The significance of Barack Obama’s victory for Latin America

The victory of Democrat Barack Obama for the presidency of the US has given indications of a change in America’s foreign policies in relation to Latin America. During the eight years of George W. Bush’s administration, and especially after 9/11, the US focus has been on the fight against terrorism in Afghanistan and Iraq. Due to this, Latin America was largely sidelined.

A change is expected with Obama, as historically Democrats view Latin America with more “care” than Republicans. However, the interventionist character of the Democratic government creates obstacles for free trade deals with the region.

According to the president-elect, a new chapter will be written on the relationship with the southern hemisphere. In interviews given throughout his campaign, Obama’s assistants spoke of working together across the continent.

If on one hand he shows signs of possible dialogue with his Latin American counterparts, on the other, his protectionist character is still apparent. For the Democrats, it is necessary to maintain the market open and dynamic, as long as it does not benefit only the rich and large companies.

The differences are clear in relation to George W. Bush. There may be gains in the region in terms of dialogue. However, Obama may give in to the agenda of American trade unions, which are against free trade agreements.

Besides the damaging of partnerships with strategic allies (Colombia and Mexico, for example), Latin Americans will have a harder time entering the American market due to the “more restricted” character of the economy, as expected to be conducted by the Democrats.

Pills of October - Latin American Overview

ARGENTINA: The country is experiencing a crisis of confidence. The nationalization of pension funds is seen by the market as a sign that the rules of the game can be changed at any moment in the country. Thus,increasing the rumors related to a strong and growing economic crisis.

URUGUAY: The alliances for the presidential election of 2009 has began. The President Tabaré Vázquez wants his substitute to be the former Minister of Economy, Danilo Astori, however, the foundations of the Broad Front (Frente Ampla) have started a petition signed to go for a constitutional change allowing the president to re-elect. Behind all this, is the fear of an economic recession. If this occurs, only the candidacy of Tabaré could avoid a return to power of the conservative parties.

PARAGUAY: President Fernando Lugo begins to taste problems in his coalition. The main advantage of his alliance, the PLRA (Authentic Radical Liberal Party), claiming more influence. Some of their leaders show reluctance in the support given to the Paraguayan head of state.

CHILE: The project of the Concertación power is seriously threatened. In municipal elections last Sunday, the National Renewal, right-wing coalition, won the elections. In opinion polls, Sebastián Piñera is leading all of them. After 18 years, the Concertación might be defeated in the presidential succession of 2009.

COLOMBIA: National Congress rejected the bill which attempted to open the possibility of President Álvaro Uribe to run for a third mandate.

VENEZUELA: Drop in price of oil on the international market creates problems for the government’s budget for next year, threatening the political project of Chavez. Thus, the President will use the regional elections of November to radicalize his speech, turning the election into a referendum on his leadership. If Chavez wins, he will try a new referendum to bid for reelection indefinitely

BOLIVIA: Division in opposition around the approval of the referendum which may approve the new constitution favors the government. Aware of this, the MAS (Movement towards Socialism) might be on the way to the construction of a hegemony in the country.

PERU: Political crisis forced Alan García to change his entire cabinet team due to the bribery of officials that his government received to avoid bidding for oil exploration. That increased the rejection of the president who today is 70%.

MEXICO: The National Congress approved the Energy Reform. With this, the president Felipe Calderón could rely on resources from the private sector to increase  PEMEX`s production.

French presence in Latin America increases

The political presence of the French in Latin America is increasing considerably in the past years. Besides acting strongly in Brazil, where the French tries to sell jet fighters, submarines and helicopters (though possibly only the submarines and helicopters will be successful), they are now increasing the approximation with Venezuela.

Last week, the Minister of Foreign Affairs of both countries (Bernard Kouchner for France and Nicolas Maduro for Venezuela) signed ten cooperation treaties. The focus areas are, as expected, energy, technology, military, industrial, telecommunications and combating narcotics.

As part of the deal, the French will invest in the oil, gas and infrastructure sectors. As announced weeks before the visit, nuclear technology will be shared between the two nations. 

Iranian President “worried” with Latin America

The Iranian President, Mahmud Ahmadinejad affirmed that the security and culture of some Latin American nations are threatened by foreign governments and embassies representing the “empire” (aka USA).

This affirmation does not come as a surprise. There are strong rumours of Iranian financing the Ecuadorian election of Rafael Correa as well as the Paraguayan campaign of Fernando Lugo. Private intelligence agencies from Europe are monitoring through an independent network of sources the Iranian participation in Latin American politics.

