US and Latin America: Overview for 2006 and Perspectives for 2007 - James Petras

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by James Petras

Introduction: Escalation of Warfare

To understand US-Latin American relations this year and its likely trajectory in 2007 it is obligatory to consider three dimensions:

1) the global context of US-LA relations;
2) internal dynamics of the US and
3) the real practical political-economic consequences of the 2006 elections in Latin America.

US imperial policy continues to pursue military victories in Iraq and Afghanistan, to give unconditional support to Israel’s war against the elected Palestinian Government and to threaten a direct or Israeli attack on Iran. In other words, the prolonged, costly and inconclusive wars in Iraq, Afghanistan, Lebanon and Palestine during 2006 will continue in 2007. Further military escalation, includes increased US troops and spending for wars in the Middle East; an extra $800 million USD in addition to the annual $3 billion USD for Israeli war plans against Lebanon, Palestine and especially Iran. Those commentators who interpreted US policy via public opinion polls, electoral processes (the victory of the Democrats), advisory reports (Baker’s Iraq Study Group) and casualty rates in Iraq, and predicted a ‘gradual’ withdrawal, failed to understand the logic of the White House’s political strategy. For the Bush regime, the military failures are a result of the application of insufficient power: what is necessary, they argue, is greater numbers of soldiers and bigger military budgets (BBC 12/16/06).


Both in the United States, Latin America and in the world at large, profound and deepening divisions are driving policy and provoking increasing conflicts. The lines of division in the United States on the fundamental questions of confrontation or negotiation in the Middle East and Latin America cut across the two major parties, and the liberal-conservative spectrum. On the one side the White House, backed by pro-war Democrats, Republicans, the Presidents of the Major Jewish Organizations, right-wing veteran groups and neo-conservative intellectuals and the majority of the corporate mass media. On the other side, minorities in the major parties and mass media, the majority of public opinion, sectors of the active and retired military officers, establishment intellectual and prominent political critics of the Zionist lobby and war policies like Brzezinski, James Carter, James Baker among others.

Similar divisions appear with regard to Latin American policy. The White House, backed by the Cuban (exile) lobby, the Pentagon and a minority of right-wing ideologues and business groups favor forceful pressure and intervention against Cuba, Venezuela and Bolivia and support of illegitimate President Calderon, the Santa Cruz separatists in Bolivia and other authoritarian extremists in the region. In varying degrees of opposition, stand liberal and conservative congress-members backed by agro-business exporters, tourists agencies, a majority of public opinion and sectors of the State Department headed by Undersecretary for Latin American Affairs, Shannon, who support greater emphasis on diplomacy, negotiations and a ‘two-track’ approach.

Within Latin America similar profound divisions emerged in 2006 which will deepen in 2007. In Mexico, the minority Calderon regime faces major opposition from the AMLO coalition, Oaxaca popular assemblies, the trade unions and social movements. As he proceeds to deepen the liberalization of the economy and he militarizes the country to implement his program, the polarization will deepen.

In Bolivia, rightwing business and agro-business elites regrouped, taking advantage of Morales conciliatory policies and incapacity to carry-out any major redistributive policies (in land and income) – and have consolidated a power base in Santa Cruz, which has forced Morales to retreat further in his reforms and aroused mass popular discontent. Similar divisions have appeared in Ecuador, between the peasants/Indians of the Andean region and the land barons and bankers of the Coast. In Colombia the divisions between the paramilitary forces allied to President Uribe and the popular civil society organizations (and the guerrilla) have deepened (Boston Globe December 14, 2006). In Venezuela the polarization between the Socialist and social-liberal Chavistas(and their allies among the ‘moderate’ opposition) will surface in 2007 as Chavez implements party and cabinet changes in pursuit of a socialist agenda.

These internal divisions in the US and Latin America are played out in an international context which radicalizes the class and national confrontations.

International Context

Two world-historic processes affect US policy toward Latin America: 1) the prolonged Middle East wars and 2) the dynamic growth of the four Asian powers led by China. The Middle Eastern/South Asian wars have severely overextended US military forces, undermined domestic support for new wars and severely strained the budget. These outcomes have weakened the US military capacity for intervention in Latin America in support of a military coup, or, even less, a direct military invasion. As a result the US increasingly relies on domestic (Latin American) clients to defend its interests (Calderon, Santa Cruz land/business barons, Garcia, Uribe).

Asia’s (particularly China and India) dynamic growth and demand for raw materials (iron, copper and oil), food and agricultural products (like soya) has resulted in greater competition with the US/EU for access to Latin American exporters and suppliers, and increased prices and revenues for Latin American treasuries (major trade and budget surpluses). Asia increases the diversity of markets and investors for Latin American exporters. These changes mean less dependence on external financing (especially the IMF) and US markets which in turn means Washington has less political and diplomatic leverage over Latin American regimes, even neo-liberal governments like Lula, Bachelet, Kirchner and Vazquez.

Faced with a loss of military capacity and a decline in economic leverage, Washington is moving toward a ‘compromise’ between the White House’s hard line militarists and the State Department’s market-driven ‘negotiators’. The essence of the compromise is to pursue a ‘two-track policy’: combining support for the subversive opposition in countries where it is strong (Bolivia) with negotiation in countries where it is weak (Venezuela). With regard to the neo-liberal regimes, which have some degree of autonomy (Brazil, Chile and Argentina), Washington will emphasize bilateral relations and try to maximize economic opportunities while discouraging any concession to the mass movements especially demands to reverse privatizations. The two-track policy will be combined in the cases of Cuba and Venezuela: with promises of dialogue and agreements conditional on major concessions in diplomacy, property and investments combined with continued financial support for agents of destabilization.

