This upcoming week and month will bring attention from the FPA towards Latin America. In addition, Fareed Zakaria interviewed Alvaro Uribe, President of Colombia last week and the interview was aired this past Sunday. Brazil and Rio de Janeiro has also won their bid to host the first Olympics for Brazil and South America as a whole, but issues abound as developing countries will always be seen in the light of the negative and positive aspects of the last Olympics in China, a fellow BRICs nation where order and progress might not include all Carioca in this celebrated event.

A book signing by Ambassador Heraldo Muñoz will take place on October 8th in New York City. Heraldo is the Permanent Representative of Chile to the United Nations and Chairman of the United Nations Peace-Building Commission. He will discuss his new book, “The Dictator’s Shadow: Life Under Augusto Pinochet” at the lecture and book signing. Those of you in New York who would like to attend can find the link to the event here on the FPA website.

Later in the month, a lecture series supported by the FPA will be presenting His Excellency Ambassador Arturo Sarukhan, Ambassador of Mexico to the United States. He will be speaking on: “Mexico’s Foreign Policy and the Current State of Mexican-American Relations.” For more information on the October 21st event, please see the link here.

Fareed Zakaria has interviews numerous leaders in the Middle East and Latin America last week. His interviews with Chavez, Ahmadinejad, and Gadhafi last week were topped off with a short interview with President Alvaro Uribe of Colombia, which was aired this past Sunday. I have a great appreciation of Zakaria’s work and focus on global policy issues and thought his interviews last week did bring out important questions and concerns, which were politely asked and validly addressed and pressed upon in all three initial interviews. Uribe’s interview, while informative, did lack deeper questions and seemed to be a lot shorter than those last week. Generally Zakaria asks many questions of leaders which I have always wanted to know myself, but often can only find in Spanish language or Arab language media. The interview with Uribe was altogether good, but for a leader who is likely the most popularly elected leader in the Western Hemisphere, certain questions were absent for the most part. Zakaria is well aware of the threats on Uribe’s life, 15 and counting, and Uribe answered those questions diligently. What I believe was lacking was questions on Colombia’s position and evidence regarding foreign support for the FARC and other internal terrorist movements in Colombia. This was a disappointment due to the lack of attention in English language media on the topic and the fact that in the interview with Chavez, conflict with Colombia was addressed but not responded to in the accompanying Uribe interview. As well, claims by US and Canadian officials denying support for an FTA between Colombia and its northern neighbours did not enter into the discussion, despite the growing debate over the country’s human rights record. This would have been interesting as the US and Canada has a trade policy that avoids criticizing similar or worse human rights records with other US and Canadian trading partners, namely China and for Canada, China and Cuba to name a few. While the agreement will be passed it seems between Canada and Colombia, an election in Canada was almost created over the issue two weeks ago and another election might be started ironically on the lack of trade between Canada and China as seen in early election commercials by one of the opposition parties. No matter what position viewers might have taken on Colombia and associated issues, a discussion on those topics would have informed us better on a situation that many have opinions on but few really understand.

Now for lighter fare, Rio de Janeiro has won their bid to host the 2016 Olympics, being the first South American nation to host the event ever. Mexico did host it nearly 40 years ago, but for the continent to the South it is a deserved first. It seems that the Olympic Committee is starting to see themselves as the ones who should pick the winners of the global economy in the future, but success does not always come from the event even if the country does well post Olympics. China received much criticism of their treatment of Tibet and Uigurs in the build up to their Olympic games and many citizens in Beijing lost their rights to property and their homes in the process of building grand structures for the games and making China look issueless in the process. The Committee should have expected this and many protestors sought to hold them to account for it.

Regarding Brazil, like with China and other developing nations, the Committee should consider questions of poverty and the benefit to the whole. If they choose to pick winners for policy reasons that often slide into issues of security and economics, then the result of that progress should be taken into account. Brazil has done its best since the 1980s to reform every aspect of its society, reduce poverty and balance the economy, even successfully in the latest economic storm. Crime and poverty however will be a major issue in Rio even in 2016, and while these issues cannot be resolved in such a short time, a focus on reduction and avoiding the repeat of China 2008 where the disadvantaged in China were ignored by China and the Olympic Committee is unacceptable in 2016 as it was in 2008. I do have faith that Brazil will do its best to provide for all events, and have learned from China 2008 on what not to do and who not to avoid. Boa Sorte Cidade of the Cariocas!

The last month of economic news has been as diverse as the last 10 months of the same forecasts. With the start of July, the drop in recent markets worldwide and predictions of further problems in large economies such as the UK and Japan set to bring the recession further attention, but by mid month the result was that some US banks were making some profits, even paying back small sums of money to Mr. Obama and some auto manufacturers were not destined to be completely eliminated as stability slowly crept back into market forecasts. While these announcements will likely change in the next few weeks as SME’s continue to wind up their companies, the biggest market change seems to be coming from China and India. While many believe that only 8% growth in China may be the limit in order to stave off mass discontent among its population, growth rates of 5% or more in places like India, and lower yet stable rates in Brazil draw attention to hopes of an economic recovery coming from the recently famous super emerging economies of the BRICs. Of great interest and increasing popularity, Brazil, who has managed to maintain a stable growth rate in their economy since the 1990’s global economic troubles between 3-5% and was able to reasonably shield itself from the meltdown of Argentina’s economy in 2001. Brazil is beginning to change into the next large emerging market economy in form and function. The recent recession has taken the new Brazil and brought its relative successes in the last few months into the meeting rooms and policy branches of those economies who wish to change the relationship between North America and Europe towards South America’s largest and most promising economy.

In the Americas there are two large economies outside of the United States that while being hit hard by the recession, have managed to keep the core financial and economic systems of their countries in good shape. Canada and Brazil have stood out as two of the largest stable economies in the Americas and worldwide. With banking systems that have not collapsed and reserves of cash from past years of growth shielding some of the effects of the global economic crisis, both countries could begin to push the Americas and world economy back into positive territory. Limits to BRICs and other relatively healthy economies may be restricted formally and informally however depending on how the EU and US decide to react to other large economies worldwide. Effects on countries such as Canada and Brazil might be produced by restrictions coming from the new Buy America provisions in the US or as an example, be expanded by talks of a possible EU-Canada Free Trade Agreement. Limiting trade between NAFTA partners in North America and retracting from agreements between the US and trade partners in the Americas is what all trading partners of the US fear in the region as well as globally.

Many experts on global economics such as Zakaria and Khanna see the US as possessing a major role in the future world economy, but also one of shared influence and regional power as a necessity. Limits to expanding the economies of the Americas in a united fashion is seen in the lack of interest in regional trade agreements and the lack of support for trade agreements as with the one with the US and Colombia. While the US seeks to put pressure on its economic allies during the recession, the EU is seeking increased open trade with large economies such as Canada, India and China, and China is seeking many economic ties with countries such as Peru, Chile, Venezuela, Argentina and of course Brazil. Even Canada has ratified a trade agreement between itself and Chile, Colombia, Costa Rica and is working on agreements with CARICOM. Effects from Buy America might better regarded as the Buyer Beware provisions, as the US creates a policy environment to push its allies to trade with other economies outside of the Americas and produce economic legacies outside of the US which will strangle future growth of private industry in the US itself. As with any investor, the prospect of future governmental and trade restrictions by doing business with a US company or investor will produce negative incentives in the long run. With so few healthy investors currently, economic legacies such as Ford, Disney, Coca-Cola and McDonalds may be replaced by those created and grown in other healthy economies outside the US and the Americas…bad economic policy is simply a caveat emptor of economic growth.

