Nikolas Kozloff

Check out my most recent interview on al-Jazeera English, a panel discussion which centered on the Venezuelan election and the wider issues in Latin America. To see the interview, click here.

To read the article, click here.

To read my latest piece, click here.

To read my latest article, click here.

Postscript: far from silencing Israel Shamir, Counterpunch continues to publish pieces by the man, most notably this article which actually condones genocide in Cambodia.

To read the article, click here.

As the unlikely Julian Assange affair continues to play out in London, the imbroglio stands to have unforeseen political ripple effects in countries near and far. In Ecuador, President Rafael Correa is hoping that the WikiLeaks saga will unfold to his advantage in advance of the country's February, 2013 election. By granting political asylum to Assange, Correa calculates that he may appeal to Ecuadoran nationalism and a wounded sense of pride. Though certainly risky in certain respects, Correa's high stakes gamble could pay off as many Ecuadoran poor rally to his banner. Indeed, it's possible that Correa's foes will veer off the Assange issue and conclude that this wild card is best left untouched.

 

The subject is particularly touchy for Guillermo Lasso, a veteran politician with perhaps the greatest chance of dislodging Correa from power. Though the President is looking rather solid in the polls, Lasso has been steadily gaining in popularity. A powerful political and economic insider who has served in two separate administrations, Lasso is former head of the Guayaquil Central Bank and briefly served as Governor of the coastal state of Guayas.

 

Despite this long track record, Lasso carries some unflattering baggage which could taint his future political prospects. According to secret diplomatic cables recently released by WikiLeaks, Lasso was determined to unseat Correa and appealed directly to the U.S. Embassy in Quito. In light of the embarrassing revelations, it's doubtful whether Lasso has a lot of sympathy for Assange and his plight.

 

Lasso's animosity toward the Quito government was put on display early on in the first Correa administration. Writing to her superiors in Washington, U.S. Ambassor to Ecuador Linda Jewell remarked that the "usually fractious" Ecuadoran private sector had gotten its act together and was beginning to develop "what could become a cohesive response to what it perceives as threats from the Correa administration."

 

Such efforts were being led by paranoid rightist forces from the commercially important city of Guayaquil, which feared creeping political encroachment by Correa, a politician linked to Hugo Chávez of Venezuela. Scared for the future, business figures urged the U.S. "to do their heavy lifting" and organize against the central government.

 

LASSOing the U.S. against Correa

 

Key in such efforts was none other than Guayaquil banker Lasso, who brazenly spoke to the Americans about his desire to rid the country of Correa. According to Jewell, Lasso had organized a "systematic effort" to coordinate the Correa opposition through a group called "Ecuador Libre" or "Ecuador Free" [according to Lasso's own web site, Ecuador Libre is a think tank pledged to coming up with public policy solutions based on the ideas of "liberty and social solidarity"].

 

Lasso reported that the business community had launched its own public relations effort and produced a breathless radio spot "which featured a Venezuelan voice discussing the situation in Venezuela and an Ecuadorian voice responding that she would not want the same situation to develop in Ecuador."

 

Determined to halt state control over the economy, Lasso had spoken to other prominent Correa opponents such as former president Lucio Gutiérrez and Guayaquil Mayor Jaime Nebot. During his conversation with the U.S. Embassy, Lasso refrained from requesting "extensive support" though the Guayaquil man did ask the Americans to "echo the private sector's appeal for individual freedoms should the private sector come under fire from the government."

 

Jewell, however, seemed a bit skeptical of getting too "lassoed" into action. The Ambassador noted that there were "real limits to working with these political leaders." Gutiérrez was willing to work with the business community, "but only on his terms," while Nebot had "chosen to frame his role as defending local Guayaquil interests (e.g., the status of the Guayaquil port), rather than seeking the mantle of leader of the national opposition to the Correa agenda."

 

By simply participating in the discussion, Jewell was certainly complicit in opposition scheming against Correa. Nevertheless, the diplomat was still wary and remarked to her superiors that "we have emphasized the importance of domestic sectors working toward consensus and offering responsible alternatives as a necessary pre-condition before any international engagement can be truly effective."

