Latin America's New Consensus (Page 2)

Asian investment, road building and common markets are not what Fidel Castro had in mind when in the 1960s he rallied third-world youth to take up arms against Yankee imperialism. Yet the rise and maintenance of the United States as a world power has long been predicated on claiming Latin America as its own. On the eve of the cold war, for instance, even as Harry Truman was promoting the United Nations and pushing for open markets elsewhere, his envoys in Latin America were negotiating an alliance that gave preferential treatment to US corporations and allowed Washington to mobilize the region as a bloc in its struggle against the Soviet Union.

In the past few years, however, the region's most consequential nations have refused to be conscripted into Bush's "war on terror." And unlike the way they lined up to quarantine Cuba during the cold war, they have rebuffed Washington's calls to pursue an "inoculation strategy" against Chávez, as Secretary of State Rice put it to Congress in February. Last year, Bush even saw his nominee to head the Organization of American States bested by a candidate backed by Venezuela. If Latin America's new left achieves nothing else, it has at least broken the political bonds of this proprietary relationship.

The FTAA is the US government's gambit to turn things around. It is meant to do for Latin America what the North American Free Trade Agreement did for Mexico: ratify its status as a US province within an increasingly globalized economy. Under NAFTA the United States has come to dominate Mexican trade, muscling out other Latin American countries. The same is expected to occur when the Chilean and Central American free-trade pacts are fully implemented. Call it "market polygamy," whereby the United States can have multiple partners but each of those partners must remain faithful to it alone.

Hopes that Brazil could counter the gravitational pull of the United States have been diminished by the corruption scandals that in the past ten months have rocked Lula's Partido dos Trabalhadores (PT) and shattered its Congressional coalition. While Lula has not yet announced whether he will stand for re-election in October, recent polls indicate that if he does, he will most likely face a tough fight. There is still time for him to pull through. He has recently raised the minimum wage, increased social spending and cut interest rates, all in the hopes of boosting the economy in the run-up to the election. But even if he does win a second term, he will govern from a greatly weakened position.

As Lula recedes, Chávez proceeds. Until his victory in the August 2004 recall, it was easy to dismiss the Venezuelan president as the latest in a long line of Latin American Bonapartists, a strongman who emerged to restore order after Venezuela's two-party system collapsed under the weight of its own venal incompetence. During Chávez's first six years in office, his fiery rhetoric did little to diminish economic inequality or challenge the generous contracts his predecessors gave to petroleum multinationals. But whereas Lula started with high expectations only to disappoint, Chávez has moved in the opposite direction. He has rebounded from the recall fight to quicken the pace of reform. With the economy booming, unemployment falling, the opposition in disarray and his Fifth Republic Movement in control of Congress and regional posts, he has accelerated the distribution of expropriated land, nationalizing industries and diverting Central Bank reserves to diversify the economy.

For Washington, the most immediate threat posed by Venezuela is not the spread of "false populism" in Latin America but Chávez's emergence as the motor behind the left's attempt to advance economic and political multilateralism. He has turned out to be a skilled rope-a-dope artist, making at times preposterous political pronouncements--in March Chávez requested that the legislature have the white horse on Venezuela's flag face left instead of right, so that it would no longer be an "imperialist horse"--while playing a nimble Great Game of geopolitics. He has capitalized on the rise of China and India as alternative sources of investment and trade--Venezuelan exports to India tripled over the past year, while oil sales to China are expected to double this year and increase fivefold by 2010--and parlayed the 2004 election of Spanish Prime Minister José Luis Rodríguez Zapatero into a strategic victory. Under Zapatero's predecessor, José Aznar, Madrid not only backed Bush's "war on terror" but helped enforce neoliberalism in Latin America through Spain's powerful banking sector. That has changed as Zapatero and Chávez have joined their respective countries into a corridor linking South America and the European Union. Although Washington may yet scuttle the deal, Spain recently agreed to sell Venezuela $2 billion worth of transport planes and patrol boats, while Caracas has offered a long-term agreement to supply Spain with gas and oil.

Chávez has cultivated alliances across the ideological spectrum, buying arms from Russia and negotiating a deal with Colombia's conservative President Alvaro Uribe to build a natural gas pipeline connecting the two countries--the first step in what observers believe will give Venezuela access to the Pacific and lower export costs to China. Venezuela has also managed to secure the tacit endorsement of Chile's just inaugurated Bachelet for its bid to become a nonpermanent member of the UN Security Council, which surely will contribute to John Bolton's anger issues.

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