A
mainstay of United States foreign policy has always been the
containment of Latin America and its ability to exert influence
over that region. But with the emergence of populist leaders
who adhere to socialism, can the United States continue to make
its presence felt there?
Practically every Latin American country except
Colombia is run by a nominally left- wing government and with
a spate of general elections expected this year, that scenario
is not likely to change anytime soon.
While the United States is distracted by its
occupation of Iraq, its war against terrorism, the quelling
of the "hotspots" of the world, not to mention what
seems like a crusade against rabid Islamic fundamentalism, Latin
America has championed social benevolence in the hemisphere.
Closer to home, the PetroCaribe initiative is
a case in point. Last year saw oil prices soar as high as US$70
a barrel, a scenario that would see the smaller economies of
the Caribbean coming under tremendous pressure.
Venezuela, under the Hugo Chavez administration,
instigated the PetroCaribe agreement which would see it pledging
highly preferential oil prices to the Caribbean with Caracas
picking up 40 per cent of the cost if oil reaches more than
US$50 a barrel. Many Caribbean countries signed up but Trinidad
and Barbados steadfastly refused. For the past few years, Ambassador
Hylton of Jamaica has sought to gain advantageous terms from
Trinidad pointing to the Treaty of Chaguaramus, but to no avail.
With PetroCaribe a reality, Trinidad is now
up in arms, threatening Caricom partners that they won't get
oil if they continue to do business with PetroCaribe. Although
Trinidad has set up its own oil trade deal called the Caricom
Petroleum Compensation Fund, to date eight countries have endorsed
the PetroCaribe scheme.
Trinidad's Prime Minister Patrick Manning, it
would seem, concurs with the United States that Venezuela is
using oil as a political tool. Chavez denies using oil to secure
political influence in the Caribbean.
Many Washington insiders see Chavez and Castro's
closeness as a threat to the stability of the Caribbean more
so because of both Cuba's and Venezuela's social benevolent
programmes such as Cuba's affordable health and free eye-care
programme and Venezuela's offers of affordable energy.
More worrying to the United States is the agenda
laid out by Bolivia's newly elected President Evo Morales. He
has vowed to nationalise the country's gas industry, legalise
the growing of coca (from which cocaine is produced) and to
stand behind native Indian rights, declaring that no longer
will they be regarded as second- class citizens in their own
country. Morales has formed an alliance with Chavez with both
men sharing a similar political outlook.
Chavez is reported to have said: "The axis
of evil - do you know who the axis of evil is? Washington- that's
the axis of evil. And their allies in the world who threaten
to invade, who kill, who assassinate."
Morales added: "We are creating the axis
of good, the new axis of the new century. The movement is not
only in Bolivia; Fidel (Castro) in Cuba and Hugo in Venezuela
are logging triumphs in social movements and leftist policies."
Chile's first woman President, Michelle Bachelet, is a somewhat
more benign socialist, and like President Lula in Brazil is
committed to a free-market economy and is not looking to deliberately
irk the United States.
In Mexico Vincente Fox has long been an "amigo"of
the United States but that is not likely to be the case if he
is ousted by leftist Andres Manuel Lopez Obrador whose campaign
is gaining traction as an election in July approaches.
In Costa Rica opinion is divided as to whether
the country should support the Central American Free Trade Agreement
(CAFTA) which was conceived by the United States.
What is clear is that there is a new Andean
movement, which is leftist in thought and is committed to progressive
socialism. No longer inclined to the military posturings of
Peron and Pinochet they are committed to balancing their budgets,
growing their economies and putting social programmes in place.
Argentina chose to default on its debt but grow
its economy leaving many creditors upset. It is this nationalistic
approach that is coming to define South America as it no longer
is prepared to suckle on the teat of the United States choosing
instead to move to more solid sustenance.
Vital data
According to the U.S economics data body, National
Association for Business Economics (NABE), Latin America's largest
economy, Brazil, was expected to expand by 2.3 per cent in 2005,
down from a previous forecast of 3.5 per cent growth, due to
sky-high interest rates aimed at keeping inflation under control.
But economists believe that rates will fall steadily in 2006,
leading to Brazilian economic expansion of 3.5 per cent this
year.
Argentina, South America's No 2 economy, racked
up a whopping 8.6 per cent growth last year as it continued
to rebound from an economic meltdown in 2002. But growth for
this year is expected to come in at 5.7 per cent.
According to the Santiago (Chile) - based United
Nations agency Economic Commission for Latin America and the
Caribbean, Latin America posted solid economic growth in 2005
for the third straight year, but its economies lagged behind
other nations struggling with poverty.
Regional economic growth was 4.3 per cent in
2005 and is expected to be 4.00 per cent this year.
Venezuela reported 9 per cent growth last year
compared with 17.4 per cent in 2004 while the economies of Chile,
Panama and Peru grew by about 6 per cent. El Salvador came in
at 2.5 per cent and Paraguay and Mexico 3.00 per cent.
Last year Cuba announced that it had turned
a corner in its recovery from severe financial crisis, reporting
11.8 per cent growth in 2005 using its own singular method for
calculating gross domestic product. Cuba's economics minister
Jose Luis Rodriguez predicted growth of 10 per cent for 2006.
There is a prevailing thought that Latin American
leaders have adopted the populist model as a way of positioning
themselves within the global economy. Under Chavez's lead Latin
America is back on the map. The privatisation of national industries,
isolating American investment and national rhetoric are becoming
contagious, but are also driving away both local and international
investment. In order to prevent investors pulling their money
out of these Latin American countries Andean governments are
now regulating exchange rates.
An isolationist approach that goes the way of
populism may indeed inhibit Latin America because it is in desperate
need of foreign investment. However, many of its leaders recognise
that globalisation is not in its best interest hence the reluctance
to sign up to the FTAA and CAFTA.
Diego Bivero in his article entitled " Populism in Latin
America Isn't Going Anywhere Anytime Soon,"said: "Developed
countries like the United States could take measures to stop
populism from spreading like wildfire in Latin America by allowing
certain economic measures that would boost their economies.
Most notably Latin America suffers from the fact that the United
States and Europe have imposed tariffs on products such as steel,
and have heavily protected their agricultural sectors. These
restrictions make it increasingly difficult for Latin exports
to find their way into European and American markets."
Former World Bank Chief Economist for Latin
America, Sebastian Edwards, states that: "Policies in the
US and Europe that promote free trade and allow Latin American
agricultural commodities and other exports to reach their markets
would go a long way towards finally defeating the spectre of
populism in Latin America."
