Latin America

Two countries have stood out in their respective regions as economically progressive policy successes in the last ten years. In Europe, Spain along with Ireland have seen much of the positive development and economic growth when the rest of the EU has been wrestling with high unemployment rates and drastic changes in governments. In Latin America, Brazil under Lula and under the former Cardoso Administration have grown at a steady positive rate, breaking the traditional Latin American plague of economic collapses and large booms that seem to be commonplace in almost all South American economies to date. With success, the importance of Spain and Brazil have taken on a new form in their regions and abroad. Traditionally the place of the United States, these emerging regional powers now seem to be inheriting some of America’s traditional problems.

Brazil has always been a country of immigration. The population of Brazil, while taking in only some immigrants from Asia, Africa and Europe in the last few years, was one of the countries that absorbed much of the world’s immigration since the 1880s. This open policy remained, and while economic problems and changes from populist, to military, to democratic governments took shape since the 1930s, immigration remained strong as long as there were jobs to be done in one of the world’s largest countries. With traditional economic instability and some recent success, many Brazilians have chosen to go abroad to either find more work or utilize their assets to enjoy life abroad. In Spain, this emigration from Brazil has taken a foothold with both emigrants coming and living illegally for work or working in legal low paying jobs, as well as those upper middle class Brazilians coming to make a life and career in Spain as professionals and entrepreneurs.

While the general impression of Brazilians in Spain is a positive one, there have been some problems against immigrants at the main Spanish airports and in society as a whole. Many immigrants, including many Brazilians often enter Spain and stay illegally. This has been a problem one many fronts, as many Latin Americans, Africans and other Europeans do not go through the normal procedures to live and work in Spain but come as temporary workers or as refugees or simply pass through the border and disappear. With Spain having some economic expansion and the closing off of the US to many immigrants, the Spanish immigration system has become overwhelmed. Since 2006, the number of Brazilians coming into Spain has nearly “tripled or quadrupled”, while at the same time in Spain eight Brazilians a day are deported.

The solution to the Brazil-Spain situation needs to be addressed by both countries. Brazil needs to reform its immigration to fit with its position as an emerging power in the world. With 3-4 millions Brazilians living abroad, Lula will have the responsibility to create and international Brazil without losing all of the most talented to other countries and still maintain funds coming from those emigrants abroad. Spain will also have to accept Brazilians and the diversity of the Brazilian social strata now living throughout the Iberian Peninsula. It will take a long time to adapt the infrastructure to treat foreigners in a respectful fashion, but attempts need to begin immediately. Brazilians and others will be challenged living in Spain in becoming Spanish. While it might be easier from some, it is doubtful that those migrants to Spain who are not seen in a positive light will be so easily welcomed in the near future.

With the retirement of Fidelito, an assessment of the positives and negatives of the Cuban Revolution has taken place in media all around the world. People hate Castro as much as others love him, mainly because while he has injured many and denied basic rights to activists living in Cuba, he has also earned the respect of others by standing up to the United States and living long enough to brag about it. While this perspective dominates most of the globe, in Latin America there is a third dimension to Cuba. Success with specific social policies places Cuba in high regard in the areas of healthcare as well as anti-poverty policies in comparison to the rest of Latin America. Latin America is considered by many as the most unequal region in the world between the wealthy and the poor, accounting on an average 35-45% or higher of the population of the region living below the poverty line. Cuba on the other hand is well known in the region for having a less severe poverty than its neighbors. Cuban doctors and institutions are the regions best in many areas of medicine and medical research. These pros and cons of Castro’s Cuba has created the divided impression of the outcomes of the Cuban Revolution, especially among Latin America’s poor and those who have had to overcome multiple economic crisis in almost every country in the region since the 1960s.

