have political consequences.

In 2004, the Argentine government asked China for some economic support so as to pay off its debt to the International Monetary Fund. The Chinese refused. I think this is a very important case that proves my point that China doesn't want to make waves in the Americans' back yard. They know they cannot cross certain lines. They do not want to subvert the institutions that are regulating U.S. hegemony in Latin America. But, they are willing to push farther than the Japanese did in the past.

NK: If you could look into your crystal ball, ten years from now how would you foresee the ongoing relationship between China and Latin America?

SP: China is currently growing because it is connected to the U.S. and Europe. To some extent therefore, the relationship between China and Latin America is conditional on relations between China, the United States, and Europe. So, I don't want to be too linear here, but there is an assumption that China will continue to grow as it will have access to American and European markets. If this happens, China would continue to import raw materials from Latin America. But this is merely an assumption and nothing more. If something should happen to the United States-China relationship, we might have an entirely different situation.

China's Military Gambit

NK: What about defense projects? How significant is the Chinese contribution?

SP: Most Latin American countries supported the Rome Treaty for the International Criminal Court. The United States completely rejected this new organization. The U.S. has asked many countries to grant concessions on this treaty [note: when Latin American countries signed on to the treaty, the United States cut military training to some nations as punishment].

This created an opportunity for China to assert itself. China has provided weapons sales to Latin America. There have been hundreds of Chinese military visits to Latin America, and vice-versa. These exchanges have been very important. Meanwhile, Venezuela, Uruguay and Argentina have refused to send any more military personnel to the so-called School of the Americas [a U.S. training facility located in Fort Benning, Georgia, which was recently renamed WHISC or Western Hemisphere Institute for Security Cooperation].

The Chinese have also sent some police officers to Haiti. This is the first ever Chinese military presence in the Western Hemisphere. In that Caribbean country, we have a United Nations peace keeping operation. The United States hasn't been too concerned about this, because the Haiti operation is essentially being run by Mercosur [a South American trade bloc] countries. So, even as the U.S. is getting bogged down in the Middle East, Mercosur is helping the United States by securing Haiti.

Meanwhile, the Chinese have expressed interest in Bejucal and Lourdes, which are former Soviet bases in Cuba. Chinese President Hu Jin Tao visited one of them. There are some reports that China plans to set up a listening station in Cuba so as to spy on U.S. communications. However, I personally am not sure if this is true as the source of the information is the Cuban exiles, who are interested in promoting this view for their own political ends.

NK: To what extent is the growing China role a concern at the State and Defense Departments here in Washington, as well as the White House?

SP: There have been several hearings in Congress, in which representatives of the Defense Department have spoken. The U.S. Southern Command in Miami has been very concerned about this growing Chinese presence. Within the Republican Party, there has also been rising concern about the issue. In testimony, officers at the U.S. Southern Command have remarked that conducting military sanctions against Latin American countries that supported the Treaty of Rome has proven to be a counterproductive strategy. The U.S. policy has allowed China an opportunity to expand its military aid and diplomacy. Because of South Com's testimony, three months ago the U.S. government decided to abandon its sanction policy against many Latin American countries.

China, Latin America, and Human Rights

NK: Do you find it ironic that, even as South American governments proclaim their adherence to social and economic justice, they seek to pursue an alliance with China which has a horrible human rights record?

SP: This is a complex issue. As you probably know, the first country to pursue an Asian strategy was Chile. Under Pinochet, Chile was criticized for its human rights record and the government sought to break out of its diplomatic isolation by pursuing ties to Asian countries that never made a big issue out of human rights.

Pinochet sought diplomatic relations with South Korea, Taiwan, China, and the Philippines under Ferdinand Marcos. Similarly, immediately following the Tiananmen Square massacre, the Chinese sought to break out of their diplomatic encirclement by approaching Latin America. In fact, the first trip by Chinese dignitaries after the massacre was to Latin America.

But most countries, not to say all countries of the world, are far from consistent on human rights and China and they make many exceptions. Within the European Union, even France and Germany have recently debated selling weapons to China.

South American Views of China

NK: If China does become a major political and economic player in South America, what do you think the response from civil society and social movements will be?

SP: One needs to look at this on a country by country basis. In some countries China is viewed as a friend whereas in others it is viewed as a threat, economically speaking. Mexico fears China, and the Mexican government has the numbers to prove it. The Mexicans have lost thousands of jobs because of Chinese exports. In the Southern Cone however, China is perceived as a partner. You cannot understand the miraculous Argentine recovery after the financial crisis of December 2001 without considering the boom in soy exports to China.

