Nikolas Kozloff

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As if the political situation in the Middle East could become no more volatile, we now have not just WikiLeaks but another document scandal, this one pertaining to the failed Palestinian-Israeli peace talks. Dubbed the "Palestine papers," the documents represent the largest leak in the history of the Middle East conflict, comprising a whopping 1,600 confidential records.
Spanning successive White House administrations, the Palestine Papers were leaked to Al Jazeera and the Guardian of London and have already created a firestorm of controversy for the Palestinian Authority which gave away key political demands to the Israeli side. In the long-term, however, the documents could wind up shaming not just the Palestinians, Israelis and the United States but also countries as far afield as Chile.

That is because Palestinian negotiators seem to have caved when it came to standing up for their people's historic "right of return." Since Israel expelled Palestinians in 1948, refugees have been floating around various corners of the Middle East hoping to one day return to their ancestral homes. Yet, according to leaked documents, Palestinian negotiators agreed to the mere return of 10,000 people over the course of 10 years, a minuscule fraction of the overall number of refugees totaling more than 5 million.

According to reports, Palestinian president Abu Mazen remarked that it would be "illogical" to expect that Israel would accept five million refugees as this would signify "the end of Israel." If true — and needless to say the Palestinian authority has derided the papers as false, taken out of context or manipulated — then the document release sorely discredits negotiators. What is even more bizarre, however, was a scheme launched by then Secretary of State Condoleezza Rice to relocate Palestinian refugees to South America.

The surreal discussion took place in June, 2008 when Rice met with Israeli and Palestinian negotiators in Berlin. At the time, Rice was following up on the Annapolis peace conference of the previous year and final status negotiations between the PLO and the Israeli government of Ehud Olmert. According to minutes from the meeting, Rice remarked "maybe we will be able to find countries that can contribute in kind. Chile, Argentina, etc (ie, give land)." Though the suggestion was certainly outlandish, Rice may have been influenced by a previous decision to transfer 117 Palestinian refugees to Chile between March and April, 2008, shortly before the Berlin negotiation.
 
Grim Conditions at Al Tanf

The 2008 transfer, a truly dramatic exodus, brought Palestinian refugees from far-flung Middle Eastern camps all the way to South America. The Palestinians had long been stuck in the miserable makeshift Al Tanf camp located in a bleak no man's land along the Iraqi-Syrian border. For years, the refugees had sought a stable home without success. The majority of Palestinian refugees who arrived in Iraq came from the city of Haifa in 1948, and their children grew up in the new adopted country. Under Saddam Hussein, the Palestinians were treated favorably but after the dictator's fall the refugees once again came under persecution. In the midst of war and instability, some were deprived of their residency papers which made it impossible for the refugees to come and go from Iraq.

The Syrian Al Tanf camp, which received aid from the UNHCR and its partners - mainly UNRWA (the UN Relief and Works Agency for Palestine Refugees in the Near East), UNICEF, the World Food Program, the Palestinian Red Crescent and the Syrian Arab Red Crescent, had been set up originally to harbor Palestinians fleeing persecution in Iraq as no other nation would take them in. When they first arrived, the refugees thought their stay in Al Tanf would be merely temporary but they ultimately wound up having to stay there for nearly four years, during which time they had to endure pests such as snakes and scorpions, not to mention extreme temperatures, sandstorms as well as snowstorms, floods and inadequate access to medical care.

Bachelet to Palestinians: "I Know What It Means to Be a Refugee"

Coming to the aid of the Palestinians, Chile offered asylum to some of the refugees in response to a UN appeal. Though the refugees were relieved to be leaving Al Tanf, they were apprehensive about their uncertain future. In Chile meanwhile, the authorities undertook an ambitious program aimed at reinserting the Palestinians into national life, while providing crucial assistance in the areas of housing, food, clothing, education, health, language skills and employment. After forty hours of grueling travel from Damascus, the refugees arrived in La Calera, a small farming town north of the Chilean capital of Santiago. "Leave your suffering in the past and let Chile be the fountain of your newfound happiness," declared Deputy Interior Secretary Felipe Harboe.