 

Business Friendly Governor

 

If anything, WikiLeaks cables merely underscore what many Ecuadorans have long suspected about Lasso: namely, that the banker is a consummate political and economic insider who favors the interests of Washington and large financial institutions. Lasso's rise on the national stage can be traced back to the year 1999, when impoverished Ecuador faced crushing and spiraling debt. Hoping to avert a catastrophe, President Jamil Mahuad accepted a loan from the International Monetary Fund (or IMF) which obliged Ecuador to reach a balanced budget for the following year.

 

At the time, Lasso was serving as Governor of Guayas state, having been previously appointed to the position by Mahuad himself. Lasso was also busily at work on radical renovation plans for the city of Guayaquil, the capital city of Guayas. As Director of the Malecón 2000 Foundation, the banker was associated with the previously mentioned Nebot, a politician who was pushing hard for boardwalk renovations.

 

In a zealous drive to emulate tough guy Mayor Rudy Giuliani, Nebot contracted former New York City Police Commissioner William Bratton to help shape the city's urban regeneration strategy. The newly constructed boardwalk was praised by many local residents as being "just like Miami." However, indigenous street vendors were removed from cleaned up urban spaces. Indeed within the new Guayaquil, urban "undesirables" found working in gentrified areas faced tough penalties and beggars and itinerant vendors could be imprisoned for up to seven days.

Tour Guide at Bush White House

 

Back in Quito meanwhile, Mahuad was facing economic troubles and so the President tapped Lasso as Ecuador's new Secretary of the Economy. Leaving aside his local political work, Lasso took up his new responsibilities with gusto. However, when Mahuad announced that Ecuador might default on its bonds, the powerful banker abruptly resigned in protest.

 

Ecuador continued its downward spiral into economic turbulence and political instability in the next couple of years until, finally, Lasso staged a comeback. In late 2002, the newly elected government of Lucio Gutiérrez included the banker on its transition team, a move which went down very well within financial circles. Though Gutiérrez had formerly been a left-leaning army officer and actually helped to depose the Mahuad government amidst a popular insurrection in 2000, the new president quickly made a political U-turn by courting the IMF and appointing Lasso as Ecuador's Ambassador-at-Large to the U.S. In Washington, D.C. Lasso conducted important liaisons with the IMF and Inter-American Development Bank.

 

In Febuary, 2003 Gutiérrez's betrayal of the Ecuadoran left went into high gear. Flying to Washington, the new Ecuadoran President met with George W. Bush at the White House. Lasso meticulously conducted every detail of Gutiérrez's tour, and the banker "moved like a fish out of water" in his new home. Reportedly, however, Lasso's presence proved disconcerting to Ecuador's career diplomats, who resented the banker's outsized influence.

Hoping to make a good impression on the Bush team, Lasso steered Gutiérrez in his meeting with the U.S. Republican President. Emerging later from the Oval Office, the new Ecuadoran leader announced that he wanted his country to "become the best ally of the U.S." in the fight against terror and drug smuggling. As Gutiérrez veered to the right, Lasso's profile continued to soar, and the banker was put in charge of free trade negotiations with the U.S.

 

Lasso's Paranoia

 

Yet again, however, Lasso was foiled in his effort to ram through his business-friendly agenda. Though progressive social forces originally supported Gutiérrez, they turned against the President once it became clear that he was more interested in pursuing Lasso's corporate-style politics. In 2005, protests forced the President from power and a new caretaker government under Alfredo Palacio took over.

 

Hoping to appease the left, Palacio appointed the aspiring and ambitious Rafael Correa as Economy Minister. Palacio was critical of many of his predecessors' policies, but the caretaker president was no radical. Indeed, according to WikiLeaks cables, Palacio requested U.S. assistance with international financial institutions and declared that he could be an effective "counterweight" to Hugo Chávez of Venezuela. Perversely, he even asked Washington and the World Bank to provide security on Amazonian oil fields.