Industrial workers in Argentina, Brazil and Mexico are quite worried about this new relationship with China because they fear they may lose their jobs. Other sectors may be happy because they see China as an alternative to U.S. imperialism and hegemony. I think right now there is little ideological clarity amongst social movements in South America. There is a big soup of indigenous movements, ecological groups, socialist/former Marxist movements, and not all of them have a consistent set of values.

NK: Has China sought to portray itself differently from the U.S. so as to dispel Latin Americans' concerns about imperialism and outside interference?

SP: China used to be the champion of Third World-ism. Now it's trying to become the champion of a multi polar world, which is something different. I don't think that China is perceived as a force which can challenge the United States. I think many people in Latin America overestimate China's capacity to change the rules of the game at an international level. China has actually been playing by the rules in many respects.

Nevertheless, U.S. policies have created an opening for China in Latin America. I'm not saying that China respects international law, but in the past few years there's been a lot of anger with the U.S. over the war in Iraq. As you remember, Mexico and Chile were members of the Security Council and they refused to authorize the use of force.

This was a very difficult decision, because these two countries were the closest friends of the U.S. in Latin America. Of course there have been some exceptions; the Salvadorans sent some forces to Iraq. But by and large, public opinion in Latin America was opposed to the U.S., which did not respect international law.

NK: What about the Amazon region, which has witnessed a lot of social unrest against development projects? What are Asian countries' plans for the area and do you think there could be social unrest in the area against China or others if development plans continue to mimic what we have seen in the past?

SP: Clearing the forest in the Amazon and exporting soy is an effort to link up to China, and there may be mining projects as well. We need to see to what extent the various governments within the Amazon region are able to control social groups. At this point I don't think any social movements in Venezuela would seriously be able to contest Chavez's power. This may not be the case in other countries such as Bolivia under Evo Morales, where the authorities are not nearly as well established.

From Tango to Tae Kwan Do

NK: In Peru during the 1990s, Alberto Fujimori, who was of Japanese descent, used his racial ancestry to propel himself to the presidency. In that case, Fujimori was able to play off people's perception that Asians were hard working. How deeply rooted is this idea?

SP: Cultural images of Asia in Latin America have been promoted through movies and books from the United States and Europe. But now, through direct experience and direct contact, Asians and Latin Americans are beginning to forge new ideas about one another which are unmediated by external cultural artifacts. This development is really something novel, and it hasn't occurred for decades or even centuries.

The first humans that lived in Latin America came from Asia, so if you want to trace the relationship you can go back pretty far. The second important event was the Manila Galleon. This was the backbone to trade in the Pacific for 250 years, and it was really very important. The third component was Asian immigration to Latin America in the 19th and 20th centuries. Economic growth and the so-called "Asian miracle" shaped Latin Americans' perceptions further and led to envy.

The image of the "Other" is different depending on the country. In Buenos Aires, if you think about Asia your reference point is the Japanese, who have dry cleaning businesses or work in the flower industry. In Peru, the reference point is the chifa [Chinese restaurant].

Cultural awareness of Asia has grown with the rise of Asian food, which is now available throughout Latin America. Martial arts are also popular, including Tae Kwon Do, Karate, and Tai Chi. I was one of the first Latin American experts to live in Asia. I remember there was an excellent professor of Tae Kwon Do from Korea who went to Buenos Aires to teach. Five years later he returned to Seoul and became a tango professor. This was amazing.

Meeting up at Macondo

SP: For Asian leaders, Latin America was a remote area, unstable, and incapable of fostering economic development. However, this view took a big blow with the economic crisis in 1997. The crisis started in Thailand and then spread throughout the region, and as a result Asians were humbled.

APEC (Asia Pacific Economic Cooperation) is the most important and symbolic meeting within the Asia Pacific region. A couple of times APEC meetings have been held in Latin America, which is something pretty new and impossible to imagine say, twenty or thirty years ago.

The 2004 APEC meeting in Chile, in particular, was really important in putting Latin America on the map of the Pacific Rim. It was really very interesting to see Asian leaders asking the Mexicans and Chileans how to deal with the IMF following the 1997 meltdown. So, this changed the idea of the "Other" for Asian elites. Still, very few people in Asia know anything about Latin America.

NK: You spent some time living and working in Asia, what was your experience?