Taking from the pages of Castro’s policies, Hugo Chavez is seeking to expand his support beyond those struggling to live in Venezuela towards others in the region. While Chavez has an amicable working relationship with most of his neighbors, his reputation in recent events has taken a beating. While he did help rescue kidnapped Colombians from the FARC, he also accused Colombia of plotting his assassination. He even angered the King of Spain who is considered a hero by many in a conference in Spain and few months ago, being told to bluntly “shut up” as recorded on Spanish TV by the King. Chavez also lost much of the support of his own people, losing in a referendum to solidify his power in Venezuela in recent weeks.

This week the International Herald Tribune did a story on Venezuela’s “Mission Miracle”, where Chavez for the last four years has sought to put the oil revenues of the recent boom to good use by giving free eye surgery to many who cannot afford in throughout Latin America. In many countries in Latin America the social heath care system leaves much to be desired, with private care and insurance covering many upper classes and leaving those who cannot afford it the inability to get more expensive treatments in the social health system. The issue of access to health care is currently a major one in the US election and could spark an election in Canada, a country which shares many attributes of socialized medicine but often cannot afford to treat many for complicated surgeries in good time as is the issue in Latin America. In the region, the same problems are exacerbated ten-fold with more than half of the population in some countries unable to access newer forms of treatments for the majority of their families. For this reason Chavez’ has gone to bring those in from all over the region to receive eye treatment which is often not as evasive as other surgeries and which allows people to maintain their vision, a vital necessity in a part of the world where people often have only themselves to keep them afloat. Newer and simple eye treatments are very expensive, but it is a simple way to cure the worries of many impoverished and ill patients all over Latin America.

In reality the support for Chavez comes from one hard reality in Latin America. Poverty and populism often comes together in one form or another, and if you seek to deal with issues on poverty you will always get a lot of support, no matter how tactless you many seem in dealing with the international community. While Fidel often had a lot more finesse than Chavez, many leaders in the region give Hugo a wide breadth because they know that poverty in the region is a never-ending problem and no one really knows how to solve it. With democratization in the region comes the power of voting, and people in dire straits will do what is best for their own personal lives…even if Chavez never shuts up and loses more tact in the future, people will vote for the person who will address their personal concerns in Latin America and in the next few elections throughout the Americas.

Since the 1930s there has been a debate on how to compensate private companies when their assets they have invested from abroad gets Nationalised by local governments. These debates have always been heavy in Latin America which has been for the most part dependent on foreign investment since the colonial period and have been the most severe victims of economic collapse from abroad since the early 1900s. Carlos Calvo, an Argentine government official in the early part of the 20th Century created a philosophy on how to approach issues of Nationalisation of foreign property at the time. His theory eventually became known as the Calvo Doctrine, where the state would be the ultimate judge on when, what and how much is to be compensated during the Nationalisation of a private company by a state. Compensation to foreign investors has moved much more in balance with the needs of investors and a preference for international arbitration since then, but the old debate has arisen again in Chavez’s Venezuela.

This week Hugo Chavez has warned that he will not sell oil to the US if the judgment of a British court to award fair and equitable compensation for Venezuela’s nationalisation of assets belonging to Exxon Mobile takes place. The judgment, taken in a British court as accepted by both parties to the agreements, and compensation which was also agreed to upon the setting of capital investment in Venezuela by Exxon was agreed to by both parties through contracts before the investment took place and via treaty obligations accepted by Venezuela. This decision by Chavez is clearly behind the times in the treatment of foreign investment for any country anywhere and has not been an option for any state in the international community in more than 70 years. Severe cases in the past such as Iran’s nationalization of US assets in the late 70’s even valued the idea of compensation, where in the end compensation was paid to many US companies, albeit less than many of them expected.