 

Despite these conservative leanings, Lasso was still dissatisfied. According to one WikiLeaks cable, the Guayaquil businessman approached the Americans and griped about Palacio. According to Lasso, Palacio "had lifted his political philosophy from his communist father. Lasso did not think Palacio had drifted far from his father's views."

 

Candidate's Far Right Connections

 

Given that even the Palacio regime was far too leftist for Lasso, it is understandable that the Guayaquil banker will now stop at nothing in his effort to unseat the more nationalist/populist Correa, who first came to power in 2006. On the campaign trail, Lasso likes to strike a moderate tone, remarking that he would do a better and more efficient job at social investment than Ecuador's current President. In an effort to counteract Correa's populism, Lasso has even inveighed against his own country's political class and business leaders, who he claims are out of touch with the day-to-day life of most working people.

 

Lasso's personal connections, however, seem to belie any such democratic talk. The Guayaquil businessman is a great admirer of former Spanish President José María Aznar, a conservative politician whose government was allegedly involved in an attempted coup d'etat against Hugo Chávez. What is more, Lasso is a member of Opus Dei, a Catholic organization which reportedly enjoyed significant influence under the Augusto Pinochet military dictatorship in Chile. In addition, Lasso is a member of Georgetown University's Latin America Board, an entity which "seeks to promote leaders who will make a disproportionate difference in the world." The Board is linked to the school's Walsh School of Foreign Service and Security Studies Program, which is a haven for spooks and intelligence folk.

 

The 2013 Election

 

As history has shown time and again, Ecuadoran social movements have little patience with the pro-U.S. and pro-corporate agenda, and all leaders from Mahuad to Gutiérrez to Palacio to even Correa have been acutely aware of this fact. Lasso, a more recent candidate espousing rightist views, must tread carefully lest he incur the wrath of Ecuador's poor majority.

Yet, according to the Guardian, the Guayaquil man is now polling at 17% of the vote and "election observers, including the Correa campaign, view Guillermo Lasso as the candidate most capable of forcing a runoff and, indeed, possibly winning the election." Meanwhile, though the candidate is somewhat unknown to most voters, the campaign has "launched aggressive efforts to promote him in television and print media."

 

Though Correa is still favored to win the election, Assange now represents a wild card in the political mix. The Guardian comments that "essentially [by providing diplomatic asylum to Assange], Correa has wrapped himself in the flag – in such a way that his conservative opponents are not able to criticize him effectively, lest they seem unpatriotic." Indeed, though Lasso must dislike Assange for disclosing sensitive diplomatic U.S. cables which cast him in an unfavorable light, the Guayaquil banker has been tight lipped about the whole affair now unfolding at the Ecuadoran Embassy in London. That is not too surprising, given that the issue seems to be playing to Correa's advantage and indigenous peoples have voiced their support for Assange.

 

According to the Guardian, political speech in the media and campaign advertising in Ecuador is severely restricted in the 90 days leading up to Election Day. That means that the next few months are going to be critical, with Lasso having only until November to make a dent in Correa's armor. "The longer and more dramatic the Assange case is," notes the Guardian, "and the longer Ecuador's diplomatic dispute with the UK and Sweden continues, the more the Ecuadorian election campaign will dwell on international affairs – a sphere the incumbent Correa dominates in relation to his opponents. With far fewer risks than the major electoral benefits it delivers, the diplomatic spat is clearly in Correa's political favor."

 

Assange, then, is now an unknown variable in larger geopolitical chess and even domestic politics within Ecuador. For better or worse, Correa has thrown in his lot with Assange, though to be sure the outcome of this imbroglio is hardly predictable at this point. Assange meanwhile undoubtedly hopes that Correa wins the election, lest his asylum bid be placed in jeopardy by a hostile Lasso administration smarting from earlier WikiLeaks revelations. Stay tuned for more ironic twists and turns.

To read the article, click here.

