Is Washington Losing Latin America?

Peter Hakim

From Foreign Affairs, January/February 2006

Summary:  For nearly a decade, U.S. policy toward Latin America has been narrowly focused on a handful of issues, such as China's growing influence in the region and the power of Venezuelan President Hugo Chávez. Latin Americans want economic ties with the United States but feel slighted by Washington and uneasy about the U.S. role in the world. The costs of the estrangement will be high for both sides.

PETER HAKIM is President of the Inter-American Dialogue.

Even more troubling to U.S. officials has been the evolving political situation. Washington likes to tout Latin America as a showcase for democracy. Democratic politics are still the norm in the region; only Cuba remains under authoritarian rule. But in the past decade, nearly a dozen elected presidents have been forced from office, many by street protests or mob violence. Despite holding elections and plebiscites, Venezuela today barely qualifies as a democracy. The same is true of Haiti, which more and more is coming to resemble a failed state. In Bolivia and Ecuador, fractious politics are reinforced by deep social, ethnic, and regional divisions. In Nicaragua, an alliance of corrupt legislators from the left and the right has so paralyzed the government that next year's presidential election may restore to power Washington's nemesis Sandinista leader Daniel Ortega. And these are not the only countries in the region where democracy is under stress and could deteriorate quickly.

Although a majority of Latin American citizens still consider democracy to be the best form of government, most hold a low opinion of their government and leaders. In many places, the performance of public institutions, tainted by corruption, has been lackluster. Judicial systems in the region are mostly slow moving and unfair. Legislatures operate erratically. Political parties are weaker and less representative than ever. Only a few Latin American countries, most prominently Chile, have bucked the region's discouraging trends and made progress in consolidating democratic politics.

The Bush administration's disillusionment with Latin America goes well beyond the region's economic and political failings, however. Washington has bristled at Latin America's opposition to much of the United States' post-9/11 security agenda. The White House was outraged when Chile and Mexico, Latin America's representatives on the UN Security Council in 2003 and two of Washington's closest allies in the region, opposed a resolution endorsing the invasion of Iraq. In fact, of the 34 Latin American and Caribbean countries, only seven supported the war. Six of them (Costa Rica, the Dominican Republic, El Salvador, Honduras, Nicaragua, and Panama) were engaged in trade negotiations with the United States at the time. And the seventh, Colombia, receives more than $600 million a year in U.S. military aid.

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More serious than Latin America's distaste for U.S. policies, however, is the emergence of Venezuelan President Hugo Chávez as a vexing and potentially dangerous adversary. Under Chávez, Venezuela has developed close ties to Cuba and is now generously subsidizing the island's economy. Some in Washington think this support could complicate Cuba's post-Castro transition by helping a repressive regime hold on to power. And there are more immediate concerns. Although the nature of Chávez's involvement remains murky, administration officials are convinced that he is provoking instability in some of the most volatile states in the hemisphere, including Bolivia, Ecuador, and Nicaragua. His alleged links to Colombia's leftist guerrillas and the sanctuary they enjoy in Venezuela also worry U.S. officials.

Furthermore, Chávez's ambitions are not limited to stirring up trouble in a few neighboring countries. He has made clear his intent to forge a wide anti-U.S. coalition in order to replace Washington's agenda for the hemisphere with his own -- one that rejects representative democracy and market economics. So far he is a long way from succeeding: no other government has followed his economic or political lead. Indeed, nearly every Latin American country still sees its future as being linked to the United States and wants to strengthen its relations with Washington. Nonetheless, the United States is alarmed by the prospects that Ortega could take power in Nicaragua and that a radical government could come to power in Bolivia if the left-wing indigenous leader Evo Morales wins the presidential elections in December 2005. Chávez has close ties to both leaders and is assisting them financially.

Despite his failure to export his "Bolivarian Revolution" thus far, Chávez, buoyed by enormous oil revenues and virtually unchecked power at home, is working to increase his influence in the region. On his watch, Venezuela has launched Petrocaribe, an energy alliance designed to deliver subsidized oil from Venezuela to the small states of the Caribbean, and begun financing Telesur, a regional news network intended to compete with the BBC's and CNN's Spanish-language programs. Venezuela is nearing full partnership in Mercosur, South America's most important free-trade zone, which also includes Argentina, Brazil, Paraguay, and Uruguay (Bolivia, Chile, and Peru are associate members). And Chávez has proposed the creation of Petrosur, which would be a confederation of the region's state-owned petroleum companies; he has also suggested forming a nuclear energy consortium with Brazil and Argentina and establishing a South American development bank.

Venezuela and the United States have clashed repeatedly at the Organization of American States (OAS) and other regional institutions. Last November, when President Bush and the hemisphere's 33 other elected presidents and prime ministers traveled to Mar del Plata, Argentina, for the fourth Summit of the Americas, violent anti-American demonstrators filled the streets. Chávez was the only head of state to join the protests (although his ally and Bolivian presidential candidate Morales joined him). His raging polemics fired up the crowds and revealed once again his political reach and popularity in the region. Although the other national leaders largely ignored him, the world press gave ample coverage to his antics.

Washington is galled that no government in Latin America has yet been willing to help it challenge Chávez. Even governments closely associated with Washington have some sympathy for the Venezuelan leader's anti-Bush, anti-American polemics. Although from time to time Brazil has helped restrain Chávez, President Luiz Inácio Lula da Silva, a staunch democrat, said in the fall of 2005 that Venezuela suffered from an excess, not a lack, of democracy. At last year's meeting of the OAS General Assembly, Latin American diplomats rebuffed a U.S. proposal to establish a committee to monitor democracy in Latin America, which was seen as a U.S. effort to put a spotlight on Chávez's democratic failings. Many regional governments are unhappy with Chávez and his policies, but they are unwilling to risk their commercial and financial relationships with Venezuela or pay the domestic political costs of opposing him.

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