Not all US policy experts agree with Buy America, and some even have been making attempts to approach Brazil as the next India or China. Mind month, the publication and discussion of the new book: Brazil as an Economic Superpower? Understanding Brazil’s Changing Role in the Global Economy was accompanied in Washington DC by a discussion of Brazil as a rising global economic power. This book launch and discussion followed the Brooking Institutions release of interesting economic data and reports on the region as a whole. Many of these discussions focus or Brazil or Latin America as the next China or India, but in reality the Latin American method or growth and that of growth in China, India and Russia only bare some basic similarities. Latin America and Brazil have traditionally depended on commodity prices principally. While the Brazilian economy is fairly diversified, a large portion of its GDP does come from commodity and oil prices, which is similar to a country like Canada who have a great deal of GDP linked to natural resources. Manufacturing in all economies, including Canada, Brazil, China and India have been greatly affected, leaving China with a growth rate of 6.1% in the first quarter of 2009. While oil prices and other commodity prices have bounced back and forth since 2008, manufacturing has taken severe hits in all nations. China and to a certain degree, India, depend greatly on the demand in foreign markets on US and global consumer spending. Entrepreneurial Organisations such as the SBA.org in the US and CFIB in Canada would be able to make the point that many of the jobs in the US and North America depend on SME’s, and with the increase in bankruptcies and the lack of business loans coming from banks in any financial state, the job loss will only increase and create a further decline in consumer spending. Manufacturing depends on its consumers being able to purchase its good and grow the economy. China, who produces many of these good in the US and EU are entirely dependent on these economies as their growth is directly linked to US and EU consumers. Brazil, while dependent on consumer spending has less than 40% of its trade with the US and is balanced by heavy industry, commodities and technology industries. While many of these sectors are hurt by the recession, it gives Brazil some added security in the long term within the global economy.

The news on recent increases in growth in China and India are positive, but with many consumers losing jobs recently and many smaller industries only failing in recent weeks, it is hard to predict a concrete economic demand for consumer products and link growth in China to the markets it depends on. In reality, many smaller and larger US firms often depended on cheap operating loans from US banks, and without not only financially stable banks, but banks willing to give out loans to investors, it is impossible to justify any prediction of growth in consumer spending when SME’s are neglected from economic recovery and are the last to receive financial aid in the economic crisis, yet provide the majority of jobs in many developed countries. Countries like Brazil and Canada should be considered a relatively strong option for investors, as historically and logically growth seems more likely for all levels of industry in few similar countries in the long run and the avoidance of economic bubbles have been relatively successful in the past.

An interesting piece I encourage you all to read:
Latin America and the Economic Crisis: Designing and Implementing Stimulus Policies
Mauricio Cárdenas, Director, Latin America Initiative
The Brooking Institution

June 25, 2009 —
Dani Rodrik recently wrote in his daily blog that Andrés Velasco is the living example that sound macroeconomic policies have a high dividend. Chile’s decisive fiscal stimulus package—adopted last January—has made him President Bachelet’s most popular minister. Not too long ago, during the years of high copper prices, many Chileans questioned their government’s economic management for saving too much and postponing key investments. Of course, those critics are silent now. Events are showing that a commitment to rules that focus on long run objectives, rather that immediate gratification, pays-off.

But rather than talking about Chile, I would like to make a more general point regarding Latin America. Today’s conventional wisdom –and I say this in complete awareness that ministers generally adhere to, and oftentimes shape, mainstream views—is that stimulus packages are working and that Latin America will soon be out of the recession. In Brazil, for example, most analysts consider that the contraction is a thing of the past. I want to take issue with those views.

Let me start by stating what, in my view, is the conventional wisdom:

The adoption of sound macroeconomic frameworks, mostly since the late 1990s, allowed Latin America to bring down inflation and public debt. Foreign reserves are high for historical standards, reflecting stronger current accounts and access to external capital. As a result, Latin America is coping with this crisis much better than a decade ago. In fact, there has been no crisis, just a mild recession.

Key to the current episode has been the ability to conduct countercyclical monetary and fiscal policies. In the current phase of the cycle, policy rates set by the central banks have been cut to 0.75% in Chile (a reduction of 7.5 percentage points), 4% in Peru, 4.5% in Colombia, 4.75% in Mexico, and 9.25% in Brazil.

Fiscal stimulus has also been the norm, although the size and composition of packages has also varied from country to country. The largest expansions have taken place in Chile (2.5% of GDP), Brazil, Peru, and Mexico.

Macro-financial variables have shown remarkable stability. In 2009, inflation has been falling, exchange rates have appreciated, stock prices have increased, and spreads on sovereign debt are falling.

Even though production and employment figures are still declining –and GDP growth projections are being revised downwards– virtually all forecasts suggest that the recovery will start soon. The latest Global Development Finance Report from the World Bank (the less optimistic of the existing “official” reports) projects major rebounds in all economies. The difference between the 2010 and the 2009 GDP growth forecasts is 5 percentage points for the world economy. The corresponding figure is 5.4 percentage points for the OECD countries, and 4.2 percentage points for Latin America. The expected rebound is spectacular for Mexico (7.5 percentage points).

I think this view errs on the side of optimism. Latin America should hope for the best but prepare for the worst. By not properly considering the risks ahead, governments have the temptation of exhausting the policy tools and not reserving any ammunition for battles that are foreseeable. My critique of the conventional wisdom is based on the following four points:

The numbers on real activity and aggregate demand conditions which are coming out from Latin America are not that encouraging

Although it is true that retail sales in Brazil increased 6.9% in April (relative to a year before), industrial production registered a 14.8% contraction in May. In Mexico, where GDP contracted by 8.2% in the first quarter, industrial production fell 13.2% in April, and consumer confidence continued to fall in May. The Chilean economic activity contracted 4.6% in April and industrial production fell by 11.1%. The figures for other countries show a similar picture: Latin American economies are experiencing a deep contraction, and the evidence does not suggest a significant recovery underway.

Of course, all this could change with a big rebound in the second semester. But, is that realistic? The contraction in investment has been in the double digits during the first months of this year for the majority of countries in the region, and will have an impact on future growth. More importantly, investor and consumer confidence measures are very low and still falling in the majority of Latin American countries. We know from past episodes that it takes time –and a good amount of positive economic news– to reverse the direction of these perceptions, especially the consumer’s sentiment.

Latin America is betting on the rebound of commodity prices

China’s real GDP growth slowed to 6.1% during the first quarter of this year. Although several measures of real activity and domestic demand have been improving lately (investment grew by 32.9% in five months to May), exports continue to deteriorate. Chinese exports contracted by 26.4% in May, suggesting that there is excess capacity. To the extent that exports do not recover, investment will loose momentum as well as commodity imports, which have increased for stockpiling purposes. These are very negative news because they suggest that the surge in commodity prices will not last. Why commodities moved ahead of the fundamentals is not clear, but Latin America should be prepared to deal with prices which are more in line with lower Chinese import demand in future months.