Does the U.K. government dare risk tarnishing its international image by raiding the Embassy of another sovereign nation? It’s a far-fetched notion, but the British seem determined at all costs to apprehend WikiLeaks founder Julian Assange, who is wanted in Sweden for questioning on allegations of sexual assault. Fearing that he would be extradited from Sweden to the U.S., which might seek to try Assange for leaking confidential government information to the public, the man behind WikiLeaks simply walked into the Ecuadoran Embassy in London and requested diplomatic asylum. After long deliberations, Quito agreed to comply with Assange’s request, which in turn has caused a diplomatic firestorm and led British officials to embark on a high stakes gamble.

In a serious escalation, the Cameron government told Ecuador in a letter that “you need to be aware that there is a legal base in the UK, the Diplomatic and Consular Premises Act 1987, that would allow us to take actions in order to arrest Mr Assange in the current premises of the embassy. We sincerely hope that we do not reach that point, but if you are not capable of resolving this matter of Mr Assange's presence in your premises, this is an open option for us.”

After news broke of the threat, police were sent to the Ecuadoran Embassy in an apparent effort to further intimidate Assange and the Rafael Correa government in Quito. If that was the intention, however, the move only served to inflame the matter further. Indeed, Ecuador’s Foreign Minister Ricardo Patiño rejected “in the most energetic terms the explicit threat of the official British communication.” In a rhetorical flourish, Patiño added for good measure that “we are not a British colony.”

The Legal Back and Forth

There’s some doubt whether the obscure British 1987 law could actually trump long-standing protections enshrined in the Vienna Convention which safeguard diplomatic immunity for embassies all over the world. Legal experts argue that diplomatic missions have long been considered sovereign territory, and the British threat should therefore be considered extraordinary and without precedent. The Ecuadoran National Assembly agreed, and recently voted to condemn Britain’s moves as an attack on the United Nations Charter as well as the Vienna Convention.

Jennifer Robinson, Julian Assange’s legal adviser, remarked that “it would be illegal as a matter of international law to enter an embassy. They are inviolable. And unless and until they withdraw that status, the British government cannot enter the embassy…If the U.K. government were to revoke that status, it would be a watershed in international law.”

Perhaps, the Cameron government realized that it had gone too far. Antony Brenton, a former UK ambassador to Russia, remarked that invading the Ecuadoran Embassy would “make the world a very different place” as diplomats all over the globe could in turn be vulnerable to punitive action exerted by host governments. Caught in the midst of a diplomatic maelstrom, the Cameron government has toned down the rhetoric and threats, at least for now.

Yet, by merely hinting that it would resort to force and “go rogue” in an effort to apprehend Assange, Britain has demonstrated its contempt for international law and diplomacy. What is more, the Cameron government’s attitude is disturbing in that it harks back to some other violent and egregious incidents from past history. Take, for example, the Guatemalan military’s raid on the Spanish Embassy in February, 1980, an episode which cost the lives of many peasant farmers.

Dark Days of Military Repression

During the early 1980s, the small Central American nation of Guatemala was engulfed in horrific violence. Determined to hold back social progress, the armed forces under General Romeo Lucas García and associated death squads carried out a scorched earth policy targeting all those calling for agrarian justice in the countryside. Hoping to raise the international profile of their struggle, 34 Indians entered the Spanish Embassy in Guatemala City, occupied the premises and announced that they would hold a press conference.

If the peasants, however, thought their actions would elude the authorities they were tragically mistaken. Rather than negotiate with the Indians, García decided to use force and, in flagrant disregard for international norms, sent in the police. The security forces surrounded the Embassy itself and hurled incendiary devices into the building, apparently igniting Molotov cocktails which the protesters had brought inside.

This in turn caused an explosion and caught the Indians in a deadly blaze. The police, however, refused to open the door or let firemen inside. In all, thirty nine people were burned alive including Vicente Menchú, the father of Nobel Peace Prize winner and indigenous activist Rigoberta Menchú. The only survivor was taken out of hospital a couple of days after the conflagration and shot, though it’s unclear by whom. The massacre at the Spanish Embassy destroyed the Guatemalan government’s standing, and demonstrated to the world that the military would stop at nothing to combat its internal enemies.