SP: I remember when I was living in Seoul in 1996 there were very few Latin Americans. Most people worked in the various embassies. We used to meet in a small café called Macondo. They used to play salsa music in Macondo, which at that time was totally unknown in South Korea and people didn't know how to dance to it. When I returned in 1999 there were thousands, if not millions of young people dancing salsa much better than me—we Argentines are usually not very good salsa dancers.

Chile and the "Platform" to Asia

NK: Currently there are a lot of different proposals concerning hemispheric integration in South America. There is Mercosur, which Venezuela recently joined. However, Venezuelan President Chavez has even been critical of Mercosur, and has called on countries to further more progressive trading arrangements such as the Bolivarian Alternative for the Americas (known by its Spanish acronym ALBA). Bolivia under Morales seems to favor Chavez's views on ALBA.

Chile, on the other hand, has an entirely different view about integration. The country hopes to act as a "platform" to Asia and a means by which South America could gain access to the Asian market.

Which of these visions do you think will predominate?

SP: In the past, Latin America was not considered to be part of the Pacific Rim, and did not share in the institutions, markets, or organizations. Chile and Mexico were one of the first Latin American countries to gain access to markets and institutions within the area. At first, Chile saw the Pacific Rim as its own area, and did not see itself as a platform for other South American countries. Chileans were not really willing to allow Argentine wheat or corn to be exported through Chilean ports. They weren't interested in this; they wanted the markets for themselves.

But other economic sectors, who did not share the interests of the agricultural sector in the central valley of Chile, began to imagine a different role for their country: as a gateway for Asians to do business in Latin America, and for Latin America to do business in Asia. But this was not initially the attitude during the time of Pinochet and slightly after. So, Chile has changed its attitude in terms of its role as a bridge between the two regions.

Another development was that Asia realized that Chile was a very small market, and a nation of only 15 million people. Asia was interested in the big countries in South America, Brazil and Argentina for example, which did not have any coastline on the Pacific. At the end of the day, China managed to set up direct links with Brazil and Argentina and because of this all the institutional architecture that had been built up within the Pacific Rim during the 1980s and 90s became less relevant.

On the other hand, the end of the Cold War made it possible for a greater convergence of political values, and later the Washington Consensus was pushed as a remedy for much of the region's ills. Unfortunately, by the end of the 1990s this recipe was perceived as a failure in Latin America and this created a crisis. This resulted in the emergence of left wing populist leaders such as Chavez, Morales, and others.

But, the Chileans have created a model that has been successful to an extent. The first free trade agreement ever signed between a Latin American and an Asian country was Chile and South Korea. So, the Chileans are pursuing a strategy which has nothing to do with Chavez's ideas.

Meanwhile the Mexican economy is totally integrated into the U.S., to the extent that some people joke that Mexico no longer belongs to Latin America. Brazil and Argentina have tried to carve out an economically and politically autonomous region of their own in the Southern Cone.

This idea of autonomy has become more complicated now from a political standpoint with the inclusion of Venezuela within Mercosur. There is an expectation that Venezuela could help to supply the energy needs of Mercosur, but we will have to see how this works out.

Gonzalo Sebastián Paz is a lecturer in international affairs at George Washington University in Washington, D.C., and is an expert on South America's ties to Asia. He has previously taught graduate courses on the Southern Cone and Latin America at Argentina's La Plata National University and the University of Salvador.

Over the past few weeks there have been some signs that Venezuela's president Hugo Chavez has backed down from his earlier confrontational posture towards Washington. According to the Venezuelan foreign minister, Chavez has no intention of reducing oil exports to the United States. The economic importance of oil in terms of Venezuelan-U.S. relations cannot be overstated. Venezuela is the fifth largest oil exporter in the world and the fourth largest supplier of oil to the United States after Canada, Mexico, and Saudi Arabia. Last year, Venezuela's state owned oil company, Petroleos de Venezuela (Pdvsa) accounted for 11.8% (1.52-million barrels a day) of U.S. imports.

 

Tensions have been bristling between the two nations ever since April 2002 when Chavez, the democratically elected president, was briefly removed from power in a coup. Chavez, a firebrand politician and former paratrooper, accused (not without merit) Washington of sponsoring the attempted overthrow as well as supporting a devastating oil lockout in 2002-3. Never one to soften his language, Chavez bluntly referred to U.S. president George Bush with an expletive and the United States as "an imperialist power." What is more, according to Chavez, Bush had plans to see him assassinated. In a further barb, Chavez declared that if he were killed the United States could "forget Venezuelan oil."

