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PORTSIDE  April 2012, Week 5

PORTSIDE April 2012, Week 5

Subject:

Latin America Delivers A Swift Kick

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Mon, 30 Apr 2012 21:55:55 -0400

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Latin America Delivers A Swift Kick 

By Conn Hallinan

Dispatches From The Edge

March 30, 2012

On one level, April's hemispheric summit meeting was an
old fashioned butt kicking for Washington's policies in
the region. The White House found itself virtually
alone-Dudley Do Right Canada its sole ally-on
everything from Cuba to the war on drugs. But the
differences go deeper than the exclusion of Havana and
the growing body count in Washington's failed anti-
narcotics strategy. They reflect profound disagreements
on how to build economies, confront inequity, and
reflect a new balance of power in world affairs.

The backdrop for the summit is anger in Latin America
over the failure of the U.S. and Europe to stimulate
their economies, all the while pursuing policies that
have flooded the region with money-a " monetary
tsunami" in the words of Brazilian President Dilma
Rousseff-driving up the value of southern hemisphere
currencies and strangling local industries.

After meeting last month with President Obama, Rousseff
said she told him of Brazil's "concern with the
expansionary monetary policies of the rich
countries.leading to the depreciation of developed
countries currencies and compromising growth among
emerging economies."

While Latin American economies are in better shape than
those in Europe and the U.S., the recession dogging the
latter areas-plus the cooling of the Chinese
economy-has slowed growth throughout much of Latin
America. Brazil's most recent figures indicate a
stalled economy, which could have an impact on efforts
by the Rousseff government to raise living standards
and narrow what was once the world's biggest gap
between rich and poor.

According to the Getulio Vargas Foundation Brazil has
lifted 33 million out of extreme poverty since 2003
and, out of a population of 190 million, has created a
relatively well-paid workforce of some 105.5 million.
In contrast to the U.S. and Europe, where the wealth
gap is accelerating, income for the poorest 50 percent
of Brazilians has risen 68 percent, while for the top
10 percent, it has grown only 10 percent.

This growth has come about because most countries in
Latin America reject the economic model pushed by
Washington and the European Union: free trade,
financial deregulation, and deep austerity.

Argentina is the poster child for the region's
rejection of the so-called "Washington consensus."
Throughout much of the `90s, a deeply indebted
Argentina followed the strictures of the International
Monetary Fund (IMF), slashing government spending and
instituting a suffocating austerity. The result was a
"debt trap": cutbacks increased unemployment, which
dampened tax revenues, which required yet more
cutbacks, and more unemployment. In the end, debts went
up. From 1998 to 2002, Argentina's economy shrank 20
percent. By the time Buenos Aires finally said "enough"
and defaulted on its $100 billion sovereign debt, half
of its 35 million people were below the poverty line.

Argentina reversed course and primed the economy with
government spending on housing, highways and education.
It also subsidized 1.9 million low-income families,
which cut poverty in half. Since 2002, the economy has
grown at an average rate of 6 percent a year, and
joblessness has fallen from 20 percent to 8 percent.

Brazil has followed a similar strategy that is now
threatened by the fiscal and monetary policies of the
U.S. and Europe. Those policies have caused the value
of Brazil's currency, the real, to grow, which prices
Brazilian manufactured goods out of the international
market.

"There is concern in South America about
deindustrialization," says Alicia Barcena of the UN
Economic Commission for Latin America. "Therefore some
countries are taking measures to support their
productive sectors." While the Obama Administration
calls this support "protectionism," Brazilian Finance
Minister Guido Mantega says, "The measures we are using
are to defend ourselves."

There are other issues Latin Americans are unhappy
about that never made it into U.S. media accounts on
the summit, in particular the make-up of the permanent
members of the United Nations Security Council that
Brazil-along with India and South Africa-would like to
join.

As former Brazilian President Luiz Lula da Silva told
the African Union summit last July, "It isn't possible
that the African continent, with 53 countries, has no
permanent representation in the Security Council. It
isn't possible that Latin America with its 400 million
inhabitants does not have permanent representation.
Five countries decide what to do, and how to do it."

The five permanent members of the Security Council are
the U.S., Britain, France, Russia, and China.