Latin America: Political Changes and US Response

The mild response of the US to the regime changes resulting from the Latin American elections of 2006 can easily be explained by the fact that they did not produce any consequential socio-economic structural changes, at least for the foreseeable future.

The clearest demonstration of the marginal effects of ‘center-left’ electoral victories is the case of the electoral victory of Lula who made it clear to even his own most ardent intellectual supporters (Frei Betto, Emir Sader, Joao Pedro Stedile) that he considered ‘leftism an infantile disorder’ (La Jornada 12/14/2006), a remark much appreciated in business circles throughout the hemisphere. No doubt Wall Street was pleased that the Brazilian ‘Workers Party’ voted to double Congressional salaries from$6500 USD to $12000 USD per month (and doubling each Congress member’s individual monthly budget to $75,000 USD) while increasing the minimum wage by $7 USD a month from $159 to $166USD (about 1.7% after inflation) (Financial Times December 16-17, 2006). One out of five Brazilian Congress members (many from Lula’s coalition) are currently under investigation for corruption. Wall Street speculators who also were recently investigated for fraud and yet received huge year-end bonuses would feel a real identity of condition with Brazilian lawmakers who doubled their salaries, while awaiting criminal charges.

Contrary to White House expectations, but much to its liking, Evo Morales’ regime pursued orthodox, austere fiscal policies aimed at budget surpluses, eschewed any redistributive policies (virtually no land, mining or energy expropriations). While Morales demobilized the social movements and focused on endless legal procedures, the oligarchy regrouped, expanded its power base in Santa Cruz and threatens to bring down the government. While Washington’s oligarchic Bolivian clients advanced toward power (La Jornada December 16, 2006) Evo Morales continued his self-destructive policies of symbolic radical populist rhetoric and greater concessions to the elites. Washington has maintained a foot in both camps, providing over $60 million dollars in foreign aid to Morales and untold millions to the opposition in Santa Cruz organizing massive ‘separatist’ demonstrations ( December 16, 2006).

Washington’s ‘soft-line’ negotiators (Shannon) strengthened their position vis-a-vis the White House’s ‘hard line’ policy toward Venezuela by pointing to Hugo Chavez’ electoral victory (63% of the vote) as a reason for a rapprochement (La Jornada, December 14, 2006). Shannon has advanced the argument in Washington that a significant sector of the Chavez government was open to a negotiated pact with involves freezing the status quo, softening criticism of US imperial policies, consolidating oil and gas agreements and blocking any steps toward socializing the economy.

Perspectives for 2007

The international position of the US during 2007 will continue to deteriorate – the coming massive military escalation in Iraq, the large-scale transfer of arms for Israel to threaten or attack Iran, Syria, Hezbollah or Hamas (or all simultaneously) – will not lessen the armed resistance in Iraq. A US-backed Israeli attack on Iran will extend warfare throughout the Gulf States including Saudi Arabia. On December 15, 2006, Bush presented the Presidential Medal of Freedom to Israeli extremist, Natan Sharansky– advocate for the genocidal ‘transfer’ of all Palestinians from ‘Greater Israel’ – symbolizing the meeting of the minds of US imperial militarism and Israeli brutal colonial expansionism. The total discarding of any new diplomatic initiative (like the recommendations of Baker’s Iraq Study Group), is the result of the combined strength of the powerful pro-Israel Lobby and the Bush-Cheney-Rice White House.

Washington, overextended militarily in the Middle East, will follow its ‘two-track’ policy in Latin America. The White House will support incumbent clients (like Uribe, Calderon and Garcia); the State, Treasury and Commerce Departments will engage in trade agreements with more ‘autonomous’ neo-liberal regimes like Lula, Bachelet, Vazquez and Kirchner), encouraging greater distance from Cuba and Venezuela and closer diplomatic relations with the US. With regard to Bolivia, Washington will continue to pressure Morales to make further concessions to the far-right civic-oligarchic coalition based in Santa Cruz, allowing the local business elite to ‘carry the ball’ for US imperial interests. In Venezuela, the ‘two track policy’ will attempt to deepen the political divisions in the Chavista movement, in order to block new Chavez initiatives toward greater socialization and in order to promote new political configuration of ‘moderate oppositionists’ and liberal Chavistas.

The weakest link in Washington’s projected strategy in Latin America is the re-emergence of socio-political movements, like those which burst forth in the late 1990’s and first years of the new century: The MST in Brazil, the workers, peasant and Indian movements in Bolivia and Ecuador and the mass uprising in Oaxaca and electoral protests in Mexico are in the process of re-grouping, none having suffered a historic defeat. All the major popular movements retain their organizational structures and have recovered their political independence. They will soon be capable of once again engaging in major uprisings and political confrontations with the oligarchies in power or with their shock troops in the streets.

The New Year does not promise ‘more of the same’: it will start with a major US military escalation in the Middle East but it will likely end with a greater military debacle, ensuring deepening political crises and increased economic instability both in the Middle East, the US and Latin America. The weakening of the US political regime will open a window of opportunity for a decisive break with the US Empire, providing that the re-emerging social-political movements can overcome the obstacles posed by the new political elites of ex-leftists and traditional oligarchs.

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