Private capital flows are shrinking at an alarming pace

The World Bank projects that net private debt and equity flows to developing countries will decline from 8.6% of global GDP in 2007 to 2.0% in 2009. This is much worse than in the debt crisis of the 1980s or the Asian and Russian crises combined. Many in Latin America argue that the region is somehow immune to this trend, mainly because of the role that foreign direct investment plays in the region. This could be true, but at the same time, the evidence available suggests that FDI flows depend largely on growth in the OECD countries. With the major contractions expected in the U.S., Europe and Japan, FDI flows will fall in the medium term. The latest IMF data suggests that this is already happening. The investment projects under way are likely to be completed, but starting new investments is a different game. The recent drop in the cross-border M&A activity is a strong signal in this direction.

For the emerging and developing countries as a whole, private debt and equity flows will likely fall short of meeting external financing needs. The question is how much of the shortfall will affect Latin America. Some countries are better prepared than others. Countries with large current account deficits, strong dependence on tourism and remittances, and limited access to private debt and equity flows will suffer considerably. This of course, points in the direction of Central America and the Caribbean, where a sharp adjustment seems inevitable.

In the largest countries, with access to international markets, much will depend on the ability of private firms to roll over their debt. There are hundreds of corporations in these countries that borrowed in the international syndicated loan market and some that issued international bonds during the last few years. They hold the majority of the outstanding short term external debt as well as the medium to long term obligations coming due in 2009. Financing the public sector is not the problem; the real issue is how to refinance the large Latin American corporations.

The prospects in this regard are not all that encouraging. The supply of credit to the region could fall even further because there are mounting pressures on the capital position of the major banks. Liquidity problems in the global interbank market remain an obstacle for banks to fund additional assets, while tightening of credit standards has been generalized. Last but not least, government ownership (even if temporary and partial) of the large banks changes the priorities in the direction of domestic recovery in the developed world, rather than greater credit risk exposure in emerging countries.

There is no ammunition left

The capacity of central banks to cut interest rates and of governments to provide more fiscal stimulus is very limited. Even in Chile, there is discussion that the fiscal deficit is already too high and that the government should bring it down again next year. The Mexican central bank has said that further cuts in interest rates are not likely, in line with the language other monetary authorities have used recently. In other words, fiscal and monetary policies do not have many degrees of freedom. If the world economy does not recover soon and private capital flows to Latin America remain low, there is not much that Latin American countries can do. Even worse, it is possible that some of the expansionary policies of the recent months will need to be reversed. This is already part of the debate in countries like Mexico, where the government may need a tax increase to cut the fiscal deficit in 2010.

In summary

In summary, Latin American governments and multilateral banks are betting excessively on a sharp economic recovery. For their projections to be right, a major recovery should be already underway. The latest figures, however, do not support that view. Even if the U.S. shows a moderate V- shaped recovery in the next two quarters, China’s imports, commodity prices, and private capital flows could still be the source of very unpleasant news for the region.

The last few weeks in the Latin American world has been anything but calm. Coming off meeting of the G20 and Summit of the Americas, the region has moved towards many intended transformations in policy and relations with the US and the EU. Some of these major changes are discussed below.

Mexico: With a severely damaged economy, an epic drug war, corruption and now H1N1 Flu, Mexican President Felipe Calderon likely feels more like the recipient of biblical plagues as opposed to Mexico’s overworked president. Shutting down the largest city in the world for 5 days is no easy task, but with Mexico’s already suffering argo-business and tourism industries on the edge, an outbreak was the last thing Mexican business and the Mexican people needed at this time. The economic impact of the flu will be severe, and many will likely offer additional financial support to Calderon’s Mexico well after the hysteria of Swine Flu subsides. While the blame for the outbreak is being tossed between the WHO and Mexican officials, impressions of the unknown nature of the Mexican healthcare system is routinely being critcised by those outside of Mexico despite the extreme and sensible measures taken by Mexican officials in the process. Anti-Mexico feeling is likely not raised by a significant degree past the normal levels of criticism, but caution from areas such as Hong Kong; where SARS originated, and China, where Mexicans visiting and living in China were quarantined despite showing no signs of illness are not helping relations between the two countries. President Calderon even sent a plane to collect his citizens, in between public announcements that have brought a great deal of order to an otherwise chaotic Mexico City. For a detailed account of the Swine Flu, please read R G Wallace’s blogpost called The NAFTA Flu on his blog Farming Pathogens here.

Cuba: Cuba’s opening and dialogue with Barak Obama comes on the heels of the election campaign and numerous surveys’ showing the lack of support by many Americans for a trade embargo on Cuba. Writer Alvaro Vargas Llosa of the Washington Post Writers Group wrote an interesting piece on Cuba and Free Trade in last week’s The New Republic. Llosa, who initially supported America’s embargo on Cuba, discusses his reasoning and rationale with many detailed examples for pushing his opinion towards the other end of the spectrum. While he still maintains his support for freedoms of individuals to travel and communicate with whomever they wish, he argues how trade and the absence of financial growth may have actually contributed more to the maintenance of the Castro regime as opposed to helping grow grassroots opposition towards it. Llosa’s numerous examples of regimes who have decayed from within in comparison to Cuba is definitely something worth pondering, but without the ability to re-write history, and re-write Cuba, the only option is to move towards sensible policy in the future, whether that involves Free Trade with Cuba, an embargo or simply a slow and progressive opening of Cuba while pressing for human rights in the process. The Llosa article named Free Trade can be seen here.

Venezuela: Two impressive articles have come out recently speaking about the future of Chavez in Venezuela and its new relations with the United States. In another Washington Post Writers Group article called Regift, Please!, Llosa discusses the book given to Obama by Chavez called: Open Veins of Latin America by Eduardo Galeano. Llosa goes through the main thesis of the book and argues against the intellectual capacity of Chavez and seeks to disassemble the perspectives of the book published originally in the early 1970’s. The book argues that Latin America has always been an absolute victim of colonialisation and imperialism from Europe and the US respectively. In the context of the early 70’s, many of Galeano’s perspectives likely gained a lot of support throughout the decade and remains with many to this day. While growth in Latin America had come in some degree since that time, most of the region sought to ensure Import Substitute Industrialisation measures since the late 60’s well into the 1980’s and growth, while improving in times of economic boom, often ensured that the impoverished in the region were hit the hardest by economic collapses in the 1980s, 1990, post-2000, and even as we speak. Beyond growth and poverty, political issues between the US and various regimes in Latin America had great effects on the development of rights and freedoms in places like Chile, Central America and other specific cases where the CIA is claimed to be involved in the region. While Llosa is right to counteract the claims of Galeano in his book, the context of Latin America in the 1970s and its effect today did create many that might agree with Galeano to some degree, even if they are not supporters of Chavez. In recent works, Galeano perhaps tempered his arguments for a more modern Latin America, but ironically the funds coming in from sales of Open Veins likely made him wealthy in the process. Please place blog comments below. Llosa’s article can be read here.