In certain respects, Chile was an agreeable and logical destination for the refugees. The country has large tracts of sparsely populated land and has Latin America's largest Palestinian population, estimated at some 350,000 people. The Palestinian community in Chile dates back a century: the first to make the trek to South America fled the Ottoman Empire and the First World War. Today, most Palestinians are middle class textile merchants and have integrated well into Chilean society.

The town of La Calera has long been home to Chileans of Middle Eastern descent, and as the refugees arrived they were greeted by local residents waving Palestinian flags and singing the Palestinian anthem. Later, the town served Arabic food, played local folk music, and danced to Chile's national dance, called the "cueca." The refugees, relaxed but exhausted, smiled and nodded while murmuring "gracias" to the crowd. "We are confident that here we will be able to live in peace," one refugee remarked through an interpreter. After the ceremony the exhausted migrants were escorted to their apartments.

As I discuss in some detail in Revolution! South America and the Rise of the New Left (Palgrave-Macmillan), former Chilean president Michelle Bachelet was herself a political exile in her youth: fleeing Chile during the military rule of Augusto Pinochet, she found shelter in communist East Germany. As the Palestinian refugees arrived, the socialist politician harked back to her own past. "I want to tell you that I know exactly how it feels to arrive in a new country as a refugee," Bachelet remarked during a reception for the Palestinians.
 
What about "The Right of Return"?

For the Palestinians, undertaking a new life in Chile was infinitely superior to languishing at the Al Tanf refugee camp. Yet, this outlandish story raises fundamental questions about the Palestinian struggle and its long term political prospects. By accepting Chile's invitation, the Palestinians sacrificed their "right of return." For Israel, it must have seemed like a sweet deal: if the Palestinians carved out a home 8,000 miles away in the Andes, this could relieve pressure on Israel to return land.

For the Palestinian community in Chile, relocation of their compatriots to South America gave rise to some mixed feelings. While the local community thanked the Bachelet government for its generosity, it maintained the Palestinian historic right of return under United Nations Resolution 194. The local Palestinians argued that Chile, which had already signed the resolution, would be violating the principle of right of return by agreeing to the refugee relocation.

The Chilean authorities, activists argued, should continue to lobby the Israelis and the international community so as to relocate the Al Tanf refugees to their legitimate homes. It would not be until later that the Palestinians would come around, reluctantly, to the Chilean plan. Mauricio Abu-Gosh, president of the Palestinian Federation of Chile, remarked that the right of return should be upheld but that the first priority should be to rescue the refugees from their plight.

Two years later, in the wake of the release of the Palestinian Papers, Abu-Ghosh was outraged when he read of the revelations. Israel, he remarked, was "making the rules" in defiance of UN Resolution 194. Ghosh added that Chile was certainly a desirable country for foreign immigration but Rice's notion of turning the Andean nation into a new homeland for Palestinians was "impractical." Daniel Jadue, vice president of the Palestinian Federation of Chile, declared that the news was "completely unacceptable." Rice's suggestion, Jadue explained, indicated that the negotiation was "dishonest," and "clearly inclined toward Israel."

Lingering Questions

What is behind the Palestinian-Chilean connection? Perhaps, Rice was inclined to suggest Chile as a possible relocation point given that the Bachelet government was a pliable U.S. ally in the wider region. Though the Chilean president was a socialist and publicly declared her support for other leftist governments in South America, her government pursued friendly relations with the United States. Indeed, as I have written, Bachelet did her utmost to convince Washington that not all Latin American leaders were fire breathing populists or identical in political orientation. According to documents released by WikiLeaks, Bachelet told U.S. diplomats that there were many moderates in Bolivia and President Evo Morales was very different from Venezuela's Chávez.