The populist trend by Chavez has likely reached its height of cleverness awhile ago in the eyes of all but his most admiring supporters. Success in policies to help Venezuela’s poor at first were welcomed by the masses in Venezuela who wish for a way out of poverty. His attacks on Bush has become the trend by not only him, but many liberal policy supporters worldwide. Recently however his interruption of left wing President Zapatero in Spain which lead King Juan Carlos to tell Chavez to bluntly shut up has become an echo for many in the world community who are anti-Bush as well, but are far from being pro-Chavez. Ignoring international norms and laws such as those regarding compensation is another strike again a Chavez who must deal with a post-Bush world where left wing policies as those of Lula of Brazil are taking the place of socialist and capitalist policies which dominated Latin America in the 1970s to 1990s. Lula, a former factory worker turned policy chair of Brazil’s Worker’s Party and eventual balanced socialist President has been Latin America’s true left wing revolutionary, reducing poverty and working amongst all of Brazil’s social and economic classes to achieve results. Chavez’s non-nonsense approach has recently been seen by many as lacking tact, and perhaps embarrassing Venezuela not in the US where it doesn’t count for many, but internationally. In Venezuela’s latest referendum Chavez lost, and in the end populism is Chavez’s only real currency in the control in Venezuela. Offending the international community can be helped in aiding Colombian kidnap victims and forming partnerships with Iran and Cuba, but in the end populism and oil are very volatile commodities for any leader who wishes to control the fate of Venezuela.

No one would like to tell Hugo Chavez “Por que no te calles!(Why don’t you shut up!)” more than President Uribe of Colombia, as King Juan Carlos of Spain did a few weeks ago. Today Chavez accused the very popular Colombian President of working with the United States to form an army to attack Venezuela. This comes as Condaleeza Rice visits Colombia in support of Uribe’s anti-drug war, anti-FARC war and pro-trade agenda with the US which hopes to pull Colombia out of the quagmire of poverty, conflict and kidnappings which has kept one of the most advanced countries in Latin America in conflict for more than four decades.

Hugo Chavez has had mixed blessing since his verbal embarrassment by the King of Spain. Firstly he lost in a referendum to increase his powers and give him an indefinite term of elected office as President in the Venezuelan Constitution. On a second more positive note, Chavez helped negotiate the release of Colombians Consuelo Gonzalez, a former Colombian Congresswoman and Clara Rojas from a 5 year abduction by FARC rebels. This helped form a media coup against Uribe government’s failure to have hostages released in his tough campaign against the FARC. While Chavez’s help was appreciated by the hostages and he is making efforts to have more of them freed and limit hostage takings in Colombia, he is also pushing Uribe to react to his criticisms of the Uribe government’s incredibly popular policies in Colombia. In reality, Chavez said openly that FARC should be recognized as a real political power as they have an army and control territory, which angered many in Colombia who do not believe that the release of Gonzalez and Rojas gives Chavez the right to interfere in their local affairs beyond his humanitarian involvement.

Chavez has taken the opportunity in the last few years as Latin America’s greatest oil producer to push his politics beyond Venezuela’s borders. His visits to Iran and oil aid to Cuba and Bolivia did not illicit a strong physical reaction by the United States to date as the war in Iraq and petrol problems in the rest of the world has made Latin America a low priority for the Bush Administration since the rise in petrol prices 2 years ago. During this time however, countries like Colombia have been dealing with Chavez in good economic times. In a FT.com article on Latin American economies, the recent downturn due to the US housing crisis may affect non-petrol economies in Latin America with greater pressure than any other region in the world. While countries such as Chile, Mexico and Brazil can most likely weather an economic downturn with some negative temporary effects, Venezuela and Ecuador’s petrol economies will likely make them stronger in the region, which means more verbal fodder from Hugo Chavez. Increased poverty in hard economic times never yields a positive result for any Latin American political leader, but for Uribe who is the man who’s destiny is linked with the fight against the FARC, the backseat criticisms from Chavez in Venezuela will likely become louder in the next year. The only saving grace for Uribe is that no one really takes Chavez seriously outside of Venezuela, so unless Colombia does react through coercion against Chavez the best response may just be to take a page from the book of King Juan Carlos of Spain.