Human Rights Watch and Chavez: I did write about these issues in the past, and Jose Miguel Vivanco of HRW, who was ejected from Venezuela for a report on Chavez could not state in better than in his article: Exposing a Chavez Charade. I wish that Vivanco’s words make a strong statement on rights in Venezuela, so I have posted a link to it here, and have pasted it below for all to read. Please leave your feedback on all articles and a response to your impressions Human Rights Watch has on Chavez’s Venezuela:

Exposing A Chávez Charade
by
José Miguel Vivanco
Published in the Washington Post
May 2, 2009

Published in the Washington Post José Miguel Vivanco, director of the Americas division

(Mexico City) - President Obama came under fire last month for sharing a smile with Venezuelan President Hugo Chávez at the Summit of the Americas. Critics say that Obama was wrong to be friendly with a foreign leader renowned for his anti-U.S. antics and authoritarian tendencies. It might be expected, because I am a human rights advocate who has documented Chávez’s authoritarian policies and suffered the consequences at the hands of his security forces, that I would share this criticism. But I think time may show that Obama did the right thing.

Already, Obama’s overture has made it more difficult for Chávez to use his personal feud with the U.S. government to divert attention from his country’s problems. It will also be easier for the Obama administration to pursue a serious multilateral effort to pressure the Venezuelan government to reverse its authoritarian approach.

Venezuela is a complicated country. To its credit, it has competitive elections and independent political parties, media outlets, labor unions and civil society organizations. While Venezuela is plagued by chronic human rights problems such as police killings and deplorable prison conditions, there is no systematic denial of fundamental freedoms, as in Cuba. Nor is there an armed conflict with widespread violence by illegal armed groups, as in Colombia.

Yet the Chávez government has actively undermined democratic institutions that are essential for safeguarding the rule of law. It has strengthened the state’s power to curb media freedoms while abusing its regulatory power to threaten and punish critical media outlets. It has systematically violated workers’ basic right to freedom of association and sought to undermine the work of local human rights advocates.

Perhaps most troubling, the Chávez government has effectively neutralized the judiciary as an independent branch of government. This disregard for judicial independence has only fed fears that a recent wave of corruption charges against prominent Chávez opponents — including the opposition’s most recent presidential candidate, Manuel Rosales — could be a campaign of political persecution orchestrated by the government. While the Venezuelan justice system should be prosecuting corruption, it needs an independent judiciary for such prosecutions to be fair and credible.

To deflect criticism of his authoritarian policies, Chávez has relied heavily on a tactic favored by his friend and mentor Fidel Castro: routinely accusing human rights advocates of conspiring with the United States to topple his government. When, for example, the highly respected Venezuelan nongovernmental organization PROVEA issued its annual report on human rights in December, Chávez’s interior and justice minister declared on national television that the PROVEA workers were “liars” who were “paid in dollars.”

In my own case, after Human Rights Watch released a report in Caracas last fall, a colleague and I were forcibly detained in our hotel by Chávez’s security forces and summarily expelled from the country.

How did they justify this abuse of power? By claiming, falsely, that we had violated our visa requirements and were conspiring with the U.S. State Department to undermine the government.

No one familiar with our work, or that of PROVEA, takes these absurd allegations seriously. Yet such allegations resonate with some audiences in Venezuela and elsewhere in the region, ultimately serving to undermine discussion of the country’s human rights problems.

Indeed, the reason such allegations have any resonance is that the U.S. government does have a long and sordid history of conspiring to topple democratic governments in the region. And when Chávez’s opponents sought to oust him in a coup d’etat in 2002, the Bush administration initially welcomed their effort rather than joining in the near-universal chorus of condemnations from democratic governments in the region. This blunder badly damaged the Bush administration’s credibility in the region on issues of human rights and democracy. It also made it much easier for Chávez to cast debates over his policies as merely part of a political and personal contest between President Bush and himself.

Obama took an important step toward ending this dynamic when he extended his hand to Chávez in front of the cameras. He took an even more important step when he acknowledged the “historic suspicions” of U.S. intervention in the region.

That said, a smile and handshake from Barack Obama won’t solve Venezuela’s human rights issues or U.S. problems with Venezuela. And it would be a mistake to pursue a better relationship with Chávez for its own sake, or out of fear that otherwise he will fall under the sway of countries such as Iran, or because Venezuela has oil — as Hillary Clinton suggested in a recent congressional hearing.

Lowering the drama between the United States and Venezuela is worthwhile because it creates an opportunity to focus the region’s attention on developments in Venezuela. In the coming months, the administration must seize that opportunity by expressing concern about policies of the Chávez government that have undermined the independence of Venezuela’s democratic institutions. The United States should also work with regional allies to establish an appropriate multilateral forum — at the Organization of American States or elsewhere — to engage Venezuela on this issue.

Obama’s symbolic gestures were essential to setting the stage for such meaningful engagement. If his administration follows through as it should, the next time Chávez tries to label all human rights criticism as a U.S. conspiracy, few people in the region will take him seriously.

This weekend leaders from across the Americas have made their way to Trinidad and Tobago for the fifth meeting of the Summit of the Americas to discuss the future relations between nations in North and South America, the Caribbean and between others interest groups in the region. The Summit is often the centerpiece for inter-governmental discussions and policy formations between nations in the region. The last few Summits have been dominated by the formation of multilateral and bilateral trade discussions, albeit with slowly dwindling support for the FTAA since the Quebec City Summit in 2001, the Summit of the Americas has moved away from discussions of a multilateral agreements into the shiny and new 2009 Summit which seeks to patch up open ended policy debates in the region, address security issues and produce some form of future dialogue between the US and states which formally have had rough relations with the Americans in the past. The best evidence of this new Summit approach is the move by the Obama administration to open a dialogue with Fidel and Raul Castro which has been reciprocated this week, make open discussions of how the US and Mexico can claim their part in the drug war, create and new open-hand diplomacy towards Venezuela and Bolivia and have increased trade with traditional allies in the hemisphere. Below I will discuss the possibility of some future developments between the US, its neighbours in the hemisphere and relations between other members and internal struggles within some countries in the Americas.

This week saw an attempt on the life of Bolivian President Evo Morales. I was able to see a live discussion with President Morales via webfeed on the Summit Website earlier on Saturday which was quite impressive and needed to be noted. Bolivia has gone through a great deal of policy changes with Morales. As one of the first indigenous leaders in Latin America, Morales has shifted much of his policy into poverty reduction strategies and through popular support, and adjustment in the power structure in his country. With a recent protest to withhold eating until anti-poverty measures and land reform issues were passed through into policy by the Bolivian Parliament and a very recent attempt on his life, there is no doubt of his commitment to changing Bolivia. Support for Morales will likely remain due to his popularly with many poorer indigenous communities that give him a large support base politically. A possible opening of relations with Bolivia’s allies in Venezuela and Cuba with the United States may change the situation greatly. In most cases Morales will be there until he is unable to satisfy the popular elements in society or so greatly alienates what he refers to as the oligarchs in society that he is unable to withdraw from protests. Bolivia will likely follow the natural course of populists in the region, albeit hopefully without violence becoming an end result.