The Palestinian Papers raise some provocative questions. Did the Bush administration ever broach Rice's idea officially with Chile and Argentina? If WikiLeaks has any documents pertaining to this issue, then Julian Assange should consider releasing any information which would fill in the gaps from the Palestine Papers. If there are further revelations, this could cause severe embarrassment not only to the U.S. and Israel, but also to the Palestinian Authority. What is more, further reporting could discredit the Chilean government which publicly supports the creation of a Palestinian state but which privately may seek to hide any skeletons lurking in the closet.

Though Arizona Senator John McCain seldom talks about it, he has gotten much of his foreign policy experience working with a cloak and dagger operation called the International Republican Institute (IRI). Since 1993, McCain has served as Chair of the outfit, which is funded by the U.S. government and private money. The group, which receives tens of millions of taxpayer dollars each year, claims to promote democracy world-wide. On the surface at least, IRI seems to have a rather innocuous agenda including party building, media training, the organization of leadership trainings, dissemination of newsletters, and strengthening of civil society.

The hottest country in which IRI currently operates is Iraq. According to the IRI’s own web site, since the summer of 2003 the organization “has conducted a multi-faceted program aimed at promoting the development of democracy in Iraq. Toward this end, IRI works with political parties, indigenous civil society groups, and elected and other government officials. In support of these efforts, IRI also conducts numerous public opinion research projects and assists its Iraqi partners in the production of radio and television ads and programs.”

By law, IRI must operate independently of the Republican Party. However, a former institute grant recipient, Ghassan Atiyyah, the Director of the Iraq Foundation for Development and Democracy, said he parted ways with the IRI over his criticism of the Bush administration’s handling of the war. In 2004 Atiyyah, who pressed for a secular, liberal government in Iraq, received $116,448 from IRI. "Instead of promoting impartial, better understanding of certain ideas and concepts, they [the IRI] are actually trying to further the cause of the Republican administration," Atiyyah said. Though Atiyyah said IRI never asked him to censor his views, it became clear to the Iraqi that the two parties disagreed politically. When his funding ran out, neither pursued the relationship. "It is a civilized divorce," he said. (Atiyyah eventually fled Iraq for Britain after his life was threatened).

Who is Running IRI?

Such criticisms aside however, IRI’s overall mission statement on its Web site fundamentally strains credibility. How can the IRI, which is caught up in an incestuous political web with the power elite in Washington and U.S. corporations, claim to be an agent of positive change in Iraq? Although officially non-partisan, IRI is closely aligned with the Republican Party. Dick Cheney received the organization’s Freedom Award in late 2001. Other winners have included Condoleezza Rice, Ronald Reagan, Lynne Cheney, Colin Powell, and Afghanistan’s Hamid Karzai.

IRI’s leadership spans the spectrum of center right, far right, and neoconservative factions of the GOP. Most of the organization’s staff and board have links to right-wing think tanks, foundations, and policy institutes. Former Iraq proconsul Paul Bremer, the disastrous colonial administrator who used to wear a blue blazer and hiking boots, sits on IRI’s Board of Directors.

Also sitting on the board is Randy Scheuneman, a former member of the neo-conservative outfit Project for the New American Century. Scheuneman had long-standing ties to the Iraqi National Congress or INC, a loose coalition of Iraqi dissidents and opposition groups headed by the Iraqi flim-flammer , Ahmed Chalabi.

Shady Scheuneman’s ties to McCain go way back even before IRI. In 2000, he served on the Arizona Senator’s foreign policy team during McCain’s unsuccessful presidential bid. Like McCain, Scheuneman was also active in the Committee for the Liberation of Iraq, which helped push for official government as well as public support for the invasion of Iraq after the 9/11 terror attacks.

Meanwhile, a who’s who of corporate America chips in to IRI including Blackwater Training Center, part of Blackwater USA. In 2005-6 the company donated $30,000 to IRI. Though Blackwater has fallen under scrutiny as a result of the company’s shooting of 17 people including women and children, the State Department recently decided to renew the firm’s contract.