The region became the “Eldorado” of political influence. With Brazil more focused on its never ending oil discoveries, Venezuela is putting all efforts in advancing its level of influence in other countries of the region. Iran and Russia, for distinct reasons are doing the same. The participation of the USA is still too focused on Free Trade Agreements, which is an intelligent alternative to the FTAA. 

Latin American Politics in July

Ingrid Betancourt’s release was South America’s greatest political event in July. Not only for the spectacular operation led by the Colombian army, but for all its symbolism. The battle fought between Colombia’s government, led by President Álvaro Uribe, and the FARC came to a climax with Ingrid’s release. Besides, as far as regional geopolitics is concerned, it came as a victory for the strategy Uribe has pursued since coming to office, against the veiled support given by Venezuelan president Hugo Chávez.
 
That said, it does not come as a surprise that Chávez is now more ’soft-core’ in this period of the year. After successive domestic victories that have helped Uribe reach a 94% approval rate, Chávez would not be such a fool to openly oppose the Colombian. As Chávez is neither a hypocrite to support and join Uribe, he has simply abstained from any controversial statements on the matter.
 
Chávez knows very well that his continuity in government depends on a good win by his party in November’s municipal elections. These elections will be crucial for Chávez’s strategy, as they will determine if he will turn ‘hard-core’ again. When Chávez lost the vote on constitution reform last November, he had been in frequent attrition not only with Uribe, but also with several political groups and figures, such as Spanish King Juan Carlos.  That negative moment may have played a role in his not so surprising defeat in the referendum.
 
Since then, Chávez has mapped the areas where he was defeated and decided to invest in massive gains in November’s municipal elections. With a good win in the relevant regions, Chávez may be able to call another referendum to reform the constitution and recover the 4 percentage points that made him lose last year. Therefore, fighting Uribe at this point is not a good idea.
 
Chávez’s ’soft-core’ behaviour is not shared by his Ecuadorean counterpart Rafael Correa. The latter decided not to resume diplomatic relations with Colombia. However, unlike Chávez, Correa has high approval rates and achieved an important political victory by having the new Constitution approved by part of the Constitutive Assembly. If his confrontational attitude towards Uribe is generating popular results, Correa will continue using that strategy to make sure the people will endorse the new Constitution. Thus, his grip on power will become more solid, as will a centralization of government activities around his cabinet.
 
Another important event in July was Cristina Kirchner’s defeat in the Argentine Senate. The ‘retention’ taxes, which sparked a real war between government and farmers, were overruled by the Senate. However, the final blow in Cristina’s defeat came from her vice president – and also Senate president – Julio Cobos. After that result, Cristina is now expected to slightly shift her economic strategy. She will be forced to compensate with investment the new wave of exports to be experimented by the country, which will probably cause inflation to rise given the reduced supply of goods for the domestic market. As the inflation figures released by INDEC are seen as under-reported by several economic analysts in the country, Cristina is left with the options of either slowly adjusting the under-reported rate until it matches the real figure, or to concede that the there was an error in arriving at the number – which is highly unlikely.
 
The deadlock arrived at in Bolivia’s recall vote is a new chapter in the endless soap opera which the country’s institutional crisis has become. The National Electoral Court says that the consultation complies with the law, but the Constitutional Tribunal wants a judgement on whether it is legal, and a quorum is necessary. There is only one judge available out of five, since four have resigned. There is an impasse when it comes to choosing these four new ministers. The opposition fears that politically motivated nominations may end up bringing judges who support the government, thus harming the progress of the process to grant autonomy to the provinces. Should Evo Morales use this strategy to obtain a legal victory, the country’s political and institutional atmosphere will certainly aggravate.
 
According to direct information provided by the Movimiento Autonómico de la Media Luna, Morales is playing with fire because he feels he is backed by a military cooperation agreement with Venezuela. According to a local source, Morales knows that there will be no comprehensive offensive movements should the Judiciary back the government. However, the autonomy process is clearly gaining more backing and support among the population.
 
Concerned with domestic elections, Chávez is paying Bolivia much less attention than he used to. Morales, sandwiched between his party and the opposition, has temporarily lost a heavyweight ally to overturn the situation. One wonders how the Judiciary situation will unfold and to what extent rebel provinces will abide by any decisions made. If they don’t, chaos is clearly ahead.
 
Brazil’s foreign policy has not had any involvement in that issue. Unless dramatic diplomatic movements are being made on the background, Brazil’s foreign policy is not paying due attention to political tensions in Bolivia. In case of a civil conflict in Bolivia, the autonomy movement estimates that approximately 300,000 people would seek refuge in Brazil. In addition, natural gas supply to Brazil would be certainly harmed.

South American Political Agenda

Latin America - March 2008