A possibly historic move by President Obama during the Summit might be a sign of thawing relations, as Barak Obama made his way to shake the hand of Hugo Chavez in an act of good will. While Chavez was criticized in US media recently for claiming that Obama needed to study up on Latin America, Obama’s active move towards open-hand diplomacy was met by a friendly response. Obama was even given a book about the history of Latin America by Chavez, but in maintaining his position Chavez handed Obama a book which some call an academic work which compiles a drastic account of state-to-state oppression by the US in Latin America. Despite slight posturing, an opening of a dialogue has already resulted in Venezuela re-instating its Ambassador to Washington and might result in some added passive economic ties between Venezuela and the US that builds on already existing trade in many markets between the two nations. The larger effect of Obama’s move to open dialogue further with Chavez likely comes from his very open and quick moves to re-initiate ties with Cuba. Although Cuba was ejected from the OAS in the early 1960s, thus did not have a formal representative at the Summit, Obama made it clear that a lifting of the travel restrictions on Cuba would be a priority as well as talks with Cuba’s leading family which were accepted by Castro before the Summit commenced. A discussion of this further by FPA’s Great Decisions program can be seen on a video titled The Latin American Left. Click here to see the video link.

Before the Summit, Obama went to Mexico to show his support for and claim some responsibility for the drug war now taking place in Mexico. Many in the US and Mexico believe that in order to conquer the drug cartels in Mexico itself, a concerted effort must be coordinated between the source of the narcotics in Mexico, and the source of weapons and main market for drugs in the US, and even the market in Canada where Canada’s Olympic city has been enveloped by a mini-drug war itself. In addition, Obama’s stop in Mexico City before the Summit brought Mexico into a similar light with the issues surrounding Cuba. The United States closest Latin American neighbors for the first time in two generations are finally being properly re-engaged, which sends a message to the rest of the region and creates a new energy for the Summit that shows the US as an open-hand to discussions in the region after many years of neglecting US-Latin American Relations. In his speeches, Obama sought to claim responsibility for US actions in the region in an attempt to clean old wounds between neighbours. He also stated that despite US actions in the region, it also must not become a scapegoat for all problems in the Americas. To see an article and video by the FPA writer Marco Vicenzino on Obama and Latin America, please click here.

The US policy towards Latin America has often been linked to free trade, and while the issues of trade and protectionism might not have been in the spotlight this weekend, America’s closest allies in the Americas have not forgotten the importance of this relationship. Economic powerhouses in the Americas such as Argentina and Brazil have been battling through the latest economic crisis but seek to open further trade ties with the US and other investors. China’s role in investment in Argentina and Brazil and other Latin American markets have started to rival those coming from the US, World Bank, IMF and IADB in levels of investment, albeit with more favorable lending conditions. Canada, the United States’ largest trading partner in the region sought to assist the US in opening relations with Cuba, to which Canada has always maintained, but hoped to keep the issue of trade protectionism in the focus of the Summit leaders as both developed and developing nations in the Americas would be greatly hurt if trade was sacrificed in the process of reinvigorating the economy in the Americas. A $4 billion cash infusion was also promised by Canada to the IADB during the Summit and moves towards a CARICOM-Canada FTA. An opening between the US and Cuba was seen as a positive for Canada as well, as support for trade between all three countries is seen as a benefit from US investment.

The greatest concern for many worried about trade protectionism in the melee of new policies and ideas at the Summit is what to do about trade and countries such as Colombia, who is the United States’ strongest ally in South America, but is being battered by interest groups in the US and opposition in Canada for the extension of Free Trade between the US, Canada and Colombia due to human rights abuses against labour leaders in Colombia. Opposition to a Colombian FTA is so great that it is doubtful that a minority government in Canada will be able to ratify it, and despite the US having strong trade ties with China and an opening with Cuba who also have numerous human rights violations, a Colombian FTA has been placed in a holding pattern of policy formation in the US Congress. Perspective must be taken into serious consideration, as the US often cannot justify trading with some partners, and penalizing others such as Cuba for human rights offences. Colombia is a success story against the drug war in the Americas, and opening a stronger economy between Colombia and North America, while pressuring for increased human rights in the process is the only way the United States and re-establishes itself in its own backyard. This statement justifying an opening of relations with Cuba cannot stop at Cuba and the US trade relationship with China.

At the end of the 5th Summit of the Americas, success will only come with a strong arm extending towards an open-hand of diplomacy in the Americas. Obama’s policy towards countries with human rights abuses must be measured and moral in its development of relations that benefit the US and the Americas as a whole.

Click here to see the Reuters Video of Chavez Meeting Obama

Click here to see the Reuters Video of Obama on New Ties with Cuba

This week’s New York Times published a fascinating article about a topic that many experts on Latin America should find very intriguing. The article titled Deals Help China Expand Sway in Latin America by writers Romero and Barrionuevo was an analysis of China’s growing influence in Latin America, with examples of how Chinese liquid investment in many large projects in the Southern Cone and Andean region seek to take American influence via multilateral organisations and FDI and divide the regions investment among the US, EU, China and the rest of Asia.

Since the admitting of China to the WTO and the drastic change in global trade and manufacturing flows, China has become a benefit to some in Latin America and less of a benefit to others. The New York Times article goes into many examples of how Chinese FDI seeks to fund many large projects in the region, from a development fund in Venezuela, to a hydroelectric project in Ecuador and providing Argentina $10 billion in financial loans and Brazil’s national oil company a similar amount to ensure future projects will send a guaranteed percentage of future oil to China. Relations between the US and many of its southern neighbours often have been strained politically in places like Venezuela and Bolivia, or have been tied in with economic restrictions such as Argentina’s relationship with many international financial institutions which set high risks for investment in the country, often funded and controlled by US investment policy within those institutions. For some in Latin America, Chinese investment is not only a good alternative, but can equal the amount invested by the IMF, World Bank and the US itself as noted in the article.

Concern from American officials will likely become greater as China seeks to displace any US and European FDI and by-pass conditions set by many international institutions that often placed Latin American and other developing countries into a position of forced policy measures. Chinese investment, most notably in Sudan and other parts of Africa, Latin America and Asia are starting to become an alternative source of funds for many countries which prefer to receive investment, but do not want conditions on their local policies, namely those which affect human rights and those connected to poverty reduction strategies. A benefit to a country like Argentina, who’s loan defaults in the past has placed it in a position where poor investment ratings still linger from 8 years ago, have received Chinese investment without major sacrifices at this point. However, places like Sudan, who are responsible for one of the largest ignored genocides since Rwanda receive not only Chinese investment in developing their oil industry, but are also suspected of receiving arms which some have connected to human rights violations in Darfur. Investment without any restrictions or a moral compass was not always practised by those in the West; especially during the colonial period, but the international investment community must decide how investment should be dealt with in the future to avoid mass slaughter of innocent communities, whether it be Chinese FDI or from the West.

Investment in Latin America has often been seen in a different light, depending on the attention Latin America has been paid during various American administrations. The Summit of the Americas this weekend comes on the heels of one of those moments in history where Latin America is becoming re-engaged, at least for the first few months of the Obama Presidency until there are added problems in the Middle East once again. The issue often seems not only one of Economics vs. Security, but one of the Americas being seen as one complete investment block/FTAA vs. a source of illegal immigration and narcotics. Often this debate plays out using clear statements of interest, referring to Latin America as a region described as America’s backyard as opposed to statements linking narcotics, illegal immigration and terrorism in much of US media on Latin America. A debate on US policy always accompanies the region, wavering as Latin America fades in and out of their sphere of influence with attention due accordingly. This challenge does have a distinct element however in 2009, as Mexico continues to fight a full scale drug war and continues its very close economic ties to the US, and Cuba and the US opening dialogue between Raul and Fidel Castro and the Obama administration. These issues may keep the US tied to regional policy until those issues lose interest, as has always been the case. Luckily some policies linked with security and partnership often pay off, as Colombians have seen in 2008-2009 and some successes with Plan Colombia and in Mexico with the Merida Initiative, not always a media attention grabber, but long term policy nonetheless.