It seems somehow doubtful that the British government by contrast would violate the territorial sovereignty of another nation, let alone cause destruction and mayhem within the Ecuadoran Embassy. Whatever its flaws, the Cameron government is a far cry from the Lucas García regime and its death squad allies of the early 1980s. Nevertheless, by simply calling international law into question, Britain seems to be riding a slippery slope. Just how far is London willing to go in its efforts to get its hands on Julian Assange? Hopefully, the authorities will come to their senses and the rule of law can prevail.

Just got off the phone after concluding an interview with Pacifica Radio KPFA about the escalating Julian Assange case. An interesting panel discussion, which begins at about 8:00. Click here to go to the link.

With the U.S. now losing a degree of its economic and political hegemony throughout the world, a key question will be how Washington reconciles itself to emerging powers such as Brazil. A South American powerhouse in the midst of an agricultural commodities boom, Brazil has witnessed the dramatic growth of its middle class and has been increasingly throwing its weight around in the realm of international affairs. In secret diplomatic cables recently disclosed by whistle-blowing outfit WikiLeaks, U.S. diplomats openly admit that Washington is engaged in an undeclared contest with Brazil for regional influence.

 

So far this rivalry has not become overtly antagonistic, yet beneath the surface lurk tensions which could break out into the open. When and where are such rivalries most likely to cause frictions? Perhaps, the small landlocked nation of Paraguay, which sits on the Brazilian border, could be one source of conflict. Brazil has made Paraguay into a veritable economic satellite, yet a recent political shakeup in Asunción stands to benefit U.S. interests.

 

Under President Fernando Lugo, Paraguay joined South America's "Pink Tide" to the left which had challenged Washington's traditional standing throughout the hemisphere. Though Lugo cultivated friendly ties with Washington, the Paraguayan leader also staked out an independent foreign policy and challenged American priorities. On the military front, for example, Lugo outright rejected any Pentagon collaboration under the so-called "New Horizons" program.

 

Washington Stages a Comeback

 

The overall political equation was hardly agreeable to Washington, yet, in light of recent developments, the U.S. may be poised to stage a comeback. Just over a month ago, in a kangaroo process akin to a "quasi-coup," Lugo was ousted from power by his country's right wing Congress. In a stunning rebuke, legislators accused Lugo of encouraging land seizures which resulted in violent clashes with security forces. In a sham, the Senate gave Lugo a mere two hours to defend himself in a public trial. When Lugo's lawyers requested more time to argue their case, they were rebuffed by the President of the Senate. Then, in an upset, Lugo's rightist Vice President Federico Franco assumed his old boss' job.

 

Washington meanwhile hasn't been too enthusiastic about calling for Lugo's reinstatement. Perhaps that is not too surprising in light of the history. Indeed, WikiLeaks cables show that the State Department was very concerned about Lugo, a politician who championed land reform and cultivated links to Hugo Chávez of Venezuela. Suspiciously, no sooner had Lugo been removed from power than legislators met with a group of U.S. generals to discuss the possibility of building a new military base on Paraguayan soil.

 

Brazil Reacts to Paraguay's Political Crisis

 

Brazilian President Dilma Rousseff, on the other hand, has been far more outspoken in opposing Paraguay's shakeup. That is not too surprising, given that Rousseff, a protégé of former Workers' Party (or PT) President Luiz Inácio "Lula" da Silva, was a kind of ideological kindred spirit to the progressive-minded Lugo. Responding to rising outrage in civil society, Brazil voted to suspend Paraguay from South American trading bloc Mercosur, a development which prompted a strong rebuke from the new de facto Franco regime in Asunción.

 

The conventional wisdom is that Paraguay's shakeup represents a big geopolitical blow to Brazil and an upset triumph for Washington. The Center for International Policy remarks "in Paraguay the most backward political and economic forces have gained ground, opening up the possibility of a closer alliance with the United States, which gains an ally in a place where it can do much harm to Brazil." There's a degree of truth in such interpretations, but the situation is a bit more complex and nuanced than analysts let on.