 

For a time it seemed that their bilateral relations could sink no lower. Though there are many reasons for the deterioration in relations (including Chavez's ties with Washington's anathema, Cuban President Fidel Castro, the Venezuelan president's criticism of U.S.-led efforts for a free trade zone in the Americas and Chavez's opposition to the war in Iraq) oil was surely of paramount importance. When he took office in 1998 Chavez launched a reform of Venezuela's oil policy, seeking to reestablish a predominant role for the presidency in the design and implementation of an oil strategy through the Ministry of Energy and Mining. This move challenged vested interests in Pdvsa, a powerful, almost autonomous, company with total assets estimated at $100 billion. The company's executives, who earned between $100,000 and $4,000,000 a year, had grown accustomed to taking the lead in defining the oil policy of their virtual fiefdom. While Chavez did not deny the role of the private sector in the oil industry, his reform process aimed at curbing the trend toward the privatization of Pdvsa. On the international front, Chavez worked to achieve a higher price for oil through OPEC, the oil cartel of which Venezuela was a founding member. He also worked to increase the profile and power of OPEC world wide. Chavez additionally sought to guarantee that the state collected a greater share of oil revenues. He imposed royalties on oil output which was applied on foreign producers operating in the country, chief among them U.S. giant Exxon-Mobil. Last year, Venezuela raised royalty taxes on heavy crude projects in the Orinoco oil belt from 1% to 16.6%. Irate Exxon-Mobil representatives say that the company is paying the new rate "under protest."

 

PDVSA Serves the Nation

Keeping Pdvsa under firm government control was politically important. In recent years, Chavez has sought to utilize oil revenue to carry out an ambitious social agenda. In a recent study it was estimated that over 60 percent of Venezuela's 24-million people live in poverty and make less than $2 a day. Accordingly, as a result of record high oil revenues, Chavez has been able to carry out an impressive array of programs promoting literacy, job training, land reform, subsidized food, and small loans. Perhaps most ambitiously, Chavez has used the nation's oil wealth to extend health care and import Cuban doctors.

 

As Chavez began to export cheap subsidized oil to Cuba, Fidel Castro sent over 13,000 doctors to Venezuela. Today, the doctors are spread throughout the Andean nation and have access to over half the population, a first in Venezuela's history. Chavez's move to bring in Cuban doctors was one of many factors regarding his rule that provoked Washington. In May 2004, the U.S. State Department's Commission for Assistance to a Free Cuba—the administration's propaganda office on Cuban issues—issued a report stating that Venezuelan oil shipments to Cuba needed to be halted if political change on the island was to occur – which was tantamount to calling for a de facto embargo against the Castro regime.

Are there any signs that the confrontation between the two antagonist nations will soon abate? Recently, Chavez has publicly stated that he wanted to mend relations with the United States. "We want to continue to send 1.5 million barrels of oil to the United States on a daily basis and to continue doing business," he said. What is more, Chavez added that although "we have said things, sometimes, very harsh things, it has been in response to aggressions." Chavez explained that, "what I have said is that if it occurs to the United States, or to someone there, to invade us, that they can forget about Venezuelan oil." He clarified that this is just "a theory that we of course do not want, and I hope that the United States does not want it either."

 

Chavez turns on the Charm

Chavez's recent conciliatory statements have brought little slack from Washington as the Bush administration's harsh anti-Chavez rhetoric continues to boil over whether its splenetic utterances coming from Secretary of State Condoleezza Rice, Defense Secretary Donald Rumsfeld or routinely from the White House and State Department press offices. On one level, Venezuelan imbroglio seems to be heading towards deeper water. Chavez has repeatedly stated his determination to reduce his country's dependency on oil sales to the United States. Accordingly, he has begun exploring the sale of parts of Citgo, Pdvsa's marketing and refining affiliate in the U.S. Citgo owns eight refineries and almost 14,000 gas stations located primarily in the eastern part of the country. Chavez has complained that Citgo, whose refineries are especially adapted to process heavy crude oil from Venezuela, sells oil to the U.S at a discount of two dollars a barrel. "We are subsidizing the U.S. budget," griped Chavez, who says Citgo contracts were signed before he assumed office in 1999. According to Citgo's 2004 financial reports, the company paid $400 million in dividends to Venezuela but paid almost as much in U.S. taxes. Energy Minister Rafael Ramírez, who also serves as Pdvsa's president, has announced a freeze on plans to expand Citgo. Meanwhile, though Citgo CEO Félix Rodríguez notes that "the government does not plan to sell off the company's assets," specialists suggest that Chavez may very well consider such a move after evaluating the profitability of each refinery. Alberto Quirós, a former executive at Royal/Dutch Shell in Venezuela, commented that selling the refineries would not be a bad idea right now. Chavez, he says, could get a decent price for the refineries because oil prices and demand are high. Were such facilities to be sold, however, the process would probably take at least a few years to be finalized.