Likely future Chinese investment may re-ignite the debate on trade with Latin America if it is seen as a major threat. The US must decide in the end where it wishes to develop its trade policy as those in the Americas seek to promote their own investments abroad if the US does not wish to pursue major investment and trade in the Americas. Debates on NAFTA and trade agreements with countries like Colombia must be taken as policies which benefit not only the United States, but the Americas region as a whole. In reality, trade between those countries in South America had on average less than 40% of their trade with the US and a significant amount with the EU and Asia. China has now displaced the EU as the second largest investor. Countries such as Canada, America’s closest trading partner has signed trade agreements beyond NAFTA, with Chile, Costa Rica and are discussing an FTA with Colombia and even the EU. According to writers such as Khanna and Zakaria, the US must consider its role in the Americas as its leader and develop its interests beyond security in the region if it is to maintain investment in a strong United States. China as a matter of investment policy is often not competing in places where the US have established strong investment ties, but in those areas where the US have been absent. The next decade of American policy towards the Americas will likely been discovered in the Summit of the Americas this weekend, determining the viability of a Fortress Americas in future US investment policy.

Fareed Zakaria GPS this past Sunday brought one of the most popular leaders in Latin America to English speaking viewers with an interview with Brazilian President Luiz Inacio “Lula” da Silva. With questions of the economic crisis, oil, relations with Cuba, Venezuela and Bolivia as well as Brazil’s role as one of the world’s largest emerging markets and role as the healthiest economy among the BRIC nations, Lula’s words will likely have an effect beyond Brazil and well beyond Latin America as a whole.

Recent discoveries of oil off the coast of Brazil, technology, industry and the traditional agro-economy in Brazil has taken the country out of economic chaos of the 1990s into a position of becoming the next China or India of the Americas. While Brazil has taken a hit in the latest economic troubles worldwide, Brazil stands out with Canada as the two countries in the Americas where a fracture of the financial system has not been considered an eventual conclusion by its government, experts and media. Despite what some call an overly positive outlook that Lula has on Brazil, the methods and conservative financial regulations which developed from past economic crisis will aid Brazil, and might save it from the worst effects of the economic downturn and gives Lula an interesting position when speaking on the economic crisis. When asked about AIG and the current problems in the US, Lula cited greed as the culprit, and suggested that greed and the culture of greed would always result in a worse situation for Americans and others worldwide, unless something is done to change that reality.

The election of Obama according to Lula comes with the realization that Brazil and the US share a similar characteristic as nations which often are more powerful than their neighbors, and hold the obligation to offer a hand to those who are smaller. His metaphor for the situation comes from his love of boxing, where he suggested that if one is weaker and falls during a match, it is not the weaker one on the floor who should offer his hand to the larger, it is the one who has the power in that situation who should offer his hand, referring to Obama’s opening of dialogue with Cuba and in response to Fareed’s question about how Obama should handle Chavez and his anti-US approach in various speeches and policy options. Lula’s perspective is an interesting one. As an incredibly popular leader who considers himself a socialist, albeit maintains many conservative economic policy reforms, Lula has positioned himself as a powerful diplomatic voice between the divisions between the traditional economic elite and socialist/populist leaders which often create large divisions in most other Latin American countries. His interview on GPS likely is a move towards bringing in closer ties with Obama, while placing Brazil as an intermediary between the US, Bolivia, Venezuela and Cuba and allowing Brazil to become a responsible regional player on the road to becoming an important international economic player. The ability for Lula and Brazil to cross boundaries is not an easy role to assume, but the ideas expressed from its leaders is a promising one, especially if Brazil is to become the mortar holding together the reputation of emerging economies in the near future.

Click here for Fareed Zakaria’s interview with Brazilian President “Lula” da Silva

The state of Latin America has changed a great deal since the start of 2009. The fate of many nations in the region have been affected by recent losses in oil revenues, problems with financial liquidity and questions about the future of populism in recent economic crisis. Economics, while always an issue in the region has also placed many countries in the position to aid in strategy developments abroad regarding international economic worries while others might have voted in placing wheels on economies in decline. Rights and the changing face of some nations remain undetermined, while bloggers and writers at FPA explore many of these issues in weekly blogs.

The first major change in the region was the referendum on term limits in the Venezuelan constitution. With a slight percentage majority, President Hugo Chavez of Venezuela has won his ongoing battle to allow him to reform the Venezuelan Constitution of 1999 and allow the two term limit of office for the Presidency to be extended indefinitely for elected leaders in the country. Supporters of Chavez and the opposition in Venezuela have vigorously debated on the legitimacy of the vote. Many anti-Chavez activists felt that media suppression, threats, and claims of political violence have arisen out of the last years of Chavez’s Presidency since the loss of the last referendum two years ago. Legal debate on the issue has also abounded as democracy in the country has adopted many legal and political characteristics. A history of the term limits and activities by Chavez and the opposition can be seen here.

The new 2009 FPA Blog on Cuba started last month with many interesting and in-depth posts on the world’s most famous island. The attention on Cuba comes with three major events which will affect the country greatly this year. The 50 year anniversary of Castro’s revolution was celebrated by many Cubans this year, but also frowned on by many anti-Castro activists in Cuba and abroad. A great effect as well is the move from Fidel’s rule to that of his brother Raul Castro. With the health and age of Fidel Castro waning slowly over time and Raul taking up positions of full control, the end of Fidel may come about with celebrations this year as well. With Obama and Raul Castro, there has been a slight move towards a thaw between US-Cuban relations. Some polls suggest that many Americans, and even those in Florida’s Cuban expatriate community have also become more open to relations with Cuba, mind you slight developments only have lead to very slight progress at the moment. The year of 2009 may change things permanently in Cuba if these three elements become larger issues this year.

Another intriguing FPA Blog that will have many crossposts with the Latin America blog is the FPA’s Rising Powers blog. Fascinating posts on Latin America’s influence on the globe have been published, focusing on Brazil and with references to Mexico and their relations to other Emerging Markets have taken shape since the beginning of 2009. With blogs on Latin America, Mexico, China Trade, Cuba and Rising Powers all producing great articles, there will be a lot of future coordination between FPA bloggers in the process. Please refer here to FPA’s Rising Powers Blog where blogger Roger Scher takes a look at Brazil as Latin America’s arising giant.

With the victory of Mr. Obama in the US Presidential elections a wave of celebration washed over the world media as praise for Obama took place, and in many cases rightly so. He is not only the first African-American President elect in US history, but more so a change from eight years of the Bush administration that can be argued was the worst eight years in Presidential history. While historians quibble over whether Bush was in fact the worst President, or a close 2nd or 3rd, challenges to the abilities of Mr. Obama have already taken place. The Economist Magazine made headlines in the election as the premiere economically conservative publication endorsing Mr. Obama, which is often on the left in his policies and by no means a conservative. Letters to the Editor were by no means gentle, and a number of them critical of The Economist's endorsement, and a few supporting it but criticizing it for support for the wrong reasons.