 

Whatever its' public rhetoric about leftist solidarity in South America, Brazil has been a cynical operator all too willing to deal with the U.S. while secretly inveighing against upstart Venezuela, and WikiLeaks documents are replete with such double-crossing. Fundamentally, while Brazil may be suspicious of Washington, the South American juggernaut is also wary of Chávez and surely does not want to see pesky Venezuela extending its influence into the Southern Cone. Paraguay, then, offers unusual insight into the "Brasilia-Washington-Caracas triangle" and the scramble for geopolitical influence in the heart of South America.

 

Radicalization in the Countryside

Though Brazil may express political solidarity with the Paraguayan left, the South American nation is compromised by its octopus-like economic interests reaching far afield. In recent years, so-called "Brasiguayos" (Brazilian farmers who moved to Paraguay to cultivate soybeans) have established a huge presence across the border. A socially conservative group some 350,000 strong, the Brasiguayos have spent years locked in violent disputes with Paraguay's campesino squatters. It is widely believed in Paraguay that the Brasiguayos have illegally taken over large swathes of land.

 

Through his calls for agrarian reform, Lugo hardly ingratiated himself amongst the Brasiguayos. Furthermore, shortly after he was elected, the Paraguayan invited Hugo Chávez to his country to discuss rural collaboration. Chávez, who had earlier pushed his own ambitious land reform project in Venezuela, declared that he was willing to help Paraguay develop an "agro-industrial center" and provide agricultural and technical assistance.

In a candid aside, Paraguay's Minister of Agriculture told the Americans that he was concerned about "radical actors surrounding the President." Specifically, the official was worried "about Venezuelan President Hugo Chávez' presence in rural areas, and [he] predicted an increase in illicit activity where the Paraguayan state has a weak presence." In further conversations, landholders "shared similar concerns about a 'chavista' influence in rural areas, and the growth of marihuana plantations by peasants from some of the same social groups demanding land."

 

Upping the Ante on Energy Resources

 

In yet another provocation, Lugo issued fiery nationalist rhetoric on the campaign trail before assuming the presidency. Brazil, Lugo charged, should pay more for electricity which it received from Itaipu, a hydroelectric dam jointly owned by Brasilia and Asunción. The facility lies along the two nations' common border, and according to Americas Quarterly, "the electricity that fattens the Paraguayan coffers also supplies São Paulo state, Brazil's industrial engine, with power."

 

Much to Brasilia's chagrin, Chávez inserted himself into the energy imbroglio by supporting Lugo's nationalist claims. During a summit of the radical ALBA bloc of Latin American nations, which included Venezuela, Bolivia, Ecuador and Cuba, members stated that Lugo's proposals were a "prerequisite" leading to "the full sovereignty of Paraguay over all its hydroelectric resources." With Chávez, Evo Morales of Bolivia and Rafael Correa of Ecuador looking on, Lugo declared "we believe that a compañero, a friend like Lula cannot defraud us. Lula cannot tell us no when it comes to a just price and free availability of that energy [Itaipu]."

 

Whether Lula was moved by such solidarity and idealistic rhetoric is unclear, but according to sensitive e-mails leaked by WikiLeaks, Brazil is very concerned about securing ongoing energy access to Itaipu. The Strafor Corporation, a company that fronts as an intelligence publisher but provides confidential intelligence services to large corporations and U.S. government agencies, was particularly interested in finding out more about Brazil's agenda in Paraguay. One confidential source told the company that Brasilia was concerned about sabotage and unrest at Itaipu, adding that the Brazilian military had a contingency plan to secure the hydroelectric facility in the event of instability.

 

Meeting with the Americans

 

If Brasilia did not have its hands full enough with such worries, the Paraguay border presented yet another problem. Along the long and porous Brazilian-Paraguayan frontier, smugglers traffic in drugs and illegal arms and this contributes to rampant crime in Brazil's dangerous favelas. Far from distancing itself from the U.S., WikiLeaks documents reveal that Brazil shares Washington's concerns about the Paraguayan border and holds joint meetings with the Americans to discuss the situation.