 

Caracas Looks to Asia

In order to diversify the Venezuelan market for oil, Chavez made plans to begin shipping Venezuelan crude to China, the world's second-largest energy consumer after the United States. "Reaching China is a strategic question," says Ramirez. "It would be a mistake not to have a presence there. They are switching over from coal to more efficient fuels." In Beijing last December, Chavez remarked "We have reached agreements with China to begin to exploit 15 mature oilfields in eastern Venezuela that have more than one billion barrels in reserves, and a large part of that oil will come to China." What is more, Chavez stated that Venezuela wanted to become a "secure, long-term" petroleum supplier to India and this month the two countries concluded an energy cooperation agreement. Transporting oil to Asia, however, could prove logistically difficult. Pdvsa has expressed interest in moving oil across Panama to the Pacific Ocean via pipeline. The company is also exploring the idea of building such a facility across Venezuela's northern border with Colombia, extending to that country's Pacific coast. Shipping oil to Asia carries other logistical and infrastructural problems. China presently has an insufficient deep conversion refining capacity and transporting petroleum to the Asian giant would be costly due to the long distances involved. Moreover, the Panama pipeline eyed by Chavez already transports 100,000 barrels a day of Ecuadorian crude from the Pacific to the Atlantic. According to analysts, there is no way that the pipeline can be converted into being able to simultaneously ship Venezuelan oil to China in the opposite direction. Finally, China may be only interested in Venezuela in the short run, as Beijing is busy exploring for oil and gas closer to its shores in the South China Sea.

 

Despite these practical problems, Chavez's rhetoric suggests the Venezuelan leader earnestly seeks to challenge U.S. regional hegemony by putting together a formidable coalition of like-minded nations. In a recent interview on al-Jazeera, Chavez cited Venezuela's energy alliance with Cuba as an example of how "we use oil in our war against neoliberalism." What is more, when he was recently in Buenos Aires, Chavez launched the first gas station run by a joint venture between Pdvsa and the Argentine company Enarsa. The venture involves production, refining and distribution of petroleum by-products and natural gas. Chavez has also concluded oil agreements with Brazil, Uruguay and Paraguay. His desire to create a South American energy company called Petrosur, which would integrate regional oil and gas industries, is already bearing fruit.

 

Any interruption in Venezuelan oil exports to the U.S. would bring significant disruption to both countries and Washington is beginning to plan for such a contingency. Oil accounts for half of Caracas' revenue and 75 percent of its exports. Currently the U.S. purchases 60 percent of Venezuela's oil exports and according to analysts, finding new markets could prove daunting to Venezuelan authorities. The fact is, exporting to the U.S. market is convenient due to close proximity and low transportation costs. Additionally, U.S. refineries are particularly equipped to process Venezuela's sulphur-rich crude.

 

U.S. analysts doubt that Chavez can afford to drastically cut shipments to the United States. And if Chavez cut off oil supplies, argue government officials, the United States would quickly make up for the loss by seeking other sources. But a potential cut off would represent no small economic loss to the U.S., as oil imported from elsewhere would likely be more expensive. The reality is that for the U.S., purchasing Venezuelan crude is economically advantageous because the South American nation is geographically close to U.S. ports. In Washington, politicians are now hedging their bets. In a clear sign of concern, Republican Senator Richard G. Lugar has asked the Government Accountability Office to study how a sharp decrease in Venezuelan oil imports could affect the U.S. economy. Additionally, the Senate recently called for a review of the government's plans "to make sure that all contingencies are in place to mitigate the effects of a significant shortfall of Venezuelan oil production, as this could have serious consequences for our nation's security and for the consumer at the pump."

 

Even before Chavez was first elected he was explicit in describing his views about petroleum. "Oil is a geopolitical weapon," he declared, "and these imbeciles who govern us don't realize the power they have, as an oil-producing country." The evidence suggests that Chavez is now trying his best to follow through on this rhetoric.