In reality, both Mr. Obama and Mr. McCain are fine individuals that are forgotten for their real talents, in being able to reach out to the other side for support. With Bush paralysing any support by the Democrats for his policies due to a laundry list of often anti-constitutional problems and controversies, McCain had been the only Republican that represented the majority of Americans and also many people who voted for Democrats in the last election. If Obama is to win the next election, he must focus his attention on the middle, and might even do well to cooperate and appoint some of the moderate Republicans in order to bring America together after eight years of being pulled apart. With nearly 47% supporting McCain in the election to Obama's 51%, and economic collapse and eight years of Bush and a War in Iraq, Obama can only survive with support from people like McCain, or perhaps hire McCain himself to work in his administration. To take a line from many action hero movies, "It is crazy, but it just might work," as in America, if Arnold can be the Last Action Hero and be elected to lead California, the 4th largest economy in the world, anything can happen.

Critical support for The Economist's endorsement often came from non-American readers, who see Obama reasserting himself as the leader of the free world and placing multilateralism as the core of his foreign policy. What seems to be lacking is support for America's closest and most effective allies, those within the Americas. With NAFTA becoming a heated debate between Obama and Hillary, even producing one of the elections first scandals, Canada and Mexico have been perplexed at how Obama might issue policies that could strangle the Canadian and Mexican economies due to a US economic collapse, a high degree of fear about debt with China and trade with China, that for some reason Hillary Clinton blamed on NAFTA, and the focus on Castro and Chavez, who oppose most activities coming from the US. All this has come with the virtual ignoring of America's allies in South America that have won many battles against terrorism, poverty, economic collapse and improving democratic institutions. Another major issue, which has brought more death to Mexico than Afghanistan and Iraq combined, is the nearly 4000 deaths that have come about since early 2008 in Mexico's drug war. With the rescue of Ingrid Betancourt and the pulverization of much of the FARC's command and control, the drug war has moved well into Mexico where the country has little luck keeping even its most senior officials safe and deaths from the conflict have reached as far north as Canada to as far south as Argentina. With illegal immigration not having a solution since last year's debate on the new Immigration Bill, and whole new issue has already arisen inside all of America's allies, on the border and inside the US itself that has been ignored completely by the candidates. With the next major issue in US policy not being seen on the radar of either candidate, it is questionable how the US will treat its closest and most important allies in the next four years.

CNN made a great acquisition taking on policy expert Fareed Zakaria and giving him his own show, Fareed Zakaria GPS which allows for a diverse perspective and a balanced international approach to a network which is often known for its Washington point of view as opposed to the perspective of global politics and policy.  The international perspective needs to be understood from the point of view of Paris, Singapore, Beijing and others. Originally the host of a PBS show and author of the book The Post-American World, Zakaria will likely become one of the most important authors on foreign policy in the next few years.

In a week of economic turmoil, Zakaria in his show F.Z. GPS decided to interview political experts from Singapore, India and China in order to get their point of view on current economic and political activities involving the US and other countries. While many perspectives were discussed, it was diverse in that countries like Singapore, India and China did not fare poorly during the last eight years of the Bush administration. While criticism did come about regarding Afghanistan and Iraq and perspectives regarding Russia's current move into Georgia, Bush's reputation is not wholly being shared by many in the Asia-Pacific, standing out in contrast to the distain for Bush in Europe, the US and even in Canada. The Canadian example is an interesting one. Currently there is a national election underway where in a recent election debate, issues concerning the country came down to 3 of 4 opposition leaders bringing the debate down to its lowest level and simply accusing the current Prime Minister, Steven Harper of being another George Bush. While Bush is not a Canadian leader and is extremely different to any existing Canadian politician, the real policy debate was wasted and the electorate was treated as people who only decide how their communities are formed based on whether George Bush's name is shouted out enough times on television. While Bush may not be popular in the Western world, the effect of using him for political gains outside the US can be just as harmful in forming illogical policy decisions based on someone who has no real effect or relation to a government outside the US at all. While the responses from many Asia-Pacific experts was logical and measured, often similar debates about the last 8 years in the Western world are foggy at best.

While new economic giants such as China and India had their perspectives shown on F.Z. GPS, it is curious to see what the last eight years have brought to countries in the Americas, and why certain policies such as immigration has been largely ignored in the recent election campaign. The focus of the Bush administration in early 2001 was immigration and the relationship between the US and the rest of the Americas regarding free trade and the FTAA. Mostly in 2008, the issue of immigration has remained a regional one in the US, concentrating around states on the US-Mexico border which take immigration to heart, but has not become a major election issue. Trade, mostly an issue with China for the US has been brought up in many border states along the US-Canada border. Talks of renegotiating NAFTA to bring jobs back to Americans was rampant, despite the issue having a lot to do with the US relationship north and south as opposed to its ties eastwards. While Mexico has ever increasing numbers going to the US illegally and a severe drug war which has taken more lives in 2008 than US lives in Iraq and Afghanistan combined, the debate on immigration was mostly nullified last year when Bush tried to pass one of his final bills opening up an immigration policy that might rationalize the current status quo on the border. After 7 years of the War on Terror, the original policy issues from 2001 were addressed, but with such complex problems and the lack of support for anything Bush ties his name to, the issue of immigration in the US will not change at all for years to come. In reality, as pointed out in the FPA Immigration Blog, some illegal immigrants are even leaving the US due to the current economic crisis and many in the US are starting to see the effect of Bush policies as changing the perception of America into a country which as one CNN reporter said, is no longer a "beacon of freedom and hope".

The rest of the Americas in the last eight years have done better than many would expect in the Western world despite many issues impacting the US itself. Canada currently stands out as one of the only countries in the G8 that is not suffering economic collapse, due to very prudent financial policies, good leadership by many governments over the last 5 years and a long term economic boom and national surplus. While being attacked in the Clinton campaign over NAFTA, Canada has been able to not be seen as another China to the US on trade and was able through a great deal of legal debates to come up with a deal on softwood lumber and push Chapter 11 decisions on NAFTA towards a more equitable framework where states have regained much of their power over companies in the NAFTA rulings. Canada has separated its support from the US, ie. regarding not supporting with troops in Iraq, but many citizens support Canadians in Afghanistan and trade with the US. Canada has not fared poorly at all, even weathering the current global crisis with merely slow growth, and keeping a lot of funds in the country and allowing cash rich Canadian companies to buy out many American and European assets if they wish. Canada's oil industry had a lot to do with this, but in the long run 8 years in Canada has not had many ill economic effects.

Brazil is currently lead by prudent left wing leader Lula and has become a beacon for reform and investment in South America. Since financial collapses that characterized the country in the 1990s, Brazil has been able to maintain a balanced level of growth and social reforms that has brought confidence into Brazil and has made it the next likely emerging economy to become another China or India. While political issues still exist to a great degree, oil and slow progress seems to be paying off and Brazil will likely weather this economic storm with a few scratches and bruises, but keep afloat. Chile is in a similar situation. With left leaning leaders and prudent economic policies and progressive social policies, stability may become a mainstay of many countries in the Americas in the future.