For Blackwater, the benefits of supporting McCain and IRI are clear: already the Arizona Senator has declared his intention to stay in Iraq “for a thousand years or a million years” if necessary. Behind the scenes, Blackwater is surely praying for a McCain victory in November: Charlie Black, McCain’s chief adviser and a successful Washington lobbyist, has represented the mercenary outfit as well as Chalabi. Black’s connection to Chalabi began in 1999 and continued up until the invasion of Iraq in 2003.

McCain, IRI and Chevron

Though George Bush has scoffed at suggestions that the invasion of Iraq had anything to do with oil, recent press reports give some credence to such claims. In April, Chevron announced that it was involved in discussions with the Iraqi Oil Ministry to increase production in an important oil field in southern Iraq. The discussions were aimed at finalizing a two-year deal, or technical support agreement, to boost production at the West Qurna Stage 1 oil field near Basra, Iraq’s second-largest city.

It turns out that Chevron, like Blackwater, has donated to McCain’s IRI. What’s more, since McCain solidified his position as the GOP’s nominee, Chevron Chairman David O’Reilly gave $28,500 to the GOP. Meanwhile lobbyist Wayne Berman, McCain’s National Finance Co-Chairman, counts Chevron as one of his principal clients.

According to Progressive Media USA, a Washington, D.C.-based non-profit, the Arizona Senator has benefited handily from Big Oil. McCain has taken in at least $700,000 from the oil and gas industry since 1989. In Congress, the Arizona senator has worked tirelessly to advance the interests of the oil industry. For example, McCain’s tax plan gives the top five oil companies $3.8 billion a year in tax breaks. McCain meanwhile has voted against reducing dependence on foreign oil, has twice rejected windfall profits tax for Big Oil, and has voted against taxing oil companies to provide a $100 rebate to consumers.

McCain, IRI and Lockheed Martin

As if these corporate ties were not enough, IRI has also accepted money from Lockheed Martin, the world’s #1 military contractor. The firm has been a McCain donor, giving more than $13,000 through its PAC to the Arizona Senator in 2006. According to the Center for Public Integrity, lobbyist Vin Weber, one of McCain’s top political advisers, counted Lockheed Martin as one of his most important clients.

Early on, Lockheed saw that it could benefit from the war in Iraq. The company’s former vice president, Bruce Jackson, even chaired the Committee for the Liberation of Iraq. There, he found common cause with Scheuneman, the group’s President, and McCain, the “honorary co-chair.” Jackson also worked with Scheuneman through The Project for the New American Century, a group that the Lockheed man directed personally.

Jackson goes way back in GOP circles. Between 1986 and 1990, when he was working in the Office of the Secretary of Defense in the Reagan and George H.W. Bush administrations, he served under Dick Cheney. He also worked under prominent neo-conservatives such as Paul Wolfowitz and Richard Perle. In 2000, he chaired the Republican Party Platform’s subcommittee for National Security and Foreign Policy when George W. Bush ran for president.

Jackson was also involved in corralling support for the Iraq war from Eastern European countries, and even went so far as to help to write their letter of endorsement for military intervention. Not surprisingly, Lockheed also had business relations with these countries. In 2003 Poland shelled out $3.5 billion for 48 F-16 fighter planes which it was able to purchase with a $3.8 billion loan from the U.S.

During the start of the Iraq invasion, Lockheed Martin’s F-117 stealth attack fighters were used to “shock and awe” the population. Jackson is now working on McCain’s 2008 presidential campaign, serving on the Senator’s foreign policy advisory team.

The mainstream press has completely failed to analyze McCain’s long term involvement in the Iraq imbroglio. If they were to delve too deeply, the corporate pundits would have to confront the uncomfortable truth that the military-industrial complex and the oil industry have played an integral role in the invasion and occupation. Surrounding the whole affair are shady figures such as Black, Scheuneman and Jackson and unscrupulous companies like Chevron, Blackwater and Lockheed Martin. At the center of the vortex are none other than IRI and John McCain.

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."