While the U.S. has endorsed India's bid-in large part
because it is wooing New Delhi to join its anti-China
coalition-Washington has been consciously silent on
Brazil's bid.  Indeed,  United Nations U.S.
representative Susan Rice has been sharply critical of
Brazil, India and South Africa for not supporting
intervention in Syria. "We have learned a lot [about
these three countries] and frankly, not all of it
encouraging." The message is clear: back us and we will
think about it.

The summit was particularly critical of the Obama
administration around the exclusion of Cuba, causing
the President to turn positively peevish. "Sometimes I
feel.we're caught in a time warp, going back to the
1950s and gunboat diplomacy and Yankees and the Cold
War."

But from Latin America's point of view, by maintaining
a half-century-old blockade, it is the U.S. who seems
locked into the world of the Cold War. And there are,
indeed, some worries about "gun boats," specifically
those that make up the newly re-constituted U.S. Fourth
Fleet, mothballed in 1950 and revived by the Bush
Administration. The U.S. has also recently established
military bases in Colombia and Central America.

The Brazilians are particularly nervous about the
security of their newly found offshore oil deposits,
and the head of the Brazilian Navy, Admiral Luiz
Umberto de Mendonca, is pressing Brasilia for surface
ships and submarines.

Testifying before the Brazilian House of
Representatives,  Simon Rosental of the prestigious
Escuela Superior de Guerra (ESG) institute warned that
"The world has known oil reserves that will only last
25 years and in the United States, only for the next
ten years."

It may be a bit of a stretch to imagine the U.S.
actually threatening Brazil's offshore oil deposits,
but Latin Americans can hardly be blamed if they are a
tad paranoid about the Colossus of the North. For the
past 100 years the U.S. has overthrown governments from
Guatemala to Chile, and supported military juntas
throughout the region. Brazil only recently emerged
from its own U.S.-backed dictatorship.

"South America," says Moniz Banderia of the ESG, "is
really trying to define its own identity, to
differentiate itself from the United States, in
opposition to its domination, which is evident in the
creation of UANSUR [Union of South American Nations]
and the South American Defense Council."

UNASUR was established in 2008 and includes all 12
South American nations, plus observers from Panama and
Mexico.

The Defense Council's Action Plan 2012 aims to
integrate the militaries of the region, establish a
"peace zone" on the continent, and create a space
agency, an essential step for launching satellites.

Certainly issues like Cuba, the war on drugs, and the
tensions over Britain's claim on the Malvinas/Falkland
Islands are areas of friction between the U.S., Europe
and South America. But it is in the realm of economics,
poverty alleviation, and independent foreign policy
that the differences are sharp.

South Americans tried the austerity model and found it
wanting. They have also seen the U.S. and NATO spark
wars in Afghanistan, Iraq, and Libya, and they are
deeply suspicious of policy of "humanitarian
intervention" in places like Syria because they don't
trust the motives behind it. Members of the BRIC
countries, made up of Brazil, South Africa, India,
Russia, and China, share those suspicions.

"There's almost a third-world sense, a post-colonial
sense," says Mark Quarterman of the Center for
Strategic and International Studies, "that they were
meddled in, in ways that didn't rebound to their
benefit, and now the same countries are claiming
humanitarian reasons for meddling."

Thus in Libya, the UN enforced an arms boycott and an
oil embargo on the Qaddafi regime, while the French
supplied arms to the rebels and Qatar handled rebel oil
sales. Brazil and other BRIC nations see a similar
pattern in Syria. In the meantime, the U.S. and Europe
are conspicuously silent on oil-rich Bahrain's
suppression of its Shiite majority and the lack of
democracy in the monarchy-dominated Persian Gulf
states.

So far the Obama Administration has responded to South
America's growing independence by increasing the U.S.
military footprint in the region and acting churlish.
While the leaders of India and South Korea got formal
state affairs, the U.S. President gave Rousseff a two-
hour meeting. "Obama could have taken her to dinner,"
one Brazilian official complained to The Guardian (UK)
"or to the Kennedy Center."

But Latin Americans no longer pay as much mind to the
atmosphere in Washington as they used to. They are too
busy confronting poverty and underdevelopment, forging
a multi-polar world in which the U.S. is looking
increasingly out of touch.

___________________________________________

Portside aims to provide material of interest to people
on the left that will help them to interpret the world
and to change it.

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