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ISSUES....
Inside, confidential, off the record


A vanishing species

Is tne U.S. becoming a Vanishing Species in South America?

Russia and Iran are engaged in a remarkable act of brinksmanship with the
Bush Administration this week. Russia let it be known that it was
considering the sale of nine advanced submarines to Chavez in a $9 billion
contract. If this sale goes through, Chavez would be on the way to naval
dominance over his Latin American neighbors. This sale would follow earlier
Russian sales of advanced fighter aircraft to Chavez and other assorted
arms.

Iran is also breaking new ground. Iran announced that it would be reopening
its embassies in Chile, Colombia, Ecuador, and Uruguay, along with a
representative office in Bolivia. Iran, with Hugo Chavez, clearly sees s
the Andean states as the US's soft underbelly in South America, and is
moving in for the kill. Iran's enhanced presence in the Andes will
reinforce aggressive new moves in Bolivia and the Andes by Chavez, Castro,
and Evo Morales.

To review the state of play, Bolivia and Ecuador are falling into Chavez's
orbit (which means Iran's orbit). Argentina is moving in the same
direction, along with Brazil and Chile, albeit at a slower pace than Bolvia.
Meanwhile, Colombia, the US's traditional ally, and today the US's only
major ally in South America, stands isolated in the region. This is not a
satisfactory picture, especially for US Hawks.

What makes this situation unusual is the US reaction, or rather the lack of
a US reaction. To be fair, the US cannot say much about Russian arm sales
in South America when the US itself is selling advanced weapons to Eastern
Europe, including participation in a global missile defense system, as well
as to the former Soviet Republics.

The US calculation on Iran's growing presence in South America is different.
The US clearly looks upon Iran as partner in Iraq and the Middle East,
hence the Bush Administration's eagerness to follow the Baker-Hamilton
recommendation for US-Iran engagement. What works in the Middle East will
work in the Andes, or so goes the thinking of the Bush Administration. We
think President Bush is dreadfully wrong here. The US Hawk will return, and
sooner rather than later.


ISSUES....

Is an independent journalist effort from Petroleumworld, on Inside, Confidential
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