 

In 2005, for example, the U.S. Ambassador in Brasilia hosted a lunch for General Jorge Armando Félix, the Minister for Institutional Security [the rough equivalent of the U.S. National Security Advisor]. During the meeting, the two discussed transnational crime and counter-terrorism operations in the Tri-Border area abutting Brazil, Paraguay and Argentina.

Brazil, then, is enmeshed in an extremely delicate game in the Southern Cone. On the one hand, the South American juggernaut does not want to jeopardize its relations with Washington, but on the other hand Rousseff would like to exert control over Paraguay, a country which has traditionally been a Brazilian buffer state. The Chávez card, meanwhile, adds yet another level of intrigue into the mix, making for an unusual geopolitical triangle.

 

Brazil Shows Paraguay Who's Boss

One WikiLeaks cable, dating to late 2008, hints at such underlying tensions. With land invasions running high in Paraguay, Brazil staged military exercises along the two nations' common border. According to the U.S. Ambassador in Asunción, Brazilian troops repeatedly encroached on Paraguayan territory. "We now have to demonstrate that we are a power," Brazil's Southern Command Chief warned, "and it is important that our neighbors know about it." In another shot across the bow, the officer reportedly remarked that Brazil would intervene if Itaipu dam were taken over by "social movements."

 

In an escalating war of words, Lugo retorted "Brazil can do what it wants inside its territory" but "we will not accept any interference." The President added, "If you believe that military exercises at the border or press statements are going to scare us, they will not." The Paraguayan military, meanwhile, went on alert as Lugo traveled personally to the border. The U.S. Ambassador no less accompanied the Paraguayan leader, and privately Lugo officials believed the diplomat's presence represented "a show of U.S. support for Paraguay to Brazil."

Perhaps, press reports speculated, the Brazilian military was sending a message to Venezuela. Just two months prior to Brazil's military encroachment, Chávez visited the rural Paraguayan department of San Pedro, known as the "epicenter of campesino activity." Within the area, agitation against the Brasiguayos was reaching a tipping point and Chávez, fanning the flames, had "singled out the department…for local development assistance."

 

One political analyst told the Americans that "the purpose of the Brazilian military exercises was to warn…Chávez that Paraguay is linked to Brazil's security plan and to not meddle in Paraguay's internal affairs by financing pro-Venezuelan political campesino groups." If that was the intention, however, then the Brazilian maneuvers surely backfired. In a sign that he would not back down, Lugo banned foreigners from owning property for agricultural purposes.

 

Removing the Chávez Card

 

Fast forward a couple of years to Lugo's ouster, and the new political milieu in the Southern Cone would seem to benefit the U.S. while hindering Brazil. The rightist de facto Franco administration in Asunción has realigned itself with Washington and opted out of South America's leftist Pink Tide. After Rousseff moved to suspend Paraguay from Mercosur over the Lugo affair, Asunción even warned Brazil that it might cut off the electrical supply to its powerful neighbor via Itaipu.

 

Yet, look beneath the surface rhetoric and the new geopolitical configuration may serve to benefit Brasilia in certain respects. The incoming Franco administration has shown itself to be very partial to agribusiness and therefore the Brasiguayos have little to fear in the countryside. Needless to say, with Lugo now gone the prospects for land reform look more distant than ever. Moreover, there is little chance of Chávez causing any rural mischief at this point, since Franco and his clique are virulently anti-Venezuela.

 

Indeed, if there was any big loser in the Paraguay reshuffle, it was Chávez, whose larger hemispheric ambitions have been dealt a severe blow. The removal of the Venezuela card, then, simplifies the geopolitical battle in the heart of South America which now pits two powers against each other where once there were three. In Paraguay, Washington has political and military leverage, while Brazil enjoys economic influence. So far, Rousseff has been careful not to upset the Obama administration, preferring instead to pursue a kind of "under the radar" diplomatic strategy. As the U.S. stages a comeback in Brazil's backyard, however, Rousseff may wonder whether the time has come to finally push back.