Venezuela also has stood out from many of its neighbours. While Brazil has benefited a lot from its oil reserves, Venezuela has had its oil reserves propel it into a forum for Chavez's influence in the Americas and remains Venezuela's only notable source of revenue. Venezuela often uses actions by Bush as the motivator of policy decisions, mostly in cases where the US has ignored Venezuela and Latin America in the last 8 years. In reality, the involvement the US has had beyond some trade policy in the last 8 years has been very minimal, only opening up further ties with economically stable countries who stabilized themselves, and not having any heavy response to populist claims by Chavez and others who often use Bush and supposed actions by the US to justify all types of local policy decisions by populist leaders. While the degree of US involvement in Venezuela is not known but likely is minimal, countries like Colombia have been able to use local and US assistance to independently address local issues. The Colombian Army's rescue of Ingrid Betancourt and American hostages from the FARC was seen as a Colombian initiative and praised by the US as solely Colombian. Ironically the FARC later was accused of having been supported by Chavez himself, mimicking accusations he had against Bush in interfering in local politics. Increasingly criticisms of Chavez come with the diminishing influence of Bush. Without Bush as a scapegoat, it will be hard to place Obama in a negative light and accuse the causation of problems in Venezuela on the President of the US. Recently a critical report on Venezuela lead to the coercive expulsion of human rights leaders from Venezuelaactions which will reflect poorly in Chavez in the future with no Bush to blame for the future.

Many other countries in the Americas have been set with their own local issues and have had some support and acknowledgement from the US in positive and negative manners. Mainly the US in the last 8 years have ignored Latin America due to The War on Terror, and minimal support and ties with the US has not had a negative effect for many in the region and their development. Ignoring the Americas, the backyard of the US and important future allies is not an option, as pointed out by Zakaria in his statements and book. A strong America's’ will do nothing but help the US reintegrate into the international community if respect and independent policies are supported by the next President of the US and progress of the Americas is valued and not hindered. Reactionist trade policy and calling the opposition George Bush when no coherent discussion is available to win votes in an election is not acceptable on any level. Policy cannot be formed by name calling, and any politician who uses this tactic does nothing but to embarrass themselves and their supporters in a democracy. The Bush era is over, and only working for new opportunities is an acceptable conclusion.

In much of the popular political debate in English speaking media, issues of defense and economy often shape the question of what is considered a democracy. Defensive explanations for altering a country towards a democratic systems is most notable in Iraq and Afghanistan, where many who took the stance similar to the Bush administration that the actions the US and its allies took in Iraq were for the democratization of the country and its people. While the true effect of the war in Iraq will most likely be seen only in hindsight, the strategy of democratization of foreign countries in order to ensure stability was used before Iraq and Afghanistan were issues on the world stage, often claiming that open trade and stable economics is the root is democratic government.

Two of the regions which took to democratizations through economics were Asia, most notably China and Latin America. The first example, while a great success story in economic policy for China, is very much devoid of democratic ideals. To claim China as more of a democracy for its open economic policies is likely as creditable as saying the US is less democratic with the recent bout of economic troubles plaguing its financial industry and citizens as a whole. While an open economy can help with stability and help ensure democratic institutions, it is not the seed in which democracy is produced, and is often used as a rationale for linking democratic governments into those non-democratic ones by way of just cause. No one would argue that a stable economy does not help a democracy, but it is an issue of great debate if one can claim that an open neo-liberal policy is the root of a democratic system. Just this week the US Government took to paying down the debt of some of America's largest private companies, and even assumed control of Fannie and Freddie, bulking the trend of privatisations in the 1990s and post- 2000 era which was adopted by many in regions like Latin America in order to place corruption and populism in the background and grow democratic institutions from the ground up using private capital. Now government intervention is helping the economy, at least in crisis, and Latin America is progressing somewhat with a leftist leader in Brazil with sensible economic policy, a populist in Argentina who is dedicated to paying back her country's debts, an increasingly privatized Chile which is the darling of the region and a very populist Hugo Chavez trying to bring the region back into the 1970s with a lot of oil money and many words with have done little towards his popularity this year, even pushing the King of Spain to tell him to shut up on international television.

Venezuela has stood out as a pariah, linking his modern policies to those of past governments in the region which sought to claim economic independence from the US by way of populist policies and anti-foreign investment strategies. Neo-liberal economic activities by those in the US and other investor countries were often the catalyst for populist policies which could always look at failures in Iraq and other democratizing nations by way of defense or economic policy and gain local support by way of failures abroad. An interesting shift has taken place however, with the neo-liberals losing much of their influence and democracy and economy as a theory being unravelled with each American voter voting for anyone but Bush, as too do populist lose their support as the focus shifts from Bush to their local policies themselves.

This past year has been a clear example of how the waning interest in Bush has lead to increased criticisms of Chavez and his personal activities and policies as leader. With the year beginning with an insult from the King of Spain, well respected for his assistance in the democratization of Spain in the late 1970s, Chavez helped in the release of some kidnap victims in Colombia, followed by his open support for the FARC in Colombia and threats of attacks on Colombia due to their assault on a FARC leader in Ecuador and eventual pulling and reinstating of Ambassadors between the two nations. In a page from the same playbook, on September 11th Chavez pulled his ambassador from the US and recalled his own in support of political troubles between the US and Bolivia and claiming that the US Embassy in Venezuela was being used in an assassination plot against him within Venezuela itself. Despite all of these activities, the Bush administration has had little reaction to Chavez, allowing Colombia to take much of the lead on dealing with the FARC and Chavez while the world cheered the release of Ingrid Betancourt, and justified claimed that Chavez has been supporting the FARC and the drug trade which has left Colombia in ruins for the last 30 years. Sympathy and support could no longer be blamed on Bush and democratization in Latin America, as the narrative moved on, Chavez has been seeking a role to play in the next stage of the region's politics, hanging on with oil revenues and seeking to increase his power before oil prices and political ideals bring his term in office to an end involving economic collapse or violence.

In reality, democracy is and always will come from he construction of institutions which promote relative equality while balancing power in the hands of the people and their representatives as opposed to one leader. In Latin America there is an added dimension however, as poverty and democracy allowed for those in need of basic needs to have some influence on the government via voting, not a characteristic of a fully functioning democracy, but a move towards creating institutions and political movements in the long run. Economics, while not the source of democracy, is needed to ensure stability and create an environment where proper laws and rights can be formed around the relationship between citizens in the economy. Democratization can work if it is not seen as an alternative or used in the same way as populism. The intricacies of rights and culture create the economic relationship, in the same way in which the ambitions of one individual is not always reflective of the country itself. The result of each is often harsh, with failed democracies being born out of the policies of the last 8 years of Bush, also being reflected in a recent Human Rights Watch report on the restrictions on rights which have resulted within the last 10 years of Chavez in Venezuela. In either case, it seems that an end of an era in the Americas will come to an end with a new President and possible reductions in oil prices and support for Chavez as its result.

The HRW Report "A Decade Under Chavez: Political Intolerance and Lost Opportunities for Advancing Human Rights in Venezuela," can be seen here.

For articles on the Expulsion of Ambassadors between Venezuela and the US, see the articles below:

Associated Press

International Herald Tribune

CNN